UNITED STATES
[Pages:76]UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended March 31, 2021 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the transition period from
to
.
Commission file number 001-33099
BlackRock, Inc. (Exact name of registrant as specified in its charter)
Delaware (State or Other Jurisdiction of Incorporation or Organization)
32-0174431 (I.R.S. Employer Identification No.)
55 East 52nd Street, New York, NY 10055 (Address of Principal Executive Offices) (Zip Code)
(212) 810-5300 (Registrant's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Common Stock, $.01 par value
1.250% Notes due 2025
Trading Symbol(s)
BLK BLK25
Name of each exchange on which registered New York Stock Exchange New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes
X
No
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (? 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
X
No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Non-accelerated filer
Accelerated filer Smaller reporting company Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
No
X
As of April 30, 2021, there were 152,526,401 shares of the registrant's common stock outstanding.
BlackRock, Inc. Index to Form 10-Q
PART I
FINANCIAL INFORMATION
Item 1.
Item 2. Item 3. Item 4.
Financial Statements (unaudited) Condensed Consolidated Statements of Financial Condition Condensed Consolidated Statements of Income Condensed Consolidated Statements of Comprehensive Income Condensed Consolidated Statements of Changes in Equity Condensed Consolidated Statements of Cash Flows Notes to Condensed Consolidated Financial Statements
Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Controls and Procedures
PART II OTHER INFORMATION
Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Item 6. Exhibits
i
Page
1 2 3 4 5 6 35 65 66
67 68 69 70
PART I ? FINANCIAL INFORMATION
Item 1. Financial Statements
BlackRock, Inc. Condensed Consolidated Statements of Financial Condition (unaudited)
(in millions, except shares and per share data)
Assets Cash and cash equivalents(1) Accounts receivable Investments(1) Separate account assets Separate account collateral held under securities lending agreements Property and equipment (net of accumulated depreciation and amortization of $1,150 and $1,098 at March 31, 2021 and December 31, 2020, respectively) Intangible assets (net of accumulated amortization of $314 and $291 at March 31, 2021 and December 31, 2020, respectively) Goodwill Other assets(1)
Total assets
Liabilities Accrued compensation and benefits Accounts payable and accrued liabilities Borrowings Separate account liabilities Separate account collateral liabilities under securities lending agreements Deferred income tax liabilities Other liabilities(1)
Total liabilities
Commitments and contingencies (Note 15) Temporary equity
Redeemable noncontrolling interests Permanent Equity BlackRock, Inc. stockholders' equity
Common stock, $0.01 par value; Shares authorized: 500,000,000 at March 31, 2021 and December 31, 2020; Shares issued: 172,075,373 at both March 31, 2021 and December 31, 2020; Shares outstanding:152,635,930 and 152,532,885 at March 31, 2021 and December 31, 2020, respectively
Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, common, at cost (19,439,443 and 19,542,488 shares held at March 31, 2021
and December 31, 2020, respectively)
Total BlackRock, Inc. stockholders' equity Nonredeemable noncontrolling interests
Total permanent equity
Total liabilities, temporary equity and permanent equity
March 31, 2021
December 31, 2020
$
6,267 $
3,825
7,145
102,415
15,711
671
18,516
15,348
3,961
$
173,859 $
8,664 3,535 6,919 104,663 16,507
681
18,263 14,551
3,199 176,982
$
1,077 $
1,196
7,232
102,415
15,711
3,794
4,594
136,019
2,499 1,028 7,264 104,663 16,507 3,673 3,692
139,326
2,411
2,322
2
2
19,121 24,872
(411 )
(8,204 )
35,380
49
35,429
$
173,859 $
19,293 24,334
(337 )
(8,009 ) 35,283
51 35,334 176,982
(1) At March 31, 2021, cash and cash equivalents, investments, other assets and other liabilities include $186 million, $4,583 million, $95 million, and $1,179 million, respectively, related to consolidated variable interest entities ("VIEs"). At December 31, 2020, cash and cash equivalents, investments, other assets and other liabilities include $155 million, $4,253 million, $90 million, and $952 million, respectively, related to consolidated VIEs.
See accompanying notes to condensed consolidated financial statements.
1
BlackRock, Inc. Condensed Consolidated Statements of Income (unaudited)
(in millions, except shares and per share data)
Revenue Investment advisory, administration fees and securities lending revenue: Related parties Other third parties Total investment advisory, administration fees and securities lending revenue Investment advisory performance fees Technology services revenue Distribution fees Advisory and other revenue
Total revenue Expense
Employee compensation and benefits Distribution and servicing costs Direct fund expense General and administration expense Amortization of intangible assets Total expense Operating income Nonoperating income (expense) Net gain (loss) on investments Interest and dividend income Interest expense Total nonoperating income (expense) Income before income taxes Income tax expense (benefit) Net income Less:
Net income (loss) attributable to noncontrolling interests
Net income attributable to BlackRock, Inc. Earnings per share attributable to BlackRock, Inc.
common stockholders: Basic Diluted
Weighted-average common shares outstanding: Basic Diluted
See accompanying notes to condensed consolidated financial statements.
2
Three Months Ended
March 31,
2021
2020
$
2,685 $
2,175
907
880
3,592 129 306 340 31
4,398
3,055 41
274 276
64 3,710
1,409 505 320 585 34
2,853 1,545
1,137 445 277
1,142 25
3,026 684
82 19 (55 ) 46 1,591 318 1,273
(40 ) 15 (46 ) (71 ) 613 (14 ) 627
74
$
1,199 $
(179 ) 806
$
7.86 $
5.19
$
7.77 $
5.15
152,567,453 154,301,812
155,243,279 156,416,726
BlackRock, Inc. Condensed Consolidated Statements of Comprehensive Income (unaudited)
(in millions)
Net income Other comprehensive income (loss):
Foreign currency translation adjustments(1) Comprehensive income (loss) Less: Comprehensive income (loss) attributable to
noncontrolling interests Comprehensive income attributable to BlackRock, Inc.
Three Months Ended
March 31,
2021
2020
$
1,273 $
627
(74 ) 1,199
(239 ) 388
74
$
1,125 $
(179 ) 567
(1) Amounts for the three months ended March 31, 2021 and 2020 include gains from a net investment hedge of $26 million (net of tax expense of $8 million) and $13 million (net of tax expense of $4 million), respectively
See accompanying notes to condensed consolidated financial statements.
3
BlackRock, Inc. Condensed Consolidated Statements of Changes in Equity (unaudited)
For the Three Months Ended March 31, 2021
(in millions)
December 31, 2020 Net income Dividends declared ($4.13 per share) Stock-based compensation Issuance of common shares related to employee stock transactions Employee tax withholdings related to employee stock transactions Shares repurchased Subscriptions (redemptions/distributions) -- noncontrolling interest holders Net consolidations (deconsolidations) of sponsored investment funds Other comprehensive income (loss)
March 31, 2021
Additional Paid-in
Capital(1)
$ 19,295 -- --
196
Retained Earnings
Accumulated Other
Comprehensive Income (Loss)
Treasury Stock
Common
Total BlackRock Stockholders'
Equity
Nonredeemable Noncontrolling
Interests
$ 24,334 $
(337 ) $ (8,009 ) $
35,283 $
51
1,199
--
--
1,199
--
(661 )
--
--
(661 )
--
--
--
--
196
--
Total Permanent
Equity
Redeemable Noncontrolling
Interests / Temporary
Equity
$ 35,334 $
2,322
1,199
74
(661 )
--
196
--
(368 )
--
--
373
5
--
5
--
--
--
--
--
--
(268 )
--
(300 )
(268 ) (300 )
--
(268 )
--
--
(300 )
--
--
--
--
--
--
(2 )
(2 )
622
--
--
--
--
$ 19,123 $ 24,872 $
-- (74 ) (411 ) $
-- -- (8,204 ) $
-- (74 ) 35,380 $
-- -- 49 $
-- (74 ) 35,429 $
(607 ) --
2,411
(1) Amounts include $2 million of common stock at both March 31, 2021 and December 31, 2020.
For the Three Months Ended March 31, 2020
(in millions)
December 31, 2019 Net income Dividends declared ($3.63 per share) Stock-based compensation Issuance of common shares related to employee stock transactions Employee tax withholdings related to employee stock transactions Shares repurchased Subscriptions (redemptions/distributions) -- noncontrolling interest holders Net consolidations (deconsolidations) of sponsored investment funds Other comprehensive income (loss)
March 31, 2020
Additional Paid-in
Capital(1)
$ 19,188 -- --
149
Accumulated
Total
Retained Earnings
Other Comprehensive Income (Loss)
Treasury Stock
Common
BlackRock Stockholders'
Equity
Nonredeemable Noncontrolling
Interests
$ 21,662 $
(571 ) $ (6,732 ) $
33,547 $
66
806
--
--
806
--
(596 )
--
--
(596 )
--
--
--
--
149
--
Redeemable Noncontrolling
Total Permanent
Equity
Interests / Temporary
Equity
$ 33,613 $
1,316
806
(179 )
(596 )
--
149
--
(450 )
--
--
453
3
--
3
--
--
--
--
--
--
(257 )
--
(400 )
(257 ) (400 )
--
(257 )
--
--
(400 )
--
--
--
--
--
--
(9 )
(9 )
871
--
--
--
--
$ 18,887 $ 21,872 $
-- (239 ) (810 ) $
-- -- (6,936 ) $
-- (239 ) 33,013 $
-- -- 57 $
-- (239 ) 33,070 $
(568 ) --
1,440
(1) Amounts include $2 million of common stock at both March 31, 2020 and December 31, 2019.
See accompanying notes to condensed consolidated financial statements.
4
BlackRock, Inc. Condensed Consolidated Statements of Cash Flows (unaudited)
(in millions)
Operating activities Net income Adjustments to reconcile net income to net cash provided by/(used in) operating activities: Depreciation and amortization Noncash lease expense Stock-based compensation Deferred income tax expense (benefit) Charitable Contribution Gain related to the Charitable Contribution Other investment gains Net (gains) losses within consolidated sponsored investment products Net (purchases) proceeds within consolidated sponsored investment products (Earnings) losses from equity method investees Distributions of earnings from equity method investees Changes in operating assets and liabilities: Accounts receivable Investments, trading Other assets Accrued compensation and benefits Accounts payable and accrued liabilities Other liabilities
Net cash provided by/(used in) operating activities Investing activities
Purchases of investments Proceeds from sales and maturities of investments Distributions of capital from equity method investees Net consolidations (deconsolidations) of sponsored investment funds Acquisitions, net of cash acquired Purchases of property and equipment Net cash provided by/(used in) investing activities Financing activities Proceeds from long-term borrowings Cash dividends paid Repurchases of common stock Net proceeds from (repayments of) borrowings by consolidated sponsored investment products Net (redemptions/distributions paid)/subscriptions received from noncontrolling
interest holders Other financing activities Net cash provided by/(used in) financing activities Effect of exchange rate changes on cash, cash equivalents and restricted cash Net increase/(decrease) in cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash, beginning of period Cash, cash equivalents and restricted cash, end of period Supplemental schedule of noncash investing and financing transactions: Issuance of common stock Charitable Contribution of an investment Increase (decrease) in noncontrolling interests due to net consolidation (deconsolidation) of sponsored investment funds
See accompanying notes to condensed consolidated financial statements.
5
Three Months Ended
March 31,
2021
2020
$
1,273 $
627
97 31 196 102 -- -- -- (104 ) (612 ) (25 )
8
82 29 149 (133 ) 589 (122 ) (244 ) 391 (860 ) 40 13
(311 ) 82
(731 ) (1,432 )
155 698
(573 )
(5 ) 132 (1,669 ) (1,222 ) (214 ) 1,479
(938 )
(146 )
(45 )
110
17
34
61
(38 )
(15 )
(1,062 )
--
(48 )
(52 )
(1,150 )
(34 )
-- (661 ) (568 )
13
999 (596 ) (657 )
22
620
5
(591 )
(7 )
(2,321 )
8,681
$
6,360 $
862 (2 )
628 (79 ) (423 ) 4,846 4,423
$
368 $
450
$
-- $
(589 )
$
(607 ) $
(568 )
BlackRock, Inc. Notes to the Condensed Consolidated Financial Statements (unaudited)
1. Business Overview BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, "BlackRock" or the "Company") is a leading publicly traded investment management firm providing a broad range of investment management and technology services to institutional and retail clients worldwide.
BlackRock's diverse platform of alpha-seeking active, index and cash management investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. Products are offered directly and through intermediaries in a variety of vehicles, including open-end and closed-end mutual funds, exchange-traded funds ("ETFs"), separate accounts, collective trust funds ("CTFs") and other pooled investment vehicles. BlackRock also offers technology services, including the investment and risk management technology platform, Aladdin?, Aladdin Wealth, eFront, Cachematrix and FutureAdvisor, as well as advisory services and solutions to a broad base of institutional and wealth management clients.
2. Significant Accounting Policies
Basis of Presentation
These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include the accounts of the Company and its controlled subsidiaries. Noncontrolling interests ("NCI") on the condensed consolidated statements of financial condition represents the portion of consolidated sponsored investment funds in which the Company does not have direct equity ownership. Accounts and transactions between consolidated entities have been eliminated.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates.
Certain financial information that normally is included in annual financial statements, including certain financial statement footnotes, is not required for interim reporting purposes and has been condensed or omitted herein. These condensed consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and notes related thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission ("SEC") on February 25, 2021 ("2020 Form 10-K").
The interim financial information at March 31, 2021 and for the three months ended March 31, 2021 and 2020 is unaudited. However, in the opinion of management, the interim information includes all normal recurring adjustments necessary for the fair presentation of the Company's results for the periods presented. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.
Certain prior period presentations and disclosures, while not required to be recast, were reclassified to ensure comparability with current period classifications.
Fair Value Measurements
Hierarchy of Fair Value Inputs. The Company uses a fair value hierarchy that prioritizes inputs to valuation approaches used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories:
Level 1 Inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date.
? Level 1 assets may include listed mutual funds, ETFs, listed equities and certain exchange-traded derivatives.
6
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