-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UQNcXpoVqQg94mC3uMDBhBOrxY93fFI7GtAS7BTs5rR3L2WIOCFiCK3qh647TUKl PVqetlsJqzuriFuOVlWCIA== /in/edgar/work/0000940180-00-000824/0000940180-00-000824.txt : 20000714 0000940180-00-000824.hdr.sgml : 20000714 ACCESSION NUMBER: 0000940180-00-000824 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000712 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000713 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACKROCK INC /NY CENTRAL INDEX KEY: 0001060021 STANDARD INDUSTRIAL CLASSIFICATION: [8744 ] IRS NUMBER: 510380803 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 812-11626 FILM NUMBER: 672379 BUSINESS ADDRESS: STREET 1: 345 PARK AVENUE 29TH FLOOR STREET 2: 212-754-5534 CITY: NEW YORK STATE: NY ZIP: 10154 BUSINESS PHONE: 2127545560 MAIL ADDRESS: STREET 1: 345 PARK AVENUE 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10154 8-K 1 0001.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 July 12, 2000 ----------------------- DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) BLACKROCK, INC. ----------------------- (Exact name of registrant as specified in its charter) COMMISSION FILE NUMBER: 001-15305 --------- DELAWARE 51-0380803 ------------------- ---------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 345 Park Avenue New York, NY 10154 ---------------------- (Address of principal executive offices) (Zip Code) (212) 754-5560 ------------------------------- (Registrant's telephone number, including area code) _______________________________ (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS Second Quarter 2000 Financial Results On July 12, 2000, BlackRock, Inc. (the "Corporation") reported results of operations for the period ended June 30, 2000. A copy of the earnings press release issued by the Corporation is attached as Exhibit 99.1 and incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits The Exhibit listed on the Exhibit Index on page 4 of this Form 8-K is filed herewith. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BlackRock, Inc. (Registrant) Date: July 13, 2000 By: /s/ Paul L. Audet ---------------------- Paul L. Audet Managing Director Chief Financial Officer 3 EXHIBIT INDEX 99.1 Earnings press release issued by the Corporation on July 12, 2000, with respect to the Corporation's results of operations for the period ended June 30, 2000, filed herewith. 4 EX-99.1 2 0002.txt EARNINGS PRESS RELEASE BY THE CORPORATION EXHIBIT 99.1 [BlackRock letterhead] CONTACT: Paul L. Audet: (212) 409-3555 invrel@blackrock.com -------------------- BlackRock, Inc. Reports Record Earnings of $20.9 Million for the Second Quarter of 2000. Diluted Earnings per Share rise 28% to $0.32 versus $0.25 for the Second Quarter of 1999. New York, New York- July 12, 2000, BlackRock, Inc. (NYSE: BLK) today reported record net income for the second quarter ended June 30, 2000 of $20.9 million, a 51% increase compared with $13.8 million earned in the second quarter of 1999 and a 9% increase compared with $19.2 million earned in the first quarter of 2000. Diluted earnings per share for the second quarter was $0.32 compared with $0.25 and $0.30 in the second quarter of 1999 and first quarter of 2000, respectively. Operating income of $34.3 million increased $7.4 million or 27% and $2.2 million or 7% compared with $26.9 million and $32.1 million earned in the second quarter of 1999 and the first quarter of 2000, respectively. Net income for the six months ended June 30, 2000 was $40.1 million, a 54% increase compared with $26.0 million earned in the six months ended June 30, 1999. Diluted earnings per share for the six months ended June 30, 2000 was $0.62, a 32% increase compared with $0.47 reported for the six months ended June 30, 1999. Operating income for the six months ended June 30, 2000 was $66.4 million, a $15.8 million or 31% increase compared with $50.6 million earned in the six months ended June 30, 1999. "We continued to produce solid investment results for our clients in the first half of 2000 which has translated into one of the strongest pipelines in our history," commented Laurence D. Fink, Chairman and CEO. "I am also particularly proud of the firm's success in integrating the new European Equity Team which won mandates in excess of $5 billion during the first six months of the year." Second Quarter Highlights ------------------------- . Assets under management rose to $177.3 billion, an increase of 25% from the $141.8 billion reported at June 30, 1999 and 8% above the December 31, 1999 total of $164.5 billion. . Net subscriptions for the second quarter and first six months of 2000 were $5.1 billion and $9.6 billion, respectively, with over $5 billion in new business assignments expected to be funded after June 30, 2000. Second quarter net subscriptions included the loss of $2.6 billion of institutional fixed income assets due to a client's corporate reorganization. . BlackRock's operating margin for the second quarter was 36.5% compared with 36.4% for the second quarter of 1999 and the first quarter of 2000. . Launched three new BlackRock funds during the quarter including a Global Science and Technology Fund and two new international equity funds. . Priced a $325 million cash flow CBO (Magnetite II) which will close in the third quarter. . Executed a major risk management assignment with one of the largest financial institutions in Japan. Total revenue for the quarter ended June 30, 2000 increased $20.4 million or 22% to $112.6 million compared with the second quarter of 1999 largely due to a 42% increase in separate account revenue. The substantial increase in separate account revenue resulted from continued strong growth in fixed income assets, a $5 billion increase in international equity assets and higher performance fees. Total revenue for the first half of 2000 totaled $220.6 million, a $40.5 million or 23% increase from the prior year. The year-to-year rise was largely driven by a $22.6 million (32%) increase in separate account revenue and a $15.7 million (16%) increase in mutual fund revenue. Compared with the first quarter of 2000, revenue increased $4.5 million or 4% in the second quarter of 2000. Mutual fund revenue decreased $2.9 million or 5% largely as a result of market depreciation in equity assets of the BlackRock Funds and lower liquidity assets. Separate account fees increased $8.4 million or 19.7% due to higher levels of fixed income and international equity assets as well as increased performance fees. About BlackRock BlackRock is one of the largest publicly traded investment management firms in the United States with $177 billion of assets under management as of June 30, 2000. BlackRock manages assets on behalf of more than 3,000 institutions and 160,000 individuals through a variety of equity, fixed income, liquidity and alternative investment separate accounts and mutual funds, including the Company's flagship fund families, BlackRock Funds and Provident Institutional Funds. In addition, risk management and advisory services are provided to a growing number of large institutional fixed income investors. BlackRock is a member of The PNC Financial Services Group, Inc. (PNC) and is majority-owned by PNC and by BlackRock employees. About PNC The PNC Financial Services Group, Inc. (NYSE:PNC), headquartered in Pittsburgh, is one of the largest diversified financial services organizations in the United States providing regional banking, corporate banking, real estate finance, mortgage banking, secured finance, private banking, asset management and processing services. Forward Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to financial performance and other financial and business matters. Forward-looking statements are typically identified by words or phrases such as "believe," "expect" "anticipate," "intend," "estimate," "position," and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" or similar expressions. BlackRock cautions that these forward-looking statements are subject to numerous assumptions, risks and uncertainties, all of which change over time, and BlackRock assumes no duty to update forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements. The following factors, among others, could cause actual results to differ materially from forward-looking statements: the introduction, withdrawal, success and timing of business initiatives and strategies; changes in economic conditions, interest rates, and financial and capital markets; the investment performance of BlackRock's sponsored investment products and separately managed accounts; competitive conditions; future acquisitions; and the impact, extent and timing of technological changes and legislative and regulatory actions and reforms. Reference is made to BlackRock's Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission which identify additional factors that can affect forward-looking statements. BlackRock, Inc. Financial Highlights ($ in thousands, except share data) (unaudited)
Three months ended Variance vs. ---------------------------------------------- ------------------------------------- June 30, March 31, June 30, 1999 March 31, 2000 ---------------------------- ---------------- ------------------------------------- 2000 1999 2000 Amount % Amount % ---------------------------- ---------------- ------------------------------------- Total revenue $ 112,571 $ 92,217 $ 108,060 $ 20,354 22% $ 4,511 4% Total expense $ 78,249 $ 65,297 $ 75,942 $ 12,952 20% $ 2,307 3% Operating income $ 34,322 $ 26,920 $ 32,118 $ 7,402 27% $ 2,204 7% Net income $ 20,857 $ 13,767 $ 19,197 $ 7,090 51% $ 1,660 9% Diluted earnings per share $ 0.32 $ 0.25 $ 0.30 $0.07 28% $ 0.02 7% Diluted cash earnings per share (a) $ 0.37 $ 0.30 $ 0.34 $0.07 23% $ 0.03 9% Average diluted shares outstanding 64,492,447 54,982,635 64,342,592 9,509,812 17% 149,855 0% EBITDA (b) $ 40,641 $ 31,696 $ 37,801 $ 8,945 28% $ 2,840 8% Operating margin (c) 36.5% 36.4% 36.4% Assets under management ($ in millions) $ 177,337 $ 141,801 $ 172,573 $ 35,536 25% $ 4,764 3%
Six months ended June 30, Variance ---------------------------- ------------------------------- 2000 1999 Amount % ---------------------------- -------------- ------------ Total revenue $ 220,631 $ 180,092 $ 40,539 23% Total expense $ 154,191 $ 129,466 $ 24,725 19% Operating income $ 66,440 $ 50,626 $ 15,814 31% Net income $ 40,054 $ 25,985 $ 14,069 54% Diluted earnings per share $ 0.62 $ 0.47 $ 0.15 32% Diluted cash earnings per share (a) $ 0.70 $ 0.56 $ 0.14 25% Average diluted shares outstanding 64,423,376 54,982,635 9,440,741 17% EBITDA (b) $ 78,442 $ 61,375 $ 17,067 28% Operating margin (c) 36.4% 35.2% Assets under management ($ in millions) $ 177,337 $ 141,801 $ 35,536 25%
(a) Net income plus amortization expense for the period divided by weighted average shares outstanding. (b) Earnings before interest, taxes, depreciation and amortization. (c) Operating income divided by total revenue less fund administration and servicing costs - affiliates. BlackRock, Inc. Condensed Consolidated Statements of Income (Dollar amounts in thousands, except share data) (unaudited)
Three months ended Six months ended ------------------ ---------------- June 30, 2000 June 30, 1999 % Change June 30, 2000 June 30, 1999 % Change ------------- ------------- -------- ------------- ------------- -------- Revenue Investment advisory and administration fees: Mutual funds $ 56,228 $ 51,123 10.0% $ 115,328 $ 99,637 15.7% Separate accounts 51,204 35,968 42.4 93,974 71,334 31.7 BAI - (614) NM - (2,054) NM ---------------------------- -------- ---------------------------- -------- Total investment advisory and administration fees 107,432 86,477 24.2 209,302 168,917 23.9 Other income 5,139 5,740 (10.5) 11,329 11,175 1.4 ---------------------------- -------- ---------------------------- -------- Total revenue 112,571 92,217 22.1 220,631 180,092 22.5 ---------------------------- -------- ---------------------------- -------- Expense Employee compensation and benefits 42,680 32,731 30.4 83,350 65,963 26.4 BAI incentive compensation - (115) NM - (1,493) NM Fund administration and servicing costs - affiliates 18,450 18,359 0.5 38,209 36,335 5.2 General and administration 14,605 11,909 22.6 27,705 23,834 16.2 Amortization of goodwill 2,514 2,413 4.2 4,927 4,827 2.1 ---------------------------- -------- ---------------------------- -------- Total expense 78,249 65,297 19.8 154,191 129,466 19.1 ---------------------------- -------- ---------------------------- -------- Operating income 34,322 26,920 27.5 66,440 50,626 31.2 Non-operating income (expense) Interest and dividend income 1,417 675 109.9 2,467 1,293 90.8 Interest expense - affiliates (86) (3,451) 97.5 (439) (7,121) 93.8 ---------------------------- -------- ---------------------------- -------- 1,331 (2,776) 147.9 2,028 (5,828) 134.8 Income before income taxes $ 35,653 $ 24,144 47.7 $ 68,468 $ 44,798 52.8 Income taxes 14,796 10,377 42.6 28,414 18,813 51.0 ---------------------------- -------- ---------------------------- -------- Net income $ 20,857 $ 13,767 51.5 $ 40,054 $ 25,985 54.1 ============================ ======== ============================ ======== Weighted-average shares outstanding Basic 63,865,770 54,807,482 16.5% 63,865,076 54,807,482 16.5% Diluted 64,492,447 54,982,635 17.3% 64,423,376 54,982,635 17.2% Earnings per share Basic $ 0.33 $ 0.25 32.0% $ 0.63 $ 0.47 34.0% Diluted $ 0.32 $ 0.25 28.0% $ 0.62 $ 0.47 31.9%
NM - Not meaningful BlackRock, Inc. Condensed Consolidated Statements of Financial Condition (Dollar amounts in thousands) (unaudited)
June 30, December 31, June 30, 2000 1999 1999 ---- ---- ---- Assets Cash and cash equivalents $116,633 $157,129 $ 76,262 Accounts receivable 72,249 65,837 103,439 Investments 10,004 2,255 2,306 Property and equipment, net 28,661 22,677 16,737 Intangible assets, net 197,370 194,257 199,083 Other assets 8,812 5,427 5,424 ------------- ------------ ------------ Total assets $433,729 $447,582 $403,251 ============= ============ ============ Liabilities and stockholders' equity Note and loan payable to affiliates $ 0 $ 28,200 $153,200 Accrued compensation 63,950 90,350 90,465 Accounts payable and accrued liabilities 39,761 44,655 27,306 Long-term obligation 8,040 - - Other liabilities 791 3,851 203 ------------- ------------ ------------ Total liabilities 112,542 167,056 271,174 Stockholders' equity 321,187 280,526 132,077 ------------- ------------ ------------ Total liabilities and stockholders' equity $433,729 $447,582 $403,251 ============= ============ ============
BlackRock, Inc. Condensed Consolidated Statements of Cash Flows (Dollar amounts in thousands) (unaudited)
Six months ended June 30, ------------------------- 2000 1999 ---- ---- Cash flows from operating activities Net income $ 40,054 $ 25,985 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 9,535 9,456 Amortization of discount on issuance of class B common stock 299 - Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (7,298) 4,198 Decrease (increase) in receivable from affiliate 886 (981) Increase in other assets (3,385) (3,423) Decrease in accrued compensation (26,400) (19,864) (Decrease) increase in accounts payable and accrued liabilities (4,189) 2,496 Decrease in accrued interest payable to affiliates (705) (470) Decrease in other liabilities (3,060) (1,781) ----------------------- Cash used in operating activities 5,737 15,616 Cash flows from investing activities Purchase of property and equipment (10,592) (9,114) (Purchase) sale of investments (7,575) 110 ----------------------- Cash used in investing activities (18,167) (9,004) Cash flows from financing activities Net repayment of note and loan payable to affiliates (28,200) (43,800) Additional proceeds received from issuance of class A common stock 222 - Shares issued under the Nonemployee Directors Stock Compensation Plan 29 - Expenses related to issuance of class A common stock (91) - ----------------------- Cash used in financing activities (28,040) (43,800) Effect of exchange rate changes on cash and cash equivalents (26) - Net decrease in cash and cash equivalents (40,496) (37,188) Cash and cash equivalents, beginning of period 157,129 113,450 ----------------------- Cash and cash equivalents, end of period $116,633 $ 76,262 =======================
BlackRock, Inc. Assets Under Management (Dollar amounts in millions) (unaudited)
June 30, December 31, 2000 1999 1999 ---------- ---------- ------------ Separate Accounts Fixed income* $ 86,344 $ 68,286 $ 75,206 Liquidity 17,707 12,362 20,934 Equity 7,621 2,353 3,080 ---------- ---------- ------------ Subtotal 111,672 83,001 99,220 ---------- ---------- ------------ Mutual Funds Fixed income 13,919 13,617 13,318 Liquidity 35,944 31,921 36,587 Equity 15,802 13,262 15,392 ---------- ---------- ------------ Subtotal 65,665 58,800 65,297 ---------- ---------- ------------ Total $177,337 $141,801 $164,517 ========== ========== ============
* includes alternative investment products. Component Changes in Assets Under Management
Three months ended Six months ended ------------------------------ ------------------------------- June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 ------------- ------------- ------------- ------------- Separate Accounts Beginning assets under management $105,349 $ 80,477 $ 99,220 $ 69,112 Net subscriptions 5,815 2,903 9,622 14,527 Market appreciation (depreciation) 508 (379) 2,830 (638) ------------- ------------- ------------- ------------- Ending assets under management 111,672 83,001 111,672 83,001 Mutual Funds Beginning assets under management 67,224 59,749 65,297 61,530 Net redemptions (762) (1,546) (2) (3,452) Market appreciation (depreciation) (797) 597 370 722 ------------- ------------- ------------- ------------- Ending assets under management 65,665 58,800 65,665 58,800 ------------- ------------- ------------- ------------- Total $177,337 $141,801 $177,337 $141,801 ============= ============= ============= ============= Net subscriptions $ 5,053 $ 1,357 $ 9,620 $ 11,075 % of Change in AUM from net subscriptions 106.1% 86.2% 75.0% 99.2%
BlackRock, Inc. Assets Under Management Quarterly Trend (Dollar amounts in millions) (unaudited)
Quarter Ended ------------------------------------------------------------- 1999 2000 Six months ended ------------------------------------------------------------- June 30 September 30 December 31 March 31 June 30 June 30, 2000 ------------------------------------------------------------- ----------------- Separate Accounts Fixed Income Beginning assets under management $64,381 $68,286 $69,266 $ 75,206 $ 79,825 $ 75,206 Net subscriptions 4,509 886 6,106 2,541 5,851 8,392 Market appreciation (depreciation) (604) 94 (166) 2,078 668 2,746 ------------------------------------------------------------- ----------------- Ending assets under management 68,286 69,266 75,206 79,825 86,344 86,344 ------------------------------------------------------------- ----------------- Liquidity Beginning assets under management 13,975 12,362 17,310 20,934 19,110 20,934 Net subscriptions (redemptions) (1,626) 4,933 3,602 (1,847) (1,423) (3,270) Market appreciation 13 15 22 23 20 43 ------------------------------------------------------------- ----------------- Ending assets under management 12,362 17,310 20,934 19,110 17,707 17,707 ------------------------------------------------------------- ----------------- Equity Beginning assets under management 2,121 2,353 2,454 3,080 6,414 3,080 Net subscriptions 20 94 35 3,113 1,387 4,500 Market appreciation (depreciation) 212 7 591 221 (180) 41 ------------------------------------------------------------- ----------------- Ending assets under management 2,353 2,454 3,080 6,414 7,621 7,621 ------------------------------------------------------------- ----------------- Total Separate Accounts Beginning assets under management 80,477 83,001 89,030 99,220 105,349 99,220 Net subscriptions 2,903 5,913 9,743 3,807 5,815 9,622 Market appreciation (depreciation) (379) 116 447 2,322 508 2,830 ------------------------------------------------------------- ----------------- Ending assets under management $83,001 $89,030 $99,220 $105,349 $111,672 $111,672 ============================================================= ================= Mutual Funds BlackRock Funds Beginning assets under management $24,757 $25,255 $24,453 $ 27,339 $ 29,280 $ 27,339 Net subscriptions (redemptions) (259) (172) 1,577 994 (168) 826 Market appreciation (depreciation) 757 (630) 1,309 947 (850) 97 ------------------------------------------------------------- ----------------- Ending assets under management 25,255 24,453 27,339 29,280 28,262 28,262 ------------------------------------------------------------- ----------------- PIF Beginning assets under management 22,978 21,578 22,387 25,554 25,755 25,554 Net subscriptions (redemptions) (1,400) 809 3,167 201 (140) 61 Market appreciation - - - - - - ------------------------------------------------------------- ----------------- Ending assets under management 21,578 22,387 25,554 25,755 25,615 25,615 ------------------------------------------------------------- ----------------- Closed End Beginning assets under management 7,668 7,507 7,579 7,340 7,560 7,340 Net subscriptions (redemptions) (1) 121 (130) - (30) (30) Market appreciation (depreciation) (160) (49) (109) 220 53 273 ------------------------------------------------------------- ----------------- Ending assets under management 7,507 7,579 7,340 7,560 7,583 7,583 ------------------------------------------------------------- ----------------- Short Term Investment Funds (STIF) Beginning assets under management 4,346 4,460 4,653 5,064 4,629 5,064 Net subscriptions (redemptions) 114 193 411 (435) (424) (859) Market appreciation - - - - - - ------------------------------------------------------------- ----------------- Ending assets under management 4,460 4,653 5,064 4,629 4,205 4,205 ------------------------------------------------------------- ----------------- Total Mutual Funds Beginning assets under management 59,749 58,800 59,072 65,297 67,224 65,297 Net subscriptions (redemptions) (1,546) 951 5,025 760 (762) (2) Market appreciation (depreciation) 597 (679) 1,200 1,167 (797) 370 ------------------------------------------------------------- ----------------- Ending assets under management $58,800 $59,072 $65,297 $ 67,224 $ 65,665 $ 65,665 ============================================================= =================
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