BlackRock Inc.

10/13/2021 | Press release | Distributed by Public on 10/13/2021 05:51

New York, October 13, 2021 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three and nine months ended September 30, 2021 - Form 8-K

New York, October 13, 2021 - BlackRock, Inc. (NYSE: BLK) today reported financial results for the three and nine months ended September 30, 2021.

$98 billion of long-term net inflows driven by continued momentum in ETFs and active strategies, with total net inflows of $75 billion reflecting outflows from low-fee cash management and advisory AUM

16% increase in revenue year-over-year reflects strong organic growth and 13% growth in technology services revenue, despite lower performance fees

10% increase in operating income (11% as adjusted) year-over-yearalso includes the impact of higher transaction-related expense and fund launch costs in the current quarter

23% increase in diluted EPS (19% as adjusted) year-over-year reflects higher nonoperating income, including noncash gains from strategic minority investments in the current quarter

Consistent capital management with $300 million of quarterly share repurchases

Laurence D. Fink, Chairman and CEO:

"Clients continue to seek BlackRock's insights and advice regarding their entire portfolios, reflecting the benefits of the investments we have made to better serve their evolving needs. BlackRock generated $98 billion of long-term net inflows in the third quarter, representing 9% annualized organic base fee growth and our 6th consecutive quarter in excess of our 5% target, once again demonstrating the strength of our diversified investment and technology platform.

"Organic growth was broad-based, spanning our active platform as well as in each of our ETF product categories. We delivered our 10th consecutive quarter of active equity inflows and client demand for ESG remains strong, with $31 billion of inflows across our sustainable active and index strategies.

"Our long-term strategy remains centered on staying ahead of our clients' needs and living our purpose of helping more and more people experience financial well-being. Whether through expanding investment choices, developing new retirement solutions, or enhancing our data analytics and technology capabilities, BlackRock remains committed to investing in high growth opportunities and industry-leading innovation."

FINANCIAL RESULTS

Q3

Q3

(in millions, except per share data)

2021

2020

AUM

$

9,463,662

$

7,808,497

% change

21

%

Average AUM

$

9,578,753

$

7,678,147

% change

25

%

Total net flows

$

75,314

$

128,701

GAAP basis:

Revenue

$

5,050

$

4,369

% change

16

%

Operating income

$

1,935

$

1,757

% change

10

%

Operating margin

38.3

%

40.2

%

Net income(1)

$

1,681

$

1,364

% change

23

%

Diluted EPS

$

10.89

$

8.87

% change

23

%

Weighted-average diluted shares

154.3

153.7

% change

0

%

As Adjusted:

Operating income(2)

$

1,946

$

1,757

% change

11

%

Operating margin(2)

45.8

%

47.0

%

Net income(1) (2)

$

1,690

$

1,418

% change

19

%

Diluted EPS(2)

$

10.95

$

9.22

% change

19

%

(1)

Net income represents net income attributable to BlackRock, Inc.

(2)

See notes (1) through (3) to the condensed consolidated statements of income and supplemental information on pages 11 through 13 for more information on as adjusted items and the reconciliation to GAAP.

NET FLOW HIGHLIGHTS

Q3

YTD

(in billions)

2021

2021

Long-term net flows:

$

98

$

290

By region:

Americas

$

57

$

130

EMEA

14

114

APAC

27

46

By client type:

Retail:

$

23

$

81

US

13

46

International

10

35

ETFs:

$

58

$

202

Core equity

16

67

Strategic

33

89

Precision

9

46

Institutional:

$

17

$

8

Active

26

86

Index

(8

)

(77

)

Cash management net flows

$

(12

)

$

50

Advisory net flows

$

(10

)

$

(13

)

Total net flows

$

75

$

328

1

BUSINESS RESULTS

Q3 2021

Q3 2021

Base fees(1)

Base fees(1)

September 30, 2021

and securities

Q3 2021

September 30, 2021

and securities

AUM

lending revenue

(in millions), (unaudited)

Net flows

AUM

lending revenue

% of Total

% of Total

RESULTS BY CLIENT TYPE

Retail

$

22,672

$

1,000,627

$

1,291

11

%

33

%

ETFs

57,954

3,038,751

1,571

32

%

40

%

Institutional:

Active

25,558

1,638,545

684

17

%

17

%

Index

(8,212

)

3,063,692

286

32

%

7

%

Total institutional

17,346

4,702,237

970

49

%

24

%

Long-term

97,972

8,741,615

3,832

92

%

97

%

Cash management

(12,398

)

712,015

111

8

%

3

%

Advisory

(10,260

)

10,032

-

-

-

Total

$

75,314

$

9,463,662

$

3,943

100

%

100

%

RESULTS BY INVESTMENT STYLE

Active

$

44,528

$

2,463,867

$

1,928

26

%

49

%

Index and ETFs

53,444

6,277,748

1,904

66

%

48

%

Long-term

97,972

8,741,615

3,832

92

%

97

%

Cash management

(12,398

)

712,015

111

8

%

3

%

Advisory

(10,260

)

10,032

-

-

-

Total

$

75,314

$

9,463,662

$

3,943

100

%

100

%

RESULTS BY PRODUCT TYPE

Equity

$

33,168

$

4,998,410

$

2,093

52

%

53

%

Fixed income

27,315

2,713,899

986

29

%

25

%

Multi-asset

30,935

773,158

369

8

%

9

%

Alternatives

6,554

256,148

384

3

%

10

%

Long-term

97,972

8,741,615

3,832

92

%

97

%

Cash management

(12,398

)

712,015

111

8

%

3

%

Advisory

(10,260

)

10,032

-

-

-

Total

$

75,314

$

9,463,662

$

3,943

100

%

100

%

(1)

Base fees include investment advisory and administration fees.

INVESTMENT PERFORMANCE AT September 30, 2021(1)

One-year period

Three-year period

Five-year period

Fixed income:

Actively managed AUM above benchmark or peer median

Taxable

77%

84%

92%

Tax-exempt

76%

65%

81%

Index AUM within or above applicable tolerance

90%

92%

94%

Equity:

Actively managed AUM above benchmark or peer median

Fundamental

68%

85%

87%

Systematic

53%

53%

93%

Index AUM within or above applicable tolerance

95%

96%

98%

(1)

Past performance is not indicative of future results. The performance information shown is based on preliminary available data. Please refer to page 14 for performance disclosure detail.

TELECONFERENCE, WEBCAST AND PRESENTATION INFORMATION

Chairman and Chief Executive Officer, Laurence D. Fink, President, Robert S. Kapito, and Chief Financial Officer, Gary S. Shedlin, will host a teleconference call for investors and analysts on Wednesday, October 13, 2021 at 8:30 a.m. (Eastern Time). Members of the public who are interested in participating in the teleconference should dial, from the United States, (800) 374-0176, or from outside the United States, (706) 679-8281, shortly before 8:30 a.m. and reference the BlackRock Conference Call (ID Number 5162309). A live, listen-only webcast will also be available via the investor relations section of www.blackrock.com.

Both the teleconference and webcast will be available for replay by 11:30 a.m. (Eastern Time) on Wednesday, October 13, 2021 and ending at midnight on Wednesday, October 27, 2021. To access the replay of the teleconference, callers from the United States should dial (855) 859-2056 and callers from outside the United States should dial (404) 537-3406 and enter the Conference ID Number 5162309. To access the webcast, please visit the investor relations section of www.blackrock.com.

ABOUT BLACKROCK

BlackRock's purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate | Twitter: @blackrock | LinkedIn: www.linkedin.com/company/blackrock.

2

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

(in millions, except shares and per share data), (unaudited)

Three Months

Three Months Ended

Ended

September 30,

June 30,

2021

2020

Change

2021

Change

Revenue

Investment advisory, administration fees and

securities lending revenue:

Investment advisory and administration fees

$

3,791

$

3,072

$

719

$

3,617

$

174

Securities lending revenue

152

153

(1

)

140

12

Total Investment advisory, administration fees and

securities lending revenue

3,943

3,225

718

3,757

186

Investment advisory performance fees

345

532

(187

)

340

5

Technology services revenue

320

282

38

316

4

Distribution fees

401

288

113

369

32

Advisory and other revenue

41

42

(1

)

38

3

Total revenue

5,050

4,369

681

4,820

230

Expense

Employee compensation and benefits

1,527

1,411

116

1,548

(21

)

Distribution and servicing costs

585

456

129

523

62

Direct fund expense

354

257

97

320

34

General and administration expense

611

461

150

461

150

Amortization of intangible assets

38

27

11

37

1

Total expense

3,115

2,612

503

2,889

226

Operating income

1,935

1,757

178

1,931

4

Nonoperating income (expense)

Net gain (loss) on investments

370

269

101

314

56

Interest and dividend income

14

9

5

8

6

Interest expense

(48

)

(54

)

6

(52

)

4

Total nonoperating income (expense)

336

224

112

270

66

Income before income taxes

2,271

1,981

290

2,201

70

Income tax expense

518

464

54

654

(136

)

Net income

1,753

1,517

236

1,547

206

Less:

Net income (loss) attributable to noncontrolling

interests

72

153

(81

)

169

(97

)

Net income attributable to BlackRock, Inc.

$

1,681

$

1,364

$

317

$

1,378

$

303

Weighted-average common shares outstanding

Basic

152,120,927

152,488,073

(367,146

)

152,443,039

(322,112

)

Diluted

154,343,277

153,742,264

601,013

154,417,581

(74,304

)

Earnings per share attributable to BlackRock, Inc.

common stockholders

Basic

$

11.05

$

8.94

$

2.11

$

9.04

$

2.01

Diluted

$

10.89

$

8.87

$

2.02

$

8.92

$

1.97

Cash dividends declared and paid per share

$

4.13

$

3.63

$

0.50

$

4.13

$

-

Supplemental information:

AUM (end of period)

$

9,463,662

$

7,808,497

$

1,655,165

$

9,495,993

$

(32,331

)

Shares outstanding (end of period)

151,988,234

152,496,403

(508,169

)

152,298,784

(310,550

)

GAAP:

Operating margin

38.3

%

40.2

%

(190

) bps

40.1

%

(180

) bps

Effective tax rate

23.6

%

25.4

%

(180

) bps

32.2

%

(860

) bps

As adjusted:

Operating income (1)

$

1,946

$

1,757

$

189

$

1,931

$

15

Operating margin (1)

45.8

%

47.0

%

(120

) bps

44.9

%

90

bps

Nonoperating income (expense), less net income

(loss) attributable to noncontrolling interests (2)

$

264

$

71

$

193

$

101

$

163

Net income attributable to BlackRock, Inc. (3)

$

1,690

$

1,418

$

272

$

1,549

$

141

Diluted earnings attributable to BlackRock, Inc.

common stockholders per share (3)

$

10.95

$

9.22

$

1.73

$

10.03

$

0.92

Effective tax rate

23.6

%

22.5

%

110

bps

23.8

%

(20

) bps

See pages 11-13 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

3

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION

(in millions, except shares and per share data), (unaudited)

Nine Months Ended

September 30,

2021

2020

Change

Revenue

Investment advisory, administration fees and

securities lending revenue:

Investment advisory and administration fees

$

10,873

$

8,725

$

2,148

Securities lending revenue

419

521

(102

)

Total Investment advisory, administration fees and

securities lending revenue

11,292

9,246

2,046

Investment advisory performance fees

814

685

129

Technology services revenue

942

834

108

Distribution fees

1,110

817

293

Advisory and other revenue

110

145

(35

)

Total revenue

14,268

11,727

2,541

Expense

Employee compensation and benefits

4,484

3,700

784

Distribution and servicing costs

1,613

1,330

283

Direct fund expense

994

780

214

General and administration expense

1,657

1,991

(334

)

Amortization of intangible assets

109

79

30

Total expense

8,857

7,880

977

Operating income

5,411

3,847

1,564

Nonoperating income (expense)

Net gain (loss) on investments

766

627

139

Interest and dividend income

41

34

7

Interest expense

(155

)

(151

)

(4

)

Total nonoperating income (expense)

652

510

142

Income before income taxes

6,063

4,357

1,706

Income tax expense

1,490

811

679

Net income

4,573

3,546

1,027

Less:

Net income (loss) attributable to noncontrolling

interests

315

162

153

Net income attributable to BlackRock, Inc.

$

4,258

$

3,384

$

874

Weighted-average common shares outstanding

Basic

152,375,504

153,816,544

(1,441,040

)

Diluted

154,352,590

154,959,812

(607,222

)

Earnings per share attributable to BlackRock, Inc.

common stockholders

Basic

$

27.94

$

22.00

$

5.94

Diluted

$

27.59

$

21.84

$

5.75

Cash dividends declared and paid per share

$

12.39

$

10.89

$

1.50

Supplemental information:

AUM (end of period)

$

9,463,662

$

7,808,497

$

1,655,165

Shares outstanding (end of period)

151,988,234

152,496,403

(508,169

)

GAAP:

Operating margin

37.9

%

32.8

%

510

bps

Effective tax rate

25.9

%

19.3

%

660

bps

As adjusted:

Operating income (1)

$

5,422

$

4,436

$

986

Operating margin (1)

45.1

%

44.3

%

80

bps

Nonoperating income (expense), less net income

(loss) attributable to noncontrolling interests (2)

$

337

$

226

$

111

Net income attributable to BlackRock, Inc. (3)

$

4,438

$

3,664

$

774

Diluted earnings attributable to BlackRock, Inc.

common stockholders per share (3)

$

28.75

$

23.64

$

5.11

Effective tax rate

22.9

%

21.4

%

150

bps

See pages 11-13 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

4

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Current Quarter Component Changes by Client Type and Product Type

Net

June 30,

inflows

Market

September 30,

2021

(outflows)

change

FX impact(1)

2021

Average AUM(2)

Retail:

Equity

$

446,327

$

9,952

$

(7,823

)

$

(2,719

)

$

445,737

$

452,433

Fixed income

359,480

4,524

(3,156

)

(1,687

)

359,161

361,730

Multi-asset

147,228

5,395

(1,332

)

(338

)

150,953

150,409

Alternatives

42,448

2,801

(318

)

(155

)

44,776

43,690

Retail subtotal

995,483

22,672

(12,629

)

(4,899

)

1,000,627

1,008,262

ETFs:

Equity

2,257,828

34,987

(36,247

)

(5,719

)

2,250,849

2,279,480

Fixed income

700,009

22,489

(3,494

)

(2,408

)

716,596

711,729

Multi-asset

7,663

593

(70

)

(36

)

8,150

7,954

Alternatives

66,005

(115

)

(2,688

)

(46

)

63,156

65,863

ETFs subtotal

3,031,505

57,954

(42,499

)

(8,209

)

3,038,751

3,065,026

Institutional:

Active:

Equity

184,174

1,930

(2,410

)

(1,462

)

182,232

185,208

Fixed income

716,671

(5,716

)

806

(3,063

)

708,698

718,139

Multi-asset

584,582

25,477

920

(5,682

)

605,297

604,848

Alternatives

138,622

3,867

560

(731

)

142,318

140,894

Active subtotal

1,624,049

25,558

(124

)

(10,938

)

1,638,545

1,649,089

Index:

Equity

2,146,062

(13,701

)

(114

)

(12,655

)

2,119,592

2,158,274

Fixed income

936,005

6,018

139

(12,718

)

929,444

947,359

Multi-asset

9,297

(530

)

19

(28

)

8,758

9,095

Alternatives

5,709

1

222

(34

)

5,898

5,796

Index subtotal

3,097,073

(8,212

)

266

(25,435

)

3,063,692

3,120,524

Institutional subtotal

4,721,122

17,346

142

(36,373

)

4,702,237

4,769,613

Long-term

8,748,110

97,972

(54,986

)

(49,481

)

8,741,615

8,842,901

Cash management

727,603

(12,398

)

(784

)

(2,406

)

712,015

722,103

Advisory(3)

20,280

(10,260

)

23

(11

)

10,032

13,749

Total

$

9,495,993

$

75,314

$

(55,747

)

$

(51,898

)

$

9,463,662

$

9,578,753

Current Quarter Component Changes by Investment Style and Product Type (Long-Term)

Net

June 30,

inflows

Market

September 30,

2021

(outflows)

change

FX impact(1)

2021

Average AUM(2)

Active:

Equity

$

479,240

$

9,651

$

(10,660

)

$

(2,999

)

$

475,232

$

483,441

Fixed income

1,054,517

(2,662

)

(2,217

)

(4,341

)

1,045,297

1,057,426

Multi-asset

731,806

30,870

(411

)

(6,020

)

756,245

755,251

Alternatives

181,069

6,669

241

(886

)

187,093

184,583

Active subtotal

2,446,632

44,528

(13,047

)

(14,246

)

2,463,867

2,480,701

Index and ETFs:

ETFs:

Equity

2,257,828

34,987

(36,247

)

(5,719

)

2,250,849

2,279,480

Fixed income

700,009

22,489

(3,494

)

(2,408

)

716,596

711,729

Multi-asset

7,663

593

(70

)

(36

)

8,150

7,954

Alternatives

66,005

(115

)

(2,688

)

(46

)

63,156

65,863

ETFs subtotal

3,031,505

57,954

(42,499

)

(8,209

)

3,038,751

3,065,026

Non-ETF Index:

Equity

2,297,323

(11,470

)

313

(13,837

)

2,272,329

2,312,474

Fixed income

957,639

7,488

6

(13,127

)

952,006

969,802

Multi-asset

9,301

(528

)

18

(28

)

8,763

9,101

Alternatives

5,710

-

223

(34

)

5,899

5,797

Non-ETF Index subtotal

3,269,973

(4,510

)

560

(27,026

)

3,238,997

3,297,174

Index and ETFs subtotal

6,301,478

53,444

(41,939

)

(35,235

)

6,277,748

6,362,200

Long-term

$

8,748,110

$

97,972

$

(54,986

)

$

(49,481

)

$

8,741,615

$

8,842,901

Current Quarter Component Changes by Product Type (Long-Term)

Net

June 30,

inflows

Market

September 30,

2021

(outflows)

change

FX impact(1)

2021

Average AUM(2)

Equity

$

5,034,391

$

33,168

$

(46,594

)

$

(22,555

)

$

4,998,410

$

5,075,395

Fixed income

2,712,165

27,315

(5,705

)

(19,876

)

2,713,899

2,738,957

Multi-asset

748,770

30,935

(463

)

(6,084

)

773,158

772,306

Alternatives:

Illiquid alternatives

95,961

2,743

195

(578

)

98,321

97,516

Liquid alternatives

81,560

3,782

9

(299

)

85,052

83,431

Currency and commodities(4)

75,263

29

(2,428

)

(89

)

72,775

75,296

Alternatives subtotal

252,784

6,554

(2,224

)

(966

)

256,148

256,243

Long-term

$

8,748,110

$

97,972

$

(54,986

)

$

(49,481

)

$

8,741,615

$

8,842,901

(1)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(2)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing four months.

(3)

Advisory AUM represents mandates linked to purchases and disposition of assets and portfolios on behalf of official institutions and long-term portfolio liquidation assignments.

(4)

Amounts include commodityETFs.

5

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Year-to-Date Component Changes by Client Type and Product Type

Net

December 31,

inflows

Market

September 30,

2020

(outflows)

Acquisition(1)

change

FX impact(2)

2021

Average AUM(3)

Retail:

Equity

$

338,434

$

34,153

$

41,324

$

35,459

$

(3,633

)

$

445,737

$

417,230

Fixed income

340,468

26,011

-

(4,457

)

(2,861

)

359,161

354,337

Multi-asset

132,624

10,269

-

8,505

(445

)

150,953

143,345

Alternatives

34,391

10,139

-

468

(222

)

44,776

39,976

Retail subtotal

845,917

80,572

41,324

39,975

(7,161

)

1,000,627

954,888

ETFs:

Equity

1,905,101

152,785

-

202,397

(9,434

)

2,250,849

2,142,649

Fixed income

690,033

45,804

-

(14,826

)

(4,415

)

716,596

694,541

Multi-asset

6,268

1,539

-

349

(6

)

8,150

7,279

Alternatives

67,605

1,463

-

(5,837

)

(75

)

63,156

66,272

ETFs subtotal

2,669,007

201,591

-

182,083

(13,930

)

3,038,751

2,910,741

Institutional:

Active:

Equity

169,522

(1,561

)

-

16,555

(2,284

)

182,232

179,247

Fixed income

716,269

5,606

-

(7,030

)

(6,147

)

708,698

710,668

Multi-asset

511,242

69,106

-

33,655

(8,706

)

605,297

556,569

Alternatives

127,429

12,407

-

3,682

(1,200

)

142,318

135,656

Active subtotal

1,524,462

85,558

-

46,862

(18,337

)

1,638,545

1,582,140

Index:

Equity

2,006,749

(128,801

)

-

264,183

(22,539

)

2,119,592

2,101,940

Fixed income

927,718

52,024

-

(25,447

)

(24,851

)

929,444

933,212

Multi-asset

8,599

(90

)

-

517

(268

)

8,758

8,919

Alternatives

5,617

(538

)

-

908

(89

)

5,898

5,680

Index subtotal

2,948,683

(77,405

)

-

240,161

(47,747

)

3,063,692

3,049,751

Institutional subtotal

4,473,145

8,153

-

287,023

(66,084

)

4,702,237

4,631,891

Long-term

7,988,069

290,316

41,324

509,081

(87,175

)

8,741,615

8,497,520

Cash management

666,252

50,132

-

(996

)

(3,373

)

712,015

704,580

Advisory(4)

22,359

(12,530

)

-

200

3

10,032

18,838

Total

$

8,676,680

$

327,918

$

41,324

$

508,285

$

(90,545

)

$

9,463,662

$

9,220,938

Year-to-Date Component Changes by Investment Style and Product Type (Long-Term)

Net

December 31,

inflows

Market

September 30,

2020

(outflows)

Acquisition(1)

change

FX impact(2)

2021

Average AUM(3)

Active:

Equity

$

410,189

$

34,854

$

-

$

34,944

$

(4,755

)

$

475,232

$

457,458

Fixed income

1,035,015

29,461

-

(10,534

)

(8,645

)

1,045,297

1,043,135

Multi-asset

643,864

79,374

-

42,158

(9,151

)

756,245

699,909

Alternatives

161,819

22,544

-

4,153

(1,423

)

187,093

175,631

Active subtotal

2,250,887

166,233

-

70,721

(23,974

)

2,463,867

2,376,133

Index and ETFs:

ETFs:

Equity

1,905,101

152,785

-

202,397

(9,434

)

2,250,849

2,142,649

Fixed income

690,033

45,804

-

(14,826

)

(4,415

)

716,596

694,541

Multi-asset

6,268

1,539

-

349

(6

)

8,150

7,279

Alternatives

67,605

1,463

-

(5,837

)

(75

)

63,156

66,272

ETFs subtotal

2,669,007

201,591

-

182,083

(13,930

)

3,038,751

2,910,741

Non-ETF Index:

Equity

2,104,516

(131,063

)

41,324

281,253

(23,701

)

2,272,329

2,240,959

Fixed income

949,440

54,180

-

(26,400

)

(25,214

)

952,006

955,082

Multi-asset

8,601

(89

)

-

519

(268

)

8,763

8,924

Alternatives

5,618

(536

)

-

905

(88

)

5,899

5,681

Non-ETF Index subtotal

3,068,175

(77,508

)

41,324

256,277

(49,271

)

3,238,997

3,210,646

Index and ETFs subtotal

5,737,182

124,083

41,324

438,360

(63,201

)

6,277,748

6,121,387

Long-term

$

7,988,069

$

290,316

$

41,324

$

509,081

$

(87,175

)

$

8,741,615

$

8,497,520

Year-to-Date Component Changes by Product Type (Long-Term)

Net

December 31,

inflows

Market

September 30,

2020

(outflows)

Acquisition(1)

change

FX impact(2)

2021

Average AUM(3)

Equity

$

4,419,806

$

56,576

$

41,324

$

518,594

$

(37,890

)

$

4,998,410

$

4,841,066

Fixed income

2,674,488

129,445

-

(51,760

)

(38,274

)

2,713,899

2,692,758

Multi-asset

658,733

80,824

-

43,026

(9,425

)

773,158

716,112

Alternatives:

Illiquid alternatives

85,770

12,315

-

1,148

(912

)

98,321

93,102

Liquid alternatives

73,218

9,455

-

2,745

(366

)

85,052

79,234

Currency and commodities(5)

76,054

1,701

-

(4,672

)

(308

)

72,775

75,248

Alternatives subtotal

235,042

23,471

-

(779

)

(1,586

)

256,148

247,584

Long-term

$

7,988,069

$

290,316

$

41,324

$

509,081

$

(87,175

)

$

8,741,615

$

8,497,520

(1)

Amounts include AUM attributable to the acquisition of Aperio Group, LLC on February 1, 2021 (the "Aperio Transaction").

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(3)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing ten months.

(4)

Advisory AUM represents mandates linked to purchases and disposition of assets and portfolios on behalf of official institutions and long-term portfolio liquidation assignments.

(5)

Amounts include commodityETFs.

6

ASSETS UNDER MANAGEMENT

(in millions), (unaudited)

Year-over-Year Component Changes by Client Type and Product Type

Net

September 30,

inflows

Market

September 30,

2020

(outflows)

Acquisition(1)

change

FX impact(2)

2021

Average AUM(3)

Retail:

Equity

$

279,427

$

50,248

$

41,324

$

73,968

$

770

$

445,737

$

387,825

Fixed income

316,008

40,231

-

2,060

862

359,161

347,052

Multi-asset

119,708

12,914

-

18,198

133

150,953

138,466

Alternatives

31,121

12,496

-

1,081

78

44,776

38,183

Retail subtotal

746,264

115,889

41,324

95,307

1,843

1,000,627

911,526

ETFs:

Equity

1,586,849

218,042

-

446,634

(676

)

2,250,849

2,028,304

Fixed income

662,999

59,339

-

(6,063

)

321

716,596

689,132

Multi-asset

5,430

1,955

-

736

29

8,150

6,895

Alternatives

66,057

1,008

-

(3,935

)

26

63,156

65,933

ETFs subtotal

2,321,335

280,344

-

437,372

(300

)

3,038,751

2,790,264

Institutional:

Active:

Equity

149,260

(4,379

)

-

37,231

120

182,232

173,263

Fixed income

693,061

9,122

-

5,825

690

708,698

707,349

Multi-asset

464,242

66,535

-

74,282

238

605,297

536,848

Alternatives

120,559

15,635

-

5,555

569

142,318

132,368

Active subtotal

1,427,122

86,913

-

122,893

1,617

1,638,545

1,549,828

Index:

Equity

1,768,582

(159,258

)

-

508,028

2,240

2,119,592

2,034,356

Fixed income

859,397

83,457

-

(16,605

)

3,195

929,444

919,677

Multi-asset

8,866

(982

)

-

1,029

(155

)

8,758

8,804

Alternatives

4,563

150

-

1,186

(1

)

5,898

5,512

Index subtotal

2,641,408

(76,633

)

-

493,638

5,279

3,063,692

2,968,349

Institutional subtotal

4,068,530

10,280

-

616,531

6,896

4,702,237

4,518,177

Long-term

7,136,129

406,513

41,324

1,149,210

8,439

8,741,615

8,219,967

Cash management

652,002

59,076

-

(1,215

)

2,152

712,015

695,260

Advisory(4)

20,366

(10,738

)

-

377

27

10,032

19,358

Total

$

7,808,497

$

454,851

$

41,324

$

1,148,372

$

10,618

$

9,463,662

$

8,934,585

Year-over-Year Component Changes by Investment Style and Product Type (Long-Term)

Net

September 30,

inflows

Market

September 30,

2020

(outflows)

Acquisition(1)

change

FX impact(2)

2021

Average AUM(3)

Active:

Equity

$

347,631

$

43,476

$

-

$

84,336

$

(211

)

$

475,232

$

434,610

Fixed income

989,412

46,244

-

8,559

1,082

1,045,297

1,032,919

Multi-asset

583,952

79,443

-

92,479

371

756,245

675,310

Alternatives

151,678

28,130

-

6,638

647

187,093

170,550

Active subtotal

2,072,673

197,293

-

192,012

1,889

2,463,867

2,313,389

Index and ETFs:

ETFs:

Equity

1,586,849

218,042

-

446,634

(676

)

2,250,849

2,028,304

Fixed income

662,999

59,339

-

(6,063

)

321

716,596

689,132

Multi-asset

5,430

1,955

-

736

29

8,150

6,895

Alternatives

66,057

1,008

-

(3,935

)

26

63,156

65,933

ETFs subtotal

2,321,335

280,344

-

437,372

(300

)

3,038,751

2,790,264

Non-ETF Index:

Equity

1,849,638

(156,865

)

41,324

534,891

3,341

2,272,329

2,160,834

Fixed income

879,054

86,566

-

(17,279

)

3,665

952,006

941,159

Multi-asset

8,864

(976

)

-

1,030

(155

)

8,763

8,808

Alternatives

4,565

151

-

1,184

(1

)

5,899

5,513

Non-ETF Index subtotal

2,742,121

(71,124

)

41,324

519,826

6,850

3,238,997

3,116,314

Index and ETFs subtotal

5,063,456

209,220

41,324

957,198

6,550

6,277,748

5,906,578

Long-term

$

7,136,129

$

406,513

$

41,324

$

1,149,210

$

8,439

$

8,741,615

$

8,219,967

Year-over-Year Component Changes by Product Type (Long-Term)

Net

September 30,

inflows

Market

September 30,

2020

(outflows)

Acquisition(1)

change

FX impact(2)

2021

Average AUM(3)

Equity

$

3,784,118

$

104,653

$

41,324

$

1,065,861

$

2,454

$

4,998,410

$

4,623,748

Fixed income

2,531,465

192,149

-

(14,783

)

5,068

2,713,899

2,663,210

Multi-asset

598,246

80,422

-

94,245

245

773,158

691,013

Alternatives:

Illiquid alternatives

79,723

16,844

-

1,660

94

98,321

90,319

Liquid alternatives

69,255

10,492

-

4,653

652

85,052

77,069

Currency and commodities(5)

73,322

1,953

-

(2,426

)

(74

)

72,775

74,608

Alternatives subtotal

222,300

29,289

-

3,887

672

256,148

241,996

Long-term

$

7,136,129

$

406,513

$

41,324

$

1,149,210

$

8,439

$

8,741,615

$

8,219,967

(1)

Amounts include AUM attributable to the Aperio Transaction.

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.

(3)

Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.

(4)

Advisory AUM represents mandates linked to purchases and disposition of assets and portfolios on behalf of official institutions and long-term portfolio liquidation assignments.

(5)

Amounts include commodityETFs.

7

SUMMARY OF REVENUE

Three Months

Three Months

Nine Months

Ended

Ended

Ended

September 30,

June 30,

September 30,

(in millions), (unaudited)

2021

2020

Change

2021

Change

2021

2020

Change

Investment advisory, administration fees and

securities lending revenue:

Equity:

Active

$

674

$

457

$

217

$

641

$

33

$

1,891

$

1,236

$

655

ETFs

1,212

880

332

1,156

56

3,436

2,551

885

Non-ETF Index

207

164

43

198

9

581

505

76

Equity subtotal

2,093

1,501

592

1,995

98

5,908

4,292

1,616

Fixed income:

Active

561

498

63

545

16

1,631

1,443

188

ETFs

304

297

7

294

10

893

817

76

Non-ETF Index

121

113

8

116

5

350

354

(4

)

Fixed income subtotal

986

908

78

955

31

2,874

2,614

260

Multi-asset

369

289

80

344

25

1,041

852

189

Alternatives:

Illiquid alternatives

166

140

26

167

(1

)

501

416

85

Liquid alternatives

163

132

31

150

13

460

361

99

Currency and commodities

55

51

4

55

-

163

118

45

Alternatives subtotal

384

323

61

372

12

1,124

895

229

Long-term

3,832

3,021

811

3,666

166

10,947

8,653

2,294

Cash management

111

204

(93

)

91

20

345

593

(248

)

Total investment advisory, administration fees

and securities lending revenue

3,943

3,225

718

3,757

186

11,292

9,246

2,046

Investment advisory performance fees:

Equity

8

4

4

36

(28

)

70

29

41

Fixed income

2

9

(7

)

15

(13

)

31

13

18

Multi-asset

-

10

(10

)

9

(9

)

17

13

4

Alternatives:

Illiquid alternatives

50

6

44

90

(40

)

147

55

92

Liquid alternatives

285

503

(218

)

190

95

549

575

(26

)

Alternatives subtotal

335

509

(174

)

280

55

696

630

66

Total performance fees

345

532

(187

)

340

5

814

685

129

Technology services revenue

320

282

38

316

4

942

834

108

Distribution fees:

Retrocessions

294

188

106

264

30

796

519

277

12b-1 fees (US mutual fund distribution fees)

91

85

6

87

4

263

254

9

Other

16

15

1

18

(2

)

51

44

7

Total distribution fees

401

288

113

369

32

1,110

817

293

Advisory and other revenue:

Advisory

13

14

(1

)

9

4

37

48

(11

)

Other

28

28

-

29

(1

)

73

97

(24

)

Total advisory and other revenue

41

42

(1

)

38

3

110

145

(35

)

Total revenue

$

5,050

$

4,369

$

681

$

4,820

$

230

$

14,268

$

11,727

$

2,541

Highlights

•

Investment advisory, administration fees and securities lending revenue increased $718 million from the third quarter of 2020, primarily driven by the positive impact of market beta and foreign exchange movements on average AUM and strong organic base fee growth, partially offset by the impact of yield-related fee waivers on certain money market funds and strategic pricing changes to certain products. Securities lending revenue of $152 million decreased from $153 million in the third quarter of 2020, primarily reflecting lower asset spreads, partially offset by higher average balances of securities on loan.

Investment advisory, administration fees and securities lending revenue increased $186 million from the second quarter of 2021, primarily driven by organic growth, the positive impact of market beta on average AUM, the effect of one additional day in the quarter and lower yield-related fee waivers on certain money market funds. Securities lending revenue of $152 million increased from $140 million in the second quarter of 2021.

•

Performance fees decreased $187 million from the third quarter of 2020, primarily reflecting lower revenue from liquid alternative products, including lower fees from a single hedge fund with an annual performance measurement period that ends in the third quarter, partially offset by higher revenue from illiquid alternative products.

Performance fees increased $5 million from the second quarter of 2021, primarily reflecting higher revenue from liquid alternative products, partially offset by lower revenue from long-only mandates and illiquid alternative products.

•

Technology services revenue increased $38 million from the third quarter of 2020, primarily reflecting higher revenue from Aladdin®. Technology services annual contract value(1) ("ACV") increased 16% from the third quarter of 2020.

(1)

ACV represents forward-looking recurring subscription fees under client contracts for the next twelve months at the end of a respective quarter, assuming all client contracts that come up for renewal are renewed. ACV excludes nonrecurring fees such as implementation and consulting fees. See note (4) in the supplemental information on page 13 for more information on ACV.

8

SUMMARY OF OPERATING EXPENSE

Three Months

Three Months

Nine Months

Ended

Ended

Ended

September 30,

June 30,

September 30,

(in millions), (unaudited)

2021

2020

Change

2021

Change

2021

2020

Change

Operating expense

Employee compensation and benefits

$

1,527

$

1,411

$

116

$

1,548

$

(21

)

$

4,484

$

3,700

$

784

Distribution and servicing costs:

Retrocessions

294

188

106

264

30

796

519

277

12b-1 costs

89

83

6

85

4

257

247

10

Other

202

185

17

174

28

560

564

(4

)

Total distribution and servicing costs

585

456

129

523

62

1,613

1,330

283

Direct fund expense

354

257

97

320

34

994

780

214

General and administration expense:

Marketing and promotional

54

48

6

53

1

142

156

(14

)

Occupancy and office related

91

81

10

80

11

250

239

11

Portfolio services

93

73

20

87

6

267

203

64

Technology

140

93

47

129

11

373

273

100

Professional services

42

36

6

41

1

122

121

1

Communications

11

14

(3

)

11

-

33

40

(7

)

Foreign exchange remeasurement

1

1

-

(2

)

3

3

7

(4

)

Contingent consideration fair value adjustments

29

-

29

1

28

33

23

10

Product launch costs

96

80

16

-

96

274

164

110

Charitable Contribution

-

-

-

-

-

-

589

(589

)

Other general and administration

54

35

19

61

(7

)

160

176

(16

)

Total general and administration expense

611

461

150

461

150

1,657

1,991

(334

)

Amortization of intangible assets

38

27

11

37

1

109

79

30

Total operating expense

$

3,115

$

2,612

$

503

$

2,889

$

226

$

8,857

$

7,880

$

977

Highlights

•

Employee compensation and benefits expense increased $116 million from the third quarter of 2020, primarily reflecting higher base compensation, driven by previously announced base salary increases and higher headcount, and higher deferred compensation, reflecting the impact of additional grants associated with prior-year compensation.

Employee compensation and benefits expense decreased $21 million from the second quarter of 2021, primarily due to lower deferred compensation, reflecting the impact of certain previous acquisition-related compensation arrangements in the second quarter of 2021, partially offset by higher base compensation associated with previously announced salary increases and higher headcount.

•

Direct fund expense increased $97 million from the third quarter of 2020 and $34 million from the second quarter of 2021, primarily reflecting higher average AUM.

•

General and administration expense increased $150 million from the third quarter of 2020 reflecting higher technology and portfolio services expense. The increase also reflected higher product launch costs, primarily associated with the September 2021 close of the BlackRock ESG Capital Allocation Trust, higher contingent consideration fair value adjustments, and $11 million of noncash occupancy expense related to the lease of office space for the Company's future headquarters located at 50 Hudson Yards in New York ("Lease cost - Hudson Yards"), which it expects to begin to occupy in late 2022 (and begin lease payments in May 2023). Lease cost - Hudson Yards has been excluded from our "as adjusted" financial results - see pages 11 through 13 for the reconciliation to GAAP and notes (1) through (3) for more information on as adjusted items.

General and administration expense also increased $150 million from the second quarter of 2021, primarily reflecting the higher product launch costs, contingent consideration fair value adjustments, higher technology expense and occupancy expense noted above.

•

Amortization of intangible assets expense increased $11 million from the third quarter of 2020, primarily reflecting amortization of intangible assets related to the Aperio Transaction.

9

SUMMARY OF NONOPERATING INCOME (expense), less net income (loss) attributable TO noncontrolling interests

Three Months

Three Months

Nine Months

Ended

Ended

Ended

September 30,

June 30,

September 30,

(in millions), (unaudited)

2021

2020

Change

2021

Change

2021

2020

Change

Nonoperating income (expense), GAAP basis

$

336

$

224

$

112

$

270

$

66

$

652

$

510

$

142

Less: Net income (loss) attributable to

noncontrolling interests ("NCI")

72

153

(81

)

169

(97

)

315

162

153

Nonoperating income (expense)(1)

$

264

$

71

$

193

$

101

$

163

$

337

$

348

$

(11

)

Three Months

Three Months

Nine Months

Ended

Ended

Ended

September 30,

June 30,

September 30,

(in millions), (unaudited)

2021

2020

Change

2021

Change

2021

2020

Change

Net gain (loss) on investments(1)

Private equity

$

124

$

18

$

106

$

66

$

58

$

212

$

8

$

204

Real assets

4

6

(2

)

3

1

10

11

(1

)

Other alternatives(2)

13

14

(1

)

17

(4

)

43

10

33

Other investments(3)

(8

)

55

(63

)

48

(56

)

37

35

2

Subtotal

133

93

40

134

(1

)

302

64

238

Gain related to the Charitable Contribution

-

-

-

-

-

-

122

(122

)

Other gains (losses)(4)

165

23

142

11

154

149

279

(130

)

Total net gain (loss) on investments(1)

298

116

182

145

153

451

465

(14

)

Interest and dividend income

14

9

5

8

6

41

34

7

Interest expense

(48

)

(54

)

6

(52

)

4

(155

)

(151

)

(4

)

Net interest expense

(34

)

(45

)

11

(44

)

10

(114

)

(117

)

3

Nonoperating income (expense)(1)

$

264

$

71

$

193

$

101

$

163

$

337

$

348

$

(11

)

(1)

Net of net income (loss) attributable to NCI. Management believes nonoperating income (expense), as adjusted, is an effective measure for reviewing BlackRock's nonoperating results, which ultimately impacts BlackRock's book value. For more information on as adjusted items and the reconciliation to GAAP see note (2) to the condensed consolidated statements of income and supplemental information on pages 11 through 13.

(2)

Amounts primarily include net gains (losses) related to credit funds, direct hedge fund strategies and hedge fund solutions.

(3)

Amounts primarily include net gains (losses) related to unhedged equity, fixed income and multi-asset investments.

(4)

The amounts for the three and nine months ended September 30, 2021 include nonoperating noncash pre-tax gains in connection with strategic minority investments in iCapital Network, Inc. of approximately $107 million and Scalable Capital Limited of approximately $46 million. The amount for the nine months ended September 30, 2020 includes a nonoperating noncash pre-tax gain of approximately $240 million in connection with a recapitalization of iCapital Network, Inc. Additional amounts include noncash pre-tax gains (losses) related to the revaluation of certain other corporate minority investments.

INCOME TAX EXPENSE

Three Months

Three Months

Nine Months

Ended

Ended

Ended

September 30,

June 30,

September 30,

(in millions), (unaudited)

2021

2020

Change

2021

Change

2021

2020

Change

Income tax expense

$

518

$

464

$

54

$

654

$

(136

)

$

1,490

$

811

$

679

Effective tax rate

23.6

%

25.4

%

(180

) bps

32.2

%

(860

) bps

25.9

%

19.3

%

660

bps

10

RECONCILIATION OF US GAAP OPERATING INCOME AND OPERATING MARGIN TO OPERATING INCOME AND OPERATING MARGIN, AS ADJUSTED

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

(in millions), (unaudited)

2021

2020

2021

2021

2020

Operating income, GAAP basis

$

1,935

$

1,757

$

1,931

$

5,411

$

3,847

Non-GAAP expense adjustment:

Lease costs - Hudson Yards

11

-

-

11

-

Charitable Contribution

-

-

-

-

589

Operating income, as adjusted (1)

1,946

1,757

1,931

5,422

4,436

Product launch costs and commissions

99

83

-

284

170

Operating income used for operating margin measurement

$

2,045

$

1,840

$

1,931

$

5,706

$

4,606

Revenue, GAAP basis

$

5,050

$

4,369

$

4,820

$

14,268

$

11,727

Non-GAAP adjustments:

Distribution fees

(401

)

(288

)

(369

)

(1,110

)

(817

)

Investment advisory fees

(184

)

(168

)

(154

)

(503

)

(513

)

Revenue used for operating margin measurement

$

4,465

$

3,913

$

4,297

$

12,655

$

10,397

Operating margin, GAAP basis

38.3

%

40.2

%

40.1

%

37.9

%

32.8

%

Operating margin, as adjusted (1)

45.8

%

47.0

%

44.9

%

45.1

%

44.3

%

See note (1) to the condensed consolidated statements of income and supplemental information on page 12 for more information on as adjusted items and the reconciliation to GAAP.

RECONCILIATION OF US GAAP NONOPERATING INCOME (EXPENSE) TO NONOPERATING INCOME (EXPENSE), LESS NET INCOME (LOSS) ATTRIBUTABLE TO NCI, AS ADJUSTED

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

(in millions), (unaudited)

2021

2020

2021

2021

2020

Nonoperating income (expense), GAAP basis

$

336

$

224

$

270

$

652

$

510

Less: Net income (loss) attributable to NCI

72

153

169

315

162

Nonoperating income (expense), net of NCI

264

71

101

337

348

Less: Gain related to the Charitable Contribution

-

-

-

-

122

Nonoperating income (expense), less net income (loss)

attributable to NCI, as adjusted (2)

$

264

$

71

$

101

$

337

$

226

See note (2) to the condensed consolidated statements of income and supplemental information on page 13 for more information on as adjusted items and the reconciliation to GAAP.

RECONCILIATION OF US GAAP NET INCOME ATTRIBUTABLE TO BLACKROCK TO NET INCOME ATTRIBUTABLE TO BLACKROCK, AS ADJUSTED

Three Months Ended

Nine Months Ended

September 30,

June 30,

September 30,

(in millions, except per share data), (unaudited)

2021

2020

2021

2021

2020

Net income attributable to BlackRock, Inc., GAAP basis

$

1,681

$

1,364

$

1,378

$

4,258

$

3,384

Non-GAAP adjustments:

Lease costs - Hudson Yards, net of tax

9

-

-

9

-

Charitable Contribution, net of tax

-

-

-

-

226

Income tax matters

-

54

171

171

54

Net income attributable to BlackRock, Inc., as adjusted (3)

$

1,690

$

1,418

$

1,549

$

4,438

$

3,664

Diluted weighted-average common shares outstanding

154.3

153.7

154.4

154.4

155.0

Diluted earnings per common share, GAAP basis

$

10.89

$

8.87

$

8.92

$

27.59

$

21.84

Diluted earnings per common share, as adjusted (3)

$

10.95

$

9.22

$

10.03

$

28.75

$

23.64

See note (3) to the condensed consolidated statements of income and supplemental information on page 13 for more information on as adjusted items and the reconciliation to GAAP.

11

NOTES TO CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SUPPLEMENTAL INFORMATION(unaudited)

BlackRock reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"); however, management believes evaluating the Company's ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and considers them to be helpful, for both management and investors, in evaluating BlackRock's financial performance over time. Management also uses non-GAAP financial measures as a benchmark to compare its performance with other companies and to enhance the comparability of this information for the reporting periods presented. Non-GAAP measures may pose limitations because they do not include all of BlackRock's revenue and expense. BlackRock's management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Non-GAAP measures may not be comparable to other similarly titled measures of other companies.

Management uses both GAAP and non-GAAP financial measures in evaluating BlackRock's financial performance. Adjustments to GAAP financial measures ("non-GAAP adjustments") include certain items management deems nonrecurring or that occur infrequently, transactions that ultimately will not impact BlackRock's book value or certain tax items that do not impact cash flow.

Computations for all periods are derived from the condensed consolidated statements of income as follows:

(1) Operating income, as adjusted, and operating margin, as adjusted: Management believes operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRock's financial performance over time, and, therefore, provide useful disclosure to investors. Management believes that operating margin, as adjusted, reflects the Company's long-term ability to manage ongoing costs in relation to its revenues. The Company uses operating margin, as adjusted, to assess the Company's financial performance and to determine the long-term and annual compensation of the Company's senior-level employees. Furthermore, this metric is used to evaluate the Company's relative performance against industry peers, as it eliminates margin variability arising from the accounting of revenues and expenses related to distributing different product structures in multiple distribution channels utilized by asset managers.

•

Operating income, as adjusted, includes non-GAAP expense adjustments. During the three and nine months ended September 30, 2021, the Company recorded expense of $11 million related to the lease of office space for its future headquarters located at 50 Hudson Yards in New York ("Lease cost - Hudson Yards"). While the Company expects to begin to occupy the new office space in late 2022 (and begin cash lease payments in May 2023), the Company is required to record lease expense from August 2021 because it obtained access to the building to begin its tenant improvements. As a result, the Company is recognizing lease expense for both its current and future headquarters until its current headquarters lease expires in April 2023. Management believes removing the Lease cost - Hudson Yards when calculating operating income, as adjusted, is useful to assess its financial performance and enhances comparability among periods presented. During the nine months ended September 30, 2020, the Company contributed its remaining 20% stake in PennyMac Financial Services, Inc. (the "Charitable Contribution"). The Charitable Contribution expense of $589 million has been excluded from operating income, as adjusted, due to its nonrecurring nature.

•

Operating income used for measuring operating margin, as adjusted, is equal to operating income, as adjusted, excluding the impact of product launch costs (e.g. closed-end fund launch costs) and related commissions. Management believes the exclusion of such costs and related commissions is useful because these costs can fluctuate considerably and revenue associated with the expenditure of these costs will not fully impact BlackRock's results until future periods.

•

Revenue used for calculating operating margin, as adjusted, is reduced to exclude all of the Company's distribution fees, which are recorded as a separate line item on the condensed consolidated statements of income, as well as a portion of investment advisory fees received that is used to pay distribution and servicing costs. For certain products, based on distinct arrangements, distribution fees are collected by the Company and then passed-through to third-party client intermediaries. For other products, investment advisory fees are collected by the Company and a portion is passed-through to third-party client intermediaries. However, in both structures, the third-party client intermediary similarly owns the relationship with the retail client and is responsible for distributing the product and servicing the client. The amount of distribution and investment advisory fees fluctuates each period primarily based on a predetermined percentage of the value of AUM during the period. These fees also vary based on the type of investment product sold and the geographic location where it is sold. In addition, the Company may waive fees on certain products that could result in the reduction of payments to the third-party intermediaries.

12

(2) Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted: Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, is an effective measure for reviewing BlackRock's nonoperating contribution to its results and provides comparability of this information among reporting periods. Management believes nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, provides a useful measure, for both management and investors, of BlackRock's nonoperating results, which ultimately impact BlackRock's book value. During the nine months ended September 30, 2020, the noncash, nonoperating pre-tax gain of $122 million related to the Charitable Contribution has been excluded from nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, due to its nonrecurring nature.

(3) Net income attributable to BlackRock, Inc., as adjusted: Management believes net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, are useful measures of BlackRock's profitability and financial performance. Net income attributable to BlackRock, Inc., as adjusted, equals net income attributable to BlackRock, Inc., GAAP basis, adjusted for significant nonrecurring items, charges that ultimately will not impact BlackRock's book value or certain tax items that do not impact cash flow.

See aforementioned discussion regarding operating income, as adjusted, operating margin, as adjusted, and nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, for information on the Lease cost - Hudson Yards and Charitable Contribution.

The nine months ended September 30, 2020 included a discrete tax benefit of $241 million that was recognized in connection with the Charitable Contribution. The discrete tax benefit has been excluded from as adjusted results due to the nonrecurring nature of the Charitable Contribution. Amounts for income tax matters represent net noncash (benefits) expense primarily associated with the revaluation of certain deferred tax liabilities related to intangible assets and goodwill as a result of tax rate changes. These amounts have been excluded from the as adjusted results as these items will not have a cash flow impact and to ensure comparability among periods presented.

Per share amounts reflect net income attributable to BlackRock, Inc., as adjusted, divided by diluted weighted-average common shares outstanding.

(4)ACV: Management believes ACV is an effective metric for reviewing BlackRock's technology services' ongoing contribution to its operating results and provides comparability of this information among reporting periods while also providing a useful supplemental metric for both management and investors of BlackRock's growth in technology services revenue over time, as it is linked to the net new business in technology services.

13

FORWARD-LOOKING STATEMENTS

This earnings release, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock's future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "potential," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" and similar expressions.

BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

BlackRock has previously disclosed risk factors in its Securities and Exchange Commission ("SEC") reports. These risk factors and those identified elsewhere in this earnings release, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) a pandemic or health crisis, including the COVID-19 pandemic, and its continued impact on financial institutions, the global economy or capital markets, as well as BlackRock's products, clients, vendors and employees, and BlackRock's results of operations, the full extent of which may be unknown; (2) the introduction, withdrawal, success and timing of business initiatives and strategies; (3) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management ("AUM"); (4) the relative and absolute investment performance of BlackRock's investment products; (5) BlackRock's ability to develop new products and services that address client preferences; (6) the impact of increased competition; (7) the impact of future acquisitions or divestitures; (8) BlackRock's ability to integrate acquired businesses successfully; (9) the unfavorable resolution of legal proceedings; (10) the extent and timing of any share repurchases; (11) the impact, extent and timing of technological changes and the adequacy of intellectual property, information and cyber security protection; (12) attempts to circumvent BlackRock's operational control environment or the potential for human error in connection with BlackRock's operational systems; (13) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock; (14) changes in law and policy and uncertainty pending any such changes; (15) any failure to effectively manage conflicts of interest; (16) damage to BlackRock's reputation; (17) terrorist activities, civil unrest, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (18) the ability to attract and retain highly talented professionals; (19) fluctuations in the carrying value of BlackRock's economic investments; (20) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products or transactions, which could affect the value proposition to clients and, generally, the tax position of the Company; (21) BlackRock's success in negotiating distribution arrangements and maintaining distribution channels for its products; (22) the failure by a key vendor of BlackRock to fulfill its obligations to the Company; (23) operational, technological and regulatory risks associated with BlackRock's major technology partnerships; (24) any disruption to the operations of third parties whose functions are integral to BlackRock's exchange-traded funds platform; (25) the impact of BlackRock electing to provide support to its products from time to time and any potential liabilities related to securities lending or other indemnification obligations; and (26) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions.

BlackRock's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and BlackRock's subsequent filings with the SEC, accessible on the SEC's website at www.sec.gov and on BlackRock's website at www.blackrock.com, discuss these factors in more detail and identify additional factors that can affect forward-looking statements. The information contained on the Company's website is not a part of this earnings release.

PERFORMANCE NOTES

Past performance is not indicative of future results. Except as specified, the performance information shown is as of September 30, 2021 and is based on preliminary data available at that time. The performance data shown reflects information for all actively and passively managed equity and fixed income accounts, including US registered investment companies, European-domiciled retail funds and separate accounts for which performance data is available, including performance data for high net worth accounts available as of August 31, 2021. The performance data does not include accounts terminated prior to September 30, 2021 and accounts for which data has not yet been verified. If such accounts had been included, the performance data provided may have substantially differed from that shown.

Performance comparisons shown are gross-of-fees for institutional and high net worth separate accounts, and net-of-fees for retail funds. The performance tracking shown for index accounts is based on gross-of-fees performance and includes all institutional accounts and all iShares® funds globally using an index strategy. AUM information is based on AUM available as of September 30, 2021 for each account or fund in the asset class shown without adjustment for overlapping management of the same account or fund. Fund performance reflects the reinvestment of dividends and distributions.

Performance shown is derived from applicable benchmarks or peer median information, as selected by BlackRock, Inc. Peer medians are based in part on data either from Lipper, Inc. or Morningstar, Inc. for each included product.

14