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,~~September 30, 2023

☐ 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

32-0174431

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer Identification No.)

50 Hudson Yards, New York, NY 10001

(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	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	BLK	New York Stock Exchange
1.250% Notes due 2025	BLK25	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	☒	Accelerated filer	☐
Non-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,~~October 31, 2023, there were ~~149,762,655~~148,762,471 shares of the registrant’s common stock outstanding.

BlackRock, Inc.

Index to Form 10-Q

PART I

FINANCIAL INFORMATION


		Page

Item 1.	Financial Statements (unaudited)

	Condensed Consolidated Statements of Financial Condition	1

	Condensed Consolidated Statements of Income	2

	Condensed Consolidated Statements of Comprehensive Income	3

	Condensed Consolidated Statements of Changes in Equity	4

	Condensed Consolidated Statements of Cash Flows	56

	Notes to Condensed Consolidated Financial Statements	67

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3036

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5969

Item 4.	Controls and Procedures	6070

PART II

OTHER INFORMATION


Item 1.	Legal Proceedings	6171

Item 1A.	Risk Factors	6272

Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	6373

Item 6.	Exhibits	6474


	Signatures	75

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BlackRock, Inc.

Condensed Consolidated Statements of Financial Condition

(unaudited)


	March 31,			December 31,			September 30,			December 31,
(in millions, except shares and per share data)	2023			2022			2023			2022
Assets
Cash and cash equivalents(1)	$	5,644		$	7,416		$	7,316		$	7,416
Accounts receivable		3,580			3,264			3,886			3,264
Investments(1)		8,172			7,466			9,835			7,466
Separate account assets		57,251			54,066			51,606			54,066
Separate account collateral held under securities lending agreements		6,465			5,765			4,740			5,765
Property and equipment (net of accumulated depreciation and amortization of $1,374 and $1,390 at March 31, 2023 and December 31, 2022, respectively)		1,046			1,031
Intangible assets (net of accumulated amortization of $520 and $483 at March 31, 2023 and December 31, 2022, respectively)		18,265			18,302
Property and equipment (net of accumulated depreciation and amortization of $1,487 and $1,390 at September 30, 2023 and December 31, 2022, respectively)								1,058			1,031
Intangible assets (net of accumulated amortization of $580 and $483 at September 30, 2023 and December 31, 2022, respectively)								18,291			18,302
Goodwill		15,339			15,341			15,516			15,341
Operating lease right-of-use assets		1,494			1,516			1,429			1,516
Other assets(1)		4,142			3,461			4,908			3,461
Total assets	$	121,398		$	117,628		$	118,585		$	117,628
Liabilities
Accrued compensation and benefits	$	1,014		$	2,272		$	1,796		$	2,272
Accounts payable and accrued liabilities		1,183			1,294			1,217			1,294
Borrowings		6,669			6,654			7,884			6,654
Separate account liabilities		57,251			54,066			51,606			54,066
Separate account collateral liabilities under securities lending agreements		6,465			5,765			4,740			5,765
Deferred income tax liabilities		3,443			3,381			3,448			3,381
Operating lease liabilities		1,823			1,835			1,780			1,835
Other liabilities(1)		4,485			3,576			5,483			3,576
Total liabilities		82,333			78,843			77,954			78,843
Commitments and contingencies (Note 14)
Temporary equity
Redeemable noncontrolling interests		1,235			909			1,851			909
Permanent equity
BlackRock, Inc. stockholders’ equity
Common stock, $0.01 par value;		2			2			2			2
Shares authorized: 500,000,000 at March 31, 2023 and December 31, 2022; Shares issued: 172,075,373 at March 31, 2023 and December 31, 2022; Shares outstanding: 149,904,546 and 149,756,492 at March 31, 2023 and December 31, 2022, respectively
Shares authorized: 500,000,000 at September 30, 2023 and December 31, 2022; Shares issued: 172,075,373 at September 30, 2023 and December 31, 2022; Shares outstanding: 148,942,746 and 149,756,492 at September 30, 2023 and December 31, 2022, respectively
Additional paid-in capital		19,427			19,772			19,687			19,772
Retained earnings		30,237			29,876			31,711			29,876
Accumulated other comprehensive loss		(975	)		(1,101	)		(1,101	)		(1,101	)
Treasury stock, common, at cost (22,170,827 and 22,318,881 shares held at March 31, 2023 and December 31, 2022, respectively)		(10,979	)		(10,805	)
Treasury stock, common, at cost (23,132,627 and 22,318,881 shares held at September 30, 2023 and December 31, 2022, respectively)								(11,672	)		(10,805	)
Total BlackRock, Inc. stockholders’ equity		37,712			37,744			38,627			37,744
Nonredeemable noncontrolling interests		118			132			153			132
Total permanent equity		37,830			37,876			38,780			37,876
Total liabilities, temporary equity and permanent equity	$	121,398		$	117,628		$	118,585		$	117,628

(1)

At ~~March 31,~~September 30, 2023, cash and cash equivalents, investments, other assets and other liabilities include $~~187~~246 million, $~~4.2~~5.1 billion, $7383 million, and $~~1.8~~2.2 billion, respectively, related to consolidated variable interest entities (“VIEs”). At December 31, 2022, cash and cash equivalents, investments, other assets and other liabilities include $234 million, $3.9 billion, $68 million, and $1.9 billion, respectively, related to consolidated VIEs.

See accompanying notes to condensed consolidated financial statements.

BlackRock, Inc.

Condensed Consolidated Statements of Income

(unaudited)


	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in millions, except per share data)	2023			2022			2023			2022			2023			2022
Revenue
Investment advisory, administration fees and securities lending revenue:
Related parties	$	2,611		$	2,883		$	2,765		$	2,647		$	8,065		$	8,299
Other third parties		891			950			916			884			2,729			2,753
Total investment advisory, administration fees and securities lending revenue		3,502			3,833			3,681			3,531			10,794			11,052
Investment advisory performance fees		55			98			70			82			243			286
Technology services revenue		340			341			407			338			1,106			1,011
Distribution fees		319			381			321			325			959			1,067
Advisory and other revenue		27			46			43			35			126			120
Total revenue		4,243			4,699			4,522			4,311			13,228			13,536
Expense
Employee compensation and benefits		1,427			1,498			1,420			1,339			4,276			4,251
Distribution and servicing costs		505			574			526			536			1,549			1,682
Direct fund expense		315			329			354			318			1,013			951
General and administration expense		521			496			546			554			1,587			1,580
Amortization of intangible assets		37			38			39			38			113			114
Total expense		2,805			2,935			2,885			2,785			8,538			8,578
Operating income		1,438			1,764			1,637			1,526			4,690			4,958
Nonoperating income (expense)
Net gain (loss) on investments		89			(102	)		114			174			434			(242	)
Interest and dividend income		86			18			139			41			314			80
Interest expense		(59	)		(54	)		(82	)		(50	)		(210	)		(158	)
Total nonoperating income (expense)		116			(138	)		171			165			538			(320	)
Income before income taxes		1,554			1,626			1,808			1,691			5,228			4,638
Income tax expense		385			263			213			330			1,041			951
Net income		1,169			1,363			1,595			1,361			4,187			3,687
Less:
Net income (loss) attributable to noncontrolling interests		12			(73	)		(9	)		(45	)		60			(232	)
Net income attributable to BlackRock, Inc.	$	1,157		$	1,436		$	1,604		$	1,406		$	4,127		$	3,919
Earnings per share attributable to BlackRock, Inc. common stockholders:
Basic	$	7.72		$	9.46		$	10.75		$	9.33		$	27.60		$	25.92
Diluted	$	7.64		$	9.35		$	10.66		$	9.25		$	27.36		$	25.67
Weighted-average common shares outstanding:
Basic		149.9			151.7			149.2			150.6			149.6			151.2
Diluted		151.3			153.5			150.5			152.0			150.9			152.6

See accompanying notes to condensed consolidated financial statements.

BlackRock, Inc.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)


	Three Months Ended					Three Months Ended						Nine Months Ended
	March 31,					September 30,						September 30,
(in millions)	2023		2022			2023			2022			2023		2022
Net income	$	1,169	$	1,363		$	1,595		$	1,361		$	4,187	$	3,687
Other comprehensive income (loss):
Foreign currency translation adjustments(1)		126		(125	)		(221	)		(381	)		—		(922	)
Comprehensive income (loss)		1,295		1,238			1,374			980			4,187		2,765
Less: Comprehensive income (loss) attributable to noncontrolling interests		12		(73	)		(9	)		(45	)		60		(232	)
Comprehensive income attributable to BlackRock, Inc.	$	1,283	$	1,311		$	1,383		$	1,025		$	4,127	$	2,997

(1)

~~Amount~~Amounts for the three months ended ~~March 31,~~September 30, 2023 ~~includes a loss~~and 2022 include gains from a net investment hedge of $10 ~~million (net of tax benefit of $~~3 ~~million). Amount for the three months ended March 31, 2022 includes a gain from a net investment hedge of $~~1317 million (net of tax expense of $45 million). and $35 million (net of tax expense of $11 million), respectively. Amounts for the nine months ended September 30, 2023 and 2022 include gains from a net investment hedge of $5 million (net of tax expense of $1 million) and $84 million (net of tax expense of $26 million), respectively.

See accompanying notes to condensed consolidated financial statements.

BlackRock, Inc.

Condensed Consolidated Statements of Changes in Equity

(unaudited)

For the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2023


(in millions)	Additional Paid-in Capital(1)			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock Common			Total BlackRock Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Permanent Equity			Redeemable Noncontrolling Interests / Temporary Equity			Additional Paid-in Capital(1)			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock Common			Total BlackRock Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Permanent Equity			Redeemable Noncontrolling Interests / Temporary Equity
December 31, 2022	$	19,774		$	29,876		$	(1,101	)	$	(10,805	)	$	37,744		$	132		$	37,876		$	909		$	19,774		$	29,876		$	(1,101	)	$	(10,805	)	$	37,744		$	132		$	37,876		$	909
Net income		—			1,157			—			—			1,157			(5	)		1,152			17			—			4,127			—			—			4,127			23			4,150			37
Dividends declared ($5.00 per share)		—			(796	)		—			—			(796	)		—			(796	)		—
Dividends declared ($15.00 per share)																										—			(2,292	)		—			—			(2,292	)		—			(2,292	)		—
Stock-based compensation		165			—			—			—			165			—			165			—			469			—			—			—			469			—			469			—
Issuance of common shares related to employee stock transactions		(510	)		—			—			547			37			—			37			—			(554	)		—			—			633			79			—			79			—
Employee tax withholdings related to employee stock transactions		—			—			—			(346	)		(346	)		—			(346	)		—			—			—			—			(369	)		(369	)		—			(369	)		—
Shares repurchased		—			—			—			(375	)		(375	)		—			(375	)		—			—			—			—			(1,131	)		(1,131	)		—			(1,131	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			(9	)		(9	)		314			—			—			—			—			—			(21	)		(21	)		1,053
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			—			(5	)		—			—			—			—			—			19			19			(148	)
Other comprehensive income (loss)		—			—			126			—			126			—			126			—			—			—			—			—			—			—			—			—
March 31, 2023	$	19,429		$	30,237		$	(975	)	$	(10,979	)	$	37,712		$	118		$	37,830		$	1,235
September 30, 2023																									$	19,689		$	31,711		$	(1,101	)	$	(11,672	)	$	38,627		$	153		$	38,780		$	1,851

(1)

Amounts include $2 million of common stock at both ~~March 31,~~September 30, 2023 and December 31, 2022.

For the Three Months Ended ~~March 31, 2022~~September 30, 2023


(in millions)	Additional Paid-in Capital(1)			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock Common			Total BlackRock Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Permanent Equity			Redeemable Noncontrolling Interests / Temporary Equity			Additional Paid-in Capital(1)			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock Common			Total BlackRock Stockholders’ Equity			Nonredeemable Noncontrolling Interests			Total Permanent Equity			Redeemable Noncontrolling Interests / Temporary Equity
December 31, 2021	$	19,642		$	27,688		$	(550	)	$	(9,087	)	$	37,693		$	113		$	37,806		$	1,087
June 30, 2023																									$	19,573		$	30,855		$	(880	)	$	(11,340	)	$	38,208		$	142		$	38,350		$	1,546
Net income		—			1,436			—			—			1,436			—			1,436			(73	)		—			1,604			—			—			1,604			3			1,607			(12	)
Dividends declared ($4.88 per share)		—			(786	)		—			—			(786	)		—			(786	)		—
Dividends declared ($5.00 per share)																										—			(748	)		—			—			(748	)		—			(748	)		—
Stock-based compensation		201			—			—			—			201			—			201			—			146			—			—			—			146			—			146			—
Issuance of common shares related to employee stock transactions		(539	)		—			—			545			6			—			6			—			(30	)		—			—			62			32			—			32			—
Employee tax withholdings related to employee stock transactions		—			—			—			(436	)		(436	)		—			(436	)		—			—			—			—			(15	)		(15	)		—			(15	)		—
Shares repurchased		—			—			—			(500	)		(500	)		—			(500	)		—			—			—			—			(379	)		(379	)		—			(379	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			(6	)		(6	)		372			—			—			—			—			—			(11	)		(11	)		403
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			—			(123	)		—			—			—			—			—			19			19			(86	)
Other comprehensive income (loss)		—			—			(125	)		—			(125	)		—			(125	)		—			—			—			(221	)		—			(221	)		—			(221	)		—
March 31, 2022	$	19,304		$	28,338		$	(675	)	$	(9,478	)	$	37,489		$	107		$	37,596		$	1,263
September 30, 2023																									$	19,689		$	31,711		$	(1,101	)	$	(11,672	)	$	38,627		$	153		$	38,780		$	1,851

(1)

Amounts include $2 million of common stock at both ~~March 31, 2022~~September 30, 2023 and ~~December 31, 2021.~~June 30, 2023.

See accompanying notes to condensed consolidated financial statements.

BlackRock, Inc.

Condensed Consolidated Statements of Changes in Equity

(unaudited)

For the Nine Months Ended September 30, 2022


(in millions)	Additional Paid-in Capital(1)			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock Common			Total BlackRock Stockholders’ Equity			Nonredeemable Noncontrolling Interests		Total Permanent Equity			Redeemable Noncontrolling Interests / Temporary Equity
December 31, 2021	$	19,642		$	27,688		$	(550	)	$	(9,087	)	$	37,693		$	113	$	37,806		$	1,087
Net income		—			3,919			—			—			3,919			2		3,921			(234	)
Dividends declared ($14.64 per share)		—			(2,259	)		—			—			(2,259	)		—		(2,259	)		—
Stock-based compensation		536			—			—			—			536			—		536			—
Issuance of common shares related to employee stock transactions		(567	)		—			—			589			22			—		22			—
Employee tax withholdings related to employee stock transactions		—			—			—			(452	)		(452	)		—		(452	)		—
Shares repurchased		—			—			—			(1,375	)		(1,375	)		—		(1,375	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			2		2			499
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			10		10			(524	)
Other comprehensive income (loss)		—			—			(922	)		—			(922	)		—		(922	)		—
September 30, 2022	$	19,611		$	29,348		$	(1,472	)	$	(10,325	)	$	37,162		$	127	$	37,289		$	828

(1)

Amounts include $2 million of common stock at both September 30, 2022 and December 31, 2021.

For the Three Months Ended September 30, 2022


(in millions)	Additional Paid-in Capital(1)			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock Common			Total BlackRock Stockholders’ Equity			Nonredeemable Noncontrolling Interests		Total Permanent Equity			Redeemable Noncontrolling Interests / Temporary Equity
June 30, 2022	$	19,471		$	28,678		$	(1,091	)	$	(9,969	)	$	37,089		$	113	$	37,202		$	1,103
Net income		—			1,406			—			—			1,406			4		1,410			(49	)
Dividends declared ($4.88 per share)		—			(736	)		—			—			(736	)		—		(736	)		—
Stock-based compensation		160			—			—			—			160			—		160			—
Issuance of common shares related to employee stock transactions		(20	)		—			—			28			8			—		8			—
Employee tax withholdings related to employee stock transactions		—			—			—			(9	)		(9	)		—		(9	)		—
Shares repurchased		—			—			—			(375	)		(375	)		—		(375	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			—		—			74
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			10		10			(300	)
Other comprehensive income (loss)		—			—			(381	)		—			(381	)		—		(381	)		—
September 30, 2022	$	19,611		$	29,348		$	(1,472	)	$	(10,325	)	$	37,162		$	127	$	37,289		$	828

(1)

Amounts include $2 million of common stock at both September 30, 2022 and June 30, 2022.

See accompanying notes to condensed consolidated financial statements.

BlackRock, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


							Nine Months Ended
	Three Months Ended						September 30,
(in millions)	March 31,						2023			2022
	2023			2022
Operating activities
Net income	$	1,169		$	1,363		$	4,187		$	3,687
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation and amortization		106			100			316			308
Noncash lease expense		43			40			108			123
Stock-based compensation		165			201			469			536
Deferred income tax expense (benefit)		53			76			41			(104	)
Other investment gains		—			(29	)		—			(276	)
Net (gains) losses within CIPs		(88	)		159			(116	)		510
Net (purchases) proceeds within CIPs		(477	)		(393	)		(1,387	)		(804	)
(Earnings) losses from equity method investees		(40	)		(2	)		(304	)		54
Distributions of earnings from equity method investees		8			25			32			27
Changes in operating assets and liabilities:
Accounts receivable		(270	)		(27	)		(607	)		254
Investments, trading		2			44			52			217
Other assets		(696	)		(3,234	)		(1,410	)		(2,273	)
Accrued compensation and benefits		(1,243	)		(1,852	)		(479	)		(1,282	)
Accounts payable and accrued liabilities		(91	)		48			(67	)		123
Other liabilities		965			3,059			1,332			1,883
Net cash provided by/(used in) operating activities		(394	)		(422	)		2,167			2,983
Investing activities
Purchases of investments		(318	)		(140	)		(681	)		(516	)
Proceeds from sales and maturities of investments		142			73			270			190
Distributions of capital from equity method investees		8			19			26			59
Net consolidations (deconsolidations) of sponsored investment funds		27			(3	)		21			(48	)
Acquisition, net of cash acquired								(189	)		—
Purchases of property and equipment		(81	)		(147	)		(220	)		(399	)
Net cash provided by/(used in) investing activities		(222	)		(198	)		(773	)		(714	)
Financing activities
Repayments of long-term borrowings								—			(750	)
Proceeds from long-term borrowings								1,238			—
Cash dividends paid		(796	)		(786	)		(2,292	)		(2,259	)
Proceeds from stock options exercised		27			—			51			—
Repurchases of common stock		(721	)		(936	)		(1,500	)		(1,827	)
Net proceeds from (repayments of) borrowings by CIPs		(19	)		—			(38	)		—
Net subscriptions received/(redemptions/distributions paid) from noncontrolling interest holders		305			366			1,032			501
Other financing activities		10			5			20			19
Net cash provided by/(used in) financing activities		(1,194	)		(1,351	)		(1,489	)		(4,316	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		38			(90	)		(5	)		(479	)
Net increase/(decrease) in cash, cash equivalents and restricted cash		(1,772	)		(2,061	)		(100	)		(2,526	)
Cash, cash equivalents and restricted cash, beginning of period		7,433			9,340			7,433			9,340
Cash, cash equivalents and restricted cash, end of period	$	5,661		$	7,279		$	7,333		$	6,814
Supplemental schedule of noncash investing and financing transactions:
Issuance of common stock	$	510		$	539		$	554		$	567
Increase (decrease) in noncontrolling interests due to net consolidation (deconsolidation) of sponsored investment funds	$	(5	)	$	(123	)	$	(129	)	$	(514	)

See accompanying notes to condensed consolidated financial statements.

BlackRock, Inc.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

1. Business Overview

BlackRock’s diverse platform of alpha-seeking active, index and cash management investment strategies across asset classes enables the Company to offer choice and tailor investment 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, iShares® and BlackRock exchange-traded funds (“ETFs”), separate accounts, collective trust funds and other pooled investment vehicles. BlackRock also offers technology services, including the investment and risk management technology platform, Aladdin®, Aladdin Wealth, eFront and Cachematrix, 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 represent the portion of consolidated sponsored investment products (“CIPs”) and a consolidated affiliate (collectively, “consolidated entities”) in which the Company does not have direct equity ownership. Intercompany balances and transactions have been eliminated upon consolidation.

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 footnotes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission (“SEC”) on February 24, 2023 (“2022 Form 10-K”).

The interim financial information at ~~March 31,~~September 30, 2023 and for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 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.

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, commodities and certain exchange-traded derivatives.

Level 2 Inputs:

Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; quotes from pricing services or brokers for which the Company can determine that orderly transactions took place at the quoted price or that the inputs used to arrive at the price are observable; and inputs other than quoted prices that are observable, such as models or other valuation methodologies.

•

Level 2 assets may include debt securities, ~~bank~~ loans held within consolidated collateralized loan obligations (“CLOs”), short-term floating-rate notes, asset-backed securities, as well as over-the-counter derivatives, including interest rate swaps and foreign currency exchange contracts that have inputs to the valuations that generally can be corroborated by observable market data.

Level 3 Inputs:

Unobservable inputs for the valuation of the asset or liability, which may include nonbinding broker quotes. Level 3 assets include investments for which there is little, if any, market activity. These inputs require significant management judgment or estimation.

•

Level 3 assets may include direct private equity investments, including those held within ~~consolidated funds,~~CIPs, investments in CLOs, and ~~bank~~ loans held within consolidated CLOs and CIPs.

•

Level 3 liabilities may include borrowings of consolidated CLOs and contingent liabilities related to acquisitions valued based upon discounted cash flow analyses, using unobservable market ~~data.~~data, or other valuation techniques.

Significance of Inputs. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Valuation Approaches. The fair values of certain Level 3 assets and liabilities were determined using various valuation approaches as appropriate, including third-party pricing vendors, broker quotes and market and income approaches.

A significant number of inputs used to value equity, debt securities, and ~~bank~~ loans held within CLOs and CIPs are sourced from third-party pricing vendors. Generally, prices obtained from pricing vendors are categorized as Level 1 inputs for identical securities traded in active markets and as Level 2 for other similar securities if the vendor uses observable inputs in determining the price.

In addition, quotes obtained from brokers generally are nonbinding and categorized as Level 3 inputs. However, if the Company is able to determine that market participants have transacted for the asset in an orderly manner near the quoted price or if the Company can determine that the inputs used by the broker are observable, the quote is classified as a Level 2 input.

Investments Measured at Net Asset Values. As a practical expedient, the Company uses net asset value (“NAV”) as the fair value for certain investments. The inputs to value these investments may include the Company’s capital accounts for its partnership interests in various alternative investments, including hedge funds, real assets and private equity funds, which may be adjusted by using the returns of certain market indices. The various partnerships ~~generally~~ are investment companies, which record their underlying investments at fair value based on fair value policies established by management of the underlying fund. Fair value policies at the underlying fund generally require the fund to utilize pricing/valuation information from third-party sources, including independent appraisals. However, in some instances, current valuation information for illiquid securities or securities in markets that are not active may not be available from any third-party source or fund management may conclude that the valuations that are available from third-party sources are not reliable. In these instances, fund management may perform model-based analytical valuations that could be used as an input to value these investments.

Fair Value Assets and Liabilities of Consolidated CLO. The Company applies the fair value option provisions for eligible assets, including ~~bank~~ loans, held by a consolidated CLO. As the fair value of the financial assets of the consolidated CLO is more observable than the fair value of the borrowings of the consolidated CLO, the Company measures the fair value of the borrowings of the consolidated CLO equal to the fair value of the assets of the consolidated CLO less the fair value of the Company’s economic interest in the CLO.

Derivatives and Hedging ~~Activities~~Activities.. The Company does not use derivative financial instruments for trading or speculative purposes. The Company uses derivative financial instruments primarily for purposes of hedging exposures to fluctuations in foreign currency exchange rates of certain assets and liabilities, and market price and interest rate exposures with respect to its total portfolio of seed investments in sponsored investment products. Certain CIPs also utilize derivatives as a part of their investment strategy.

In addition, during ~~the first quarter of~~ 2023, the Company acquired both investments and derivatives to economically hedge market valuation changes on certain deferred cash compensation plans, for which the final value of the deferred amount distributed to employees in cash upon vesting is determined based on the returns onof specified investment funds. The Company recognizes compensation expense for the appreciation (depreciation) of the deferred cash compensation liability in proportion to the vested amount of the award during a respective period, while the gain (loss) to economically hedge these plans is immediately recognized in nonoperating income (expense). See Note 4, Investments, and Note 8, Derivatives and Hedging, for further information on the Company’s investments and derivatives, respectively, used to economically hedge ~~certain~~these deferred cash compensation plans.

The Company records all derivative financial instruments as either assets or liabilities at fair value on a gross basis in the condensed consolidated statements of financial condition. Credit risks are managed through master netting and collateral support agreements. The amounts related to the right to reclaim or the obligation to return cash collateral may not be used to offset amounts due under the derivative instruments in the normal course of settlement. Therefore, such amounts are not offset against fair value amounts recognized for derivative instruments with the same counterparty and are included in other assets and other liabilities. Changes in the fair value of the Company’s derivative financial instruments are recognized in earnings and, where applicable, are offset by the corresponding gain or loss on the related foreign-denominated or hedged assets or liabilities, ~~or hedged investments,~~ on the condensed consolidated statements of income.

The Company may also use financial instruments designated as net investment hedges for accounting purposes to hedge net investments in international subsidiaries whose functional currency is not United States ("US") dollars. The gain or loss from revaluing net investment hedges at the spot rate is deferred and reported within accumulated other comprehensive income (loss) (“AOCI”) on the condensed consolidated statements of financial condition. The Company reassesses the effectiveness of its net investment hedge at least quarterly.

Separate Account Assets and Liabilities. Separate account assets are maintained by BlackRock Life Limited, a wholly owned subsidiary of the Company, which is a registered life insurance company in the United Kingdom (“UK”), and represent segregated assets held for purposes of funding individual and group pension contracts. The life insurance company does not underwrite any insurance contracts that involve any insurance risk transfer from the insured to the life insurance company. The separate account assets primarily include equity securities, debt securities, money market funds and derivatives. The separate account assets are not subject to general claims of the creditors of BlackRock. These separate account assets and the related equal and offsetting liabilities are recorded as separate account assets and separate account liabilities on the condensed consolidated statements of financial condition.

The net investment income attributable to separate account assets supporting individual and group pension contracts accrues directly to the contract owner and is not reported on the condensed consolidated statements of income. While BlackRock has no economic interest in these separate account assets and liabilities, BlackRock earns policy administration and management fees associated with these products, which are included in investment advisory, administration fees and securities lending revenue on the condensed consolidated statements of income.

Separate Account Collateral Assets Held and Liabilities Under Securities Lending Agreements. The Company facilitates securities lending arrangements whereby securities held by separate accounts maintained by BlackRock Life Limited are lent to third parties under global master securities lending agreements. In exchange, the Company obtains either (1) the legal title, or (2) a first ranking priority security interest, in the collateral. The minimum collateral values generally range from approximately 102% to 112% of the value of the securities in order to reduce counterparty risk. The required collateral value is calculated on a daily basis. The global master securities lending agreements provide the Company the right to request additional collateral or, in the event of borrower default, the right to liquidate collateral. The securities lending transactions entered into by the Company are accompanied by an agreement that entitles the Company to request the borrower to return the securities at any time; therefore, these transactions are not reported as sales.

In situations where the Company obtains the legal title to collateral under these securities lending arrangements, the Company records an asset on the condensed consolidated statements of financial condition in addition to an equal collateral liability for the obligation to return the collateral. Additionally, in situations where the Company obtains a first ranking priority security interest in the collateral, the Company does not have the ability to pledge or resell the collateral and therefore does not record the collateral on the condensed consolidated statements of financial condition. At ~~March 31,~~September 30, 2023 and December 31, 2022, the fair value of loaned securities held by separate accounts was approximately $~~10.9~~8.6 billion and $10.2 billion, respectively, and the fair value of the collateral under these securities lending agreements was approximately $~~11.9~~9.3 billion and $11.0 billion, respectively, of which approximately $~~6.5~~4.7 billion as of ~~March 31,~~September 30, 2023 and $5.8 billion as of December 31, 2022 was recognized on the condensed consolidated statements of financial condition. During the ~~three~~nine months ended ~~March 31,~~September 30, 2023 and 2022, the Company had not resold or repledged any of the collateral obtained under these arrangements. The securities lending revenue earned from lending securities held by the separate accounts is included in investment advisory, administration fees and securities lending revenue on the condensed consolidated statements of income.

Property and ~~Equipment~~Equipment. . Property and equipment are recorded at cost less accumulated depreciation. Depreciation is generally determined by cost less any estimated residual value using the straight-line method over the estimated useful lives of the various classes of property and equipment. Leasehold improvements are amortized using the straight-line method over the shorter of the estimated useful life or the remaining lease term. During the ~~first quarter of~~nine months ended September 30, 2023, BlackRock reclassed approximately $400 million from construction in progress to leasehold improvements primarily related to its new headquarters located at 50 Hudson Yards in New ~~York.~~York.

Money Market Fee Waivers.The Company may voluntarily waive a portion of its management fees on certain money market funds to ensure that they maintain a targeted level of daily net investment income (the “Yield Support waivers”). There were no Yield Support waivers during the three and nine months ended ~~March 31, 2023. During~~September 30, 2023 and during the three months ended ~~March 31,~~September 30, 2022. During the nine months ended September 30, 2022 Yield Support waivers resulted in a reduction of management fees of approximately $72 million. The reduction in management fees was partially offset by a reduction of BlackRock’s distribution and servicing costs paid to financial intermediaries. The Company may increase or decrease the level of Yield Support waivers in future periods.

910

3. Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents reported within the condensed consolidated statements of financial condition to the cash, cash equivalents, and restricted cash reported within the condensed consolidated statements of cash flows.


	March 31,		December 31,
	2023		2022		September 30,		December 31,
(in millions)					2023		2022
Cash and cash equivalents	$	5,644	$	7,416	$	7,316	$	7,416
Restricted cash included in other assets		17		17		17		17
Total cash, cash equivalents and restricted cash	$	5,661	$	7,433	$	7,333	$	7,433

4. Investments

A summary of the carrying value of total investments is as follows:


	March 31,		December 31,		September 30,		December 31,
(in millions)	2023		2022		2023		2022
Debt securities:
Trading securities (including $1,406 and $1,279 held by CIPs at March 31, 2023 and December 31, 2022, respectively)	$	1,462	$	1,331
Trading securities (including $2,059 and $1,279 held by CIPs at September 30, 2023 and December 31, 2022, respectively)					$	2,100	$	1,331
Held-to-maturity investments		553		544		595		544
Total debt securities		2,015		1,875		2,695		1,875
Equity securities at FVTNI (including $1,271 and $1,089 held by CIPs at March 31, 2023 and December 31, 2022, respectively)(1)		1,401		1,211
Equity securities at FVTNI (including $1,332 and $1,089 held by CIPs at September 30, 2023 and December 31, 2022, respectively)(1)						1,449		1,211
Equity method investments:
Equity method investments(2)		1,910		1,895		2,306		1,895
Deferred cash compensation plan - equity method investments(1)		252		—
Investments related to deferred cash compensation plans(1)						228		—
Total equity method investments		2,162		1,895		2,534		1,895
Bank loans held by CIPs		358		354
Loans held by CIPs						542		354
Federal Reserve Bank stock(3)		91		91		92		91
Carried interest(4)		1,519		1,550		1,945		1,550
Other investments(1)(5)		626		490		578		490
Total investments	$	8,172	$	7,466	$	9,835	$	7,466

(1)

Amounts include investments held to economically hedge the impact of market valuation changes on certain deferred cash compensation plans of $~~252~~228 million, $14 million, and $1210 million included within equity method investments, equity securities at fair value recorded through net income ~~(“FVTNI”~~("FVTNI") and other investments, ~~respectively.~~respectively, as of September 30, 2023.

(2)

Equity method investments primarily include BlackRock’s direct investments in certain BlackRock sponsored investment funds.

(3)

Federal Reserve Bank stock is held for regulatory purposes and is restricted from sale.

(4)

Carried interest represents allocations to BlackRock’s general partner capital accounts from certain sponsored investment funds. These balances are subject to change upon cash distributions, additional allocations or reallocations back to limited partners within the respective funds.

(5)

Other investments include BlackRock’s investments in nonmarketable equity securities, which are measured at cost, adjusted for observable price changes, and private equity, ~~and~~ real asset, and commodity investments held by CIPs, which are measured at fair value.

Held-to-Maturity Investments

Held-to-maturity investments included certain investments in BlackRock sponsored CLOs. The amortized cost (carrying value) of these investments approximated fair value (primarily a Level 2 input). At ~~March 31,~~September 30, 2023, $269 million of these investments mature between one ~~year~~ to five years, $~~246~~299 million of these investments mature between five to ten years and $~~281~~287 million of these investments mature after ten years.

1011

Trading Debt Securities and Equity Securities at FVTNI

A summary of the cost and carrying value of trading debt securities and equity securities at FVTNI is as follows:



	March 31, 2023				December 31, 2022				September 30, 2023				December 31, 2022
(in millions)	Cost		Carrying Value		Cost		Carrying Value		Cost		Carrying Value		Cost		Carrying Value
Trading debt securities:
Corporate debt	$	910	$	863	$	823	$	795	$	1,500	$	1,434	$	823	$	795
Government debt		489		451		420		400		533		500		420		400
Asset/mortgage-backed debt		170		148		154		136		190		166		154		136
Total trading debt securities	$	1,569	$	1,462	$	1,397	$	1,331	$	2,223	$	2,100	$	1,397	$	1,331
Equity securities at FVTNI:
Equity securities/mutual funds	$	1,312	$	1,401	$	1,216	$	1,211	$	1,434	$	1,449	$	1,216	$	1,211

5. Consolidated Sponsored Investment Products

The Company consolidates certain sponsored investment funds accounted for as voting rights entities (“VREs”) because it is deemed to control such funds.

In the normal course of business, the Company is the manager of various types of sponsored investment vehicles, which may be considered VIEs. The Company may from time to time own equity or debt securities or enter into derivatives or loan arrangements with the vehicles, each of which are considered variable interests. The Company’s involvement in financing the operations of the VIEs is generally limited to its ~~investments~~economic interest in the entity. The Company’s consolidated VIEs include certain sponsored investment products in which BlackRock has an ~~investment~~economic interest and as the investment manager, is deemed to have both the power to direct the most significant activities of the products and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to these sponsored investment products. The assets of these VIEs are not available to creditors of the Company. In addition, the investors in these VIEs have no recourse to the credit of the Company.

The following table presents the balances related to these CIPs accounted for as VIEs and VREs that were recorded on the condensed consolidated statements of financial condition, including BlackRock’s net interest in these products:


	March 31, 2023									December 31, 2022									September 30, 2023									December 31, 2022
(in millions)	VIEs			VREs			Total			VIEs			VREs			Total			VIEs			VREs			Total			VIEs			VREs			Total
Cash and cash equivalents(1)	$	187		$	56		$	243		$	234		$	31		$	265		$	246		$	76		$	322		$	234		$	31		$	265
Investments:
Trading debt securities		1,033			373			1,406			949			330			1,279			1,665			394			2,059			949			330			1,279
Equity securities at FVTNI		951			320			1,271			821			268			1,089			945			387			1,332			821			268			1,089
Bank loans		221			137			358			234			120			354
Loans																				214			328			542			234			120			354
Other investments		494			92			586			373			77			450			431			105			536			373			77			450
Carried interest		1,470			—			1,470			1,497			—			1,497			1,880			—			1,880			1,497			—			1,497
Total investments		4,169			922			5,091			3,874			795			4,669			5,135			1,214			6,349			3,874			795			4,669
Other assets		73			32			105			68			29			97			83			72			155			68			29			97
Other liabilities(2)		(1,799	)		(51	)		(1,850	)		(1,876	)		(48	)		(1,924	)		(2,207	)		(294	)		(2,501	)		(1,876	)		(48	)		(1,924	)
Noncontrolling interest - CIPs		(1,103	)		(193	)		(1,296	)		(857	)		(125	)		(982	)		(1,686	)		(271	)		(1,957	)		(857	)		(125	)		(982	)
BlackRock's net interest in CIPs	$	1,527		$	766		$	2,293		$	1,443		$	682		$	2,125		$	1,571		$	797		$	2,368		$	1,443		$	682		$	2,125

(1)

The Company generally cannot readily access cash and cash equivalents held by CIPs to use in its operating activities.

(2)

At ~~both March 31,~~September 30, 2023, ~~and December 31, 2022,~~ other liabilities of VIEs primarily include deferred carried interest liabilities, borrowings of a consolidated CLO of $201 million and borrowings of other CIPs of $115 million. At December 31, 2022, other liabilities of VIEs primarily included deferred carried interest liabilities and borrowings of a consolidated CLO. Borrowings of other CIPs are recorded at amortized cost, which approximates fair value (a Level 3 input).

BlackRock’s total exposure to CIPs represents the value of its economic ownership interest in these CIPs. Valuation changes associated with investments held at fair value by these CIPs are reflected in nonoperating income (expense) and partially offset in net income (loss) attributable to NCI for the portion not attributable to BlackRock.

Net gain (loss) related to consolidated VIEs is presented in the following table:


	Three Months Ended					Three Months Ended						Nine Months Ended
	March 31,					September 30,						September 30,
(in millions)	2023		2022			2023			2022			2023		2022
Nonoperating net gain (loss) on consolidated VIEs	$	59	$	(133	)	$	(26	)	$	(89	)	$	113	$	(405	)

Net income (loss) attributable to NCI on consolidated VIEs	$	12	$	(75	)	$	(8	)	$	(35	)	$	65	$	(218	)

6. Variable Interest Entities

Nonconsolidated VIEs. At ~~March 31,~~September 30, 2023 and December 31, 2022, the Company’s carrying value of assets and liabilities included on the condensed consolidated statements of financial condition pertaining to nonconsolidated VIEs and its maximum risk of loss related to VIEs for which it held a variable interest, but for which it was not the primary beneficiary, was as follows:


			Advisory Fee		Other Net Assets			Maximum				Advisory Fee		Other Net Assets			Maximum
(in millions)	Investments		Receivables		(Liabilities)			Risk of Loss(1)		Investments		Receivables		(Liabilities)			Risk of Loss(1)
March 31, 2023
September 30, 2023
Sponsored investment products	$	1,151	$	86	$	(11	)	$	1,254	$	2,193	$	89	$	(11	)	$	2,299
December 31, 2022
Sponsored investment products	$	1,060	$	95	$	(12	)	$	1,172	$	1,060	$	95	$	(12	)	$	1,172

(1)

At both ~~March 31,~~September 30, 2023 and December 31, 2022, BlackRock’s maximum risk of loss associated with these VIEs primarily related to BlackRock’s investments and the collection of advisory fee receivables.

The net assets of sponsored investment products that are nonconsolidated VIEs approximated $2333 billion and $19 billion at ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.

1213

7. Fair Value Disclosures

Fair Value Hierarchy

Assets and liabilities measured at fair value on a recurring basis


March 31, 2023 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Investments Measured at NAV(1)		Other(2)		March 31, 2023
September 30, 2023 (in millions)													Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Investments Measured at NAV(1)		Other(2)		September 30, 2023
Assets:
Investments
Debt securities:
Trading securities	$	—	$	1,407	$	55	$	—	$	—	$	1,462	$	—	$	2,060	$	40	$	—	$	—	$	2,100
Held-to-maturity investments		—		—		—		—		553		553		—		—		—		—		595		595
Total debt securities		—		1,407		55		—		553		2,015		—		2,060		40		—		595		2,695
Equity securities at FVTNI:
Equity securities/mutual funds		1,401		—		—		—		—		1,401		1,449		—		—		—		—		1,449
Equity method:
Equity, fixed income, and multi-asset mutual funds		164		—		—		—		—		164		231		—		—		—		—		231
Hedge funds/funds of hedge funds/other		—		—		—		460		—		460		—		—		—		495		—		495
Private equity funds		—		—		—		962		—		962		—		—		—		1,200		—		1,200
Real assets funds		—		—		—		324		—		324		—		—		—		380		—		380
Deferred cash compensation plan equity method investments		—		—		—		252		—		252
Investments related to deferred cash compensation plans														—		—		—		228		—		228
Total equity method		164		—		—		1,998		—		2,162		231		—		—		2,303		—		2,534
Bank loans		—		111		247		—		—		358
Loans														—		161		381		—		—		542
Federal Reserve Bank Stock		—		—		—		—		91		91		—		—		—		—		92		92
Carried interest		—		—		—		—		1,519		1,519		—		—		—		—		1,945		1,945
Other investments		39		—		—		440		147		626		18		—		—		405		155		578
Total investments		1,604		1,518		302		2,438		2,310		8,172		1,698		2,221		421		2,708		2,787		9,835
Other assets(3)		138		37		—		—		—		175		104		5		107		—		—		216
Separate account assets		36,632		19,927		—		—		692		57,251		33,308		17,524		—		—		774		51,606
Separate account collateral held under securities lending agreements:
Equity securities		2,244		—		—		—		—		2,244		1,906		—		—		—		—		1,906
Debt securities		—		4,221		—		—		—		4,221		—		2,834		—		—		—		2,834
Total separate account collateral held under securities lending agreements		2,244		4,221		—		—		—		6,465		1,906		2,834		—		—		—		4,740
Total	$	40,618	$	25,703	$	302	$	2,438	$	3,002	$	72,063	$	37,016	$	22,584	$	528	$	2,708	$	3,561	$	66,397
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	2,244	$	4,221	$	—	$	—	$	—	$	6,465	$	1,906	$	2,834	$	—	$	—	$	—	$	4,740
Other liabilities(4)		—		18		257		—		—		275		—		41		295		—		—		336
Total	$	2,244	$	4,239	$	257	$	—	$	—	$	6,740	$	1,906	$	2,875	$	295	$	—	$	—	$	5,076

(1)

Amounts are comprised of certain investments measured at fair value using NAV (or its equivalent) as a practical expedient.

(2)

Amounts are comprised of investments held at amortized cost and cost, adjusted for observable price changes, carried interest, certain equity method investments and other assets, which are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.

(3)

Level 1 amount includes a minority investment in a publicly traded company. Level 3 amount includes a strategic private debt investment with changes in fair value recorded in AOCI, net of tax.

(4)

Level 2 amount primarily includes fair value of derivatives (See Note 8, Derivatives and Hedging, for more information). Level 3 amount primarily includes borrowings of a consolidated CLO classified based on the significance of unobservable inputs used for calculating the fair value of consolidated CLO assets, and contingent liabilities related to acquisitions.


December 31, 2022 (in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Investments Measured at NAV(1)		Other(2)		December 31, 2022
Assets:
Investments
Debt securities:
Trading securities	$	—	$	1,279	$	52	$	—	$	—	$	1,331
Held-to-maturity investments		—		—		—		—		544		544
Total debt securities		—		1,279		52		—		544		1,875
Equity securities at FVTNI:
Equity securities/mutual funds		1,211		—		—		—		—		1,211
Equity method:
Equity, fixed income, and multi-asset mutual funds		181		—		—		—		—		181
Hedge funds/funds of hedge funds/other		—		—		—		525		—		525
Private equity funds		—		—		—		885		—		885
Real assets funds		—		—		—		304		—		304
Total equity method		181		—		—		1,714		—		1,895
Loans		—		106		248		—		—		354
Federal Reserve Bank Stock		—		—		—		—		91		91
Carried interest		—		—		—		—		1,550		1,550
Other investments		28		—		—		316		146		490
Total investments		1,420		1,385		300		2,030		2,331		7,466
Other assets(3)		145		1		—		—		—		146
Separate account assets		34,823		18,544		—		—		699		54,066
Separate account collateral held under securities lending agreements:
Equity securities		2,163		—		—		—		—		2,163
Debt securities		—		3,602		—		—		—		3,602
Total separate account collateral held under securities lending agreements		2,163		3,602		—		—		—		5,765
Total	$	38,551	$	23,532	$	300	$	2,030	$	3,030	$	67,443
Liabilities:
Separate account collateral liabilities under securities lending agreements	$	2,163	$	3,602	$	—	$	—	$	—	$	5,765
Other liabilities(4)		—		31		280		—		—		311
Total	$	2,163	$	3,633	$	280	$	—	$	—	$	6,076

(1)

Amounts are comprised of certain investments measured at fair value using NAV (or its equivalent) as a practical expedient.

(2)

Amounts are comprised of investments held at amortized cost and cost, adjusted for observable price changes, carried interest and certain equity method investments, which include sponsored investment funds and other assets, which are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.

(3)

Level 1 amount includes a minority investment in a publicly traded company. Level 2 amount primarily includes fair value of derivatives (See Note 8, Derivatives and Hedging, for more information).

(4)

1315

December 31, 2022
(in millions)
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Investments
Measured at
NAV(1)

Other(2)

December 31,
2022

Assets:

Investments

Debt securities:

Trading securities
$
—

$
1,279

$
52

$
—

$
—

$
1,331

Held-to-maturity investments

—

—

—

—

544

544

Total debt securities

—

1,279

52

—

544

1,875

Equity securities at FVTNI:

Equity securities/mutual funds

1,211

—

—

—

—

1,211

Equity method:

Equity, fixed income, and multi-asset
   mutual funds

181

—

—

—

—

181

Hedge funds/funds of hedge
   funds/other

—

—

—

525

—

525

Private equity funds

—

—

—

885

—

885

Real assets funds

—

—

—

304

—

304

Total equity method

181

—

—

1,714

—

1,895

Bank loans

—

106

248

—

—

354

Federal Reserve Bank Stock

—

—

—

—

91

91

Carried interest

—

—

—

—

1,550

1,550

Other investments

28

—

—

316

146

490

Total investments

1,420

1,385

300

2,030

2,331

7,466

Other assets(3)

145

1

—

—

—

146

Separate account assets

34,823

18,544

—

—

699

54,066

Separate account collateral held under
securities lending agreements:

Equity securities

2,163

—

—

—

—

2,163

Debt securities

—

3,602

—

—

—

3,602

Total separate account collateral held
   under securities lending agreements

2,163

3,602

—

—

—

5,765

Total
$
38,551

$
23,532

$
300

$
2,030

$
3,030

$
67,443

Liabilities:

Separate account collateral
   liabilities under securities
   lending agreements
$
2,163

$
3,602

$
—

$
—

$
—

$
5,765

Other liabilities(4)

—

31

280

—

—

311

Total
$
2,163

$
3,633

$
280

$
—

$
—

$
6,076

~~(1)~~

~~Amounts are comprised of certain investments measured at fair value using NAV (or its equivalent) as a practical expedient.~~

~~(2)~~

~~(3)~~

~~Level 1 amount includes a minority investment in a publicly traded company. Level 2 amount primarily includes fair value of derivatives (See Note 8,~~ ~~Derivatives and Hedging, for more information).~~

~~(4)~~

~~Level 2 amount primarily includes fair value of derivatives (See Note 8,~~ ~~Derivatives and Hedging~~, for more information). Level 3 amount primarily includes borrowings of a consolidated CLO classified based on the significance of unobservable inputs used for calculating the fair value of consolidated CLO assets, and contingent liabilities related to certain acquisitions (see Note 14, ~~Commitments and Contingencies, for more information).~~

Level 3 Assets. Level 3 assets predominantly include investments in CLOs, ~~and bank~~ loans of consolidated CIPs, ~~which~~and a strategic private debt investment. Investments in CLOs and loans were valued based on single-broker nonbinding quotes or quotes from pricing services which use significant unobservable inputs. BlackRock's strategic private debt investment was valued using the income approach by discounting the expected cash flows to a single present value. For investments utilizing a discounted cashflow valuation technique, an increase (decrease) in the discount rate or risk premium in isolation could have resulted in a significantly lower (higher) fair value measurement as of September 30, 2023.

Level 3 Liabilities. Level 3 liabilities primarily include borrowings of a consolidated CLO, which were valued based on the fair value of the assets of the consolidated CLO less the fair value of the Company’s economic interest in the CLO, as well as contingent liabilities related to certain acquisitions, which were valued based upon discounted cash flow analyses, using unobservable market data ~~inputs.~~

inputs, or other valuation techniques.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended ~~March 31,~~September 30, 2023


(in millions)	December 31, 2022		Realized and Unrealized Gains (Losses)		Purchases		Sales and Maturities			Issuances and Other Settlements(1)			Transfers into Level 3		Transfers out of Level 3			March 31, 2023		Total Net Unrealized Gains (Losses) Included in Earnings(2)		June 30, 2023		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements(1)		Transfers into Level 3		Transfers out of Level 3			September 30, 2023		Total Net Unrealized Gains (Losses) Included in Earnings(2)
Assets:
Investments:
Debt securities:
Trading	$	52	$	1	$	2	$	—		$	—		$	—	$	—		$	55	$	1	$	41	$	(1	)	$	2	$	(2	)	$	—	$	—	$	—		$	40	$	(1	)
Total debt securities		52		1		2		—			—			—		—			55		1		41		(1	)		2		(2	)		—		—		—			40		(1	)
Bank loans		248		6		12		(20	)		—			5		(4	)		247		6
Loans																							266		(17	)		117		—			—		23		(8	)		381		(17	)
Total investments	$	300	$	7	$	14	$	(20	)	$	—		$	5	$	(4	)	$	302	$	7		307		(18	)		119		(2	)		—		23		(8	)		421		(18	)
Other assets																							109		(2	)		—		—			—		—		—			107		(2	)
Total assets																						$	416	$	(20	)	$	119	$	(2	)	$	—	$	23	$	(8	)	$	528	$	(20	)
Liabilities:
Other liabilities	$	280	$	4	$	—	$	—		$	(19	)	$	—	$	—		$	257	$	4	$	254	$	3		$	—	$	—		$	44	$	—	$	—		$	295	$	3

(1)

~~Amounts include~~Issuance and other settlements amount includes a contingent liability in connection with the acquisition of Kreos Capital in August 2023 (the “Kreos Transaction”), partially offset by repayments of borrowings of a consolidated CLO.

(2)

Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2023


(in millions)	December 31, 2022		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements(1)		Transfers into Level 3		Transfers out of Level 3			September 30, 2023		Total Net Unrealized Gains (Losses) Included in Earnings(2)
Assets:
Investments:
Debt securities:
Trading	$	52	$	(1	)	$	8	$	(19	)	$	—	$	—	$	—		$	40	$	(1	)
Total debt securities		52		(1	)		8		(19	)		—		—		—			40		(1	)
Loans		248		6			129		(21	)		—		33		(14	)		381		6
Total investments		300		5			137		(40	)		—		33		(14	)		421		5
Other assets		—		(2	)		109		—			—		—		—			107		(2	)
Total assets	$	300	$	3		$	246	$	(40	)	$	—	$	33	$	(14	)	$	528	$	3
Liabilities:
Other liabilities	$	280	$	7		$	—	$	—		$	22	$	—	$	—		$	295	$	7

(1)

Issuance and other settlements amount includes a contingent liability in connection with the Kreos Transaction, partially offset by repayments of borrowings of a consolidated CLO.

(2)

Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended ~~March 31,~~September 30, 2022


(in millions)	December 31, 2021		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements(1)			Transfers into Level 3		Transfers out of Level 3			March 31, 2022		Total Net Unrealized Gains (Losses) Included in Earnings(2)			June 30, 2022		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements			Transfers into Level 3		Transfers out of Level 3			September 30, 2022		Total Net Unrealized Gains (Losses) Included in Earnings(1)
Assets:
Investments:
Debt securities:
Trading	$	17	$	—		$	6	$	(12	)	$	—		$	—	$	(3	)	$	8	$	—		$	16	$	(1	)	$	14	$	(5	)	$	—		$	25	$	—		$	49	$	(1	)
Total debt securities		17		—			6		(12	)		—			—		(3	)		8		—			16		(1	)		14		(5	)		—			25		—			49		(1	)
Private equity		5		—			—		—			—			—		(1	)		4		—			4		(2	)		—		—			—			—		(2	)		—		—
Bank loans		270		—			8		—			—			—		(14	)		264		—
Loans																									252		(1	)		—		(16	)		—			4		(3	)		236		(1	)
Total investments	$	292	$	—		$	14	$	(12	)	$	—		$	—	$	(18	)	$	276	$	—		$	272	$	(4	)	$	14	$	(21	)	$	—		$	29	$	(5	)	$	285	$	(2	)
Liabilities:
Other liabilities	$	342	$	(1	)	$	—	$	—		$	(31	)	$	—	$	—		$	312	$	(1	)	$	314	$	8		$	—	$	—		$	(3	)	$	—	$	—		$	303	$	8

(1)

Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2022


(in millions)	December 31, 2021		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and Other Settlements(1)			Transfers into Level 3		Transfers out of Level 3			September 30, 2022		Total Net Unrealized Gains (Losses) Included in Earnings(2)
Assets:
Investments:
Debt securities:
Trading	$	17	$	(4	)	$	33	$	(18	)	$	—		$	25	$	(4	)	$	49	$	(4	)
Total debt securities		17		(4	)		33		(18	)		—			25		(4	)		49		(4	)
Private equity		5		(2	)		—		—			—			—		(3	)		—		—
Loans		270		(4	)		16		(34	)		—			8		(20	)		236		(4	)
Total investments	$	292	$	(10	)	$	49	$	(52	)	$	—		$	33	$	(27	)	$	285	$	(8	)
Liabilities:
Other liabilities	$	342	$	7		$	—	$	—		$	(32	)	$	—	$	—		$	303	$	7

(1)

Amounts include proceeds from borrowings of a consolidated CLO and a contingent liability ~~payments~~payment related to ~~certain acquisitions.~~a prior acquisition.

(2)

Earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities still held at the reporting date.

Realized and Unrealized Gains (Losses) for Level 3 Assets and Liabilities. Realized and unrealized gains (losses) recorded for Level 3 assets and liabilities are primarily reported in nonoperating income (expense) on the condensed consolidated statements of income. A portion of net income (loss) related to securities held by CIPs is allocated to NCI to reflect net income (loss) not attributable to the Company.

Transfers in and/or out of Levels. Transfers in and/or out of levels are reflected when significant inputs, including market inputs or performance attributes, used for the fair value measurement become observable/unobservable.

Disclosures of Fair Value for Financial Instruments Not Held at Fair Value. At ~~March 31,~~September 30, 2023 and December 31, 2022, the fair value of the Company’s financial instruments not held at fair value are categorized in the table below:


	March 31, 2023				December 31, 2022						September 30, 2023				December 31, 2022
(in millions)	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Fair Value Hierarchy		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value		Fair Value Hierarchy
Financial Assets(1):
Cash and cash equivalents	$	5,644	$	5,644	$	7,416	$	7,416	Level 1	(2) (3)	$	7,316	$	7,316	$	7,416	$	7,416	Level 1	(2)(3)
Other assets	$	75	$	75	$	86	$	86	Level 1	(2) (4)	$	103	$	103	$	86	$	86	Level 1	(2)(4)

Financial Liabilities:
Long-term borrowings	$	6,669	$	6,093	$	6,654	$	5,949	Level 2	(5)	$	7,884	$	7,007	$	6,654	$	5,949	Level 2	(5)

(1)

See Note 4, Investments, for further information on investments not held at fair value.

(2)

Cash and cash equivalents are carried at either cost or amortized cost, which approximates fair value due to their short-term maturities.

(3)

At ~~March 31,~~September 30, 2023 and December 31, 2022, approximately $~~1.3~~2.5 billion and $2.2 billion, respectively, of money market funds were recorded within cash and cash equivalents on the condensed consolidated statements of financial condition. Money market funds are valued based on quoted market prices, or $1.00 per share, which generally is the NAV of the fund.

(4)

At ~~March 31,~~September 30, 2023 and December 31, 2022, other assets included cash collateral of approximately $5886 million and $69 million, respectively. See Note 8, Derivatives and Hedgingfor further information on derivatives held by the Company. In addition, other assets included $17 million of restricted cash at both ~~March 31,~~September 30, 2023 and December 31, 2022.

(5)

Long-term borrowings are recorded at amortized cost, net of debt issuance costs. The fair value of the long-term borrowings, including the current portion of long-term borrowings, is determined using market prices and the EUR/USD foreign exchange rate at the end of ~~March 31,~~September 2023 and December 2022, respectively. See Note 13, Borrowings, for the fair value of each of the Company’s long-term borrowings.

1518

Investments in Certain Entities that Calculate NAV Per Share

As a practical expedient to value certain investments that do not have a readily determinable fair value and have attributes of an investment company, the Company uses NAV as the fair value. The following tables list information regarding all investments that use a fair value measurement to account for both their financial assets and financial liabilities in their calculation of a NAV per share (or equivalent).

March 31, 2023

September 30, 2023

(in millions)

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Equity method(1):

Hedge funds/funds of hedge
funds/other

(a)

460

141

Daily/Monthly (17%)
Quarterly (9%)
N/R (74%)

1 – 90 days

(a)

495

142

Daily/Monthly (15%)
Quarterly (9%)
N/R (76%)

1 – 90 days

Private equity funds

(b)

962

172

N/R

(b)

1,200

184

N/R

Real assets funds

(c)

324

294

Quarterly (15%)
N/R (85%)

60 days

(c)

380

247

Quarterly (12%)
N/R (88%)

60 days

Deferred cash compensation plan
equity method investments

(e)

252

—

Monthly

1 – 90 days

Investments related to deferred
cash compensation plan

(e)

228

—

Monthly

1 – 90 days

Consolidated sponsored
investment products:

Real assets funds

(c)

140

N/R

(c)

150

N/R

Private equity funds

(d)

187

N/R

(d)

N/R

Hedge funds/other

(a)

113

Quarterly

90 days

(a)

161

Quarterly (88%)
N/R (12%)

90 days

Total

2,438

796

2,708

746

December 31, 2022

(in millions)

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Equity method(1):

Hedge funds/funds of hedge
funds/other

(a)

525

149

Daily/Monthly (23%)
Quarterly (13%)
N/R (64%)

1 – 90 days

(a)

525

149

Daily/Monthly (23%)
Quarterly (13%)
N/R (64%)

1 – 90 days

Private equity funds

(b)

885

174

N/R

(b)

885

174

N/R

Real assets funds

(c)

304

Quarterly (17%)
N/R (83%)

60 days

(c)

304

Quarterly (17%)
N/R (83%)

60 days

Consolidated sponsored
investment products:

Real assets funds

(c)

116

N/R

(c)

116

N/R

Private equity funds

(d)

183

N/R

(d)

183

N/R

Other funds

Quarterly

90 days

Quarterly

90 days

Total

2,030

789

2,030

789

N/R – Not Redeemable

(1)

Comprised of equity method investments, which include investment companies that account for their financial assets and most financial liabilities under fair value measures; therefore, the Company’s investment in such equity method investees approximates fair value.

(a)

This category includes hedge funds, funds of hedge funds, and other funds that invest primarily in equities, fixed income securities, ~~distressed~~private credit, opportunistic and mortgage instruments and other third-party hedge funds. The fair values of the investments have been estimated using the NAV of the Company’s ownership interest in partners’ capital. The liquidation period for the investments in the funds that are not subject to redemption is unknown at both ~~March 31,~~September 30, 2023 and December 31, 2022.

(b)

This category includes private equity funds that initially invest in nonmarketable securities of private companies, which ultimately may become public in the future. The fair values of these investments have been estimated using capital accounts representing the Company’s ownership interest in the funds and may also include other performance inputs. The Company’s investment in each fund is not subject to redemption and is normally returned through distributions as a result of the liquidation of the underlying assets of the private equity funds. The liquidation period for the investments in these funds is unknown at both ~~March 31,~~September 30, 2023 and December 31, 2022.

(c)

This category includes several real assets funds that invest directly and indirectly in real estate or infrastructure. The fair values of the investments have been estimated using capital accounts representing the Company’s ownership interest in the funds. The Company’s investments that are not subject to redemption or are not currently redeemable are normally returned through distributions and realizations of the underlying assets of the funds. The liquidation period for the investments in the funds that are not subject to redemptions is unknown at both ~~March 31,~~September 30, 2023 and December 31, 2022. The total remaining unfunded commitments were $~~385~~314 million and $398 million at ~~March 31,~~September 30, 2023 and December 31, 2022, respectively. The Company’s portion of the total remaining unfunded commitments was $~~342~~289 million and $364 million at ~~March 31,~~September 30, 2023 and December 31, 2022, respectively.

(d)

This category includes the underlying third-party private equity funds within consolidated BlackRock sponsored private equity funds of funds. These investments are not subject to redemption or are not currently redeemable; however, for certain funds, the Company may sell or transfer its interest, which may need approval by the general partner of the underlying funds. Due to the nature of the investments in this category, the Company reduces its investment by distributions that are received through the realization of the underlying assets of the funds. The liquidation period for the underlying assets of these funds is unknown.

(e)

This category includes hedge funds and funds of hedge funds that invest primarily in equities, fixed income securities, mortgage instruments and other third-party hedge funds. The fair values of the investments have been estimated using the NAV of the ~~Company’s~~Company's ownership interest in ~~partners’~~partners' capital. The investments in hedge funds will be redeemed upon settlement of certain deferred cash compensation liabilities.

Fair Value Option

At ~~March 31,~~September 30, 2023 and December 31, 2022, the Company elected the fair value option for certain investments in CLOs of approximately $5541 million and $52 million, respectively, reported within investments.

In addition, the Company elected the fair value option for bank loans and borrowings of a consolidated CLO, recorded within investments and other liabilities, respectively. The following table summarizes the information related to these bank loans and borrowings at ~~March 31,~~September 30, 2023 and December 31, 2022:


	March 31,		December 31,		September 30,		December 31,
(in millions)	2023		2022		2023		2022
CLO Bank loans:
Aggregate principal amounts outstanding	$	230	$	238	$	224	$	238
Fair value		221		234		213		234
Aggregate unpaid principal balance in excess of (less than) fair value	$	9	$	4	$	11	$	4

CLO Borrowings:
Aggregate principal amounts outstanding	$	224	$	245	$	221	$	245
Fair value	$	222	$	245	$	201	$	245

At ~~March 31,~~September 30, 2023, the principal amounts outstanding of the borrowings issued by the CLO mature in 2030, and may be repaid prior to maturity at any time.

During the three and nine months ended ~~March 31,~~September 30, 2023 and 2022, the net gains (losses) from the change in fair value of the bank loans and borrowings held by the consolidated CLO were not material and were recorded in net gain (loss) on the condensed consolidated statements of income. The change in fair value of the assets and liabilities included interest income and expense, respectively.

8. Derivatives and Hedging

The Company maintains a program to enter into exchange traded futures as a macro hedging strategy to hedge market price and interest rate exposures with respect to its total portfolio of seed investments in sponsored investment products. At ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had outstanding exchange traded futures related to this macro hedging strategy with aggregate notional values of approximately $~~1.5~~1.6 billion and $1.5 billion, with expiration dates during the ~~second~~fourth and first quarter of 2023, respectively.

In addition, beginning in the first quarter of 2023, the Company entered into futures to economically hedge the exposure to market movements on certain deferred cash compensation plans. At ~~March 31,~~September 30, 2023, the Company had outstanding exchange traded futures with aggregate notional values related to its deferred cash compensation hedging program of approximately $~~184~~182 million, ~~and~~ with expiration dates during the ~~second~~fourth quarter of ~~2023.~~ 2023.

Changes in the value of the futures contracts are recognized as gains or losses within nonoperating income (expense). Variation margin payments, which represent settlements of profit/loss, are generally received or made daily, ~~depending upon whether gains or losses are incurred,~~ and are reflected in other assets and other liabilities on the condensed consolidated statements of financial condition. These amounts were not material as of ~~March 31,~~September 30, 2023 and December 31, 2022.

The Company executes forward foreign currency exchange contracts to mitigate the risk of certain foreign exchange movements. At ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had outstanding forward foreign currency exchange contracts with aggregate notional values of approximately $2.4 billion and $2.2 billion, ~~and~~ with expiration dates in ~~April~~October 2023 and January 2023, respectively.

At both ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had a derivative providing credit protection with a notional amount of approximately $17 million to a counterparty, representing the Company’s maximum risk of loss with respect to the derivative. The Company carries the derivative at fair value based on the expected discounted future cash outflows under the arrangement.

The following table presents the fair values of derivative instruments recognized in the condensed consolidated statements of financial condition at ~~March 31,~~September 30, 2023 and December 31, 2022:


	Assets					Liabilities					Assets					Liabilities
(in millions)	Statement of Financial Condition Classification	March 31, 2023		December 31, 2022		Statement of Financial Condition Classification	March 31, 2023		December 31, 2022		Statement of Financial Condition Classification	September 30, 2023		December 31, 2022		Statement of Financial Condition Classification	September 30, 2023		December 31, 2022
Derivative Instruments
Forward foreign currency exchange contracts	Other assets	$	37	$	1	Other liabilities	$	7	$	19	Other assets	$	5	$	1	Other liabilities	$	30	$	19

The following table presents realized and unrealized gains (losses) recognized in the condensed consolidated statements of income on derivative instruments:


			Three Months Ended							Three Months Ended						Nine Months Ended
			March 31,							September 30,						September 30,
		Statement of Income	2023			2022			Statement of Income	2023			2022			2023		2022
(in millions)		Classification	Gains (Losses)						Classification	Gains (Losses)						Gains (Losses)
Derivative Instruments
Exchange traded futures(1)		Nonoperating income (expense)	$	(45	)	$	—		Nonoperating income (expense)	$	72		$	—		$	14	$	—
Forward foreign currency exchange contracts		General and administration expense		40			(42	)	General and administration expense		(66	)		(124	)		29		(295	)
Total return swaps		Nonoperating income (expense)		—			41		Nonoperating income (expense)		—			44			—		147
Total gain (loss) from derivative instruments	Total gain (loss) from derivative instruments		$	(5	)	$	(1	)		$	6		$	(80	)	$	43	$	(148	)

(1)

~~Amount includes~~Amounts include $81 million and $6 million of gains on futures used as a macro hedging strategy of seed investments for the three and nine months ended September 30, 2023, respectively. In addition amounts include $9 million ~~gain~~of losses and $8 million of gains on futures used to economically hedge certain deferred cash compensation ~~plans.~~plans for the three and nine months ended September 30, 2023, respectively.

The Company's CIPs may utilize derivative instruments as a part of the ~~funds’~~funds' investment strategies. The change in fair value of such derivatives, which is recorded in nonoperating income (expense), was not material for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022.

See Note 15, Borrowings, in the 2022 Form 10-K for more information on the Company’s net investment hedge.

9. Goodwill

Goodwill activity during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was as follows:


(in millions)
December 31, 2022	$	15,341		$	15,341
Other(1)		(2	)
March 31, 2023	$	15,339
Acquisition(1)					184
Other					(9	)
September 30, 2023				$	15,516

(1)

~~Amounts primarily resulted from a decline related to tax benefits realized from tax-deductible~~Amount represents goodwill in ~~excess of book goodwill from~~connection with the Kreos Transaction. The Company believes this acquisition ~~of the fund-of-funds business of Quellos Group, LLC in October 2007 (the “Quellos Transaction”). Goodwill related~~will add to the ~~Quellos Transaction will continue~~Company's position as a leading global credit asset manager and advance its ambitions to ~~be reduced in future periods by~~provide clients with a diverse range of private market investment products and solutions. Total consideration for the amount of tax benefits realized from tax-deductible goodwill in excess of book goodwill from the Quellos Transaction. The balance of the Quellos Transaction's tax-deductible goodwill in excess of book goodwilltransaction was approximately $4250 million, ~~and $~~11 ~~million at March 31, 2023 and December 31, 2022, respectively.~~which included contingent consideration.

10. Intangible Assets

The carrying amounts of identifiable intangible assets are summarized as follows:

(in millions)
Indefinite-lived

Finite-lived

Total

December 31, 2022
$
17,578

$
724

$
18,302

Amortization expense

—

(37
)

(37
)
March 31, 2023
$
17,578

$
687

$
18,265


(in millions)	Indefinite-lived		Finite-lived			Total
December 31, 2022	$	17,578	$	724		$	18,302
Acquisition(1)		—		106			106
Amortization expense		—		(113	)		(113	)
Other		—		(4	)		(4	)
September 30, 2023	$	17,578	$	713		$	18,291

18(1)

In connection with the Kreos Transaction, the Company acquired approximately $67 million of finite-lived management contracts and $

39 million of finite-lived investor relationships with weighted-average estimated lives of approximately five and ten years, respectively.

11. Leases

The following table presents components of lease cost included in general and administration expense on the condensed consolidated statements of income:


	Three Months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in millions)	2023		2022		2023		2022		2023		2022
Lease cost:
Operating lease cost(1)	$	55	$	51	$	43	$	55	$	144	$	160
Variable lease cost(2)		11		11		15		10		35		32
Total lease cost	$	66	$	62	$	58	$	65	$	179	$	192

(1)

Amounts include short-term leases, which are immaterial for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022.

(2)

Amounts include operating lease payments, which may be adjusted based on usage, changes in an index or market rate, as well as common area maintenance charges and other variable costs not included in the measurement of right-of-use (“ROU”) assets and operating lease liabilities.

Supplemental information related to operating leases is summarized below:


	Three Months Ended				Nine Months Ended
	March 31,				September 30,
(in millions)	2023		2022		2023		2022
Supplemental cash flow information:
Operating cash flows from operating leases included in the measurement of operating lease liabilities	$	42	$	41	$	109	$	122

Supplemental noncash information:
ROU assets in exchange for operating lease liabilities	$	11	$	12	$	20	$	45


	March 31,			December 31,			September 30,			December 31,
	2023			2022			2023			2022
Lease term and discount rate:
Weighted-average remaining lease term		16	years		16	years		15	years		16	years
Weighted-average discount rate		3	%		3	%		3	%		3	%

1922

12. Other Assets

At ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had $~~792~~771 million and $809 million of equity method investments, respectively, recorded within other assets on the condensed consolidated statements of financial condition, since such investees are considered to be an extension of BlackRock’s core business. BlackRock’s share of these investees’ underlying net income or loss is based upon the most currently available information and is recorded within advisory and other revenue. In accordance with GAAP, certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.

At ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had $~~368~~443 million and $375 million, respectively, of other nonequity method corporate minority investments recorded within other assets on the condensed consolidated statements of financial condition, ~~which~~since such investees are considered to be an extension of BlackRock’s core business. These investments included ~~investments in~~ equity securities, generally measured at fair value or under the measurement alternative to fair value for nonmarketable ~~securities.~~securities, and a strategic private debt investment measured at fair value. Changes in value of ~~these~~the equity securities are recorded in nonoperating income (expense) onand changes in value of the ~~condensed consolidated statements~~debt security is recorded in AOCI, net of ~~income.~~tax. See Note 2, Significant Accounting Policies, in the notes to the consolidated financial statements contained in the 2022 Form 10-K for further information.

13. Borrowings

Short-Term Borrowings

2023 Revolving Credit Facility.The Company maintains an unsecured revolving credit facility which is available for working capital and general corporate purposes (the “2023 credit facility”). In March 2023, the 2023 credit facility was amended to, among other things, (1) increase the aggregate commitment amount by $300 million to $5 billion, (2) extend the maturity date to March 2028 and (3) change the secured overnight financing rate (“SOFR”) adjustment to 10 bps per annum for all SOFR-based ~~loans.~~borrowings. The 2023 credit facility permits the Company to request up to an additional $1.0 billion of borrowing capacity, subject to lender credit approval, which could increase the overall size of the 2023 credit facility to an aggregate principal amount of up to $6 billion. The 2023 credit facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at ~~March 31,~~September 30, 2023. At ~~March 31,~~September 30, 2023, the Company had no amount outstanding under the 2023 credit facility.

Commercial Paper Program. The Company can issue unsecured commercial paper notes (the “CP Notes”) on a private-placement basis up to a maximum aggregate amount outstanding at any time of $4 billion. The commercial paper program is currently supported by the 2023 credit facility. At ~~March 31,~~September 30, 2023, BlackRock had no CP Notes outstanding.

Long-Term Borrowings

2033 Notes. In May 2023, the Company issued $1.25 billion in aggregate principal amount of 4.75% senior unsecured notes maturing on May 25, 2033 (the “2033 Notes”). The net proceeds of the 2033 Notes are being used for general corporate purposes, which may include the future repayment of all or a portion of the $1.0 billion 3.50% Notes due March 2024. Interest of approximately $59 million per year is payable semi-annually on May 25 and November 25 of each year, commencing on November 25, 2023. The 2033 Notes may be redeemed at the option of the Company, in whole or in part, at any time prior to February 25, 2033 at a "make-whole" redemption price, or thereafter at 100% of the principal amount of the 2033 Notes, in each case plus accrued but unpaid interest. The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2033 Notes.

The carrying value and fair value of long-term borrowings determined using market prices and EUR/USD foreign exchange rate at ~~March 31,~~the end of September 2023 included the following:

(in millions)
Maturity
Amount

Unamortized
Discount
and Debt
Issuance Costs(1)

Carrying Value

Fair Value

3.50% Notes due 2024
$
1,000

$
(1
)

$
999

$
986

1.25% Notes due 2025

761

(2
)

759

723

3.20% Notes due 2027

700

(3
)

697

671

3.25% Notes due 2029

1,000

(8
)

992

949

2.40% Notes due 2030

1,000

(5
)

995

879

1.90% Notes due 2031

1,250

(9
)

1,241

1,046

2.10% Notes due 2032

1,000

(14
)

986

839

Total long-term borrowings
$
6,711

$
(42
)

$
6,669

$
6,093


(in millions)	Maturity Amount		Unamortized Discount and Debt Issuance Costs(1)			Carrying Value		Fair Value
3.50% Notes due 2024	$	1,000	$	—		$	1,000	$	989
1.25% Notes due 2025		741		(1	)		740		707
3.20% Notes due 2027		700		(3	)		697		655
3.25% Notes due 2029		1,000		(8	)		992		898
2.40% Notes due 2030		1,000		(5	)		995		831
1.90% Notes due 2031		1,250		(8	)		1,242		985
2.10% Notes due 2032		1,000		(12	)		988		772
4.75% Notes due 2033		1,250		(20	)		1,230		1,170
Total long-term borrowings	$	7,941	$	(57	)	$	7,884	$	7,007

(1)

The unamortized discount and debt issuance costs are being amortized over the term of the notes.

Long-term borrowings at December 31, 2022 had a carrying value of $6.7 billion and a fair value of $5.9 billion, determined using market prices at the end of December ~~31,~~ 2022.

See Note 15, Borrowings, in the 2022 Form 10-K for more information regarding the Company’s borrowings.

14. Commitments and Contingencies

Investment Commitments. At ~~March 31,~~September 30, 2023, the Company had $~~836~~774 million of various capital commitments to fund sponsored investment products, including CIPs. These products include private equity funds, real assets funds and opportunistic funds. This amount excludes additional commitments made by consolidated funds of funds to underlying third-party funds as third-party noncontrolling interest holders have the legal obligation to fund the respective commitments of such funds of funds. Generally, the timing of the funding of these commitments is unknown and the commitments are callable on demand at any time prior to the expiration of the commitment. These unfunded commitments are not recorded on the condensed consolidated statements of financial condition. These commitments do not include potential future commitments approved by the Company that are not yet legally binding. The Company intends to make additional capital commitments from time to time to fund additional investment products for, and with, its clients.

Contingencies

Legal Proceedings. From time to time, BlackRock receives subpoenas or other requests for information from various US federal and state governmental and regulatory authorities and international governmental and regulatory authorities in connection with industry-wide or other investigations or proceedings. It is BlackRock’s policy to cooperate fully with such matters. BlackRock is currently responding to requests from the SEC in connection with a publicly reported, industry-wide investigation of investment advisers’ compliance with record retention requirements relating to certain types of electronic communications. BlackRock is cooperating with the SEC’s investigation.

The Company, certain of its subsidiaries and employees have been named as defendants in various legal actions, including arbitrations and other litigation arising in connection with BlackRock’s activities. Additionally, BlackRock-advised investment portfolios may be subject to lawsuits, any of which potentially could harm the investment returns of the applicable portfolio or result in the Company being liable to the portfolios for any resulting damages.

Management, after consultation with legal counsel, currently does not anticipate that the aggregate liability arising out of regulatory matters or lawsuits will have a material effect on BlackRock’s results of operations, financial position, or cash flows. However, there is no assurance as to whether any such pending or threatened matters will have a material effect on BlackRock’s results of operations, financial position or cash flows in any future reporting period. Due to uncertainties surrounding the outcome of these matters, management cannot reasonably estimate the possible loss or range of loss that may arise from these matters.

Indemnifications. In the ordinary course of business or in connection with certain acquisition agreements, BlackRock enters into contracts pursuant to which it may agree to indemnify third parties in certain circumstances. The terms of these indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined or the likelihood of any liability is considered remote. Consequently, no liability has been recorded on the condensed consolidated statements of financial condition.

In connection with securities lending transactions, BlackRock has agreed to indemnify certain securities lending clients against potential loss resulting from a borrower’s failure to fulfill its obligations under the securities lending agreement should the value of the collateral pledged by the borrower at the time of default be insufficient to cover the borrower’s obligation under the securities lending agreement. The amount of securities on loan as of ~~March 31,~~September 30, 2023 and subject to this type of indemnification was approximately $~~264~~246 billion. In the Company’s capacity as lending agent, cash and securities totaling approximately $~~281~~262 billion were held as collateral for indemnified securities on loan at ~~March 31,~~September 30, 2023. The fair value of these indemnifications was not material at ~~March 31,~~September 30, 2023.

2125

15. Revenue

The table below presents detail of revenue for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 and includes the product mix of investment advisory, administration fees and securities lending revenue, and performance fees.


	Three Months Ended				Three Months Ended					Nine Months Ended
	March 31,				September 30,					September 30,
(in millions)	2023		2022		2023		2022			2023		2022
Revenue
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	500	$	616	$	510	$	503		$	1,516	$	1,669
ETFs		1,078		1,158		1,136		1,063			3,316		3,324
Non-ETF index		177		187		186		179			560		552
Equity subtotal		1,755		1,961		1,832		1,745			5,392		5,545
Fixed income:
Active		468		534		479		478			1,429		1,515
ETFs		295		289		315		276			919		839
Non-ETF index		87		118		93		91			268		311
Fixed income subtotal		850		941		887		845			2,616		2,665
Multi-asset		296		359		308		316			904		1,006
Alternatives:
Illiquid alternatives		201		179		231		184			638		547
Liquid alternatives		145		167		143		155			434		483
Currency and commodities(1)		46		56		46		51			141		169
Alternatives subtotal		392		402		420		390			1,213		1,199
Long-term		3,293		3,663		3,447		3,296			10,125		10,415
Cash management		209		170		234		235			669		637
Total investment advisory, administration fees and securities lending revenue		3,502		3,833		3,681		3,531			10,794		11,052
Investment advisory performance fees:
Equity		6		12		17		(2	)		38		13
Fixed income		1		9		1		(3	)		2		19
Multi-asset		15		5		5		2			23		14
Alternatives:
Illiquid alternatives		21		37		24		79			124		181
Liquid alternatives		12		35		23		6			56		59
Alternatives subtotal		33		72		47		85			180		240
Total investment advisory performance fees		55		98		70		82			243		286
Technology services revenue		340		341		407		338			1,106		1,011
Distribution fees		319		381		321		325			959		1,067
Advisory and other revenue:
Advisory		14		16		21		8			66		39
Other		13		30		22		27			60		81
Total advisory and other revenue		27		46		43		35			126		120
Total revenue	$	4,243	$	4,699	$	4,522	$	4,311		$	13,228	$	13,536

(1)

Amounts include commodity ETFs.

2226

The tables below present the investment advisory, administration fees and securities lending revenue by client type and investment style:


	Three Months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in millions)	2023		2022		2023		2022		2023		2022
By client type:
Retail	$	1,032	$	1,224	$	1,046	$	1,058	$	3,122	$	3,421
ETFs		1,418		1,501		1,498		1,385		4,376		4,322
Institutional:
Active		622		675		670		623		1,932		1,934
Index		221		263		233		230		695		738
Total institutional		843		938		903		853		2,627		2,672
Long-term		3,293		3,663		3,447		3,296		10,125		10,415
Cash management		209		170		234		235		669		637
Total	$	3,502	$	3,833	$	3,681	$	3,531	$	10,794	$	11,052

By investment style:
Active	$	1,606	$	1,851	$	1,662	$	1,635	$	4,903	$	5,213
Index and ETFs		1,687		1,812		1,785		1,661		5,222		5,202
Long-term		3,293		3,663		3,447		3,296		10,125		10,415
Cash management		209		170		234		235		669		637
Total	$	3,502	$	3,833	$	3,681	$	3,531	$	10,794	$	11,052

Investment Advisory and Administration Fees – Remaining Performance Obligation

The tables below present estimated investment advisory and administration fees expected to be recognized in the future related to the unsatisfied portion of the performance obligations at ~~March 31,~~September 30, 2023 and 2022:

~~March 31,~~September 30, 2023


	Remainder of												Remainder of
(in millions)	2023		2024		2025		2026		Thereafter		Total		2023		2024		2025		2026		Thereafter		Total
Investment advisory and administration fees:
Alternatives(1)(2)	$	123	$	120	$	87	$	67	$	49	$	446	$	51	$	173	$	141	$	119	$	89	$	573

~~March 31,~~September 30, 2022


	Remainder of												Remainder of
(in millions)	2022		2023		2024		2025		Thereafter		Total		2022		2023		2024		2025		Thereafter		Total
Investment advisory and administration fees:
Alternatives(1)(2)	$	130	$	159	$	96	$	58	$	38	$	481	$	47	$	176	$	112	$	73	$	53	$	461

(1)

Investment advisory and administration fees include management fees related to certain alternative products, which are based on contractual committed capital outstanding at ~~March 31,~~September 30, 2023 and 2022. Actual management fees could be higher to the extent additional committed capital is raised. These fees are generally billed on a quarterly basis in arrears.

(2)

The Company elected the following practical expedients and therefore does not include amounts related to (a) performance obligations with an original duration of one year or less, and (b) variable consideration related to future service periods.

Change in Deferred Carried Interest Liability

The table below presents changes in the deferred carried interest liability, which is included in other liabilities on the condensed consolidated statements of financial condition, for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in millions)	2023			2022			2023			2022			2023			2022
Beginning balance	$	1,420		$	1,508		$	1,651		$	1,592		$	1,420		$	1,508
Net increase (decrease) in unrealized allocations		54			223			250			(58	)		569			119
Performance fee revenue recognized		(16	)		(32	)		(12	)		(72	)		(100	)		(165	)
Ending balance	$	1,458		$	1,699		$	1,889		$	1,462		$	1,889		$	1,462

Technology Services Revenue – Remaining Performance Obligation

The tables below present estimated technology services revenue expected to be recognized in the future related to the unsatisfied portion of the performance obligations at ~~March 31,~~September 30, 2023 and 2022:

~~March 31,~~September 30, 2023


	Remainder of												Remainder of
(in millions)	2023		2024		2025		2026		Thereafter		Total		2023		2024		2025		2026		Thereafter		Total
Technology services revenue(1)(2)	$	87	$	56	$	37	$	26	$	18	$	224	$	34	$	90	$	55	$	39	$	30	$	248

~~March 31,~~September 30, 2022


	Remainder of												Remainder of
(in millions)	2022		2023		2024		2025		Thereafter		Total		2022		2023		2024		2025		Thereafter		Total
Technology services revenue(1)(2)	$	92	$	60	$	37	$	22	$	18	$	229	$	29	$	79	$	45	$	29	$	26	$	208

(1)

Technology services revenue primarily includes upfront payments from customers, which the Company generally recognizes as services are performed.

(2)

In addition to amounts disclosed in the tables above, certain technology services contracts require fixed minimum fees, which are billed on a monthly or quarterly basis in arrears. The Company recognizes such revenue as services are performed. As of ~~March 31,~~September 30, 2023, the estimated fixed minimum fees for the remainder of the year approximated $~~700~~255 million. The term for these contracts, which are either in their initial or renewal period, ranges from one to five years.

The table below presents changes in the technology services deferred revenue liability for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022, which is included in other liabilities on the condensed consolidated statements of financial condition:


	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in millions)	2023			2022			2023			2022			2023			2022
Beginning balance	$	125		$	122		$	122		$	108		$	125		$	122
Additions(1)		21			22			21			25			58			74
Revenue recognized that was included in the beginning balance		(26	)		(31	)		(28	)		(32	)		(68	)		(95	)
Ending balance	$	120		$	113		$	115		$	101		$	115		$	101

(1)

Amounts are net of revenue recognized.

2429

16. Stock-Based Compensation

Restricted Stock Units ~~(“RSUs”~~("RSUs")

RSU activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 is summarized below.


Outstanding at	RSUs			Weighted- Average Grant Date Fair Value		RSUs			Weighted- Average Grant Date Fair Value
December 31, 2022		2,009,207		$	710.67		2,009,207		$	710.67
Granted		620,348		$	743.12		732,750		$	734.02
Converted		(787,688	)	$	633.48		(895,044	)	$	633.55
Forfeited		(9,967	)	$	731.22		(53,098	)	$	772.82
March 31, 2023		1,831,900		$	754.73
September 30, 2023							1,793,815		$	756.85

In January 2023, pursuant to the BlackRock, Inc. Second Amended and Restated 1999 Stock Award and Incentive Plan (the “Award Plan”), the Company granted~~342,706~~ ~~RSUs to employees~~ as part of the 2022 annual incentive compensation342,706 RSUs to employees that vest ratably over three years from the grant date ~~of grant~~ and 259,465 RSUs to employees that cliff vest 100% on January 31, 2026. On May 30, 2023, pursuant to the Award Plan, the Company granted 71,267 RSUs that cliff vest 100% on May 30, 2027. The Company values RSUs at their grant-date fair value as measured by BlackRock’s common stock price. The total fair market value of RSUs granted to employees during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was $~~461~~538 million.

At ~~March 31,~~September 30, 2023, the intrinsic value of outstanding RSUs was $1.2 billion, reflecting a closing stock price of $~~669.12~~646.49.

At ~~March 31,~~September 30, 2023, total unrecognized stock-based compensation expense related to unvested RSUs was $~~759~~547 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of ~~1.6~~1.3 years.

Performance-Based RSUs.

Performance-based RSU activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 is summarized below.


Outstanding at	Performance- Based RSUs			Weighted- Average Grant Date Fair Value		Performance- Based RSUs			Weighted- Average Grant Date Fair Value
December 31, 2022		531,054		$	672.47		531,054		$	672.47
Granted		169,938		$	743.60		169,938		$	743.60
Additional shares granted due to attainment of performance measures		29,194		$	532.15
Additional shares due to attainment of performance measures							29,194		$	532.15
Converted		(262,797	)	$	534.00		(262,797	)	$	534.00
Forfeited		(1,793	)	$	641.08		(11,005	)	$	756.51
March 31, 2023		465,596		$	767.91
September 30, 2023							456,384		$	767.69

In January 2023, pursuant to the Award Plan, the Company granted 169,938 performance-based RSUs that cliff vest 100% on January 31, 2026. These awards are amortized over a service period of three years. The number of shares distributed at vesting could be higher or lower than the original grant based on the level of attainment of predetermined Company performance measures. In January 2023, the Company granted 29,194 additional RSUs based on the attainment of Company performance measures during the performance period.

The Company values performance-based RSUs at their grant-date fair value as measured by BlackRock’s common stock price. The total grant-date fair market value of performance-based RSUs granted to employees during the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was $142 million.

At ~~March 31,~~September 30, 2023, the intrinsic value of outstanding performance-based RSUs was $~~311~~295 million, reflecting a closing stock price of $~~669.12~~646.49.

At ~~March 31,~~September 30, 2023, total unrecognized stock-based compensation expense related to unvested performance-based awards was $~~163~~112 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of ~~1.9~~1.4 years.

See Note 18, Stock-Based Compensation, in the 2022 Form 10-K for more information on performance-based RSUs.

2530

~~Performance-based~~ Stock ~~Options.~~Options

Stock option activity and ending balance for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 is summarized below.


	2017 Performance-based Options					2023 Performance-based Options					2023 Time-based Options
	Shares Under Option			Weighted Average Exercise Price		Shares Under Option			Weighted Average Exercise Price		Shares Under Option		Weighted Average Exercise Price
Outstanding at December 31, 2022		1,735,898		$	513.50		—		$	—		—	$	—
Granted		—		$	—		814,482		$	673.58		326,391	$	673.58
Exercised		(99,145	)	$	513.50		—		$	—		—	$	—
Forfeited		(2,577	)	$	513.50		(6,787	)	$	673.58		—	$	—
Outstanding at September 30, 2023		1,634,176		$	513.50		807,695		$	673.58		326,391	$	673.58

Shares
Under
Option

Weighted
Average
Exercise
Price

Weighted Average Remaining Contractual Life (Years)

Aggregate Intrinsic Value (in millions)

Outstanding at December 31, 2022

1,735,898

$
513.50

Exercised

(54,072
)

$
513.50

Forfeited

(2,576
)

$
513.50

Outstanding at March 31, 2023(1)

1,679,250

$
513.50

3.7

$
261

Exercisable at March 31, 2023

540,583

$
513.50

3.7

$
84


	Options Outstanding								Options Exercisable
Option Type	Exercise Prices		Options Outstanding(1)		Weighted Average Remaining Life (years)		Aggregate Intrinsic Value (in millions)		Exercise Prices		Options Exercisable		Weighted Average Remaining Life (years)		Aggregate Intrinsic Value (in millions)
2017 Performance-based	$	513.50		1,634,176		3.2	$	217	$	513.50		495,510		3.2	$	66
2023 Performance-based	$	673.58		807,695		8.7		—	$	673.58		—		—		—
2023 Time-based	$	673.58		326,391		8.7		—	$	673.58		—		—		—
				2,768,262		5.4	$	217				495,510		3.2	$	66

(1)

At ~~March 31,~~September 30, 2023, ~~approximately~~ 1.1 million 2017 performance-based options, 0.8 million 2023 performance-based options and 0.3 million 2023 time-based options were expected to vest.

At September 30, 2023, total unrecognized stock-based compensation expense related to unvested performance-based and time-based stock options was $171 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of 2.8 years.

Performance-based stock options

In 2017, pursuant to the Award Plan, the Company awarded performance-based stock option grants to certain employees ("2017 Performance-based Options"). Vesting of ~~the performance-based stock options~~2017 Performance-based Options was contingent upon the achievement of obtaining 125% of BlackRock's grant-date stock price within five years from the grant date and the attainment of Company performance measures during the four-year performance period. Both hurdles have been achieved, and the first tranche of the awards vested at the end of 2022 with two subsequent equal installments vesting at the end of 2023 and 2024, respectively. The aggregate intrinsic value of 2017 Performance-based Options exercised during the nine months ended September 30, 2023 was $22 million. See Note 18, Stock-Based Compensation, in the 2022 Form 10-K for more information on 2017 Performance-based Options.

On May 30, 2023, pursuant to the Award Plan, the Company awarded performance-based options to purchase 814,482 shares of BlackRock common stock to certain employees as long-term incentive compensation ("2023 Performance-based Options"). Vesting of 2023 Performance-based Options is contingent upon the achievement of obtaining 130% of grant-date stock price over 60 calendar days within four years from the grant date and attainment of Company performance measures during the three-year performance period. If both hurdles are achieved, the award will vest in three tranches of 25%, 25% and 50% in May of 2027, 2028 and 2029, respectively. Vested options are exercisable for up to nine years following the grant ~~date. The~~date, and the awards are ~~generally~~ forfeited if the employee ~~leaves the Company~~resigns before the respective vesting date. The expense for each tranche is amortized over the respective requisite service period.

~~At March 31,~~The 2023 ~~total unrecognized stock-based compensation expense related to unvested performance-based stock options~~Performance-based Options have a strike price of $673.58 which was the closing price of the shares on the grant date. The grant-date fair value of the 2023 Performance-based Options was $16120 ~~million.~~ million and was estimated using a Monte Carlo simulation with an embedded lattice model using the assumptions included in the following table:


Grant Year	Expected Term (Years)(1)	Expected Stock Volatility(2)			Expected Dividend Yield(3)			Risk-Free Interest Rate(4)
2023	6.02		27.73	%		3.02	%		3.61	%

(1)

The ~~unrecognized compensation cost is~~expected term was derived using a Monte Carlo simulation with the embedded lattice model and represents the period of time that options granted are expected to be ~~recognized over~~outstanding.

(2)

The expected stock volatility was based upon an average of historical stock price fluctuations of BlackRock’s common stock and an implied volatility at the ~~remaining weighted-average~~grant date.

(3)

The expected dividend yield was calculated as the most recent quarterly dividend divided by the average three-month stock price as of the grant date.

(4)

The risk-free interest rate is based on the US Treasury Constant Maturities yield curve at grant date.

Time-based stock options

On May 30, 2023, pursuant to the Award Plan, the Company awarded time-based stock options to purchase 326,391 shares of BlackRock common stock to certain employees as long-term incentive compensation ("2023 Time-based Options"). These awards will vest in three tranches of 25%, 25% and 50% in May 2027, 2028 and 2029, respectively. Vested options can be exercised up to nine years following the grant date, and the awards are forfeited if the employee resigns before the respective vesting date.

The 2023 Time-based Options have a strike price of $673.58 which was the closing price of the shares on the grant date. The grant-date fair value of the 2023 Time-based Options was $55 million and was estimated using a Black-Scholes-Merton model using the assumptions included in the following table:


Grant Year	Expected Term (Years)(1)		Expected Stock Volatility(2)			Expected Dividend Yield(3)			Risk-Free Interest Rate(4)
2023		7.13		28.29	%		3.02	%		3.65	%

(1)

The expected term represents the period of time that options granted are expected to be outstanding, and was calculated as the midpoint between the weighted average time to vest and expiration.

(2)~~1.2~~ ~~years.~~

The ~~aggregate intrinsic value~~expected stock volatility was based upon an average of ~~performance-based~~historical stock ~~options exercised during~~price fluctuations of BlackRock’s common stock and an implied volatility at the ~~three months ended March 31, 2023~~grant date.

(3)

The expected dividend yield was $12 ~~million.~~

~~See Note 18,~~ ~~Stock-Based Compensation,~~ incalculated as the ~~2022 Form 10-K for more information~~most recent quarterly dividend divided by the average three-month stock price as of the grant date.

(4)

The risk-free interest rate is based on ~~performance-based stock options.~~

the US Treasury Constant Maturities yield curve at grant date.

17. Net Capital Requirements

The Company is required to maintain net capital in certain regulated subsidiaries within a number of jurisdictions, which is partially maintained by retaining cash and cash equivalent investments in those subsidiaries or jurisdictions. As a result, such subsidiaries of the Company may be restricted in their ability to transfer cash between different jurisdictions and to their parents. Additionally, transfers of cash between international jurisdictions may have adverse tax consequences that could discourage such transfers.

At ~~March 31,~~September 30, 2023, the Company was required to maintain approximately $~~2.2~~1.8 billion in net capital in certain regulated subsidiaries, including BlackRock Institutional Trust Company, N.A. (a wholly owned subsidiary of the Company chartered as a national bank with powers limited to trust and other fiduciary activities and subject to regulatory capital requirements administered by the US Office of the Comptroller of the Currency), entities regulated by the Financial Conduct Authority and Prudential Regulation Authority in the UK, and the Company’s broker-dealers. The Company was in compliance with all applicable regulatory net capital requirements.

2632

18. Accumulated Other Comprehensive Income (Loss)

The following table presents changes in AOCI for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022:


	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in millions)	2023			2022			2023			2022			2023			2022
Beginning balance	$	(1,101	)	$	(550	)	$	(880	)	$	(1,091	)	$	(1,101	)	$	(550	)
Foreign currency translation adjustments(1)		126			(125	)		(221	)		(381	)		—			(922	)
Ending balance	$	(975	)	$	(675	)	$	(1,101	)	$	(1,472	)	$	(1,101	)	$	(1,472	)

(1)

19. Capital Stock

Share Repurchases. In January 2023, the Company announced that the Board of Directors authorized the repurchase of an additional seven million shares under the ~~Company’s~~Company's existing share repurchase program for a total of up to approximately 7.9 million shares of BlackRock common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including legal limitations, price and market conditions.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repurchased ~~0.5~~1.6 million common shares under the Company’s existing share repurchase program for approximately $~~375~~1.1 ~~million.~~billion. At ~~March 31,~~September 30, 2023, there were approximately ~~7.4~~6.3 million shares still authorized to be repurchased under the program.

20. Restructuring Charge

A restructuring charge of $91 million ($69 million after-tax), comprised of $58 million of severance and $33 million of expense related to the accelerated amortization of previously granted stock-based compensation awards, was recorded in the fourth quarter of 2022 in connection with an initiative to modify the workforce to align more closely with strategic priorities.

The table below presents a rollforward of the Company's restructuring liability for the ~~three~~nine months ended ~~March 31,~~September 30, 2023, which is included in other liabilities on the condensed consolidated statements of financial ~~condition:~~condition.


	Three Months Ended			Nine Months Ended
(in millions)	March 31, 2023			September 30, 2023
Liability as of December 31, 2022	$	58		$	58
Cash payments		(34	)		(56	)
Liability as of March 31, 2023	$	24
Liability as of September 30, 2023				$	2

21. Income Taxes

Income tax expense for the three months ended ~~March 31,~~September 30, 2023 included a $38223 million of discrete tax ~~benefit related to stock-based compensation awards that vested in the first quarter, offset by a $~~38 ~~million discrete tax expense~~benefits related to the resolution of certain outstanding tax matters.

Income tax expense for the ~~three~~nine months ended ~~March 31, 2022~~September 30, 2023 included $~~133~~185 million of discrete tax net benefits related to the resolution of certain outstanding tax matters and $41 million of discrete tax benefits related to stock-based compensation awards that vested in 2023.

Income tax expense for the ~~first quarter~~three months ended September 30, 2022 included approximately $93 million of ~~2022 and~~discrete tax benefits related to the resolution of certain outstanding tax matters. Income tax expense for the nine months ended September 30, 2022 included $139 million of discrete tax benefits related to the resolution of certain tax matters and $87 million of discrete tax benefits related to stock-based compensation awards that vested in 2022. In addition, GAAP income tax expense for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 included $18 million of net noncash tax ~~benefits~~benefit related to the revaluation of certain deferred income tax liabilities.

2733

22. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (“EPS”) for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 under the treasury stock method:


	Three Months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in millions, except shares and per share data)	2023		2022		2023		2022		2023		2022
Net income attributable to BlackRock, Inc.	$	1,157	$	1,436	$	1,604	$	1,406	$	4,127	$	3,919
Basic weighted-average shares outstanding		149,909,343		151,732,845		149,155,258		150,644,985		149,553,652		151,219,485
Dilutive effect of:
Nonparticipating RSUs		1,007,476		1,229,694		930,202		981,319		900,643		1,015,467
Stock options		433,010		567,856		419,683		335,085		407,728		409,102
Total diluted weighted-average shares outstanding		151,349,829		153,530,395		150,505,143		151,961,389		150,862,023		152,644,054
Basic earnings per share	$	7.72	$	9.46	$	10.75	$	9.33	$	27.60	$	25.92
Diluted earnings per share	$	7.64	$	9.35	$	10.66	$	9.25	$	27.36	$	25.67

For the three and nine months ended ~~March 31,~~September 30, 2023, ~~and 2022,~~ ~~394,076~~328,319 and ~~443,223~~149,684 shares, primarily related to stock options, respectively, were excluded from the calculation of diluted EPS because to include them would have an anti-dilutive effect. For the three and nine months ended September 2022, 371,687 and 348,343 RSUs, respectively, were excluded from the calculation of diluted EPS because to include them would have an anti-dilutive effect. Certain performance-based RSUs and stock options were excluded from the diluted EPS calculation because the designated ~~contingency was~~contingencies were not met for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022, respectively.

23. Segment Information

The Company’s management directs BlackRock’s operations as one business, the asset management business. The Company utilizes a consolidated approach to assess performance and allocate resources. As such, the Company operates in one business segment.

The following table illustrates total revenue for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 by geographic region. These amounts are aggregated on a legal entity basis and do not necessarily reflect where the customer resides or affiliated services are provided.

Three Months Ended

March 31,

(in millions)

2023

2022

Revenue

Americas

$
2,831

$
3,089

Europe

1,224

1,396

Asia-Pacific

188

214

Total revenue

$
4,243

$
4,699


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Revenue
Americas	$	2,979	$	2,890	$	8,792	$	8,993
Europe		1,361		1,241		3,876		3,944
Asia-Pacific		182		180		560		599
Total revenue	$	4,522	$	4,311	$	13,228	$	13,536

See Note 15, Revenue, for further information on the Company’s sources of revenue.

The following table illustrates long-lived assets that consist of goodwill and property and equipment at ~~March 31,~~September 30, 2023 and December 31, 2022 by geographic region. These amounts are aggregated on a legal entity basis and do not necessarily reflect where the asset is physically located.


	March 31,		December 31,		September 30,		December 31,
(in millions)	2023		2022		2023		2022
Long-lived Assets
Americas	$	14,957	$	14,945	$	14,975	$	14,945
Europe		1,332		1,329		1,504		1,329
Asia-Pacific		96		98		95		98
Total long-lived assets	$	16,385	$	16,372	$	16,574	$	16,372

Americas is primarily comprised of the US, Latin America and Canada, while Europe is primarily comprised of the UK, the Netherlands, Switzerland, France, Ireland and Luxembourg. Asia-Pacific is primarily comprised of Hong Kong, Australia, Japan and Singapore.

2834

24. Subsequent Events

The Company conducted a review for subsequent events and determined that no subsequent events had occurred that would require accrual or additional disclosures.

2935

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

This report, 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 reports. These risk factors and those identified elsewhere in this report, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) 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”); (3) the relative and absolute investment performance of BlackRock’s investment products; (4) BlackRock’s ability to develop new products and services that address client preferences; (5) the impact of increased competition; (6) the impact of future acquisitions or divestitures; (7) BlackRock’s ability to integrate acquired businesses successfully; (8) the unfavorable resolution of legal proceedings; (9) the extent and timing of any share repurchases; (10) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and cybersecurity protection; (11) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (12) the impact of legislative and regulatory actions and reforms, regulatory, supervisory or enforcement actions of government agencies and governmental scrutiny relating to BlackRock; (13) changes in law and policy and uncertainty pending any such changes; (14) any failure to effectively manage conflicts of interest; (15) damage to BlackRock’s reputation; (16) geopolitical unrest, terrorist activities, civil or international hostilities, including the war between Russia and Ukraine, and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (17) a pandemic or health crisis, and related impact on BlackRock’s business, operations and financial condition; (18) climate-related risks to BlackRock's business, products, operations and clients; (19) the ability to attract, train and retain highly qualified and diverse professionals; (20) fluctuations in the carrying value of BlackRock’s economic investments; (21) 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; (22) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (23) the failure by key third-party providers of BlackRock to fulfill their obligations to the Company; (24) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (25) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds (“ETFs”) platform; (26) 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 (27) the impact of problems, instability or failure of other financial institutions or the failure or negative performance of products offered by other financial institutions.

3036

OVERVIEW

BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) is a leading publicly traded investment management firm with $9.1 trillion of AUM at ~~March 31,~~September 30, 2023. With approximately ~~19,500~~19,900 employees in more than 30 countries, BlackRock provides a broad range of investment management and technology services to institutional and retail clients in more than 100 countries across the globe.

BlackRock’s diverse platform of alpha-seeking active, index and cash management investment strategies across asset classes enables the Company to offer choice and tailor investment 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, iShares® and BlackRock ETFs, separate accounts, collective trust funds and other pooled investment vehicles. BlackRock also offers technology services, including the investment and risk management technology platform, Aladdin®, Aladdin Wealth, eFront, and Cachematrix, as well as advisory services and solutions to a broad base of institutional and wealth management clients. The Company is highly regulated and manages its clients’ assets as a fiduciary. The Company does not engage in proprietary trading activities that could conflict with the interests of its clients.

BlackRock serves a diverse mix of institutional and retail clients across the globe. Clients include tax-exempt institutions, such as defined benefit and defined contribution pension plans, charities, foundations and endowments; official institutions, such as central banks, sovereign wealth funds, supranationals and other government entities; taxable institutions, including insurance companies, financial institutions, corporations and third-party fund sponsors, and retail intermediaries.

BlackRock maintains a significant global sales and marketing presence that is focused on establishing and maintaining retail and institutional investment management and technology service relationships by marketing its services to investors directly and through third-party distribution relationships, including financial professionals and pension consultants.

Acquisition. In August 2023, BlackRock completed the acquisition of Kreos Capital, a provider of growth and venture debt financing to companies in the technology and healthcare industries (the "Kreos Transaction"). The Company believes this acquisition will add to the Company's position as a leading global credit asset manager and advance its ambitions to provide clients with a diverse range of private market investment products and solutions. Total consideration for the transaction was approximately $250 million, which included contingent consideration.

3137

EXECUTIVE SUMMARY


	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in millions, except per share data)	2023			2022			2023			2022			2023			2022
GAAP basis:
GAAP basis(1):
Total revenue	$	4,243		$	4,699		$	4,522		$	4,311		$	13,228		$	13,536
Total expense		2,805			2,935			2,885			2,785			8,538			8,578
Operating income	$	1,438		$	1,764		$	1,637		$	1,526		$	4,690		$	4,958
Operating margin		33.9	%		37.5	%		36.2	%		35.4	%		35.5	%		36.6	%
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests		104			(65	)		180			210			478			(88	)
Income tax expense		385			263			213			330			1,041			951
Net income attributable to BlackRock	$	1,157		$	1,436		$	1,604		$	1,406		$	4,127		$	3,919
Diluted earnings per common share	$	7.64		$	9.35		$	10.66		$	9.25		$	27.36		$	25.67
Effective tax rate		25.0	%		15.5	%		11.7	%		19.0	%		20.1	%		19.5	%
As adjusted(1):
As adjusted(2):
Operating income	$	1,511		$	1,822		$	1,691		$	1,585		$	4,877		$	5,134
Operating margin		40.4	%		44.2	%		42.3	%		42.0	%		41.8	%		43.3	%
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests	$	87		$	(65	)	$	184		$	210		$	449		$	(88	)
Net income attributable to BlackRock	$	1,200		$	1,462		$	1,642		$	1,451		$	4,241		$	4,035
Diluted earnings per common share	$	7.93		$	9.52		$	10.91		$	9.55		$	28.11		$	26.43
Effective tax rate		25.0	%		16.8	%		12.4	%		19.2	%		20.4	%		20.0	%
Other:
Other:
Assets under management (end of period)	$	9,090,271		$	9,569,513		$	9,100,825		$	7,961,373		$	9,100,825		$	7,961,373
Diluted weighted-average common shares outstanding		151.3			153.5			150.5			152.0			150.9			152.6
Shares outstanding (end of period)		149.9			151.7			148.9			150.5			148.9			150.5
Book value per share~~(2)~~(3)	$	251.57		$	247.08		$	259.34		$	246.99		$	259.34		$	246.99
Cash dividends declared and paid per share	$	5.00		$	4.88		$	5.00		$	4.88		$	15.00		$	14.64

(1)

Accounting principles generally accepted in the United States (“GAAP”).

(2)

As adjusted items are described in more detail in Non-GAAP Financial Measures. Beginning in the first quarter of 2023, BlackRock updated the definitions of its non-GAAP financial measures to exclude the impact of market valuation changes on certain deferred cash compensation plans which the Company began economically hedging in 2023.

~~(2)~~(3)

Total BlackRock stockholders’ equity divided by total shares outstanding at ~~March 31~~September 30 of the respective period-end.

Three Months Ended ~~March 31,~~September 30, 2023 Compared with Three Months Ended ~~March 31,~~September 30, 2022

GAAP. Operating income of ~~$1.4~~$1.6 billion ~~decreased $326~~increased $111 million and operating margin of ~~33.9% decreased 360~~36.2% increased 80 bps from the three months ended ~~March 31,~~September 30, 2022. Increases in operating income and operating margin reflected higher investment advisory and administration fees (collectively "base fees"), primarily driven by organic base fee growth and the impact of market movements over the past twelve months on average AUM, and higher technology services revenue.

Nonoperating income (expense) less net income (loss) attributable to noncontrolling interests (“NCI”) decreased $30 million from the three months ended September 30, 2022, reflecting the impact of $267 million of noncash gains related to BlackRock's strategic minority investment in iCapital Network, Inc. ("iCapital") during 2022, partially offset by higher mark-to-market revaluation of the Company's seed capital portfolio, net of impact of certain hedges, higher gains on private equity co-investment portfolios, and higher interest and dividend income during the three months ended September 30, 2023.

Earnings per diluted common share increased $1.41, or 15%, from the three months ended September 30, 2022, primarily driven by higher operating income and a lower effective tax rate, partially offset by lower nonoperating income. Income tax expense for the three months ended September 30, 2023 and September 30, 2022 included approximately $223 million and $93 million, respectively, of discrete tax benefits related to the resolution of certain outstanding tax matters.

As Adjusted. Operating income of $1.7 billion increased $106 million and operating margin of 42.3% increased 30 bps from the three months ended September 30, 2022. Earnings per diluted common share increased $1.36, or 14%, from the three months ended September 30, 2022, primarily reflecting higher operating income and a lower effective tax rate, partially offset by lower nonoperating income.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

GAAP. Operating income of $4.7 billion decreased $268 million and operating margin of 35.5% decreased 110 bps from the nine months ended September 30, 2022. Decreases in operating income and operating margin reflected lower base fees, driven by the impact of lower markets, ~~and the negative impact of foreign exchange movements, and lower performance fees,~~ partially offset by ~~lower~~higher technology expense.

Nonoperating income (expense) less net income (loss) attributable to ~~noncontrolling interests (“NCI”)~~NCI increased ~~$169~~$566 million from the ~~three~~nine months ended ~~March 31,~~September 30, 2022, driven primarily by higher mark-to-market gains on the Company’s ~~un-hedged seed capital and~~ private equity co-investment portfolios, higher mark-to-market revaluation of Company's seed capital portfolio, net of impact of certain hedges, and higher interest and dividend ~~income.~~income, partially offset by the impact of $267 million of noncash gains related to BlackRock's strategic minority investment in iCapital during 2022.

~~First quarter 2023 income~~Income tax expense for the nine months ended September 30, 2023 included ~~a $38~~$226 million discrete tax ~~benefit related to stock-based compensation awards that vested in 2023, offset by a $38 million discrete tax expense~~net benefits related to the resolution of certain outstanding tax ~~matters. First quarter 2022 income~~matters and stock-based compensation awards that vested in 2023. Income tax expense for the nine months ended September 30, 2022 included ~~$133~~$226 million of discrete tax benefits related to stock-based compensation awards that vested in 2022 and the resolution of certain outstanding tax ~~matters. In addition, first quarter 2022 income tax expense included~~matters, and $18 million of net noncash tax benefits related to the revaluation of certain deferred income tax liabilities. ~~See~~ ~~Income Tax Expense~~ ~~within~~ ~~Discussion of Financial Results~~ ~~for more information.~~

Earnings per diluted common share ~~decreased $1.71,~~increased $1.69 or ~~18%~~7%, from the ~~three~~nine months ended ~~March 31,~~September 30, 2022, primarily reflecting ~~lower operating~~higher nonoperating income, ~~and a higher effective tax rate,~~ partially offset by ~~higher nonoperating income in the current quarter.~~lower operating income.

As Adjusted.Operating income of ~~$1.5~~$4.9 billion decreased ~~$311~~$257 million and operating margin of ~~40.4%~~41.8% decreased ~~380~~150 bps from the ~~three~~nine months ended ~~March 31,~~September 30, 2022.

Earnings per diluted common share ~~decreased $1.59,~~increased $1.68, or ~~17%~~6%, from the ~~three~~nine months ended ~~March 31, 2022, reflecting lower operating income and a higher effective tax rate, partially offset by higher nonoperating income.~~September 30, 2022. Income tax expense ~~as adjusted,~~ for the ~~first quarter of~~nine months ended September 30, 2022 excluded the $18 million of net noncash ~~tax benefits~~benefit described above.

Beginning in the first quarter of 2023, BlackRock updated its definitions of operating income, as adjusted, operating margin, as adjusted, nonoperating income (expense), as adjusted, and net income attributable to BlackRock, Inc., as adjusted, to exclude the compensation expense related to the market valuation changes on certain deferred cash compensation plans, and the related nonoperating gain (loss) impact of an economic hedge of these deferred cash compensation plans. See Non-GAAP Financial Measures for further information on as adjusted items and the reconciliation to ~~accounting principles generally accepted in the United States (“GAAP”).~~GAAP.

For further discussion of BlackRock’s revenue, expense, nonoperating results and income tax expense, see Discussion of Financial Results herein.

3339

NON-GAAP FINANCIAL MEASURES

BlackRock reports its financial results in accordance with GAAP; however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. 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. Management reviews non-GAAP financial measures, in addition to 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 comparability for the reporting periods presented. Non-GAAP financial 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 financial measures may not be comparable to other similarly titled measures of other companies.

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

3440

(1) Operating income, as adjusted, and operating margin, as adjusted:


	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in millions)	2023			2022			2023			2022			2023			2022
Operating income, GAAP basis	$	1,438		$	1,764		$	1,637		$	1,526		$	4,690		$	4,958
Non-GAAP expense adjustments:
Compensation expense related to appreciation (depreciation) on deferred cash compensation plans (a)		20			—			(3	)		—			29			—
Amortization of intangible assets (b)		37			38			39			38			113			114
Acquisition-related compensation costs (b)		5			7			6			5			15			18
Acquisition-related transaction costs (b)(1)								4			—			7			—
Contingent consideration fair value adjustments (b)		—			1			—			1			1			2
Lease costs - New York (c)		11			12			—			15			14			42
Reduction of indemnification asset (d)(1)								8			—			8			—
Operating income, as adjusted		1,511			1,822		$	1,691		$	1,585		$	4,877		$	5,134
Product launch costs and commissions		—			—
Operating income used for operating margin measurement	$	1,511		$	1,822
Revenue, GAAP basis	$	4,243		$	4,699		$	4,522		$	4,311		$	13,228		$	13,536
Non-GAAP adjustments:
Distribution fees		(319	)		(381	)		(321	)		(325	)		(959	)		(1,067	)
Investment advisory fees		(186	)		(193	)		(205	)		(211	)		(590	)		(615	)
Revenue used for operating margin measurement	$	3,738		$	4,125		$	3,996		$	3,775		$	11,679		$	11,854
Operating margin, GAAP basis		33.9	%		37.5	%		36.2	%		35.4	%		35.5	%		36.6	%
Operating margin, as adjusted		40.4	%		44.2	%		42.3	%		42.0	%		41.8	%		43.3	%

(1)

Amount included within general and administration expense.

(2) Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted:


	Three Months Ended					Three Months Ended						Nine Months Ended
	March 31,					September 30,						September 30,
(in millions)	2023		2022			2023			2022			2023		2022
Nonoperating income (expense), GAAP basis	$	116	$	(138	)	$	171		$	165		$	538	$	(320	)
Less: Net income (loss) attributable to NCI		12		(73	)		(9	)		(45	)		60		(232	)
Nonoperating income (expense), net of NCI		104		(65	)		180			210			478		(88	)
Less: Hedge gain (loss) on deferred cash compensation plans (a)		17		—			(4	)		—			29		—
Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted	$	87	$	(65	)	$	184		$	210		$	449	$	(88	)

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


	Three Months Ended					Three Months Ended				Nine Months Ended
	March 31,					September 30,				September 30,
(in millions, except per share data)	2023		2022			2023		2022		2023		2022
Net income attributable to BlackRock, Inc., GAAP basis	$	1,157	$	1,436		$	1,604	$	1,406	$	4,127	$	3,919
Non-GAAP adjustments(1):
Net impact of hedged deferred cash compensation plans (a)		2		—			1		—		—		—
Amortization of intangible assets (b)		28		29			30		29		86		87
Acquisition-related compensation costs (b)		4		5			4		4		11		14
Acquisition-related transaction costs (b)							3		—		5		—
Contingent consideration fair value adjustments (b)		—		1			—		1		1		2
Lease costs - New York (c)		9		9			—		11		11		31
Income tax matters		—		(18	)		—		—		—		(18	)
Net income attributable to BlackRock, Inc., as adjusted	$	1,200	$	1,462		$	1,642	$	1,451	$	4,241	$	4,035
Diluted weighted-average common shares outstanding		151.3		153.5			150.5		152.0		150.9		152.6
Diluted earnings per common share, GAAP basis	$	7.64	$	9.35		$	10.66	$	9.25	$	27.36	$	25.67
Diluted earnings per common share, as adjusted	$	7.93	$	9.52		$	10.91	$	9.55	$	28.11	$	26.43

(1)

Non-GAAP adjustments, excluding income tax matters, are net of ~~tax excluding income tax matters.~~tax.

3541

(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, to determine the long-term and annual compensation of the Company’s senior-level employees and to evaluate the Company’s relative performance against industry peers. Furthermore, this metric 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 the following non-GAAP expense adjustments:

(a)

Compensation expense related to appreciation (depreciation) on deferred cash compensation plans.Beginning in the first quarter of 2023, the Company updated its definition of operating income, as adjusted, to exclude compensation expense related to the market valuation changes on certain deferred cash compensation plans, which the Company began hedging economically in 2023. For these deferred cash compensation plans, the final value of the deferred amount to be distributed to employees in cash upon vesting is determined based on the returns on specified investment funds. The Company recognizes compensation expense for the appreciation (depreciation) of the deferred cash compensation liability in proportion to the vested amount of the award during a respective period, while the gain (loss) to economically hedge these plans is immediately recognized in nonoperating income (expense), which creates a timing difference impacting net income. This timing difference will reverse and offset to zero over the life of the award at the end of the multi-year vesting period. Management believes excluding market valuation changes related to the deferred cash compensation plans in the calculation of operating income, as adjusted, provides useful disclosure to both management and investors of the Company’s financial performance over time as these amounts are economically hedged, while also increasing comparability with other companies.

(b)

Acquisition related costs. ~~Includes~~Acquisition related costs include adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions. Management believes excluding the impact of these expenses when calculating operating income, as adjusted, provides a helpful indication of the Company’s financial performance over time, thereby providing helpful information for both management and investors while also increasing comparability with other companies.

(c)

Lease costs – New York. The Company began recording expenses in August 2021 related to the lease of office space for its new headquarters located at 50 Hudson Yards in New York (“Lease cost – Hudson Yards”), when it obtained access to the building to begin its tenant improvements. The Company will begin lease payments related to its new headquarters in May 2023. As a result,In 2022 and 2023, the Company continued to recognize lease expense within general and administration expense for both its ~~new~~current headquarters located at 50 Hudson Yards in New York and prior headquarters until the Company's lease on its prior headquarters expired in April 2023. The Company began lease payments related to its current headquarters in May 2023, but began recording lease expense in August 2021 when it obtained access to the building to begin its tenant improvements. Prior to the Company’s move to its current headquarters in February 2023, the impact of ~~Lease cost –~~lease costs related to 50 Hudson Yards was excluded from operating income, as adjusted. ~~Beginning in~~In February 2023, ~~when~~ the Company completed the majority of its move to 50 Hudson Yards itand no longer excluded the impact of ~~Lease cost – Hudson Yards and began to exclude~~these lease costs. Subsequently, from February 2023 through April 2023, the Company excluded the impact of lease costs related to the Company's prior ~~headquarters for its remaining lease term.~~headquarters. Management believes excluding the impact of these respective New York lease costs (“Lease costs – New York”) when calculating operating income, as adjusted, is useful to assess the Company’s financial performance and ongoing operations, and enhances comparability among periods presented.

•(d)

~~Operating income used for measuring operating margin,~~Reduction of indemnification asset. In connection with a previous acquisition, BlackRock recorded an $8 million indemnification asset. Due to the resolution of certain tax matters in the current quarter, BlackRock recorded $8 million of general and administration expense to reflect the reduction of the indemnification asset and an offsetting $8 million tax benefit. The $8 million general and administrative expense and $8 million tax benefit have been excluded from as adjusted results as there is ~~equal to operating income, as adjusted, excluding the~~no 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 impacton BlackRock’s ~~results until future periods.~~book value.

3642

•

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.

(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. Nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, excludes the gain (loss) on the economic hedge of certain deferred cash compensation plans. As the gain (loss) on investments and derivatives used to hedge these compensation plans over time substantially offsets the compensation expense related to the market valuation changes on these deferred cash compensation plans, which is included in operating income, GAAP basis, management believes excluding the gain (loss) ~~impact of an~~on the economic hedge of ~~these~~the deferred cash compensation plans when calculating 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 that impact book value.

(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 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.

See notes (1) and (2) above regarding operating income, as adjusted, for information on the updated presentation of non-GAAP adjustments. For each period presented, the non-GAAP adjustments were tax effected at the respective blended rates applicable to the adjustments. Amounts for income tax matters represent net noncash (benefit) 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 enhance comparability among periods presented. ~~The amounts for 2022 income tax matters included net noncash expense related to state and local income tax changes.~~

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

3743

ASSETS UNDER MANAGEMENT

AUM for reporting purposes generally is based upon how investment advisory and administration fees are calculated for each portfolio. Net asset values, total assets, committed assets or other measures may be used to determine portfolio AUM.


AUM and Net Inflows (Outflows) by Client Type and Product Type	AUM and Net Inflows (Outflows) by Client Type and Product Type												AUM and Net Inflows (Outflows) by Client Type and Product Type
	AUM						Net inflows (outflows)						AUM								Net inflows (outflows)
	March 31,		December 31,		March 31,		Three Months Ended March 31,			Twelve Months Ended March 31,			September 30,		June 30,		December 31,		September 30,		Three Months Ended September 30,			Nine Months Ended September 30,			Twelve Months Ended September 30,
(in millions)	2023		2022		2022		2023			2023			2023		2023		2022		2022		2023			2023			2023
Retail	$	876,979	$	843,475	$	989,123	$	283		$	(29,403	)	$	868,440	$	903,630	$	843,475	$	806,498	$	(3,585	)	$	487		$	(14,339	)
ETFs		3,074,303		2,909,610		3,150,496		21,705			185,831			3,118,409		3,215,932		2,909,610		2,621,410		28,521			98,221			187,872
Institutional:
Active		1,778,340		1,641,591		1,676,167		71,537			223,964			1,753,262		1,812,719		1,641,591		1,487,285		(1,330	)		79,595			155,623
Index		2,677,711		2,528,615		3,019,763		9,175			1,813			2,637,033		2,782,790		2,528,615		2,352,061		(36,242	)		(31,550	)		(36,721	)
Institutional subtotal		4,456,051		4,170,206		4,695,930		80,712			225,777			4,390,295		4,595,509		4,170,206		3,839,346		(37,572	)		48,045			118,902
Long-term		8,407,333		7,923,291		8,835,549		102,700			382,205			8,377,144		8,715,071		7,923,291		7,267,254		(12,636	)		146,753			292,435
Cash management		682,938		671,194		724,939		7,618			(42,661	)		723,681		710,141		671,194		694,119		15,205			46,295			14,337
Advisory		—		—		9,025		—			(9,022	)
Total	$	9,090,271	$	8,594,485	$	9,569,513	$	110,318		$	330,522		$	9,100,825	$	9,425,212	$	8,594,485	$	7,961,373	$	2,569		$	193,048		$	306,772

AUM and Net Inflows (Outflows) by Investment Style and Product Type	AUM and Net Inflows (Outflows) by Investment Style and Product Type												AUM and Net Inflows (Outflows) by Investment Style and Product Type
	AUM						Net inflows (outflows)						AUM								Net inflows (outflows)
	March 31,		December 31,		March 31,		Three Months Ended March 31,			Twelve Months Ended March 31,			September 30,		June 30,		December 31,		September 30,		Three Months Ended September 30,			Nine Months Ended September 30,			Twelve Months Ended September 30,
(in millions)	2023		2022		2022		2023			2023			2023		2023		2022		2022		2023			2023			2023
Active	$	2,474,034	$	2,317,560	$	2,479,139	$	68,293		$	183,380		$	2,426,322	$	2,516,396	$	2,317,560	$	2,141,066	$	(7,742	)	$	64,982		$	126,357
Index and ETFs		5,933,299		5,605,731		6,356,410		34,407			198,825			5,950,822		6,198,675		5,605,731		5,126,188		(4,894	)		81,771			166,078
Long-term		8,407,333		7,923,291		8,835,549		102,700			382,205			8,377,144		8,715,071		7,923,291		7,267,254		(12,636	)		146,753			292,435
Cash management		682,938		671,194		724,939		7,618			(42,661	)		723,681		710,141		671,194		694,119		15,205			46,295			14,337
Advisory		—		—		9,025		—			(9,022	)
Total	$	9,090,271	$	8,594,485	$	9,569,513	$	110,318		$	330,522		$	9,100,825	$	9,425,212	$	8,594,485	$	7,961,373	$	2,569		$	193,048		$	306,772

AUM and Net Inflows (Outflows) by Product Type	AUM and Net Inflows (Outflows) by Product Type												AUM and Net Inflows (Outflows) by Product Type
	AUM						Net inflows (outflows)						AUM								Net inflows (outflows)
	March 31,		December 31,		March 31,		Three Months Ended March 31,			Twelve Months Ended March 31,			September 30,		June 30,		December 31,		September 30,		Three Months Ended September 30,			Nine Months Ended September 30,			Twelve Months Ended September 30,
(in millions)	2023		2022		2022		2023			2023			2023		2023		2022		2022		2023			2023			2023
Equity	$	4,707,344	$	4,435,354	$	5,119,044	$	(6,790	)	$	22,289		$	4,741,291	$	4,961,344	$	4,435,354	$	4,020,312	$	(34,467	)	$	(45,575	)	$	(15,858	)
Fixed income		2,653,744		2,536,823		2,645,871		53,876			296,134			2,576,205		2,668,851		2,536,823		2,350,263		13,211			110,906			226,421
Multi-asset		771,880		684,904		785,181		53,675			67,225			788,872		811,927		684,904		637,445		12,797			83,837			85,950
Alternatives:
Illiquid alternatives		123,416		117,751		109,141		4,432			16,610			131,937		127,678		117,751		111,729		2,623			10,105			14,513
Liquid alternatives		80,151		80,654		87,326		(2,125	)		(5,722	)		75,139		78,056		80,654		81,418		(3,472	)		(8,082	)		(9,937	)
Currency and commodities(1)		70,798		67,805		88,986		(368	)		(14,331	)		63,700		67,215		67,805		66,087		(3,328	)		(4,438	)		(8,654	)
Alternatives subtotal		274,365		266,210		285,453		1,939			(3,443	)		270,776		272,949		266,210		259,234		(4,177	)		(2,415	)		(4,078	)
Long-term		8,407,333		7,923,291		8,835,549		102,700			382,205			8,377,144		8,715,071		7,923,291		7,267,254		(12,636	)		146,753			292,435
Cash management		682,938		671,194		724,939		7,618			(42,661	)		723,681		710,141		671,194		694,119		15,205			46,295			14,337
Advisory		—		—		9,025		—			(9,022	)
Total	$	9,090,271	$	8,594,485	$	9,569,513	$	110,318		$	330,522		$	9,100,825	$	9,425,212	$	8,594,485	$	7,961,373	$	2,569		$	193,048		$	306,772

(1)

Amounts include commodity ETFs.

3844

Component Changes in AUM for the Three Months Ended ~~March 31,~~September 30, 2023

The following table presents the component changes in AUM by client type and product type for the three months ended ~~March 31,~~September 30, 2023.


	December 31,		Net inflows			Market			FX			March 31,		Average		June 30,		Net inflows					Market			FX			September 30,		Average
(in millions)	2022		(outflows)			change			impact(1)			2023		AUM(2)		2023		(outflows)			Acquisition(1)		change			impact(2)			2023		AUM(3)
Retail:
Equity	$	370,612	$	1,999		$	19,727		$	1,936		$	394,274	$	390,849	$	415,475	$	(815	)	$	—	$	(15,248	)	$	(3,382	)	$	396,030	$	413,957
Fixed income		299,114		421			4,212			2,190			305,937		305,909		309,449		(701	)		—		(6,668	)		(1,848	)		300,232		307,480
Multi-asset		125,168		(1,144	)		4,340			317			128,681		128,208		133,546		395			—		(4,352	)		(412	)		129,177		133,226
Alternatives		48,581		(993	)		332			167			48,087		48,514		45,160		(2,464	)		—		567			(262	)		43,001		44,179
Retail subtotal		843,475		283			28,611			4,610			876,979		873,480		903,630		(3,585	)		—		(25,701	)		(5,904	)		868,440		898,842
ETFs:
Equity		2,081,742		(10,105	)		117,173			2,627			2,191,437		2,164,367		2,309,054		19,228			—		(87,140	)		(6,867	)		2,234,275		2,322,220
Fixed income		758,093		33,513			17,645			1,525			810,776		784,986		837,759		12,477			—		(27,962	)		(3,530	)		818,744		838,179
Multi-asset		8,875		(1,628	)		439			2			7,688		8,039		7,892		159			—		(286	)		(49	)		7,716		7,898
Alternatives		60,900		(75	)		3,560			17			64,402		61,527		61,227		(3,343	)		—		(167	)		(43	)		57,674		60,922
ETFs subtotal		2,909,610		21,705			138,817			4,171			3,074,303		3,018,919		3,215,932		28,521			—		(115,555	)		(10,489	)		3,118,409		3,229,219
Institutional:
Active:
Equity		168,734		(3,682	)		9,984			1,017			176,053		171,321		178,057		(3,883	)		—		(3,874	)		(2,383	)		167,917		176,861
Fixed income		774,955		15,703			22,010			1,969			814,637		795,268		807,167		(12,349	)		—		(18,514	)		(4,723	)		771,581		794,925
Multi-asset		544,469		56,587			25,134			2,828			629,018		597,419		664,069		13,392			—		(23,497	)		(6,971	)		646,993		665,094
Alternatives		153,433		2,929			1,723			547			158,632		156,385		163,426		1,510			2,177		989			(1,331	)		166,771		165,936
Active subtotal		1,641,591		71,537			58,851			6,361			1,778,340		1,720,393		1,812,719		(1,330	)		2,177		(44,896	)		(15,408	)		1,753,262		1,802,816
Index:
Equity		1,814,266		4,998			121,405			4,911			1,945,580		1,906,349		2,058,758		(48,997	)		—		(47,733	)		(18,959	)		1,943,069		2,035,665
Fixed income		704,661		4,239			8,454			5,040			722,394		714,315		714,476		13,784			—		(26,213	)		(16,399	)		685,648		710,937
Multi-asset		6,392		(140	)		251			(10	)		6,493		6,487		6,420		(1,149	)		—		(241	)		(44	)		4,986		5,970
Alternatives		3,296		78			(133	)		3			3,244		3,258		3,136		120			—		94			(20	)		3,330		3,307
Index subtotal		2,528,615		9,175			129,977			9,944			2,677,711		2,630,409		2,782,790		(36,242	)		—		(74,093	)		(35,422	)		2,637,033		2,755,879
Institutional subtotal		4,170,206		80,712			188,828			16,305			4,456,051		4,350,802		4,595,509		(37,572	)		2,177		(118,989	)		(50,830	)		4,390,295		4,558,695
Long-term		7,923,291		102,700			356,256			25,086			8,407,333		8,243,201		8,715,071		(12,636	)		2,177		(260,245	)		(67,223	)		8,377,144		8,686,756
Cash management		671,194		7,618			1,819			2,307			682,938		659,387		710,141		15,205			—		2,258			(3,923	)		723,681		709,841
Total	$	8,594,485	$	110,318		$	358,075		$	27,393		$	9,090,271	$	8,902,588	$	9,425,212	$	2,569		$	2,177	$	(257,987	)	$	(71,146	)	$	9,100,825	$	9,396,597

(1)

Amounts include AUM attributable to the Kreos Transaction.

(2)

Foreign exchange reflects the impact of translating non-US dollar denominated AUM into United States ~~("US"~~('US") dollars for reporting purposes.

~~(2)~~(3)

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

3945

The following table presents the component changes in AUM by investment style and product type for the three months ended ~~March 31,~~September 30, 2023.


	December 31,		Net inflows			Market			FX			March 31,		Average		June 30,		Net inflows					Market			FX			September 30,		Average
(in millions)	2022		(outflows)			change			impact(1)			2023		AUM(2)		2023		(outflows)			Acquisition(1)		change			impact(2)			2023		AUM(3)
Active:
Equity	$	392,836	$	(5,093	)	$	21,200		$	1,946		$	410,889	$	407,524	$	418,663	$	(6,461	)	$	—	$	(14,556	)	$	(3,956	)	$	393,690	$	414,619
Fixed income		1,053,083		16,007			25,879			3,768			1,098,737		1,079,569		1,091,544		(14,111	)		—		(24,907	)		(5,821	)		1,046,705		1,076,883
Multi-asset		669,629		55,443			29,475			3,145			757,692		725,619		797,605		13,784			—		(27,848	)		(7,383	)		776,158		798,311
Alternatives		202,012		1,936			2,054			714			206,716		204,899		208,584		(954	)		2,177		1,555			(1,593	)		209,769		210,114
Active subtotal		2,317,560		68,293			78,608			9,573			2,474,034		2,417,611		2,516,396		(7,742	)		2,177		(65,756	)		(18,753	)		2,426,322		2,499,927
Index and ETFs:
ETFs:
Equity		2,081,742		(10,105	)		117,173			2,627			2,191,437		2,164,367		2,309,054		19,228			—		(87,140	)		(6,867	)		2,234,275		2,322,220
Fixed income		758,093		33,513			17,645			1,525			810,776		784,986		837,759		12,477			—		(27,962	)		(3,530	)		818,744		838,179
Multi-asset		8,875		(1,628	)		439			2			7,688		8,039		7,892		159			—		(286	)		(49	)		7,716		7,898
Alternatives		60,900		(75	)		3,560			17			64,402		61,527		61,227		(3,343	)		—		(167	)		(43	)		57,674		60,922
ETFs subtotal		2,909,610		21,705			138,817			4,171			3,074,303		3,018,919		3,215,932		28,521			—		(115,555	)		(10,489	)		3,118,409		3,229,219
Non-ETF Index:
Equity		1,960,776		8,408			129,916			5,918			2,105,018		2,060,995		2,233,627		(47,234	)		—		(52,299	)		(20,768	)		2,113,326		2,211,864
Fixed income		725,647		4,356			8,797			5,431			744,231		735,923		739,548		14,845			—		(26,488	)		(17,149	)		710,756		736,459
Multi-asset		6,400		(140	)		250			(10	)		6,500		6,495		6,430		(1,146	)		—		(242	)		(44	)		4,998		5,979
Alternatives		3,298		78			(132	)		3			3,247		3,258		3,138		120			—		95			(20	)		3,333		3,308
Non-ETF Index subtotal		2,696,121		12,702			138,831			11,342			2,858,996		2,806,671		2,982,743		(33,415	)		—		(78,934	)		(37,981	)		2,832,413		2,957,610
Index & ETFs subtotal		5,605,731		34,407			277,648			15,513			5,933,299		5,825,590		6,198,675		(4,894	)		—		(194,489	)		(48,470	)		5,950,822		6,186,829
Long-term		7,923,291		102,700			356,256			25,086			8,407,333		8,243,201		8,715,071		(12,636	)		2,177		(260,245	)		(67,223	)		8,377,144		8,686,756
Cash management		671,194		7,618			1,819			2,307			682,938		659,387		710,141		15,205			—		2,258			(3,923	)		723,681		709,841
Total	$	8,594,485	$	110,318		$	358,075		$	27,393		$	9,090,271	$	8,902,588	$	9,425,212	$	2,569		$	2,177	$	(257,987	)	$	(71,146	)	$	9,100,825	$	9,396,597

The following table presents the component changes in AUM by product type for the three months ended ~~March 31,~~September 30, 2023.


	December 31,		Net inflows			Market		FX		March 31,		Average		June 30,		Net inflows					Market			FX			September 30,		Average
(in millions)	2022		(outflows)			change		impact(1)		2023		AUM(2)		2023		(outflows)			Acquisition(1)		change			impact(2)			2023		AUM(3)
Equity	$	4,435,354	$	(6,790	)	$	268,289	$	10,491	$	4,707,344	$	4,632,886	$	4,961,344	$	(34,467	)	$	—	$	(153,995	)	$	(31,591	)	$	4,741,291	$	4,948,703
Fixed income		2,536,823		53,876			52,321		10,724		2,653,744		2,600,478		2,668,851		13,211			—		(79,357	)		(26,500	)		2,576,205		2,651,521
Multi-asset		684,904		53,675			30,164		3,137		771,880		740,153		811,927		12,797			—		(28,376	)		(7,476	)		788,872		812,188
Alternatives:
Illiquid alternatives		117,751		4,432			626		607		123,416		120,872		127,678		2,623			2,177		606			(1,147	)		131,937		130,523
Liquid alternatives		80,654		(2,125	)		1,503		119		80,151		80,631		78,056		(3,472	)		—		966			(411	)		75,139		76,795
Currency and commodities~~(3)~~(4)		67,805		(368	)		3,353		8		70,798		68,181		67,215		(3,328	)		—		(89	)		(98	)		63,700		67,026
Alternatives subtotal		266,210		1,939			5,482		734		274,365		269,684		272,949		(4,177	)		2,177		1,483			(1,656	)		270,776		274,344
Long-term		7,923,291		102,700			356,256		25,086		8,407,333		8,243,201		8,715,071		(12,636	)		2,177		(260,245	)		(67,223	)		8,377,144		8,686,756
Cash management		671,194		7,618			1,819		2,307		682,938		659,387		710,141		15,205			—		2,258			(3,923	)		723,681		709,841
Total	$	8,594,485	$	110,318		$	358,075	$	27,393	$	9,090,271	$	8,902,588	$	9,425,212	$	2,569		$	2,177	$	(257,987	)	$	(71,146	)	$	9,100,825	$	9,396,597

(1)

Amounts include AUM attributable to the Kreos Transaction.

(2)

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

~~(2)~~(3)

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

~~(3)~~(4)

Amounts include commodity ~~ETFs~~.ETFs.

4046

AUM decreased $324 billion to $9.1 trillion at September 30, 2023 from $9.4 trillion at June 30, 2023, driven primarily by net market depreciation and the negative impact of foreign exchange movement.

Long-term net outflows of $13 billion were comprised of net outflows of $38 billion and $4 billion from institutional and retail clients, respectively, partially offset by net inflows of $29 billion into ETFs. Net flows in long-term products are described below.

•

Institutional index net outflows of $36 billion primarily reflected $49 billion of net outflows from lower-fee institutional index equity strategies, including $19 billion from a single international client, partially offset by fixed income net inflows.

•

Institutional active net outflows of $1 billion primarily reflected fixed income net outflows, impacted by client-specific partial redemptions, including reinsurance activity, partially offset by multi-asset net inflows, reflecting continued demand for target-date strategies.

•

Retail net outflows of $4 billion primarily reflected net outflows from liquid alternatives.

•

ETFs net inflows of $29 billion were led by net inflows into core equity and bond ETFs, partially offset by redemptions from precision ETFs.

Cash management AUM increased to $724 billion, driven by net inflows into US government money market funds.

Net market depreciation of $258 billion was primarily driven by global equity and fixed income market depreciation.

AUM decreased $71 billion due to the impact of foreign exchange movements, primarily resulting from the strengthening of the US dollar against the British pound, the euro and the Japanese yen.

Component Changes in AUM for the Nine Months Ended September 30, 2023

The following table presents the component changes in AUM by client type and product type for the nine months ended September 30, 2023.


	December 31,		Net inflows					Market			FX			September 30,		Average
(in millions)	2022		(outflows)			Acquisition(1)		change			impact(2)			2023		AUM(3)
Retail:
Equity	$	370,612	$	3,180		$	—	$	22,167		$	71		$	396,030	$	401,244
Fixed income		299,114		4,081			—		(4,615	)		1,652			300,232		306,856
Multi-asset		125,168		(203	)		—		4,119			93			129,177		130,860
Alternatives		48,581		(6,571	)		—		981			10			43,001		46,398
Retail subtotal		843,475		487			—		22,652			1,826			868,440		885,358
ETFs:
Equity		2,081,742		23,013			—		132,850			(3,330	)		2,234,275		2,232,883
Fixed income		758,093		80,730			—		(18,815	)		(1,264	)		818,744		814,245
Multi-asset		8,875		(1,492	)		—		335			(2	)		7,716		7,902
Alternatives		60,900		(4,030	)		—		797			7			57,674		62,015
ETFs subtotal		2,909,610		98,221			—		115,167			(4,589	)		3,118,409		3,117,045
Institutional:
Active:
Equity		168,734		(14,005	)		—		14,122			(934	)		167,917		174,595
Fixed income		774,955		(1,297	)		—		798			(2,875	)		771,581		798,447
Multi-asset		544,469		86,908			—		17,181			(1,565	)		646,993		632,229
Alternatives		153,433		7,989			2,177		3,686			(514	)		166,771		160,966
Active subtotal		1,641,591		79,595			2,177		35,787			(5,888	)		1,753,262		1,766,237
Index:
Equity		1,814,266		(57,763	)		—		210,289			(23,723	)		1,943,069		1,968,370
Fixed income		704,661		27,392			—		(28,274	)		(18,131	)		685,648		712,834
Multi-asset		6,392		(1,376	)		—		122			(152	)		4,986		6,246
Alternatives		3,296		197			—		(123	)		(40	)		3,330		3,252
Index subtotal		2,528,615		(31,550	)		—		182,014			(42,046	)		2,637,033		2,690,702
Institutional subtotal		4,170,206		48,045			2,177		217,801			(47,934	)		4,390,295		4,456,939
Long-term		7,923,291		146,753			2,177		355,620			(50,697	)		8,377,144		8,459,342
Cash management		671,194		46,295			—		5,962			230			723,681		683,678
Total	$	8,594,485	$	193,048		$	2,177	$	361,582		$	(50,467	)	$	9,100,825	$	9,143,020

(1)

Amounts include AUM attributable to the Kreos 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.

The following table presents the component changes in AUM by investment style and product type for the nine months ended September 30, 2023.


	December 31,		Net inflows					Market			FX			September 30,		Average
(in millions)	2022		(outflows)			Acquisition(1)		change			impact(2)			2023		AUM(3)
Active:
Equity	$	392,836	$	(21,284	)	$	—	$	23,194		$	(1,056	)	$	393,690	$	410,836
Fixed income		1,053,083		(1,852	)		—		(3,276	)		(1,250	)		1,046,705		1,081,613
Multi-asset		669,629		86,701			—		21,300			(1,472	)		776,158		763,080
Alternatives		202,012		1,417			2,177		4,667			(504	)		209,769		207,363
Active subtotal		2,317,560		64,982			2,177		45,885			(4,282	)		2,426,322		2,462,892
Index and ETFs:
ETFs:
Equity		2,081,742		23,013			—		132,850			(3,330	)		2,234,275		2,232,883
Fixed income		758,093		80,730			—		(18,815	)		(1,264	)		818,744		814,245
Multi-asset		8,875		(1,492	)		—		335			(2	)		7,716		7,902
Alternatives		60,900		(4,030	)		—		797			7			57,674		62,015
ETFs subtotal		2,909,610		98,221			—		115,167			(4,589	)		3,118,409		3,117,045
Non-ETF Index:
Equity		1,960,776		(47,304	)		—		223,384			(23,530	)		2,113,326		2,133,373
Fixed income		725,647		32,028			—		(28,815	)		(18,104	)		710,756		736,524
Multi-asset		6,400		(1,372	)		—		122			(152	)		4,998		6,255
Alternatives		3,298		198			—		(123	)		(40	)		3,333		3,253
Non-ETF Index subtotal		2,696,121		(16,450	)		—		194,568			(41,826	)		2,832,413		2,879,405
Index & ETFs subtotal		5,605,731		81,771			—		309,735			(46,415	)		5,950,822		5,996,450
Long-term		7,923,291		146,753			2,177		355,620			(50,697	)		8,377,144		8,459,342
Cash management		671,194		46,295			—		5,962			230			723,681		683,678
Total	$	8,594,485	$	193,048		$	2,177	$	361,582		$	(50,467	)	$	9,100,825	$	9,143,020

The following table presents the component changes in AUM by product type for the nine months ended September 30, 2023.


	December 31,		Net inflows					Market			FX			September 30,		Average
(in millions)	2022		(outflows)			Acquisition(1)		change			impact(2)			2023		AUM(3)
Equity	$	4,435,354	$	(45,575	)	$	—	$	379,428		$	(27,916	)	$	4,741,291	$	4,777,092
Fixed income		2,536,823		110,906			—		(50,906	)		(20,618	)		2,576,205		2,632,382
Multi-asset		684,904		83,837			—		21,757			(1,626	)		788,872		777,237
Alternatives:
Illiquid alternatives		117,751		10,105			2,177		2,088			(184	)		131,937		125,590
Liquid alternatives		80,654		(8,082	)		—		2,744			(177	)		75,139		78,712
Currency and commodities(4)		67,805		(4,438	)		—		509			(176	)		63,700		68,329
Alternatives subtotal		266,210		(2,415	)		2,177		5,341			(537	)		270,776		272,631
Long-term		7,923,291		146,753			2,177		355,620			(50,697	)		8,377,144		8,459,342
Cash management		671,194		46,295			—		5,962			230			723,681		683,678
Total	$	8,594,485	$	193,048		$	2,177	$	361,582		$	(50,467	)	$	9,100,825	$	9,143,020

(1)

Amounts include AUM attributable to the Kreos 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)

Amounts include commodity ETFs.

AUM increased ~~$496~~$506 billion to $9.1 trillion at ~~March~~September 30, 2023 from $8.6 trillion at December 31, ~~2023,~~2022, driven by net market appreciation and net inflows, ~~and~~partially offset by the ~~positive~~negative impact of foreign exchange ~~movements.~~movement.

Long-term net inflows of ~~$103~~$147 billion were comprised of net inflows of ~~$81~~$98 billion and ~~$22~~$48 billion from ETFs and institutional clients, ~~and ETFs,~~ respectively. Net flows in long-term products are described below.

•

ETFs net inflows of $98 billion were led by $81 billion and $23 billion of net inflows into fixed income and equity ETFs, respectively. ETFs net inflows also included $77 billion and $51 billion of net inflows into strategic and core equity, respectively, partially offset by $30 billion in redemptions from precision ETFs.

•

Institutional active net inflows of ~~$72~~$80 billion were led by multi-asset ~~and fixed income~~ net inflows and included the impact of significant outsourcing mandates.

•

Institutional index net ~~inflows~~outflows of $9$32 billion primarily reflected net outflows from lower-fee institutional index equity ~~and~~strategies, including $19 billion from a single international client in the third quarter, partially offset by fixed income net inflows.

•

~~ETFs net inflows of $22 billion were led by $34 billion of net inflows into bond ETFs, partially offset by net outflows from precision ETFs.~~

Cash management AUM increased to ~~$683~~$724 billion, ~~driven by~~due to net inflows into US government money market funds.

Net market appreciation of ~~$358~~$362 billion was primarily driven by global equity market appreciation.

AUM ~~increased $27~~decreased $50 billion due to the ~~positive~~ impact of foreign exchange movements, primarily due to the ~~weakening~~strengthening of the US dollar ~~largely~~ against the ~~British pound and the euro.~~Japanese yen.

4150

Component Changes in AUM for the Twelve Months Ended ~~March 31,~~September 30, 2023

The following table presents the component changes in AUM by client type and product type for the twelve months ended ~~March 31,~~September 30, 2023.


	March 31,		Net inflows			Market			FX			March 31,		Average		September 30,		Net inflows					Market			FX		September 30,		Average
(in millions)	2022		(outflows)			change			impact(1)			2023		AUM(2)		2022		(outflows)			Acquisition(1)		change			impact(2)		2023		AUM(3)
Retail:
Equity	$	446,043	$	(4,305	)	$	(41,661	)	$	(5,803	)	$	394,274	$	389,562	$	342,647	$	(1,842	)	$	—	$	48,731		$	6,494	$	396,030	$	392,563
Fixed income		343,712		(17,982	)		(18,742	)		(1,051	)		305,937		312,168		294,977		(2,458	)		—		1,958			5,755		300,232		304,392
Multi-asset		149,480		(7,266	)		(13,039	)		(494	)		128,681		131,531		120,814		(2,924	)		—		10,217			1,070		129,177		129,414
Alternatives		49,888		150			(1,743	)		(208	)		48,087		49,017		48,060		(7,115	)		—		1,452			604		43,001		46,830
Retail subtotal		989,123		(29,403	)		(75,185	)		(7,556	)		876,979		882,278		806,498		(14,339	)		—		62,358			13,923		868,440		873,199
ETFs:
Equity		2,350,421		49,481			(196,133	)		(12,332	)		2,191,437		2,124,649		1,861,499		67,578			—		296,097			9,101		2,234,275		2,182,103
Fixed income		712,767		148,255			(47,182	)		(3,064	)		810,776		735,279		694,062		127,829			—		(8,698	)		5,551		818,744		792,396
Multi-asset		8,716		(364	)		(511	)		(153	)		7,688		8,000		7,273		(294	)		—		707			30		7,716		7,871
Alternatives		78,592		(11,541	)		(2,541	)		(108	)		64,402		65,163		58,576		(7,241	)		—		6,236			103		57,674		61,199
ETFs subtotal		3,150,496		185,831			(246,367	)		(15,657	)		3,074,303		2,933,091		2,621,410		187,872			—		294,342			14,785		3,118,409		3,043,569
Institutional:
Active:
Equity		188,822		4,369			(13,186	)		(3,952	)		176,053		171,020		150,409		(10,044	)		—		24,024			3,528		167,917		172,013
Fixed income		718,225		133,339			(30,053	)		(6,874	)		814,637		727,212		685,194		63,873			—		16,830			5,684		771,581		779,631
Multi-asset		617,843		76,406			(51,197	)		(14,034	)		629,018		568,433		502,787		91,187			—		41,619			11,400		646,993		607,567
Alternatives		151,277		9,850			(610	)		(1,885	)		158,632		152,231		148,895		10,607			2,177		3,032			2,060		166,771		158,372
Active subtotal		1,676,167		223,964			(95,046	)		(26,745	)		1,778,340		1,618,896		1,487,285		155,623			2,177		85,505			22,672		1,753,262		1,717,583
Index:
Equity		2,133,758		(27,256	)		(118,136	)		(42,786	)		1,945,580		1,894,107		1,665,757		(71,550	)		—		332,610			16,252		1,943,069		1,924,530
Fixed income		871,167		32,522			(137,835	)		(43,460	)		722,394		745,023		676,030		37,177			—		(46,732	)		19,173		685,648		707,225
Multi-asset		9,142		(1,551	)		(836	)		(262	)		6,493		7,073		6,571		(2,019	)		—		419			15		4,986		6,336
Alternatives		5,696		(1,902	)		(321	)		(229	)		3,244		4,185		3,703		(329	)		—		(56	)		12		3,330		3,343
Index subtotal		3,019,763		1,813			(257,128	)		(86,737	)		2,677,711		2,650,388		2,352,061		(36,721	)		—		286,241			35,452		2,637,033		2,641,434
Institutional subtotal		4,695,930		225,777			(352,174	)		(113,482	)		4,456,051		4,269,284		3,839,346		118,902			2,177		371,746			58,124		4,390,295		4,359,017
Long-term		8,835,549		382,205			(673,726	)		(136,695	)		8,407,333		8,084,653		7,267,254		292,435			2,177		728,446			86,832		8,377,144		8,275,785
Cash management		724,939		(42,661	)		3,517			(2,857	)		682,938		700,296		694,119		14,337			—		7,321			7,904		723,681		686,105
Advisory		9,025		(9,022	)		(3	)		—			—		2,741
Total	$	9,569,513	$	330,522		$	(670,212	)	$	(139,552	)	$	9,090,271	$	8,787,690	$	7,961,373	$	306,772		$	2,177	$	735,767		$	94,736	$	9,100,825	$	8,961,890

(1)

Amounts include AUM attributable to the Kreos Transaction.

(2)

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

~~(2)~~(3)

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

4251

The following table presents the component changes in AUM by investment style and product type for the twelve months ended ~~March 31,~~September 30, 2023.


	March 31,		Net inflows			Market			FX			March 31,		Average		September 30,		Net inflows					Market			FX		September 30,		Average
(in millions)	2022		(outflows)			change			impact(1)			2023		AUM(2)		2022		(outflows)			Acquisition(1)		change			impact(2)		2023		AUM(3)
Active:
Equity	$	472,849	$	(9,764	)	$	(45,511	)	$	(6,685	)	$	410,889	$	410,109	$	359,587	$	(21,978	)	$	—	$	49,389		$	6,692	$	393,690	$	404,531
Fixed income		1,037,813		114,006			(46,234	)		(6,848	)		1,098,737		1,017,777		960,932		56,585			—		18,981			10,207		1,046,705		1,061,118
Multi-asset		767,315		69,139			(64,235	)		(14,527	)		757,692		699,956		623,594		88,259			—		51,835			12,470		776,158		736,973
Alternatives		201,162		9,999			(2,352	)		(2,093	)		206,716		201,247		196,953		3,491			2,177		4,484			2,664		209,769		205,200
Active subtotal		2,479,139		183,380			(158,332	)		(30,153	)		2,474,034		2,329,089		2,141,066		126,357			2,177		124,689			32,033		2,426,322		2,407,822
Index and ETFs:
ETFs:
Equity		2,350,421		49,481			(196,133	)		(12,332	)		2,191,437		2,124,649		1,861,499		67,578			—		296,097			9,101		2,234,275		2,182,103
Fixed income		712,767		148,255			(47,182	)		(3,064	)		810,776		735,279		694,062		127,829			—		(8,698	)		5,551		818,744		792,396
Multi-asset		8,716		(364	)		(511	)		(153	)		7,688		8,000		7,273		(294	)		—		707			30		7,716		7,871
Alternatives		78,592		(11,541	)		(2,541	)		(108	)		64,402		65,163		58,576		(7,241	)		—		6,236			103		57,674		61,199
ETFs subtotal		3,150,496		185,831			(246,367	)		(15,657	)		3,074,303		2,933,091		2,621,410		187,872			—		294,342			14,785		3,118,409		3,043,569
Non-ETF Index:
Equity		2,295,774		(17,428	)		(127,472	)		(45,856	)		2,105,018		2,044,580		1,799,226		(61,458	)		—		355,976			19,582		2,113,326		2,084,575
Fixed income		895,291		33,873			(140,396	)		(44,537	)		744,231		766,626		695,269		42,007			—		(46,925	)		20,405		710,756		730,130
Multi-asset		9,150		(1,550	)		(837	)		(263	)		6,500		7,081		6,578		(2,015	)		—		420			15		4,998		6,344
Alternatives		5,699		(1,901	)		(322	)		(229	)		3,247		4,186		3,705		(328	)		—		(56	)		12		3,333		3,345
Non-ETF Index subtotal		3,205,914		12,994			(269,027	)		(90,885	)		2,858,996		2,822,473		2,504,778		(21,794	)		—		309,415			40,014		2,832,413		2,824,394
Index & ETFs subtotal		6,356,410		198,825			(515,394	)		(106,542	)		5,933,299		5,755,564		5,126,188		166,078			—		603,757			54,799		5,950,822		5,867,963
Long-term		8,835,549		382,205			(673,726	)		(136,695	)		8,407,333		8,084,653		7,267,254		292,435			2,177		728,446			86,832		8,377,144		8,275,785
Cash management		724,939		(42,661	)		3,517			(2,857	)		682,938		700,296		694,119		14,337			—		7,321			7,904		723,681		686,105
Advisory		9,025		(9,022	)		(3	)		—			—		2,741
Total	$	9,569,513	$	330,522		$	(670,212	)	$	(139,552	)	$	9,090,271	$	8,787,690	$	7,961,373	$	306,772		$	2,177	$	735,767		$	94,736	$	9,100,825	$	8,961,890

The following table presents the component changes in AUM by product type for the twelve months ended ~~March 31,~~September 30, 2023.


	March 31,		Net inflows			Market			FX			March 31,		Average		September 30,		Net inflows					Market			FX		September 30,		Average
(in millions)	2022		(outflows)			change			impact(1)			2023		AUM(2)		2022		(outflows)			Acquisition(1)		change			impact(2)		2023		AUM(3)
Equity	$	5,119,044	$	22,289		$	(369,116	)	$	(64,873	)	$	4,707,344	$	4,579,338	$	4,020,312	$	(15,858	)	$	—	$	701,462		$	35,375	$	4,741,291	$	4,671,209
Fixed income		2,645,871		296,134			(233,812	)		(54,449	)		2,653,744		2,519,682		2,350,263		226,421			—		(36,642	)		36,163		2,576,205		2,583,644
Multi-asset		785,181		67,225			(65,583	)		(14,943	)		771,880		715,037		637,445		85,950			—		52,962			12,515		788,872		751,188
Alternatives:
Illiquid alternatives		109,141		16,610			(1,468	)		(867	)		123,416		114,703		111,729		14,513			2,177		1,463			2,055		131,937		122,897
Liquid alternatives		87,326		(5,722	)		(349	)		(1,104	)		80,151		82,517		81,418		(9,937	)		—		3,021			637		75,139		79,092
Currency and commodities~~(3)~~(4)		88,986		(14,331	)		(3,398	)		(459	)		70,798		73,376		66,087		(8,654	)		—		6,180			87		63,700		67,755
Alternatives subtotal		285,453		(3,443	)		(5,215	)		(2,430	)		274,365		270,596		259,234		(4,078	)		2,177		10,664			2,779		270,776		269,744
Long-term		8,835,549		382,205			(673,726	)		(136,695	)		8,407,333		8,084,653		7,267,254		292,435			2,177		728,446			86,832		8,377,144		8,275,785
Cash management		724,939		(42,661	)		3,517			(2,857	)		682,938		700,296		694,119		14,337			—		7,321			7,904		723,681		686,105
Advisory		9,025		(9,022	)		(3	)		—			—		2,741
Total	$	9,569,513	$	330,522		$	(670,212	)	$	(139,552	)	$	9,090,271	$	8,787,690	$	7,961,373	$	306,772		$	2,177	$	735,767		$	94,736	$	9,100,825	$	8,961,890

(1)

Amounts include AUM attributable to the Kreos Transaction.

(2)

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

~~(2)~~(3)

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

~~(3)~~(4)

Amounts include commodity ETFs.

4352

AUM ~~decreased $479 billion~~increased $1.1 trillion to $9.1 trillion at ~~March 31,~~September 30, 2023 from $8.0 trillion at September 30, 2022, driven by net market ~~depreciation~~appreciation, net inflows, and the ~~negative~~positive impact of foreign exchange ~~movements, partially offset by net inflows.~~movements.

Long-term net inflows of ~~$382~~$292 billion were comprised of net inflows of ~~$226~~$188 billion and ~~$186~~$119 billion from ETFs and institutional clients, ~~and ETFs,~~ respectively, partially offset by retail net outflows of ~~$29 billion from retail.~~$14 billion. Net flows in long-term products are described below.

•

ETFs net inflows of $188 billion were driven by net inflows into bond and core equity ETFs.

•

Institutional active net inflows of ~~$224~~$156 billion were led by multi-asset and fixed income ~~and multi-asset~~ net inflows and included the impact of several significant outsourcing mandates.

•

Institutional index net ~~inflows~~outflows of $2$37 billion primarily reflected ~~$33~~$72 billion of equity net outflows, partially offset by $37 billion of fixed income net ~~inflows, partially offset by equity net outflows of $27 billion.~~

•

~~ETFs net inflows of $186 billion were driven by net inflows into bond and core equity ETFs.~~inflows.

•

Retail net outflows of ~~$29~~$14 billion were primarily ~~due to~~driven by net outflows ~~of $18 billion and $7 billion~~ from ~~fixed income and multi-asset, respectively.~~liquid alternatives.

Cash management AUM ~~decreased~~increased to ~~$683~~$724 billion due to net ~~outflows.~~inflows into US government money market funds.

Net market ~~depreciation~~appreciation of ~~$670~~$736 billion was driven by global equity ~~and fixed income~~ market ~~depreciation.~~appreciation.

AUM ~~decreased $140~~increased $95 billion due to the ~~negative~~ impact of foreign exchange movements, primarily ~~resulting from~~due to the ~~strengthening~~weakening of the US dollar largely against the British pound and euro, partially offset by the strengthening of the US dollar against the Japanese ~~yen and the euro.~~yen.

4453

DISCUSSION OF FINANCIAL RESULTS

The Company’s results of operations for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 are discussed below. For a further description of the Company’s revenue and expense, see the ~~Company’s~~Company's Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Securities and Exchange Commission on February 24, 2023 (“("2022 Form ~~10-K”~~10-K.").

Revenue

The table below presents detail of revenue for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 and includes the product type mix of base fees and securities lending revenue and performance fees.


	Three Months Ended				Three Months Ended					Nine Months Ended
	March 31,				September 30,					September 30,
(in millions)	2023		2022		2023		2022			2023		2022
Revenue
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	500	$	616	$	510	$	503		$	1,516	$	1,669
ETFs		1,078		1,158		1,136		1,063			3,316		3,324
Non-ETF index		177		187		186		179			560		552
Equity subtotal		1,755		1,961		1,832		1,745			5,392		5,545
Fixed income:
Active		468		534		479		478			1,429		1,515
ETFs		295		289		315		276			919		839
Non-ETF index		87		118		93		91			268		311
Fixed income subtotal		850		941		887		845			2,616		2,665
Multi-asset		296		359		308		316			904		1,006
Alternatives:
Illiquid alternatives		201		179		231		184			638		547
Liquid alternatives		145		167		143		155			434		483
Currency and commodities(1)		46		56		46		51			141		169
Alternatives subtotal		392		402		420		390			1,213		1,199
Long-term		3,293		3,663		3,447		3,296			10,125		10,415
Cash management		209		170		234		235			669		637
Total investment advisory, administration fees and securities lending revenue		3,502		3,833		3,681		3,531			10,794		11,052
Investment advisory performance fees:
Equity		6		12		17		(2	)		38		13
Fixed income		1		9		1		(3	)		2		19
Multi-asset		15		5		5		2			23		14
Alternatives:
Illiquid alternatives		21		37		24		79			124		181
Liquid alternatives		12		35		23		6			56		59
Alternatives subtotal		33		72		47		85			180		240
Total investment advisory performance fees		55		98		70		82			243		286
Technology services revenue		340		341		407		338			1,106		1,011
Distribution fees		319		381		321		325			959		1,067
Advisory and other revenue:
Advisory		14		16		21		8			66		39
Other		13		30		22		27			60		81
Total advisory and other revenue		27		46		43		35			126		120
Total revenue	$	4,243	$	4,699	$	4,522	$	4,311		$	13,228	$	13,536

(1)

Amounts include commodity ETFs.

4554

The table below lists a percentage breakdown of base fees and securities lending revenue and average AUM by product type:


	Three Months Ended March 31,												Three Months Ended September 30,												Nine Months Ended September 30,
	Percentage of Base Fees and Securities Lending Revenue						Percentage of Average AUM by Product Type(1)						Percentage of Base Fees and Securities Lending Revenue						Percentage of Average AUM by Product Type(1)						Percentage of Base Fees and Securities Lending Revenue						Percentage of Average AUM by Product Type(2)
	2023			2022			2023			2022			2023			2022			2023			2022			2023			2022			2023			2022
Equity:
Active		14	%		16	%		5	%		5	%		14	%		14	%		4	%		5	%		14	%		14	%		4	%		5	%
ETFs		32	%		30	%		24	%		24	%		32	%		30	%		24	%		25	%		31	%		30	%		25	%		24	%
Non-ETF index		5	%		5	%		23	%		24	%		5	%		5	%		24	%		23	%		5	%		5	%		23	%		24	%
Equity subtotal		51	%		51	%		52	%		53	%		51	%		49	%		52	%		53	%		50	%		49	%		52	%		53	%
Fixed income:
Active		13	%		14	%		12	%		11	%		12	%		14	%		11	%		11	%		13	%		14	%		12	%		11	%
ETFs		9	%		8	%		9	%		7	%		9	%		8	%		9	%		8	%		9	%		7	%		9	%		8	%
Non-ETF index		2	%		3	%		8	%		10	%		3	%		3	%		8	%		9	%		2	%		3	%		8	%		9	%
Fixed income subtotal		24	%		25	%		29	%		28	%		24	%		25	%		28	%		28	%		24	%		24	%		29	%		28	%
Multi-asset		8	%		9	%		8	%		8	%		8	%		9	%		9	%		8	%		8	%		9	%		9	%		8	%
Alternatives:
Illiquid alternatives		6	%		5	%		1	%		1	%		6	%		5	%		1	%		1	%		6	%		5	%		1	%		1	%
Liquid alternatives		4	%		4	%		1	%		1	%		4	%		4	%		1	%		1	%		4	%		4	%		1	%		1	%
Currency and commodities(2)		1	%		2	%		1	%		1	%
Currency and commodities(3)														1	%		1	%		1	%		1	%		2	%		3	%		1	%		1	%
Alternatives subtotal		11	%		11	%		3	%		3	%		11	%		10	%		3	%		3	%		12	%		12	%		3	%		3	%
Long-term		94	%		96	%		92	%		92	%		94	%		93	%		92	%		92	%		94	%		94	%		93	%		92	%
Cash management		6	%		4	%		8	%		8	%		6	%		7	%		8	%		8	%		6	%		6	%		7	%		8	%
Total AUM		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%

(1)

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

(2)

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

(3)

Amounts include commodity ETFs.

Three Months Ended ~~March 31,~~September 30, 2023 Compared with Three Months Ended ~~March 31,~~September 30, 2022

Revenue ~~decreased $456~~increased $211 million, or ~~10%~~5%, from the three months ended ~~March 31,~~September 30, 2022, primarily driven by higher base fees due to the impact of ~~lower markets~~organic growth and market movements over the ~~negative impact of foreign exchange movements~~past twelve months on average AUM and ~~lower performance fees.~~higher technology service revenue.

Investment advisory, administration fees and securities lending revenue of ~~$3.5~~$3.7 billion ~~decreased $331~~increased $150 million from ~~$3.8~~$3.5 billion for the three months ended ~~March 31,~~September 30, 2022, primarily driven by organic base fee growth and the impact of market and foreign exchange movements over the past twelve months on average AUM. Securities lending revenue of $167 million increased from $162 million for the three months ended September 30, 2022.

Investment advisory performance fees of $70 million decreased $12 million from $82 million for the three months ended September 30, 2022, primarily reflecting lower revenue from illiquid alternative products, partially offset by higher revenue from long-only and liquid alternative products.

Technology services revenue of $407 million increased $69 million from $338 million for the three months ended September 30, 2022, driven by sustained demand for our technology offerings. Current quarter technology services revenue also benefited from the impact of several large client renewals of eFront on-premise licenses, for which a majority of the revenue is recognized at the time of renewal.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Revenue decreased $308 million, or 2%, from the nine months ended September 30, 2022, primarily driven by the impact of lower markets on average AUM and lower performance fees, partially offset by higher technology services revenue.

Investment advisory, administration fees and securities lending revenue of $10.8 billion decreased $258 million from $11.1 billion for the nine months ended September 30, 2022, primarily driven by the negative impact of market beta ~~and foreign exchange movements~~ on average AUM, partially offset by ~~the elimination of yield-related fee waivers on money market funds and~~ higher securities lending revenue. Securities lending revenue of ~~$167~~$518 million increased from ~~$138~~$460 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, primarily reflecting higher spreads.

Investment advisory performance fees of ~~$55~~$243 million decreased $43 million from ~~$98~~$286 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, primarily reflecting lower revenue from illiquid alternative and long-only fixed income products, partially offset by higher revenue from long-only equity products.

Technology services revenue of ~~$340 million decreased $1~~$1.1 billion increased $95 million from ~~$341 million~~$1.0 billion for the ~~three~~nine months ended ~~March 31,~~September 30, 2022, ~~due to~~reflecting sustained demand for our technology offerings but also the ~~negative~~ impact of ~~foreign exchange movements on Aladdin’s non-dollar revenue and market declines on Aladdin’s~~ fixed income ~~platform assets~~market movements over the last twelve months ~~offset by continued strong~~on positions on the Aladdin platform. Current period technology services revenue also benefited from the impact of several large client ~~demand~~renewals of eFront on-premise licenses, for ~~Aladdin.~~

~~Total advisory and other~~which a majority of the revenue is recognized at the time of ~~$27 million decreased $19 million from $46 million for the three months ended March 31, 2022, primarily reflecting lower volume of transition management assignments.~~

renewal.

Expense

The following table presents expense for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022.


	Three Months Ended						Three Months Ended					Nine Months Ended
	March 31,						September 30,					September 30,
(in millions)	2023			2022			2023			2022		2023			2022
Expense
Employee compensation and benefits	$	1,427		$	1,498		$	1,420		$	1,339	$	4,276		$	4,251
Distribution and servicing costs		505			574			526			536		1,549			1,682
Direct fund expense		315			329			354			318		1,013			951
General and administration expense:
Marketing and promotional		80			60			82			95		244			231
Occupancy and office related		110			99			103			99		313			304
Portfolio services		68			69			65			73		202			209
Sub-advisory		20			22			20			21		59			63
Technology		135			145			145			156		421			449
Professional services		42			40			51			47		128			129
Communications		12			11			12			11		36			32
Foreign exchange remeasurement		(1	)		(3	)		(3	)		3		(2	)		2
Contingent consideration fair value adjustments		—			1			—			1		1			2
Other general and administration		55			52			71			48		185			159
Total general and administration expense		521			496			546			554		1,587			1,580
Amortization of intangible assets		37			38			39			38		113			114
Total expense	$	2,805		$	2,935		$	2,885		$	2,785	$	8,538		$	8,578

Three Months Ended ~~March 31,~~September 30, 2023 Compared with Three Months Ended ~~March 31,~~September 30, 2022

Expense ~~decreased $130~~increased $100 million, or 4%, from the three months ended ~~March 31,~~September 30, 2022, reflecting ~~lower~~higher employee compensation and benefits expense and ~~lower volume related expense, partially offset by higher general and administration~~direct fund expense.

Employee compensation and benefits expense ~~decreased $71~~increased $81 million from the three months ended ~~March 31,~~September 30, 2022, reflecting higher base compensation, driven primarily by base salary increases, and higher incentive compensation primarily as a result of higher operating income.

Direct fund expense increased $36 million from the three months ended September 30, 2022, primarily reflecting higher average index AUM.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Expense decreased $40 million from the nine months ended September 30, 2022, reflecting lower distribution and servicing costs due to lower average AUM, partially offset by higher direct fund expense and employee compensation and benefits expense.

Employee compensation and benefits expense increased $25 million from the nine months ended September 30, 2022, primarily resulting from higher base compensation, driven primarily by base salary increases, partially offset by lower incentive compensation, largely driven by lower operating income.

Direct fund expense ~~decreased $14~~increased $62 million from the ~~three~~nine months ended ~~March 31,~~September 30, 2022, primarily reflecting ~~lower~~higher average index AUM.

~~General and administration expense~~ increased $25 million from the three months ended March 31, 2022, primarily driven by higher marketing and promotional expense, resulting from higher travel and entertainment expense, and higher occupancy and office related expense, partially offset by lower technology expense, related to the impact of certain credits.

4757

Nonoperating Results

The summary of nonoperating income (expense), less net income (loss) attributable to NCI for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022 was as follows:


	Three Months Ended					Three Months Ended						Nine Months Ended
	March 31,					September 30,						September 30,
(in millions)	2023		2022			2023			2022			2023		2022
Nonoperating income (expense), GAAP basis	$	116	$	(138	)	$	171		$	165		$	538	$	(320	)
Less: Net income (loss) attributable to NCI		12		(73	)		(9	)		(45	)		60		(232	)
Nonoperating income (expense), net of NCI		104		(65	)		180			210			478		(88	)
Less: Hedge gain (loss) on deferred cash compensation plans(1)		17		—			(4	)		—			29		—
Nonoperating income (expense), net of NCI, as adjusted(2)	$	87	$	(65	)	$	184		$	210		$	449	$	(88	)


	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in millions)	2023			2022			2023			2022			2023			2022
Net gain (loss) on investments, net of NCI
Private equity	$	39		$	10		$	91		$	20		$	281		$	22
Real assets		6			13			3			9			11			23
Other alternatives(3)		6			4			22			1			32			—
Other investments(4)		12			(75	)		46			(58	)		51			(245	)
Hedge gain (loss) on deferred cash compensation plans(1)		17			—			(4	)		—			29			—
Subtotal		80			(48	)		158			(28	)		404			(200	)
Other gains (losses)(5)		(3	)		19			(35	)		247			(30	)		190
Total net gain (loss) on investments, net of NCI		77			29			123			219			374			(10	)
Interest and dividend income		86			18			139			41			314			80
Interest expense		(59	)		(54	)		(82	)		(50	)		(210	)		(158	)
Net interest income (expense)		27			(36	)		57			(9	)		104			(78	)
Nonoperating income (expense), net of NCI		104			(65	)		180			210			478			(88	)
Less: Hedge gain (loss) on deferred cash compensation plans(1)		17			—			(4	)		—			29			—
Nonoperating income (expense), net of NCI, as adjusted(2)	$	87		$	(65	)	$	184		$	210		$	449		$	(88	)

(1)

Amount relates to the gain (loss) from economically hedging ~~BlackRock’s~~BlackRock's deferred cash compensation plans.

(2)

Management believes nonoperating income (expense), net of NCI, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating results, which ultimately impacts BlackRock’s book value. See Non-GAAP Financial Measures for further information on other non-GAAP financial measures.

(3)

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

(4)

Amounts primarily include net gains (losses) related to ~~unhedged~~BlackRock's seed ~~investments.~~investment portfolio, net of impact of certain hedges.

(5)

The amounts for the three and nine months ended September 30, 2022, primarily include nonoperating noncash pre-tax gains in connection with strategic minority investment in iCapital Network, Inc. of approximately $267 million. Additional amounts include noncash pre-tax gains (losses) related to the revaluation of certain other minority investments

4858

Income Tax Expense


	GAAP						As Adjusted						GAAP												As Adjusted
	Three Months Ended						Three Months Ended						Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
	March 31,						March 31,						September 30,						September 30,						September 30,						September 30,
(in millions)	2023			2022			2023			2022			2023			2022			2023			2022			2023			2022			2023			2022
Operating income(1)	$	1,438		$	1,764		$	1,511		$	1,822		$	1,637		$	1,526		$	4,690		$	4,958		$	1,691		$	1,585		$	4,877		$	5,134
Total nonoperating income (expense)(1)(2)	$	104		$	(65	)	$	87		$	(65	)	$	180		$	210		$	478		$	(88	)	$	184		$	210		$	449		$	(88	)
Income before income taxes(2)	$	1,542		$	1,699		$	1,598		$	1,757		$	1,817		$	1,736		$	5,168		$	4,870		$	1,875		$	1,795		$	5,326		$	5,046
Income tax expense	$	385		$	263		$	398		$	295		$	213		$	330		$	1,041		$	951		$	233		$	344		$	1,085		$	1,011
Effective tax rate		25.0	%		15.5	%		25.0	%		16.8	%		11.7	%		19.0	%		20.1	%		19.5	%		12.4	%		19.2	%		20.4	%		20.0	%

(1)

As adjusted items are described in more detail in Non-GAAP Financial Measures.

(2)

Net of net income (loss) attributable to NCI.

2023. Income tax expense for the three months ended ~~March 31,~~September 30, 2023 included ~~a $38~~approximately $223 million of discrete tax ~~benefit related to stock-based compensation awards that vested in the first quarter of 2023, offset by a $38 million discrete tax expense~~benefits related to the resolution of certain outstanding tax matters.

Income tax expense for the nine months ended September 30, 2023 included approximately $185 million of discrete tax net benefits related to the resolution of certain outstanding tax matters and $41 million of discrete tax benefits related to stock-based compensation awards that vested in 2023.

On August 16, 2022, the Inflation Reduction Act of 2022 ("IRA") was enacted into law, which became effective January 1, 2023 and introduced new provisions including a corporate book minimum tax and an excise tax on net stock repurchases. The provisions within the IRA did not have a material impact on BlackRock's condensed consolidated financial statements.

2022. Income tax expense for the three months ended September 30, 2022 included ~~$133~~approximately $93 million of discrete tax benefits related to the resolution of certain outstanding tax matters. Income tax expense for the nine months ended September 30, 2022 included $139 million of discrete tax benefits related to the resolution of certain tax matters and $87 million of discrete tax benefits related to stock-based compensation awards that vested in ~~the first quarter of 2022 and the resolution of certain outstanding tax matters.~~2022. In addition, ~~first quarter 2022~~ GAAP income tax expense for the nine months ended September 30, 2022 included $18 million of net noncash tax ~~benefits~~benefit related to the revaluation of certain deferred income tax ~~liabilities, which was excluded from our as adjusted results, as it will not have a cash flow impact and to ensure comparability among periods presented.~~liabilities.

4959

STATEMENT OF FINANCIAL CONDITION OVERVIEW

As Adjusted Statement of Financial Condition

The following table presents a reconciliation of the condensed consolidated statement of financial condition presented on a GAAP basis to the condensed consolidated statement of financial condition, excluding the impact of separate account assets and separate account collateral held under securities lending agreements (directly related to lending separate account securities) and separate account liabilities and separate account collateral liabilities under securities lending agreements and consolidated sponsored investment products ("CIPs").

The Company presents the as adjusted statement of financial condition as additional information to enable investors to exclude certain assets that have equal and offsetting liabilities or NCI that ultimately do not have an impact on stockholders’ equity or cash flows. Management views the as adjusted statement of financial condition, which contains non-GAAP financial measures, as an economic presentation of the Company’s total assets and liabilities; however, it 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.

Separate Account Assets and Liabilities and Separate Account Collateral Held under Securities Lending Agreements

Separate account assets are maintained by BlackRock Life Limited, a wholly owned subsidiary of the Company that is a registered life insurance company in the United Kingdom ("UK"), and represent segregated assets held for purposes of funding individual and group pension contracts. The Company records equal and offsetting separate account liabilities. The separate account assets are not available to creditors of the Company and the holders of the pension contracts have no recourse to the Company’s assets. The net investment income attributable to separate account assets accrues directly to the contract owners and is not reported on the condensed consolidated statements of income. While BlackRock has no economic interest in these assets or liabilities, BlackRock earns an investment advisory fee for the service of managing these assets on behalf of its clients.

In addition, the Company records on its condensed consolidated statements of financial condition the separate account collateral obtained under BlackRock Life Limited securities lending arrangements for which it has legal title as its own asset in addition to an equal and offsetting separate account collateral liability for the obligation to return the collateral. The collateral is not available to creditors of the Company, and the borrowers under the securities lending arrangements have no recourse to the Company’s assets.

Consolidated Sponsored Investment Products

The Company consolidates certain sponsored investment products accounted for as variable interest entities (“VIEs”) and voting rights entities (“VREs”). See Note 2, Significant Accounting Policies, in the notes to the consolidated financial statements contained in the 2022 Form 10-K for more information on the Company’s consolidation policy.

5060

The Company cannot readily access cash and cash equivalents or other assets held by CIPs to use in its operating activities. In addition, the Company cannot readily sell investments held by CIPs in order to obtain cash for use in the Company’s operations.


	March 31, 2023								September 30, 2023
(in millions)	GAAP Basis		Separate Account Assets/ Collateral(1)		CIPs(2)		As Adjusted		GAAP Basis		Separate Account Assets/ Collateral(1)		CIPs(2)		As Adjusted
Assets
Cash and cash equivalents	$	5,644	$	—	$	243	$	5,401	$	7,316	$	—	$	322	$	6,994
Accounts receivable		3,580		—		—		3,580		3,886		—		—		3,886
Investments		8,172		—		1,328		6,844		9,835		—		2,101		7,734
Separate account assets and collateral held under securities lending agreements		63,716		63,716		—		—		56,346		56,346		—		—
Operating lease right-of-use assets		1,494		—		—		1,494		1,429		—		—		1,429
Other assets(3)		5,188		—		105		5,083		5,966		—		155		5,811
Subtotal		87,794		63,716		1,676		22,402		84,778		56,346		2,578		25,854
Goodwill and intangible assets, net		33,604		—		—		33,604		33,807		—		—		33,807
Total assets	$	121,398	$	63,716	$	1,676	$	56,006	$	118,585	$	56,346	$	2,578	$	59,661
Liabilities
Accrued compensation and benefits	$	1,014	$	—	$	—	$	1,014	$	1,796	$	—	$	—	$	1,796
Accounts payable and accrued liabilities		1,183		—		—		1,183		1,217		—		—		1,217
Borrowings		6,669		—		—		6,669		7,884		—		—		7,884
Separate account liabilities and collateral liabilities under securities lending agreements		63,716		63,716		—		—		56,346		56,346		—		—
Deferred income tax liabilities(4)		3,443		—		—		3,443		3,448		—		—		3,448
Operating lease liabilities		1,823		—		—		1,823		1,780		—		—		1,780
Other liabilities		4,485		—		380		4,105		5,483		—		621		4,862
Total liabilities		82,333		63,716		380		18,237		77,954		56,346		621		20,987
Equity
Total BlackRock, Inc. stockholders’ equity		37,712		—		—		37,712		38,627		—		—		38,627
Noncontrolling interests		1,353		—		1,296		57		2,004		—		1,957		47
Total equity		39,065		—		1,296		37,769		40,631		—		1,957		38,674
Total liabilities and equity	$	121,398	$	63,716	$	1,676	$	56,006	$	118,585	$	56,346	$	2,578	$	59,661

(1)

Amounts represent segregated client assets and related liabilities, in which BlackRock has no economic interest. BlackRock earns an investment advisory fee for the service of managing these assets on behalf of its clients.

(2)

Amounts represent the impact of consolidating CIPs.

(3)

Amount includes property and equipment and other assets.

(4)

Amount includes approximately $4.3 billion of deferred income tax liabilities related to goodwill and ~~intangibles~~.intangibles.

The following discussion summarizes the significant changes in assets and liabilities on a GAAP basis. Please see the condensed consolidated statements of financial condition as of ~~March 31,~~September 30, 2023 and December 31, 2022 contained in Part I, Item 1 of this filing. The discussion does not include changes related to assets and liabilities that are equal and offsetting and have no impact on BlackRock’s stockholders’ equity.

Assets. Cash and cash equivalents at ~~March 31,~~September 30, 2023 ~~and December 31, 2022~~ included ~~$243~~$322 million ~~and $265 million, respectively,~~ of cash held by CIPs (see Liquidity and Capital Resources for details on the change in cash and cash equivalents during the ~~three~~nine months ended ~~March 31,~~September 30, 2023). Accounts receivable at ~~March 31,~~September 30, 2023 increased ~~$316~~$622 million from December 31, 2022, primarily due to higher base fee and technology services receivables.Investments at ~~March 31,~~September 30, 2023 increased ~~$706 million~~$2.4 billion from December 31, 2022 (for more information see Investments herein). Goodwill and intangible assets at ~~March 31,~~September 30, 2023 ~~decreased $39~~increased $164 million from December 31, 2022, primarily due to the Kreos Transaction, partially offset by the amortization of intangible assets. Other assets at ~~March 31,~~September 30, 2023 increased ~~$696 million~~$1.5 billion from December 31, 2022, primarily related to an increase in unit trust receivables (substantially offset by an increase in unit trust payables recorded within other liabilities), partially offset by a decrease in due from related parties.

Liabilities.Accrued compensation and benefits at ~~March 31,~~September 30, 2023 decreased ~~$1.3 billion~~$476 million from December 31, 2022, primarily due to 2022 incentive compensation cash payments in the first quarter of 2023, partially offset by 2023 incentive compensation accruals. Other liabilities at ~~March 31,~~September 30, 2023 increased ~~$909 million~~$1.9 billion from December 31, 2022, primarily due to higher unit trust payables (substantially offset by an increase in unit trust receivables recorded within other assets). and an increase in the deferred carried interest liability. Net deferred income tax liabilities at ~~March 31,~~September 30, 2023 increased ~~$62~~$67 million from December 31, 2022, primarily due to the effects of temporary differences associated with stock-based compensation ~~partially offset by capitalized costs.~~and the Kreos Transaction.

5161

Investments

The Company’s investments were ~~$8.2~~$9.8 billion and $7.5 billion at ~~March 31,~~September 30, 2023 and December 31, 2022, respectively. Investments include CIPs accounted for as VIEs and VREs. Management reviews BlackRock’s investments on an “economic” basis, which eliminates the portion of investments that does not impact BlackRock’s book value or net income attributable to BlackRock. 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.

The Company presents investments, as adjusted, to enable investors to understand the portion of investments that is owned by the Company, net of NCI, as a gauge to measure the impact of changes in net nonoperating income (expense) on investments to net income (loss) attributable to BlackRock.

The Company further presents net “economic” investment exposure, net of deferred cash compensation investments and hedged exposures, to reflect another helpful measure for investors. The economic impact of investments held pursuant to deferred cash compensation plans is substantially offset by a change in associated compensation expense, and the impact of the portfolio of seed investments is mitigated by futures entered into as part of the Company's macro hedging strategy. Carried interest capital allocations are excluded as there is no impact to BlackRock’s stockholders’ equity until such amounts are realized as performance fees. Finally, the Company’s regulatory investment in Federal Reserve Bank stock, which is not subject to market or interest rate risk, is excluded from the Company’s net economic investment exposure.


	March 31,			December 31,			September 30,			December 31,
(in millions)	2023			2022			2023			2022
Investments, GAAP	$	8,172		$	7,466		$	9,835		$	7,466
Investments held by CIPs		(5,091	)		(4,669	)		(6,349	)		(4,669	)
Net interest in CIPs(1)		3,763			3,622			4,248			3,622
Investments, as adjusted		6,844			6,419			7,734			6,419
Deferred cash compensation investments		(278	)		—
Investments related to deferred cash compensation plans								(252	)		—
Hedged exposures		(1,504	)		(1,461	)		(1,578	)		(1,461	)
Federal Reserve Bank stock		(91	)		(91	)		(92	)		(91	)
Carried interest		(1,519	)		(1,550	)		(1,945	)		(1,550	)
Total “economic” investment exposure(2)	$	3,452		$	3,317		$	3,867		$	3,317

(1)

Amounts ~~include~~included $1.9 billion and $1.5 billion of carried interest (VIEs) as of ~~both March 31,~~September 30, 2023 and December 31, 2022, respectively, which has no impact on the Company’s “economic” investment exposure.

(2)

Amounts ~~exclude~~do not include investments in strategic minority investments included in other assets on the condensed consolidated statements of financial condition.

5262

The following table represents the carrying value of the Company’s economic investment exposure, by asset type, at ~~March 31,~~September 30, 2023 and December 31, 2022:


	March 31,			December 31,			September 30,			December 31,
(in millions)	2023			2022			2023			2022
Equity/Fixed income/Multi-asset(1)	$	2,542		$	2,423		$	2,776		$	2,423
Alternatives:
Private equity		1,287			1,207			1,429			1,207
Real assets		404			368			467			368
Other alternatives(2)		723			780			773			780
Alternatives subtotal		2,414			2,355			2,669			2,355
Hedged exposures		(1,504	)		(1,461	)		(1,578	)		(1,461	)
Total “economic” investment exposure	$	3,452		$	3,317		$	3,867		$	3,317

(1)

Amounts include seed investments in equity, ~~fixed income,~~fixed-income, and multi-asset mutual funds/strategies.

(2)

Other alternatives primarily include co-investments in credit funds, direct hedge fund strategies, and hedge fund solutions.

As adjusted investment activity for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 was as follows:


(in millions)	Three Months Ended March 31,			Nine Months Ended September 30, 2023
Investments, as adjusted, beginning balance	$	6,419		$	6,419
Purchases/capital contributions		490			1,142
Sales/maturities		(165	)		(542	)
Distributions(1)		(20	)		(68	)
Market appreciation(depreciation)/earnings from equity method investments		132			392
Carried interest capital allocations/(distributions)		(31	)		395
Other(2)		19			(4	)
Investments, as adjusted, ending balance	$	6,844		$	7,734

(1)

Amount includes distributions representing return of capital and return on investments.

(2)

Amount includes the impact of foreign exchange movements.

5363

LIQUIDITY AND CAPITAL RESOURCES

BlackRock Cash Flows Excluding the Impact of CIPs

The condensed consolidated statements of cash flows include the cash flows of the CIPs. The Company uses an adjusted cash flow statement, which excludes the impact of CIPs, as a supplemental non-GAAP measure to assess liquidity and capital requirements. The Company believes that its cash flows, excluding the impact of the CIPs, provide investors with useful information on the cash flows of BlackRock relating to its ability to fund additional operating, investing and financing activities. BlackRock’s management does not advocate that investors consider such non-GAAP measures in isolation from, or as a substitute for, its cash flows presented in accordance with GAAP.

The following table presents a reconciliation of the condensed consolidated statements of cash flows presented on a GAAP basis to the condensed consolidated statements of cash flows, excluding the impact of the cash flows of CIPs:


(in millions)	GAAP Basis			Impact on Cash Flows of CIPs			Cash Flows Excluding Impact of CIPs			GAAP Basis			Impact on Cash Flows of CIPs			Cash Flows Excluding Impact of CIPs
Cash, cash equivalents and restricted cash, December 31, 2022	$	7,433		$	265		$	7,168		$	7,433		$	265		$	7,168
Net cash provided by/(used in) operating activities		(394	)		(335	)		(59	)		2,167			(958	)		3,125
Net cash provided by/(used in) investing activities		(222	)		27			(249	)		(773	)		21			(794	)
Net cash provided by/(used in) financing activities		(1,194	)		286			(1,480	)		(1,489	)		994			(2,483	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		38			—			38			(5	)		—			(5	)
Net increase/(decrease) in cash, cash equivalents and restricted cash		(1,772	)		(22	)		(1,750	)		(100	)		57			(157	)
Cash, cash equivalents and restricted cash, March 31, 2023	$	5,661		$	243		$	5,418
Cash, cash equivalents and restricted cash, September 30, 2023										$	7,333		$	322		$	7,011

Sources of BlackRock’s operating cash primarily include base fees and securities lending revenue, performance fees, technology services revenue, advisory and other revenue and distribution fees. BlackRock uses its cash to pay all operating expenses, interest and principal on borrowings, income taxes, dividends ~~on BlackRock’s capital stock,~~and repurchases of the Company’s stock, acquisitions, capital expenditures and purchases of co-investments and seed investments.

For details of the Company’s GAAP cash flows from operating, investing and financing activities, see the ~~Condensed Consolidated Statements~~condensed consolidated statements of ~~Cash Flows~~cash flows contained in Part I, Item 1 of this filing.

Cash flows provided by/(used in) operating activities, excluding the impact of CIPs, primarily include the receipt of base fees, securities lending revenue, performance fees and technology services revenue, offset by the payment of operating expenses incurred in the normal course of business, including year-end incentive and deferred cash compensation accrued during prior years, and income tax payments.

Cash flows used in investing activities, excluding the impact of CIPs, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 were ~~$249~~$794 million and primarily reflected ~~$176~~$411 million of net investment purchases, ~~and $81~~$220 million of purchases of property and ~~equipment.~~equipment, and $189 million related to the Kreos Transaction.

Cash flows used in financing activities, excluding the impact of CIPs, for the ~~three~~nine months ended ~~March 31,~~September 30, 2023 were ~~$1.5~~$2.5 billion, primarily resulting from ~~$796 million~~$2.3 billion of cash dividend payments, ~~$721 million~~and $1.5 billion of share repurchases, including ~~$375 million~~$1.1 billion in open market transactions and ~~$346 million~~$0.4 billion of employee tax withholdings related to employee stock ~~transactions.~~transactions, partially offset by $1.2 billion of proceeds from long-term borrowings.

5464

The Company manages its financial condition and funding to maintain appropriate liquidity for the business. Management believes that the Company’s liquid assets, continuing cash flows from operations, borrowing capacity under the Company’s existing revolving credit facility and uncommitted commercial paper private placement program, provide sufficient resources to meet the Company’s short-term and long-term cash needs, including operating, debt and other obligations as they come due and anticipated future capital requirements. Liquidity resources at ~~March 31,~~September 30, 2023 and December 31, 2022 were as follows:


	March 31,			December 31,			September 30,			December 31,
(in millions)	2023			2022			2023			2022
Cash and cash equivalents	$	5,644		$	7,416		$	7,316		$	7,416
Cash and cash equivalents held by CIPs(1)		(243	)		(265	)		(322	)		(265	)
Subtotal(2)		5,401			7,151			6,994			7,151
Credit facility – undrawn		5,000			4,700			5,000			4,700
Total liquidity resources	$	10,401		$	11,851		$	11,994		$	11,851

(1)

The Company cannot readily access such cash and cash equivalents to use in its operating activities.

(2)

The percentage of cash and cash equivalents held by the Company’s US subsidiaries was approximately ~~40%~~55% and 50% at ~~March 31,~~both September 30, 2023 and December 31, 2022, respectively. See Net Capital Requirements herein for more information on net capital requirements in certain regulated subsidiaries.

Total liquidity resources ~~decreased $1.5 billion~~increased $143 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2023, primarily reflecting ~~cash payments of 2022 year-end incentive awards, cash dividend payments of $796 million, and share repurchases of $721 million, partially offset by~~ cash flows from other operating activities, $1.2 billion of proceeds from long-term borrowings and a $300 million increase in the aggregate commitment amount under the credit ~~facility.~~facility, partially offset by cash dividend payments of $2.3 billion, share repurchases of $1.5 billion and $189 million related to the Kreos Transaction.

A significant portion of the Company’s ~~$6.8~~$7.7 billion of investments, as adjusted, is illiquid in nature and, as such, cannot be readily convertible to cash.

Share Repurchases.In January 2023, the Company announced that the Board of Directors authorized the repurchase of an additional seven million shares under the ~~Company’s~~Company's existing share repurchase program for a total of up to approximately 7.9 million shares of BlackRock common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including legal limitations, price and market conditions.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company repurchased ~~0.5~~1.6 million common shares under the Company’s existing share repurchase program for approximately ~~$375 million.~~$1.1 billion. At ~~March 31,~~September 30, 2023, there were approximately ~~7.4~~6.3 million shares still authorized to be repurchased under the program.

Net Capital Requirements.The Company is required to maintain net capital in certain regulated subsidiaries within a number of jurisdictions, which is partially maintained by retaining cash and cash equivalent investments in those subsidiaries or jurisdictions. As a result, such subsidiaries of the Company may be restricted in their ability to transfer cash between different jurisdictions and to their parents. Additionally, transfers of cash between international jurisdictions may have adverse tax consequences that could discourage such transfers.

BlackRock Institutional Trust Company, N.A. (“BTC”) is chartered as a national bank that does not accept deposits or make commercial loans and whose powers are limited to trust and other fiduciary activities. BTC provides investment management and other fiduciary services, including investment advisory and securities lending agency services, to institutional clients. BTC is subject to regulatory capital and liquid asset requirements administered by the US Office of the Comptroller of the Currency.

At ~~both March 31,~~September 30, 2023 and December 31, 2022, the Company was required to maintain approximately $1.8 billion and $2.2 billion, respectively, in net capital in certain regulated subsidiaries, including BTC, entities regulated by the Financial Conduct Authority and Prudential Regulation Authority in the UK, and the Company’s broker-dealers. The Company was in compliance with all applicable regulatory net capital requirements.

5565

Short-Term Borrowings

2023 Revolving Credit Facility. The Company maintains an unsecured revolving credit facility which is available for working capital and general corporate purposes (the “2023 credit facility”). In March 2023, the 2023 credit facility was amended to, among other things, (1) increase the aggregate commitment amount by $300 million to $5 billion, (2) extend the maturity date to March 2028 and (3) change the secured overnight financing rate (“SOFR”) adjustment to 10 bps per annum for all SOFR-based ~~loans.~~borrowings. The 2023 credit facility permits the Company to request up to an additional $1.0 billion of borrowing capacity, subject to lender credit approval, which could increase the overall size of the 2023 credit facility to an aggregate principal amount of up to $6 billion. The 2023 credit facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at ~~March 31,~~September 30, 2023. At ~~March 31,~~September 30, 2023, the Company had no amount outstanding under the 2023 credit facility.

Long-Term Borrowings

At ~~March 31,~~September 30, 2023, the principal amount of long-term notes outstanding was ~~$6.7~~$7.9 billion. See Note 15, Borrowings, in the 2022 Form 10-K for more information on overall borrowings outstanding as of December 31, 2022.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2023, the Company paid approximately ~~$51~~$140 million of interest on long-term notes. Future principal repayments and interest requirements at ~~March 31,~~September 30, 2023 were as follows:


(in millions)
Year	Principal		Interest		Total Payments		Principal		Interest		Total Payments
Remainder of 2023	$	—	$	117	$	117	$	—	$	58	$	58
2024		1,000		151		1,151		1,000		210		1,210
2025(1)		761		133		894		741		193		934
2026		—		124		124		—		183		183
2027		700		112		812		700		172		872
2028		—		102		102		—		161		161
Thereafter		4,250		185		4,435		5,500		452		5,952
Total	$	6,711	$	924	$	7,635	$	7,941	$	1,429	$	9,370

(1)

The amounts related to the 2025 Notes are calculated using the EUR/USD foreign exchange rate as of ~~March 31,~~September 30, 2023.

In May 2023, the Company issued $1.25 billion in aggregate principal amount of 4.75% senior unsecured notes maturing on May 25, 2033 (the “2033 Notes”). The net proceeds of the 2033 Notes are being used for general corporate purposes, which may include the future repayment of all or a portion of the $1.0 billion 3.50% Notes maturing in March 2024. Interest of approximately $59 million per year is payable semi-annually on May 25 and November 25 of each year, commencing on November 25, 2023. The 2033 Notes may be redeemed at the option of the Company, in whole or in part, at any time prior to February 25, 2033 at a "make-whole" redemption price, or thereafter at 100% of the principal amount of the 2033 Notes, in each case plus accrued but unpaid interest. The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2033 Notes.

Commitments and Contingencies

Investment Commitments. At ~~March 31,~~September 30, 2023, the Company had ~~$836~~$774 million of various capital commitments to fund sponsored investment products, including CIPs. These products include various illiquid alternative products, including private equity funds and real assets funds and opportunistic funds. This amount excludes additional commitments made by consolidated funds of funds to underlying third-party funds as third-party noncontrolling interest holders have the legal obligation to fund the respective commitments of such funds of funds. Generally, the timing of the funding of these commitments is unknown and the commitments are callable on demand at any time prior to the expiration of the commitment. These unfunded commitments are not recorded on the condensed consolidated statements of financial condition. These commitments do not include potential future commitments approved by the Company that are not yet legally binding. The Company intends to make additional capital commitments from time to time to fund additional investment products for, and with, its clients.

5666

Critical Accounting Policies ~~And~~and Estimates

The preparation of condensed consolidated 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 condensed consolidated financial statements and the reported amounts of revenue and expense during the reporting periods. Actual results could differ significantly from those estimates. These estimates, judgments and assumptions are affected by the Company’s application of accounting policies. Management considers the following accounting policies and estimates critical to understanding the condensed consolidated financial statements. These policies and estimates are considered critical because they had a material impact, or are reasonably likely to have a material impact on the Company’s condensed consolidated financial statements and because they require management to make significant judgments, assumptions or estimates. For a summary of these and additional accounting policies, see Note 2, Significant Accounting Policies, in the notes to the condensed consolidated financial statements. In addition, see Critical Accounting Policies and Estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2, Significant Accounting Policies, in the 2022 Form 10-K for further information.

Consolidation. The Company consolidates entities in which the Company has a controlling financial interest. The company has a controlling financial interest when it owns a majority of the VRE or is a primary beneficiary (“PB”) of a VIE. Assessing whether an entity is a VIE or a VRE involves judgment and analysis on a structure-by-structure basis. Factors considered in this assessment include the entity’s legal organization, the entity’s capital structure, the rights of equity investment holders, the Company’s contractual involvement with and economic interest in the entity and any related party or de facto agent implications of the Company’s involvement with the entity. Entities that are determined to be VREs are consolidated if the Company can exert control over the financial and operating policies of the investee, which generally exists if there is greater than 50% voting interest. Entities that are determined to be VIEs are consolidated if the Company is the PB of the entity. BlackRock is deemed to be the PB of a VIE if it (1) has the power to direct the activities that most significantly impact the ~~entities'~~entities’ economic performance and (2) has the obligation to absorb losses or the right to receive benefits that potentially could be significant to the VIE. There is judgment involved in assessing whether the Company is the PB of a VIE. In addition, the Company’s ownership interest in VIEs is subject to variability and is impacted by actions of other investors such as on-going redemptions and contributions. The Company generally consolidates VIEs in which it holds an economic interest of 10% or greater and deconsolidates such VIEs once its economic interest falls below 10%. As of ~~March 31,~~September 30, 2023, the Company was deemed to be the PB of 92109 VIEs. See Note 5, Consolidated Sponsored Investment Products, in the notes to the condensed consolidated financial statements for more information.

Fair Value Measurements. The Company’s assessment of the significance of a particular input to the fair value measurement according to the fair value hierarchy (i.e., Level 1, 2 and 3 inputs, as defined) in its entirety requires judgment and considers factors specific to the financial instrument. See Note 2, Significant Accounting Policies, and Note 7, Fair Value Disclosures, in the notes to the condensed consolidated financial statements for more information on fair value measurements.

Investment Advisory Performance Fees / Carried Interest. The Company receives investment advisory performance fees, including incentive allocations (carried interest) from certain actively managed investment funds and certain separately managed accounts ~~(“SMAs”~~("SMAs"). These performance fees are dependent upon exceeding specified relative or absolute investment return thresholds, which vary by product or account, and include monthly, quarterly, annual or longer measurement periods.

Performance fees, including carried interest, are recognized when it is determined that they are no longer probable of significant reversal (such as upon the sale of a fund’s investment or when the investment performance exceeds a contractual threshold at the end of a specified measurement period). Given the unique nature of each fee arrangement, contracts with customers are evaluated on an individual basis to determine the timing of revenue recognition. Significant judgment is involved in making such determination. Performance fees typically arise from investment management services that began in prior reporting periods. Consequently, a portion of the fees the Company recognizes may be partially related to the services performed in prior periods that meet the recognition criteria in the current period. At each reporting date, the Company considers various factors in estimating performance fees to be recognized, including carried interest. These factors include but are not limited to whether: (1) the amounts are dependent on the financial markets and, thus, are highly susceptible to factors outside the Company’s influence; (2) the ultimate payments have a large number and a broad range of possible amounts; and (3) the funds or SMAs have the ability to (a) invest or reinvest their sales proceeds or (b) distribute their sales proceeds and determine the timing of such distributions.

The Company is allocated/distributed carried interest from certain alternative investment products upon exceeding performance thresholds. The Company may be required to reverse/return all, or part, of such carried interest allocations/distributions depending upon future performance of these products. Carried interest subject to such clawback provisions is recorded in investments or cash and cash equivalents to the extent that it is distributed, on its condensed

consolidated statements of financial condition. The Company records a liability for deferred carried interest to the extent it receives cash or capital allocations related to carried interest prior to meeting the revenue recognition criteria. At ~~March 31,~~September 30, 2023 and December 31, 2022, the Company had ~~$1.5~~$1.9 billion and $1.4 billion, respectively, of deferred carried interest recorded in other liabilities on the condensed consolidated statements of financial condition. A portion of the deferred carried interest may also be paid to certain ~~employees.~~employees and other third parties. The ultimate timing of the recognition of performance fee revenue and related compensation expense, if any, is unknown. See Note 15, Revenue, in the notes to the condensed consolidated financial statements for detailed changes in the deferred carried interest liability balance for the three and nine months ended ~~March 31,~~September 30, 2023 and 2022.

5868

Item 3. Quantitative and Qualitative Disclosures About Market Risk

AUM Market Price Risk. BlackRock’s investment advisory and administration fees are primarily comprised of fees based on a percentage of the value of AUM and, in some cases, performance fees expressed as a percentage of the returns realized on AUM. At ~~March 31,~~September 30, 2023, the majority of the Company’s investment advisory and administration fees were based on average or period end AUM of the applicable investment funds or separate accounts. Movements in equity market prices, interest rates/credit spreads, foreign exchange rates or all three could cause the value of AUM to decline, which would result in lower investment advisory and administration fees.

Corporate Investments Portfolio Risks. As a leading investment management firm, BlackRock devotes significant resources across all of its operations to identifying, measuring, monitoring, managing and analyzing market and operating risks, including the management and oversight of its own investment portfolio. The Board of Directors of the Company has adopted guidelines for the review of investments (or commitments to invest) to be made by the Company, requiring, among other things, that ~~investments be reviewed by certain senior officers of the Company, and that~~ certain investments ~~may~~ be referred to ~~the Audit Committee or~~ the Board of Directors, depending on the circumstances, for notification or approval.

In the normal course of its business, BlackRock is exposed to equity market price risk, interest rate/credit spread risk and foreign exchange rate risk associated with its corporate investments.

BlackRock has investments primarily in sponsored investment products that invest in a variety of asset classes, including real assets, private equity and hedge funds. Investments generally are made for co-investment purposes, to establish a performance track record, to hedge exposure to certain deferred cash compensation plans or for regulatory purposes. The Company has a seed capital hedging program in which it enters into futures to hedge market and interest rate exposure with respect to its total portfolio of seed investments in sponsored investment products. The Company had outstanding futures related to its seed capital hedging program with an aggregate notional value of approximately $1.6 billion and $1.5 billion at ~~both March 31,~~September 30, 2023 and December 31, ~~2022.~~2022, respectively.

At ~~March 31,~~September 30, 2023, approximately ~~$5.1~~$6.3 billion of BlackRock’s investments were maintained in consolidated sponsored investment products accounted for as variable interest entities or voting rights entities. Excluding the impact of the Federal Reserve Bank stock, carried interest, investments made to hedge exposure to certain deferred cash compensation plans and certain investments that are hedged via the seed capital hedging program, the Company’s economic exposure to its investment portfolio is ~~$3.5~~$3.9 billion. See Statement of Financial Condition Overview-Investments in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information on the Company’s investments.

Equity Market Price Risk.At ~~March 31,~~September 30, 2023, the Company’s net exposure to equity market price risk in its investment portfolio was approximately ~~$1.4~~$1.6 billion of the Company’s total economic investment exposure. Investments subject to market price risk include public and private equity and real assets investments, hedge funds and funds of funds as well as mutual funds. The Company estimates that a hypothetical 10% adverse change in market prices would result in a decrease of approximately ~~$141~~$160 million in the carrying value of such investments.

Interest Rate/Credit Spread Risk. At ~~March 31,~~September 30, 2023, the Company was exposed to interest rate risk and credit spread risk as a result of approximately ~~$2.1~~$2.3 billion of investments in debt securities and sponsored investment products that invest primarily in debt securities. Management considered a hypothetical 100 basis point fluctuation in interest rates or credit spreads and estimates that the impact of such a fluctuation on these investments, in the aggregate, would result in a decrease, or increase, of approximately ~~$49~~$60 million in the carrying value of such investments.

Foreign Exchange Rate Risk.As discussed above, the Company invests in sponsored investment products that invest in a variety of asset classes. The carrying value of the total economic investment exposure denominated in foreign currencies, primarily the British pound and euro, was approximately ~~$1.0~~$1.1 billion at ~~March 31,~~September 30, 2023. A 10% adverse change in the applicable foreign exchange rates would result in approximately a ~~$104~~$111 million decline in the carrying value of such investments.

Other Market Risks. The Company executes forward foreign currency exchange contracts to mitigate the risk of certain foreign exchange risk movements. At ~~March 31,~~September 30, 2023, the Company had outstanding forward foreign currency exchange contracts with an aggregate notional value of approximately $2.4 billion, with expiration dates in ~~April~~October 2023. In addition, the Company entered into futures to hedge economically the exposure to market movements on certain deferred cash compensation plans. At ~~March 31,~~September 30, 2023, the Company had outstanding exchange traded futures with aggregate notional values related to its deferred cash compensation hedging program of approximately ~~$184~~$182 million, ~~and~~ with expiration dates during the ~~second~~fourth quarter of 2023.

5969

Item 4. Controls and Procedures

Disclosure Controls and Procedures. Under the direction of BlackRock’s Chief Executive Officer and Chief Financial Officer, BlackRock evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, BlackRock’s Chief Executive Officer and Chief Financial Officer have concluded that BlackRock’s disclosure controls and procedures were effective.

Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~March 31,~~September 30, 2023 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

6070

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of the Company’s legal proceedings, see Note 14, Commitments and Contingencies, in the notes to the condensed consolidated financial statements of this Form 10-Q.

6171

Item 1A. Risk Factors

In addition to the other information set forth in this report, the risks discussed in BlackRock's Annual Report on Form 10-K for the year ended December 31, 2022 could materially affect our business, financial condition, operating results and nonoperating results.

6272

Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities

During the three months ended ~~March 31,~~September 30, 2023, the Company made the following purchases of its common stock, which is registered pursuant to Section 12(b) of the Exchange Act.

Total Number
of Shares
Purchased(1)

Average
Price Paid
per Share

Total Number
of Shares
Purchased
as Part of
Publicly
Announced
Plans or
Programs

Maximum
Number of
Shares that
May Yet Be
Purchased
Under the
Plans or
Programs(1)

January 1, 2023 through January 31, 2023

632,935

$
748.23

172,410

7,736,743

February 1, 2023 through February 28, 2023

308,898

$
720.73

308,898

7,427,845

March 1, 2023 through March 31, 2023

36,263

$
681.02

34,442

7,393,403

Total

978,096

$
737.05

515,750


	Total Number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1)
July 1, 2023 through July 31, 2023		165,353	$	739.65		154,138		6,672,170
August 1, 2023 through August 31, 2023		353,007	$	691.60		346,762		6,325,408
September 1, 2023 through September 30, 2023		34,448	$	702.46		29,677		6,295,731
Total		552,808	$	706.65		530,577

(1)

Consists of purchases made by the Company primarily to satisfy income tax withholding obligations of employees and members of the Company’s Board of Directors related to the vesting of certain restricted stock unit awards and purchases made by the Company as part of the share repurchase program that the Company announced in July 2010, which initially authorized the repurchase of 5.1 million shares with no stated expiration. In January 2023, the Company announced that the Board of Directors authorized the repurchase of an additional seven million shares under the Company’s existing share repurchase program, for a total of up to approximately 7.9 million shares of BlackRock common stock.

6373

Item 6. Exhibits


Exhibit No.		Description

~~10.1(1)~~3.1(1)		~~Amendment No. 13, dated as~~Amended and Restated Bylaws of ~~March 31, 2023, by and among~~ BlackRock Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, a swingline lender, an issuing lender, L/C agent and a lender, and the banks and other financial institutions referred to therein.

31.1		Section 302 Certification of Chief Executive Officer

31.2		Section 302 Certification of Chief Financial Officer

32.1		Section 906 Certification of Chief Executive Officer and Chief Financial Officer

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

(1)

Incorporated by reference to ~~BlackRock’s~~BlackRock's Current Report on Form 8-K filed on ~~April 3,~~September 15, 2023.

6474

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 thereunto duly authorized.


	BLACKROCK, INC.
	(Registrant)

	By:	/s/ Martin S. Small
Date: ~~May 5,~~November 6, 2023		Martin S. Small
		Senior Managing Director & Chief Financial Officer ~~(Principal~~(Principal Financial Officer)

6575


	Shares Under Option			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (in millions)
Outstanding at December 31, 2022		1,735,898		$	513.50
Exercised		(54,072	)	$	513.50
Forfeited		(2,576	)	$	513.50
Outstanding at March 31, 2023(1)		1,679,250		$	513.50		3.7	$	261
Exercisable at March 31, 2023		540,583		$	513.50		3.7	$	84