(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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.

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).

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.

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).

As of July 31, ~~2019,~~2020, there were ~~154,573,783~~152,483,559 shares of the registrant’s common stock outstanding.

	June 30,			December 31,			June 30,			December 31,
(in millions, except shares and per share data)	2019			2018			2020			2019
Assets
Cash and cash equivalents(1)	$	3,920		$	6,302		$	5,466		$	4,829
Accounts receivable		2,863			2,657			2,990			3,179
Investments(1)		1,989			1,796			5,171			5,489
Assets of consolidated variable interest entities:
Cash and cash equivalents		103			186
Investments		2,431			2,680
Other assets		63			876
Separate account assets		96,807			90,285			91,930			102,844
Separate account collateral held under securities lending agreements		18,446			20,655			14,367			15,466
Property and equipment (net of accumulated depreciation of $836 and $750 at June 30, 2019 and December 31, 2018, respectively)		659			643
Intangible assets (net of accumulated amortization of $284 and $244 at June 30, 2019 and December 31, 2018, respectively)		18,477			17,839
Property and equipment (net of accumulated depreciation of $979 and $880 at June 30, 2020 and December 31, 2019, respectively)								697			715
Intangible assets (net of accumulated amortization of $237 and $185 at June 30, 2020 and December 31, 2019, respectively)								18,317			18,369
Goodwill		14,511			13,526			14,556			14,562
Other assets		3,078			2,128
Other assets⁽¹⁾								3,848			3,169
Total assets	$	163,347		$	159,573		$	157,342		$	168,622
Liabilities
Accrued compensation and benefits	$	1,078		$	1,988		$	1,189		$	2,057
Accounts payable and accrued liabilities		1,277			1,292			914			1,167
Liabilities of consolidated variable interest entities:
Borrowings		142			84
Other liabilities		502			1,290
Borrowings		5,964			4,979			7,190			4,955
Separate account liabilities		96,807			90,285			91,930			102,844
Separate account collateral liabilities under securities lending agreements		18,446			20,655			14,367			15,466
Deferred income tax liabilities		3,825			3,571			3,664			3,734
Other liabilities		2,646			1,889
Other liabilities⁽¹⁾								4,054			3,470
Total liabilities		130,687			126,033			123,308			133,693
Commitments and contingencies (Note 14)
Commitments and contingencies (Note 15)
Temporary equity
Redeemable noncontrolling interests		710			1,107			1,248			1,316
Permanent Equity
BlackRock, Inc. stockholders’ equity
Common stock, $0.01 par value;		2			2			2			2
Shares authorized: 500,000,000 at June 30, 2019 and December 31, 2018; Shares issued: 171,252,185 at June 30, 2019 and December 31, 2018; Shares outstanding: 154,543,673 and 157,553,501 at June 30, 2019 and December 31, 2018, respectively
Preferred stock (Note 19)		—			—
Shares authorized: 500,000,000 at June 30, 2020 and December 31, 2019; Shares issued: 172,075,373 and 171,252,185 at June 30, 2020 and December 31, 2019, respectively; Shares outstanding: 152,460,239 and 154,375,780 at June 30, 2020 and December 31, 2019, respectively
Preferred stock (Note 20)								—			—
Additional paid-in capital		18,947			19,168			19,007			19,186
Retained earnings		20,267			19,282			22,532			21,662
Accumulated other comprehensive loss		(664	)		(691	)		(781	)		(571	)
Treasury stock, common, at cost (16,708,512 and 13,698,684 shares held at June 30, 2019 and December 31, 2018, respectively)		(6,659	)		(5,387	)
Treasury stock, common, at cost (19,615,134 and 16,876,405 shares held at June 30, 2020 and December 31, 2019, respectively)								(8,030	)		(6,732	)
Total BlackRock, Inc. stockholders’ equity		31,893			32,374			32,730			33,547
Nonredeemable noncontrolling interests		57			59			56			66
Total permanent equity		31,950			32,433			32,786			33,613
Total liabilities, temporary equity and permanent equity	$	163,347		$	159,573		$	157,342		$	168,622

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
(in millions, except shares and per share data)	2019			2018			2019			2018			2020			2019			2020			2019
Revenue
Investment advisory, administration fees and securities lending revenue
Related parties	$	2,061		$	2,087		$	4,050		$	4,199		$	2,052		$	2,061		$	4,227		$	4,050
Other third parties		842			857			1,658			1,692			914			842			1,794			1,658
Total investment advisory, administration fees and securities lending revenue		2,903			2,944			5,708			5,891			2,966			2,903			6,021			5,708
Investment advisory performance fees		64			91			90			161			112			64			153			90
Technology services revenue		237			198			441			382			278			237			552			441
Distribution fees		267			294			529			605			253			267			529			529
Advisory and other revenue		53			78			102			149			39			53			103			102
Total revenue		3,524			3,605			6,870			7,188			3,648			3,524			7,358			6,870
Expense
Employee compensation and benefits		1,083			1,082			2,147			2,203			1,152			1,083			2,289			2,147
Distribution and servicing costs		416		��	415			820			847			429			416			874			820
Direct fund expense		252			264			494			525			246			252			523			494
General and administration		470			393			858			776			388			470			1,530			858
Amortization of intangible assets		25			11			40			22			27			25			52			40
Total expense		2,246			2,165			4,359			4,373			2,242			2,246			5,268			4,359
Operating income		1,278			1,440			2,511			2,815			1,406			1,278			2,090			2,511
Nonoperating income (expense)
Net gain (loss) on investments		89			3			231			18			398			89			358			231
Interest and dividend income		20			19			49			34			10			20			25			49
Interest expense		(52	)		(46	)		(98	)		(92	)		(51	)		(52	)		(97	)		(98	)
Total nonoperating income (expense)		57			(24	)		182			(40	)		357			57			286			182
Income before income taxes		1,335			1,416			2,693			2,775			1,763			1,335			2,376			2,693
Income tax expense		322			338			620			603
Income tax expense (benefit)														361			322			347			620
Net income		1,013			1,078			2,073			2,172			1,402			1,013			2,029			2,073
Less:
Net income (loss) attributable to noncontrolling interests		10			5			17			10			188			10			9			17
Net income attributable to BlackRock, Inc.	$	1,003		$	1,073		$	2,056		$	2,162		$	1,214		$	1,003		$	2,020		$	2,056
Earnings per share attributable to BlackRock, Inc. common stockholders:
Basic	$	6.46		$	6.67		$	13.11		$	13.42		$	7.90		$	6.46		$	13.08		$	13.11
Diluted	$	6.41		$	6.62		$	13.02		$	13.30		$	7.85		$	6.41		$	12.99		$	13.02
Weighted-average common shares outstanding:
Basic		155,354,552			160,980,960			156,803,244			161,114,746			153,732,878			155,354,552			154,488,079			156,803,244
Diluted		156,360,741			162,161,937			157,853,711			162,532,637			154,712,032			156,360,741			155,556,187			157,853,711

	Three Months Ended						Six Months Ended					Three Months Ended					Six Months Ended
	June 30,						June 30,					June 30,					June 30,
(in millions)	2019			2018			2019		2018			2020		2019			2020			2019
Net income	$	1,013		$	1,078		$	2,073	$	2,172		$	1,402	$	1,013		$	2,029		$	2,073
Other comprehensive income (loss):
Foreign currency translation adjustments⁽¹⁾		(41	)		(274	)		27		(137	)		29		(41	)		(210	)		27
Comprehensive income (loss)		972			804			2,100		2,035			1,431		972			1,819			2,100
Less: Comprehensive income (loss) attributable to noncontrolling interests		10			5			17		10			188		10			9			17
Comprehensive income attributable to BlackRock, Inc.	$	962		$	799		$	2,083	$	2,025		$	1,243	$	962		$	1,810		$	2,083

(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, 2019	$	19,188		$	21,662		$	(571	)	$	(6,732	)	$	33,547		$	66		$	33,613		$	1,316
Net income		—			2,020			—			—			2,020			—			2,020			9
Dividends declared ($7.26 per share)		—			(1,150	)		—			—			(1,150	)		—			(1,150	)		—
Stock-based compensation		298			—			—			—			298			—			298			—
Issuance of common shares related to employee stock transactions		(477	)		—			—			484			7			—			7			—
Employee tax withholdings related to employee stock transactions		—			—			—			(270	)		(270	)		—			(270	)		—
Shares repurchased		—			—			—			(1,512	)		(1,512	)		—			(1,512	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			(10	)		(10	)		815
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			—			(892	)
Other comprehensive income (loss)		—			—			(210	)		—			(210	)		—			(210	)		—
June 30, 2020	$	19,009		$	22,532		$	(781	)	$	(8,030	)	$	32,730		$	56		$	32,786		$	1,248

(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
March 31, 2020	$	18,887		$	21,872		$	(810	)	$	(6,936	)	$	33,013		$	57		$	33,070		$	1,440
Net income		—			1,214			—			—			1,214			—			1,214			188
Dividends declared ($3.63 per share)		—			(554	)		—			—			(554	)		—			(554	)		—
Stock-based compensation		149			—			—			—			149			—			149			—
Issuance of common shares related to employee stock transactions		(27	)		—			—			31			4			—			4			—
Employee tax withholdings related to employee stock transactions		—			—			—			(13	)		(13	)		—			(13	)		—
Shares repurchased		—			—			—			(1,112	)		(1,112	)		—			(1,112	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			(1	)		(1	)		(56	)
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			—			(324	)
Other comprehensive income (loss)		—			—			29			—			29			—			29			—
June 30, 2020	$	19,009		$	22,532		$	(781	)	$	(8,030	)	$	32,730		$	56		$	32,786		$	1,248

(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, 2018	$	19,170		$	19,282		$	(691	)	$	(5,387	)	$	32,374		$	59		$	32,433		$	1,107		$	19,170		$	19,282		$	(691	)	$	(5,387	)	$	32,374		$	59		$	32,433		$	1,107
Net income		—			2,056			—			—			2,056			—			2,056			17			—			2,056			—			—			2,056			—			2,056			17
Dividends declared ($6.60 per share)		—			(1,071	)		—			—			(1,071	)		—			(1,071	)		—			—			(1,071	)		—			—			(1,071	)		—			(1,071	)		—
Stock-based compensation		294			—			—			—			294			—			294			—			294			—			—			—			294			—			294			—
PNC preferred stock capital contribution		60			—			—			—			60			—			60			—			60			—			—			—			60			—			60			—
Retirement of preferred stock		(60	)		—			—			—			(60	)		—			(60	)		—			(60	)		—			—			—			(60	)		—			(60	)		—
Issuance of common shares related to employee stock transactions		(515	)		—			—			523			8			—			8			—			(515	)		—			—			523			8			—			8			—
Employee tax withholdings related to employee stock transactions		—			—			—			(229	)		(229	)		—			(229	)		—			—			—			—			(229	)		(229	)		—			(229	)		—
Shares repurchased		—			—			—			(1,566	)		(1,566	)		—			(1,566	)		—			—			—			—			(1,566	)		(1,566	)		—			(1,566	)		—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			1			1			443			—			—			—			—			—			1			1			443
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			(3	)		(3	)		(857	)		—			—			—			—			—			(3	)		(3	)		(857	)
Other comprehensive income (loss)		—			—			27			—			27			—			27			—			—			—			27			—			27			—			27			—
June 30, 2019	$	18,949		$	20,267		$	(664	)	$	(6,659	)	$	31,893		$	57		$	31,950		$	710		$	18,949		$	20,267		$	(664	)	$	(6,659	)	$	31,893		$	57		$	31,950		$	710

(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
March 31, 2019	$	18,829		$	19,779		$	(623	)	$	(6,676	)	$	31,309		$	53		$	31,362		$	1,009		$	18,829		$	19,779		$	(623	)	$	(6,676	)	$	31,309		$	53		$	31,362		$	1,009
Net income		—			1,003			—			—			1,003			—			1,003			10			—			1,003			—			—			1,003			—			1,003			10
Dividends declared ($3.30 per share)		—			(515	)		—			—			(515	)		—			(515	)		—			—			(515	)		—			—			(515	)		—			(515	)		—
Stock-based compensation		140			—			—			—			140			—			140			—			140			—			—			—			140			—			140			—
Issuance of common shares related to employee stock transactions		(20	)		—			—			24			4			—			4			—			(20	)		—			—			24			4			—			4			—
Employee tax withholdings related to employee stock transactions		—			—			—			(7	)		(7	)		—			(7	)		—			—			—			—			(7	)		(7	)		—			(7	)		—
Shares repurchased		—			—			—			—			—			—			—			—
Subscriptions (redemptions/distributions) — noncontrolling interest holders		—			—			—			—			—			6			6			243			—			—			—			—			—			6			6			243
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			(2	)		(2	)		(552	)		—			—			—			—			—			(2	)		(2	)		(552	)
Other comprehensive income (loss)		—			—			(41	)		—			(41	)		—			(41	)		—			—			—			(41	)		—			(41	)		—			(41	)		—
June 30, 2019	$	18,949		$	20,267		$	(664	)	$	(6,659	)	$	31,893		$	57		$	31,950		$	710		$	18,949		$	20,267		$	(664	)	$	(6,659	)	$	31,893		$	57		$	31,950		$	710

(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, 2017
$
19,258

$
16,939

$
(432
)

$
(3,967
)

$
31,798

$
50

$
31,848

$
416

Net income

—

2,162

—

—

2,162

9

2,171

1

Dividends declared ($5.76 per share)

—

(969
)

—

—

(969
)

—

(969
)

—

Stock-based compensation

310

—

—

—

310

—

310

—

PNC preferred stock
   capital contribution

58

—

—

—

58

—

58

—

Retirement of preferred stock

(58
)

—

—

—

(58
)

—

(58
)

—

Issuance of common shares related to
   employee stock transactions

(613
)

—

—

619

6

—

6

—

Employee tax withholdings related to
   employee stock transactions

—

—

—

(405
)

(405
)

—

(405
)

—

Shares repurchased

—

—

—

(635
)

(635
)

—

(635
)

—

Subscriptions (redemptions/distributions)
   — noncontrolling interest holders

—

—

—

—

—

(5
)

(5
)

535

Net consolidations (deconsolidations) of
  sponsored investment funds

—

—

—

—

—

—

—

(266
)
Other comprehensive income (loss)

—

—

(137
)

—

(137
)

—

(137
)

—

Adoption of accounting guidance

—

6

(6
)

—

—

—

—

—

June 30, 2018
$
18,955

$
18,138

$
(575
)

$
(4,388
)

$
32,130

$
54

$
32,184

$
686

(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

March 31, 2018
$
18,858

$
17,529

$
(301
)

$
(4,108
)

$
31,978

$
44

$
32,022

$
561

Net income

—

1,073

—

—

1,073

10

1,083

(5
)
Dividends declared ($2.88 per share)

—

(464
)

—

—

(464
)

—

(464
)

—

Stock-based compensation

135

—

—

—

135

—

135

—

Issuance of common shares related to
   employee stock transactions

(38
)

—

—

41

3

—

3

—

Employee tax withholdings related to
   employee stock transactions

—

—

—

(21
)

(21
)

—

(21
)

—

Shares repurchased

—

—

—

(300
)

(300
)

—

(300
)

—

Subscriptions (redemptions/distributions)
   — noncontrolling interest holders

—

—

—

—

—

—

—

183

Net consolidations (deconsolidations) of
  sponsored investment funds

—

—

—

—

—

—

—

(53
)
Other comprehensive income (loss)

—

—

(274
)

—

(274
)

—

(274
)

—

June 30, 2018
$
18,955

$
18,138

$
(575
)

$
(4,388
)

$
32,130

$
54

$
32,184

$
686

	Six Months Ended						Six Months Ended
(in millions)	June 30,						June 30,
	2019			2018			2020			2019
Operating activities
Net income	$	2,073		$	2,172		$	2,029		$	2,073
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Depreciation and amortization		189			107			225			189
Stock-based compensation		294			310			298			294
Deferred income tax expense (benefit)		60			2			(67	)		60
Charitable Contribution								589			—
Gain related to the Charitable Contribution								(122	)		—
Gain related to iCapital recapitalization								(244	)		—
Other gains		(26	)		—			—			(26	)
Net (gains) losses within consolidated VIEs		(133	)		12
Net (purchases) proceeds within consolidated VIEs		(453	)		(531	)
Net (gains) losses within consolidated sponsored investment products								69			(166	)
Net (purchases) proceeds within consolidated sponsored investment products								(828	)		(563	)
(Earnings) losses from equity method investees		(56	)		(65	)		(24	)		(56	)
Distributions of earnings from equity method investees		21			17			23			21
Changes in operating assets and liabilities:
Accounts receivable		(131	)		78			120			(131	)
Investments, trading		(157	)		36			114			(14	)
Other assets		(208	)		(178	)		(817	)		(208	)
Accrued compensation and benefits		(930	)		(992	)		(885	)		(930	)
Accounts payable and accrued liabilities		(16	)		27			(273	)		(16	)
Other liabilities		170			292			562			170
Net cash provided by/(used in) operating activities		697			1,287			769			697
Investing activities
Purchases of investments		(73	)		(200	)		(180	)		(73	)
Proceeds from sales and maturities of investments		71			161			69			71
Distributions of capital from equity method investees		47			12			93			47
Net consolidations (deconsolidations) of sponsored investment funds (VIEs/VREs)		(97	)		(52	)
Acquisition, net of cash acquired		(1,506	)		—
Net consolidations (deconsolidations) of sponsored investment funds								(40	)		(97	)
Acquisitions, net of cash acquired								—			(1,506	)
Purchases of property and equipment		(105	)		(63	)		(100	)		(105	)
Net cash provided by/(used in) investing activities		(1,663	)		(142	)		(158	)		(1,663	)
Financing activities
Proceeds from long-term borrowings		992			—			2,245			992
Cash dividends paid		(1,071	)		(969	)		(1,150	)		(1,071	)
Repurchases of common stock		(1,795	)		(1,040	)		(1,782	)		(1,795	)
Net proceeds from (repayments of) borrowings by consolidated VIEs		58			—
Net proceeds from (repayments of) borrowings by consolidated sponsored investment products								30			58
Net (redemptions/distributions paid)/subscriptions received from noncontrolling interest holders		444			530			805			444
Other financing activities		(136	)		6			(42	)		(136	)
Net cash provided by/(used in) financing activities		(1,508	)		(1,473	)		106			(1,508	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		9			(27	)		(80	)		9
Net increase/(decrease) in cash, cash equivalents and restricted cash		(2,465	)		(355	)		637			(2,465	)
Cash, cash equivalents and restricted cash, beginning of period		6,505			7,096			4,846			6,505
Cash, cash equivalents and restricted cash, end of period	$	4,040		$	6,741		$	5,483		$	4,040
Supplemental disclosure of cash flow information:
Cash paid for:
Interest	$	93		$	94		$	90		$	93
Income taxes (net of refunds)	$	604		$	589		$	583		$	604
Supplemental schedule of noncash investing and financing transactions:
Issuance of common stock	$	515		$	613		$	477		$	515
PNC preferred stock capital contribution	$	60		$	58		$	—		$	60
Charitable Contribution of an investment							$	(589	)	$	—
Increase (decrease) in noncontrolling interests due to net consolidation (deconsolidation) of sponsored investment funds	$	(860	)	$	(266	)	$	(892	)	$	(860	)

BlackRock’s diverse platform of alpha-seeking active, index and cash management investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. Products are offered directly and through intermediaries in a variety of vehicles, including open-end and closed-end mutual funds, iShares^® exchange-traded funds (“ETFs”), separate accounts, collective ~~investment trusts~~trust funds (“CTFs”) and other pooled investment vehicles. BlackRock also offers technology services, including the investment and risk management technology platform, Aladdin^®, Aladdin Wealth, eFront, Cachematrix and FutureAdvisor, as well as advisory services and solutions to a broad base of institutional and wealth management clients.

At June 30, 2019, The PNC Financial Services Group, Inc. (“PNC”) held 22.0% of the Company’s voting common stock and 22.4% of the Company’s capital stock, which includes outstanding common and nonvoting preferred stock.

These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its controlled subsidiaries. Noncontrolling interests (“NCI”) on the condensed consolidated statements of financial condition represents the portion of consolidated sponsored investment funds in which the Company does not have direct equity ownership. Accounts and transactions between consolidated entities have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting periods. Actual results could differ from those estimates.

Certain financial information that normally is included in annual financial statements, including certain financial statement footnotes, is not required for interim reporting purposes and has been condensed or omitted herein. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, which was filed with the Securities and Exchange Commission (“SEC”) on February 28, 2020 (“2019 ~~(“2018~~ Form 10-K”).

The interim financial information at June 30, ~~2019~~2020 and for the three and six months ended June 30, ~~2019~~2020 and ~~2018~~2019 is unaudited. However, in the opinion of management, the interim information includes all normal recurring adjustments necessary for the fair presentation of the Company’s results for the periods presented. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year.

Certain prior period presentations and disclosures, while not required to be recast, were reclassified to ensure comparability with current period classifications.

~~Leases~~Measurement of Credit Losses.. In ~~February~~June 2016, the Financial Accounting Standards Board ~~(“FASB”)~~ issued Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments~~2016-02,~~ ~~Leases, and several amendments (collectively, “ASU 2016-02”~~ (“ASU 2016-13”), which significantly changes the accounting and disclosures for credit losses for most financial assets. The new guidance requires ~~lessees to recognize assets~~an estimate of expected lifetime credit losses and ~~liabilities arising from most operating leases on the condensed consolidated statements of financial condition.~~

The Company adopted ASU 2016-02 on its effective date of January 1, 2019 on a modified retrospective basis and elected not to apply ASU 2016-02 to the comparative periods presented. Under this transition method, any cumulative effect adjustment is recognized in the opening balance of retained earnings in the period of adoption. The Company elected the package of practical expedients to alleviate certain operational complexities related to the adoption, which among other things, allowed the Company to carry forwardeliminates the existing lease classification. The Company elected to account for lease and non-lease components as a single component for its leases. The Company also elected the short-term lease practical expedient for its leases. Consequently, leases with an initial term of 12 months or less are not recorded on the condensed consolidated statement of financial condition. Upon adoption of ASU 2016-02, the Company recorded a net increase of approximately $0.7 billion in its assets and liabilities related to the right-of-use (“ROU”) asset and lease liability for its operating leases.recognition thresholds under current models. The adoption of ASU ~~2016-02~~2016-13, which was effective for the Company on January 1, 2020, did not have a material impact on ~~the~~its condensed consolidated ~~statement of income or cash flows. See Note 10,~~ ~~Leases~~financial statements.~~, for more information.~~

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:

Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date.

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.

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.

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, investments in CLOs and bank loans is 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 of Assets and Liabilities of Consolidated CLO. The Company applies the fair value option provisions for eligible assets, including bank loans, held by a consolidated ~~CLOs.~~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 as 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. 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 exposures for certain seed investments. However, certain consolidated sponsored investment funds may also utilize derivatives as a part of their investment strategy.

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. 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 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 US dollars. The gain or loss from revaluing accounting hedges of net investments in foreign operations at the spot rate is deferred and reported within accumulated other comprehensive income (loss) on the condensed consolidated statements of financial condition. Amounts excluded from the effectiveness assessment are reported in the condensed consolidated statements of income using a systematic and rational method. The Company reassesses the effectiveness of its net investment ~~hedges~~hedge at least quarterly.

~~Leases~~. The Company determines if a contract is a lease or contains a lease at inception. The Company accounts for its office facility leases as operating leases, which may include escalation clauses that are based on an index or market rate. ~~The Company accounts for lease and non-lease components as a single component for its leases. The Company elected the short-term lease exception for l~~eases with an initial term of 12 months or less. Consequently, such leases are not recorded on the condensed consolidated statement of financial condition. The Company’s lease terms include options to extend or terminate the lease when it is reasonably certain they will be exercised or not, respectively.

~~Fixed lease payments are included in ROU assets and lease liabilities within other assets and other liabilities, respectively, on the condensed consolidated statement of financial condition.~~ROU assets and lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date using the Company’s incremental borrowing rate as the discount rate. Fixed lease payments made over the lease term are recorded as lease expense on a straight-line basis. Variable lease payments based on usage, changes in an index or market rate are expensed as incurred.

Upon adoption of ASU 2016-02, for existing leases, the Company elected to determine the discount rate based on the remaining lease term as of January 1, 2019 and for lease payments based on an index or rate to apply the rate at commencement date. For new leases, the discount rates are based on the entire noncancelable lease term.

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, 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 receives legal title to the collateral with minimum values generally ranging from approximately 102% to 112% of the value of the securities lent 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.

The Company records on the condensed consolidated statements of financial condition the cash and noncash collateral received under these BlackRock Life Limited securities lending arrangements as its own asset in addition to an equal and offsetting collateral liability for the obligation to return the collateral. 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. During the six months ended June 30, ~~2019~~2020 and ~~2018,~~2019, the Company had not resold or repledged any of the collateral received under these arrangements. At June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the fair value of loaned securities held by separate accounts was approximately ~~$17.0~~$13.1 billion and ~~$18.9~~$14.4 billion, respectively, and the fair value of the collateral held under these securities lending agreements was approximately ~~$18.4~~$14.4 billion and ~~$20.7~~$15.5 billion, respectively.

On May 10, 2019, the Company acquired 100% of the equity interests of eFront Holding SAS (“eFront Transaction” or “eFront”), a leading alternative investment management software and solutions provider for approximately $1.3 billion, excluding the settlement of eFront’s outstanding debt. The acquisition of eFront ~~will expand~~expanded Aladdin’s illiquid alternative capabilities and ~~enable~~enables BlackRock to provide individual alternative or whole-portfolio technology solutions to clients.

The purchase price was funded through a combination of existing cash and issuance of commercial paper (subsequently repaid with existing cash) and long-term notes in April 2019. ~~See Note 13,~~ ~~Borrowings, for information on the debt issuance in April 2019.~~

The purchase price for the eFront Transaction was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the transaction. The goodwill recognized in connection with the acquisition is non-deductible for tax purposes and is primarily attributable to anticipated synergies from the transaction.

A summary of the ~~recorded~~ fair values of the assets acquired and liabilities assumed in this acquisition is as ~~follows~~⁽¹⁾:follows:


	Estimate of
(in millions)	Fair Value			Fair Value
Accounts receivable	$	65		$	61
Finite-lived intangible assets:
Customer relationships⁽²⁾		452
Technology-related⁽³⁾		205
Trade name⁽⁴⁾		21
Customer relationships					400
Technology-related					203
Trade name					14
Goodwill		990			1,044
Other assets		31			49
Deferred income tax liabilities		(194	)		(146	)
Other liabilities assumed		(64	)		(125	)
Total consideration, net of cash acquired	$	1,506		$	1,500

Summary of consideration, net of cash acquired:
Cash paid including settlement of outstanding debt of approximately $0.2 billion				$	1,555
Cash acquired					(55	)
Total consideration, net of cash acquired				$	1,500

⁽¹⁾At this time, the Company does not expect material changes to the value of the assets acquired or liabilities assumed in conjunction with the transaction with the exception of intangible assets and deferred income tax liabilities, which were valued using preliminary assumptions.

⁽²⁾The fair value was determined based on the excess earnings method (a Level 3 input), has a weighted-average estimated useful life of approximately 11 years and is amortized using the accelerated amortization method.

⁽³⁾ The fair value was determined based upon a relief from royalty method (a Level 3 input), has a weighted-average estimated useful life of approximately eight years and is amortized using the accelerated amortization method.

⁽⁴⁾ ~~The fair value was determined using a relief from royalty method (a Level 3 input), has an estimated useful life of approximately five years and is amortized using the accelerated amortization method.~~

Finite-lived intangible assets are amortized over their estimated useful lives, which range from five to 11 years. Amortization expense related to the finite-lived intangible assets was $10 million for the three and six months ended June 30, 2019. The finite-lived intangible assets had a weighted-average remaining useful life of approximately 10 years with remaining amortization expense as follows:

The financial results of eFront have been included in BlackRock’s consolidated financial statements from the closing of the eFront Transaction. For the three and six months ended June 30, 2019, eFront contributed $22 million of revenue and did not have a material impact to net income attributable to BlackRock, Inc. Consequently, the Company has not presented pro forma combined results of operations for this acquisition.

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.

					June 30,		December 31,
	June 30,		December 31,		2020		2019
(in millions)	2019		2018
Cash and cash equivalents	$	3,920	$	6,302	$	5,466	$	4,829
Cash and cash equivalents of consolidated VIEs		103		186
Restricted cash included in other assets		17		17		17		17
Total cash, cash equivalents and restricted cash	$	4,040	$	6,505	$	5,483	$	4,846


	June 30,		December 31,		June 30,		December 31,
(in millions)	2019		2018		2020		2019
Debt securities:
Held-to-maturity investments	$	213	$	188	$	259	$	249
Trading securities (debt securities of consolidated sponsored investment funds of $143 and $233 at June 30, 2019 and December 31, 2018, respectively)		180		265
Trading securities						1,444		1,249
Total debt securities		393		453		1,703		1,498
Equity securities at FVTNI⁽¹⁾ (equity securities of consolidated sponsored investment funds of $309 and $291 at June 30, 2019 and December 31, 2018, respectively)		537		452
Equity securities at FVTNI⁽¹⁾						1,393		1,926
Equity method investments⁽²⁾		846		781		1,018		943
Bank loans						232		204
Federal Reserve Bank stock⁽³⁾		93		92		94		93
Carried interest⁽⁴⁾		12		18		458		528
Other investments⁽⁵⁾		108		—		273		297
Total investments	$	1,989	$	1,796	$	5,171	$	5,489

The carrying value of held-to-maturity investments was ~~$213~~$259 million and ~~$188~~$249 million at June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. Held-to-maturity investments included certain investments in CLOs and foreign government debt held primarily for regulatory ~~purposes and certain investments in CLOs.~~purposes. The amortized cost (carrying value) of these investments approximated fair value (primarily a Level 2 input). At June 30, ~~2019, $44~~2020, $14 million mature between one to five years, $117 million of these investments mature between five to ten years and ~~$169~~$128 million mature after ten years.

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


	June 30, 2019				December 31, 2018				June 30, 2020				December 31, 2019
(in millions)	Cost		Carrying Value		Cost		Carrying Value		Cost		Carrying Value		Cost		Carrying Value
Trading debt securities:
Corporate debt	$	122	$	122	$	144	$	140	$	1,132	$	1,135	$	822	$	844
Government debt		7		7		69		67		228		228		268		269
Asset/mortgage-backed debt		51		51		67		58		98		81		141		136
Total trading debt securities	$	180	$	180	$	280	$	265	$	1,458	$	1,444	$	1,231	$	1,249
Equity securities at FVTNI:
Deferred compensation plan mutual funds	$	6	$	22	$	21	$	34
Equity securities/multi-asset mutual funds		473		515		420		418	$	1,302	$	1,393	$	1,769	$	1,926
Total equity securities at FVTNI	$	479	$	537	$	441	$	452	$	1,302	$	1,393	$	1,769	$	1,926

In addition, the Company accounts for its interest in PennyMac Financial Services, Inc. (“PennyMac”) as an equity method investment. At June 30, 2019 and December 31, 2018, the Company’s investment in PennyMac is included in other assets on the condensed consolidated statements of financial condition. The carrying value and market value of the Company’s interest (approximately 20% or 16 million shares) were approximately $414 million and $345 million, respectively, at June 30, 2019 and approximately $397 million and $331 million, respectively, at December 31, 2018. The market value of the Company’s interest reflected the PennyMac stock price at June 30, 2019 and December 31, 2018, respectively (a Level 1 input). The Company performed an other-than-temporary impairment analysis as of June 30, 2019 and believes the shortfall of market value versus carrying value is temporary.

The Company consolidates certain sponsored investment funds accounted for as ~~VREs~~voting rights entities (“VREs”) because it is deemed to control such funds. The following table presents the amounts related to these consolidated VREs that were recorded on the condensed consolidated statements of financial condition, including BlackRock’s net interest in these funds:

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

~~The Company cannot readily access cash and cash equivalents held by consolidated VREs to use in its operating activities.~~

In the normal course of business, the Company is the manager of various types of sponsored investment vehicles, which may be considered ~~variable interest entities (“VIEs”).~~VIEs. The Company may from time to time own equity or debt securities or enter into derivatives 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 in the entity. ~~The Company consolidates entities when it is determined to be the primary beneficiary (“PB”).~~

~~Consolidated VIEs.~~ The Company’s consolidated VIEs include certain sponsored investment products in which BlackRock has an investment 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.

~~Consolidated VIE assets~~The following table presents the balances related to these consolidated sponsored investment products accounted for as VIEs and ~~liabilities are presented after intercompany eliminations~~VREs that were recorded on the consolidated statements of financial condition, including BlackRock’s net interest in ~~the following table:~~these products:

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

The Company cannot readily access cash and cash equivalents held by consolidated sponsored investment products to use in its operating activities.

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

Nonconsolidated VIEs. At June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, 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 ~~PB,~~primary beneficiary, was as follows:

(in millions)
At June 30, 2019	Investments		Advisory Fee Receivables		Other Net Assets (Liabilities)			Maximum Risk of Loss⁽¹⁾
At June 30, 2020										Investments		Advisory Fee Receivables		Other Net Assets (Liabilities)			Maximum Risk of Loss⁽¹⁾
Sponsored investment products	$	492	$	65	$	(7	)	$	574	$	557	$	47	$	(12	)	$	621
At December 31, 2018
At December 31, 2019
Sponsored investment products	$	348	$	43	$	(6	)	$	408	$	539	$	71	$	(10	)	$	627

The net assets of sponsored investment products that are nonconsolidated VIEs approximated ~~$11 billion and $9~~$12 billion at both June 30, ~~2019~~2020 and December 31, ~~2018, respectively.~~2019.

June 30, 2019 (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⁾		June 30, 2019
June 30, 2020 (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⁾		June 30, 2020
Assets:
Investments:
Investments
Debt securities:
Held-to-maturity securities	$	—	$	—	$	—	$	—	$	213	$	213
Held-to-maturity investments													$	—	$	—	$	—	$	—	$	259	$	259
Trading securities		—		178		2		—		—		180		—		1,434		10		—		—		1,444
Total debt securities		—		178		2		—		213		393		—		1,434		10		—		259		1,703
Equity securities at FVTNI:
Deferred compensation plan mutual funds		22		—		—		—		—		22
Equity securities/Multi-asset mutual funds		515		—		—		—		—		515		1,393		—		—		—		—		1,393
Total equity securities at FVTNI		537		—		—		—		—		537
Equity method:
Equity and fixed income mutual funds		140		—		—		16		—		156		208		—		—		—		—		208
Hedge funds/funds of hedge funds														—		—		—		245		—		245
Private equity funds														—		—		—		310		—		310
Real assets funds														—		—		—		251		—		251
Other		42		—		—		645		3		690		—		—		—		4		—		4
Total equity method		182		—		—		661		3		846		208		—		—		810		—		1,018
Bank loans														—		3		229		—		—		232
Federal Reserve Bank Stock		—		—		—		—		93		93		—		—		—		—		94		94
Carried interest		—		—		—		—		12		12		—		—		—		—		458		458
Other investments⁽³⁾		—		—		—		—		108		108		—		3		16		83		171		273
Total investments		719		178		2		661		429		1,989		1,601		1,440		255		893		982		5,171
Investments of consolidated VIEs:
Trading debt securities		—		939		—		—		—		939
Equity securities at FVTNI		736		—		—		—		—		736
Bank loans		—		20		125		—		—		145
Private equity⁽⁴⁾		—		—		9		33		78		120
Other		—		—		—		62		—		62
Carried interest		—		—		—		—		429		429
Total investments of consolidated VIEs		736		959		134		95		507		2,431
Other assets⁽⁵⁾		168		—		—		—		—		168
Other assets⁽⁴⁾														184		—		—		—		—		184
Separate account assets		69,029		27,001		—		—		777		96,807		61,946		29,124		—		—		860		91,930
Separate account collateral held under securities lending agreements:
Equity securities		12,113		—		—		—		—		12,113		11,305		—		—		—		—		11,305
Debt securities		—		6,333		—		—		—		6,333		—		3,062		—		—		—		3,062
Total separate account collateral held under securities lending agreements		12,113		6,333		—		—		—		18,446		11,305		3,062		—		—		—		14,367
Total	$	82,765	$	34,471	$	136	$	756	$	1,713	$	119,841	$	75,036	$	33,626	$	255	$	893	$	1,842	$	111,652
Liabilities:
Borrowings of consolidated VIEs⁽⁶⁾	$	—	$	—	$	142	$	—	$	—	$	142
Separate account collateral liabilities under securities lending agreements		12,113		6,333		—		—		—		18,446	$	11,305	$	3,062	$	—	$	—	$	—	$	14,367
Other liabilities⁽⁷⁾		—		7		168		—		—		175
Other liabilities⁽⁵⁾														—		90		262		—		—		352
Total	$	12,113	$	6,340	$	310	$	—	$	—	$	18,763	$	11,305	$	3,152	$	262	$	—	$	—	$	14,719

December 31, 2018 (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, 2018
December 31, 2019 (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, 2019
Assets:
Investments:
Investments
Debt securities:
Held-to-maturity securities	$	—	$	—	$	—	$	—	$	188	$	188
Held-to-maturity investments													$	—	$	—	$	—	$	—	$	249	$	249
Trading securities		—		261		4		—		—		265		—		1,241		8		—		—		1,249
Total debt securities		—		261		4		—		188		453		—		1,241		8		—		249		1,498
Equity securities at FVTNI:
Deferred compensation plan mutual funds		34		—		—		—		—		34
Equity securities/Multi-asset mutual funds		418		—		—		—		—		418		1,926		—		—		—		—		1,926
Total equity securities at FVTNI		452		—		—		—		—		452
Equity method:
Equity and fixed income mutual funds		122		—		—		14		—		136		157		—		—		—		—		157
Hedge funds/funds of hedge funds														—		—		—		220		—		220
Private equity funds														—		—		—		248		—		248
Real assets funds														—		—		—		296		—		296
Other		—		—		—		642		3		645		12		—		—		10		—		22
Total equity method		122		—		—		656		3		781		169		—		—		774		—		943
Bank loans														—		27		177		—		—		204
Federal Reserve Bank Stock		—		—		—		—		92		92		—		—		—		—		93		93
Carried interest		—		—		—		—		18		18		—		—		—		—		528		528
Other investments⁽³⁾														—		—		9		98		190		297
Total investments		574		261		4		656		301		1,796		2,095		1,268		194		872		1,060		5,489
Investments of consolidated VIEs:
Trading debt securities		—		1,395		—		—		—		1,395
Equity securities at FVTNI		569		—		—		—		—		569
Bank loans		—		14		70		—		—		84
Private equity⁽³⁾		—		—		82		48		75		205
Other		—		—		—		58		—		58
Carried interest		—		—		—		—		369		369
Total investments of consolidated VIEs		569		1,409		152		106		444		2,680
Other assets⁽⁴⁾		122		—		—		—		—		122		173		—		—		—		—		173
Separate account assets		63,610		25,810		—		—		865		90,285		72,515		29,582		—		—		747		102,844
Separate account collateral held under securities lending agreements:
Equity securities		15,066		—		—		—		—		15,066		10,209		—		—		—		—		10,209
Debt securities		—		5,589		—		—		—		5,589		—		5,257		—		—		—		5,257
Total separate account collateral held under securities lending agreements		15,066		5,589		—		—		—		20,655		10,209		5,257		—		—		—		15,466
Total	$	79,941	$	33,069	$	156	$	762	$	1,610	$	115,538	$	84,992	$	36,107	$	194	$	872	$	1,807	$	123,972
Liabilities:
Borrowings of consolidated VIEs⁽⁵⁾	$	—	$	—	$	84	$	—	$	—	$	84
Separate account collateral liabilities under securities lending agreements		15,066		5,589		—		—		—		20,655	$	10,209	$	5,257	$	—	$	—	$	—	$	15,466
Other liabilities⁽⁶⁾		—		6		287		—		—		293
Other liabilities⁽⁵⁾														—		10		388		—		—		398
Total	$	15,066	$	5,595	$	371	$	—	$	—	$	21,032	$	10,209	$	5,267	$	388	$	—	$	—	$	15,864

Level 3 Assets. Level 3 assets may include investments in CLOs and bank loans of consolidated CLOs, which were valued based on single-broker nonbinding quotes and direct private equity investments, which were valued using the market or income ~~approach as described below.~~approach.

Level 3 investments of ~~consolidated VIEs of $134~~$255 million and ~~$152~~$194 million at June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, ~~related to direct investments in private equity companies held by consolidated private equity funds. At June 30, 2019, Level 3 investments of consolidated VIEs also~~primarily included bank loans of a consolidated CLO ~~which was valued based on single-broker nonbinding quotes.~~

~~Direct~~ and investments in private equity companies may be valued using the market approach or the income approach, or a combination thereof, and were valued based on an assessment of each underlying investment, incorporating evaluation of additional significant third-party financing, changes in valuations of comparable peer companies, the business environment of the companies, market indices, assumptions relating to appropriate risk adjustments for nonperformance and legal restrictions on disposition, among other factors. The fair value derived from the methods used is evaluated and weighted, as appropriate, considering the reasonableness of the range of values indicated. Under the market approach, fair value may be determined by reference to multiples of market-comparable companies or transactions, including earnings before interest, taxes, depreciation and amortization multiples. Under the income approach, fair value may be determined by discounting the expected cash flows to a single present value amount using current expectations about those future amounts. Unobservable inputs used in a discounted cash flow model may include projections of operating performance generally covering a five-year period and a terminal value of the private equity direct investment. For investments utilizing a discounted cash flow valuation technique, a significant increase (decrease) in the discount rate, risk premium or discount for lack of marketability in isolation could have resulted in a significantly lower (higher) fair value measurement as of June 30, 2019. For investments utilizing the market-comparable valuation technique, a significant increase (decrease) in a valuation multiple in isolation could have resulted in a significantly higher (lower) fair value measurement as of June 30, 2019.CLOs.

Level 3 Liabilities. Level 3 ~~other~~ liabilities primarily include ~~recorded~~ contingent liabilities related to certain acquisitions, which were valued based upon discounted cash flow analyses using unobservable market data inputs and borrowings of a consolidated ~~VIEs,~~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.

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended June 30, ~~2019~~2020

(in millions)

March 31,
2019

Realized
and
Unrealized
Gains
(Losses)

Purchases

Sales and
Maturities

Issuances and
other
Settlements⁽¹⁾

Transfers
into
Level 3

Transfers
out of
Level 3

June 30,
2019

Total Net
Unrealized
Gains (Losses)
Included in
Earnings⁽²⁾

Assets:

Investments:

Debt securities:

Trading

$
—

$
—

$
2

$
—

$
—

$
—

$
—

$
2

Total investments

—

—

2

—

—

—

—

2

Assets of consolidated VIEs:

Bank loans⁽³⁾

123

—

2

—

—

—

—

125

Private equity

10

(1
)

—

—

—

—

—

9

(1
)
Total Assets of consolidated VIEs

133

(1
)

2

—

—

—

—

134

(1
)
Total Level 3 assets

$
133

$
(1
)

$
4

$
—

$
—

$
—

$
—

$
136

$
(1
)
Liabilities:

Borrowings of consolidated VIEs⁽³⁾

$
134

$
—

$
—

$
—

$
8

$
—

$
—

$
142

$
—

Other liabilities⁽⁴⁾

275

(13
)

—

—

(120
)

—

—

168

(13
)
Total Level 3 liabilities

$
409

$
(13
)

$
—

$
—

$
(112
)

$
—

$
—

$
310

$
(13
)

~~Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended June 30, 2019~~

(in millions)	December 31, 2018		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities		Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3⁽²⁾			June 30, 2019		Total Net Unrealized Gains (Losses) Included in Earnings⁽³⁾			March 31, 2020		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities		Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3		June 30, 2020		Total Net Unrealized Gains (Losses) Included in Earnings⁽²⁾
Assets:
Investments:
Debt securities:
Trading	$	4	$	—		$	2	$	—	$	—		$	—	$	(4	)	$	2				$	9	$	—		$	1	$	—	$	—		$	—	$	—	$	10	$	—
Total debt securities																								9		—			1		—		—			—		—		10		—
Private equity																								16		—			—		—		—			—		—		16		—
Bank loans⁽⁴⁾																								181		14			18		—		—			16		—		229		14
Total investments		4		—			2		—		—			—		(4	)		2				$	206	$	14		$	19	$	—	$	—		$	16	$	—	$	255	$	14
Assets of consolidated VIEs:
Bank loans⁽⁴⁾		70		—			55		—		—			—		—			125
Private equity		82		(1	)		—		—		—			—		(72	)		9		(1	)
Total Assets of consolidated VIEs		152		(1	)		55		—		—			—		(72	)		134		(1	)
Total Level 3 assets	$	156	$	(1	)	$	57	$	—	$	—		$	—	$	(76	)	$	136	$	(1	)
Liabilities:
Borrowings of consolidated VIEs⁽⁴⁾	$	84	$	—		$	—	$	—	$	58		$	—	$	—		$	142	$	—
Other liabilities⁽⁵⁾		287		(19	)		—		—		(138	)		—		—			168		(19	)
Other liabilities⁽³⁾																							$	421	$	(12	)	$	—	$	—	$	(171	)	$	—	$	—	$	262	$	(19	)
Total Level 3 liabilities	$	371	$	(19	)	$	—	$	—	$	(80	)	$	—	$	—		$	310	$	(19	)	$	421	$	(12	)	$	—	$	—	$	(171	)	$	—	$	—	$	262	$	(19	)

~~Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended June 30, 2018~~

(in millions)

March 31,
2018

Realized
and
Unrealized
Gains
(Losses)

Purchases

Sales and
Maturities

Issuances
and
other
Settlements⁽¹⁾

Transfers
into
Level 3

Transfers
out of
Level 3

June 30,
2018

Total Net
Unrealized
Gains (Losses)
Included in
Earnings⁽²⁾

Assets:

Investments:

Debt securities:

Available-for-sale securities⁽³⁾

$
26

$
—

$
—

$
—

$
—

$
—

$
(26
)

$
—

Trading

5

—

—

—

—

—

(5
)

—

Total investments

31

—

—

—

—

—

(31
)

—

Assets of consolidated VIEs - Private equity

116

—

—

(12
)

—

—

—

104

Total Level 3 assets

$
147

$
—

$
—

$
(12
)

$
—

$
—

$
(31
)

$
104

$
—

Liabilities:

Other liabilities⁽⁴⁾

$
242

$
3

$
—

$
—

$
(16
)

$
—

$
—

$
223

$
3

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended June 30, ~~2018~~2020

(in millions)	December 31, 2017		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3			June 30, 2018		Total Net Unrealized Gains (Losses) Included in Earnings⁽²⁾			December 31, 2019		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities			Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3		June 30, 2020		Total Net Unrealized Gains (Losses) Included in Earnings⁽²⁾
Assets:
Investments:
Available-for-sale securities⁽³⁾	$	—	$	—		$	26	$	—		$	—		$	—	$	(26	)	$	—
Debt securities:
Trading		—		—			5		—			—			—		(5	)		—				$	8	$	—		$	2	$	—		$	—		$	—	$	—	$	10	$	—
Total debt securities																									8		—			2		—			—			—		—		10		—
Private equity																									9		—			8		(1	)		—			—		—		16		—
Bank loans																									177		—			36		—			—			16		—		229		—
Total investments		—		—			31		—			—			—		(31	)		—				$	194	$	—		$	46	$	(1	)	$	—		$	16	$	—	$	255	$	—
Assets of consolidated VIEs - Private equity		116		—			—		(12	)		—			—		—			104
Total Level 3 assets	$	116	$	—		$	31	$	(12	)	$	—		$	—	$	(31	)	$	104	$	—
Liabilities:
Other liabilities⁽⁴⁾	$	236	$	(3	)	$	—	$	—		$	(16	)	$	—	$	—		$	223	$	(3	)
Other liabilities⁽³⁾																								$	388	$	(23	)	$	—	$	—		$	(149	)	$	—	$	—	$	262	$	(30	)
Total Level 3 liabilities																								$	388	$	(23	)	$	—	$	—		$	(149	)	$	—	$	—	$	262	$	(30	)

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended June 30, 2019

(in millions)	March 31, 2019		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities		Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3		June 30, 2019		Total Net Unrealized Gains (Losses) Included in Earnings⁽²⁾
Assets:
Investments:
Debt securities:
Trading	$	—	$	—		$	2	$	—	$	—		$	—	$	—	$	2	$	—
Total debt securities		—		—			2		—		—			—		—		2		—
Private equity		10		(1	)		—		—		—			—		—		9		(1	)
Bank loans		123		—			2		—		—			—		—		125		—
Total investments		133		(1	)		4		—		—			—		—		136		(1	)
Total Level 3 assets	$	133	$	(1	)	$	4	$	—	$	—		$	—	$	—	$	136	$	(1	)
Liabilities:
Other liabilities⁽³⁾	$	409	$	(13	)	$	—	$	—	$	(112	)	$	—	$	—	$	310	$	(13	)
Total Level 3 liabilities	$	409	$	(13	)	$	—	$	—	$	(112	)	$	—	$	—	$	310	$	(13	)

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended June 30, 2019

(in millions)	December 31, 2018		Realized and Unrealized Gains (Losses)			Purchases		Sales and Maturities		Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3⁽²⁾			June 30, 2019		Total Net Unrealized Gains (Losses) Included in Earnings⁽³⁾
Assets:
Investments:
Debt securities:
Trading	$	4	$	—		$	2	$	—	$	—		$	—	$	(4	)	$	2	$	—
Total debt securities		4		—			2		—		—			—		(4	)		2		—
Private equity		82		(1	)		—		—		—			—		(72	)		9		(1	)
Bank loans		70		—			55		—		—			—		—			125		—
Total investments		156		(1	)		57		—		—			—		(76	)		136		(1	)
Total Level 3 assets	$	156	$	(1	)	$	57	$	—	$	—		$	—	$	(76	)	$	136	$	(1	)
Liabilities:
Other liabilities⁽⁴⁾	$	371	$	(19	)	$	—	$	—	$	(80	)	$	—	$	—		$	310	$	(19	)
Total Level 3 liabilities	$	371	$	(19	)	$	—	$	—	$	(80	)	$	—	$	—		$	310	$	(19	)

Realized and Unrealized Gains (Losses) for Level 3 Assets and Liabilities. Realized and unrealized gains (losses) recorded for Level 3 assets and liabilities are reported in nonoperating income (expense) on the condensed consolidated statements of income. A portion of net income (loss) for consolidated sponsored investment funds is allocated to noncontrolling interests 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, or when the carrying value of certain equity method investments no longer represents fair value as determined under valuation methodologies.

Disclosures of Fair Value for Financial Instruments Not Held at Fair Value. At June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the fair value of the Company’s financial instruments not held at fair value are categorized in the table below:

	June 30, 2019				December 31, 2018						June 30, 2020				December 31, 2019
(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	$	3,920	$	3,920	$	6,302	$	6,302	Level 1	^{(2) (3)}	$	5,466	$	5,466	$	4,829	$	4,829	Level 1	^{(2) (3)}
Cash and cash equivalents of consolidated VIEs	$	103	$	103	$	186	$	186	Level 1	^{(2) (3)}
Other assets	$	63	$	63	$	18	$	18	Level 1	^{(2) (4)}	$	94	$	94	$	68	$	68	Level 1	⁽⁴⁾

Financial Liabilities:
Long-term borrowings	$	5,964	$	6,257	$	4,979	$	5,034	Level 2	⁽⁵⁾	$	7,190	$	7,787	$	4,955	$	5,254	Level 2	⁽⁵⁾

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 in entities 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).

June 30, 2019

June 30, 2020

(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

(a)

188

Daily/Monthly (27%)

Quarterly (20%)

N/R (53%)

1 – 90 days

(a)

245

109

Daily/Monthly (28%)

Quarterly (15%)

N/R (57%)

1 – 90 days

Private equity funds

(b)

123

349

N/R

(b)

310

255

N/R

Real assets funds

(c)

334

142

Quarterly (64%)

N/R (36%)

60 days

(c)

251

173

Quarterly (47%)

N/R (53%)

60 days

Other

Daily/Monthly (73%)

N/R (27%)

3 – 5 days

N/R

Consolidated VIEs:

Consolidated sponsored investment

products:

Private equity funds of funds

(d)

N/R

(d)

N/R

Hedge fund

(a)

—

Quarterly

90 days

(a)

—

Quarterly

90 days

Real assets funds

(c)

N/R

(c)

103

N/R

Total

756

608

893

653

December 31, 2018

December 31, 2019

(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

(a)

173

Daily/Monthly (30%)

Quarterly (18%)

N/R (52%)

1 – 90 days

(a)

220

120

Daily/Monthly (27%)

Quarterly (15%)

N/R (58%)

1 – 90 days

Private equity funds

(b)

116

N/R

(b)

248

212

N/R

Real assets funds

(c)

353

Quarterly (68%)

N/R (32%)

60 days

(c)

296

120

Quarterly (57%)

N/R (43%)

60 days

Other

Daily (80%)

N/R (20%)

5 days

N/R

Consolidated VIEs:

Consolidated sponsored investment

products:

Private equity funds of funds

(d)

N/R

(d)

N/R

Hedge fund

(a)

—

Quarterly

90 days

(a)

—

Quarterly

90 days

Real assets funds

(c)

N/R

(c)

N/R

Total

762

343

872

553

At ~~both~~ June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company elected the fair value option for certain investments in CLOs of approximately ~~$32~~$29 million and $37 million, respectively, reported within investments.

~~The following table summarizes information related to assets~~In addition, the Company elected the fair value option for bank loans and ~~liabilities~~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 ~~of consolidated VIEs, respectively, for which the fair value option was elected:~~at June 30, 2020 and December 31, 2019:

	June 30,		December 31,		June 30,		December 31,
(in millions)	2019		2018		2020		2019
CLO Bank loans:
Aggregate principal amounts outstanding	$	145	$	84	$	244	$	204
Fair value		145		84		232		204
Aggregate unpaid principal balance in excess of (less than) fair value	$	—	$	—	$	12	$	—

CLO Borrowings:
Aggregate principal amounts outstanding	$	142	$	84	$	249	$	195
Fair value	$	142	$	84	$	225	$	195

At June 30, ~~2019,~~2020, the principal amounts outstanding of the borrowings issued by the CLOs mature in 2030.

During the three and six months ended June 30, ~~2019~~2020 and ~~December 31, 2018,~~2019, 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 ~~consolidated VIEs on~~ the condensed consolidated statements of income. The change in fair value of the assets and liabilities included interest income and expense, respectively.

The Company maintains a program to enter into swaps to hedge against market price and interest rate exposures with respect to certain seed investments in sponsored investment products. At June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company had outstanding total return swaps with aggregate notional values of approximately ~~$522~~$667 million and ~~$483~~$644 million, respectively.

At both June 30, 2019 and December 31, 2018, the Company had a derivative providing credit protection of approximately $17 million to a counterparty, representing the Company’s maximum risk of loss with respect to the provision of credit protection. The Company carries the derivative at fair value based on the expected discounted future cash outflows under the arrangement.

The Company executes forward foreign currency exchange contracts to mitigate the risk of certain foreign exchange movements. At June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company had outstanding forward foreign currency exchange contracts with aggregate notional values of approximately ~~$2.1~~$2.6 billion and $~~2.2~~3.4 billion, respectively.

At both June 30, 2020 and December 31, 2019, 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 June 30, 2020:

The fair values of the outstanding total return swaps ~~credit default swap~~ and forward foreign currency exchange contracts were not material to the condensed consolidated statement of financial condition at ~~both June 30, 2019 and~~ December 31, ~~2018.~~2019.

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

			Three Months Ended						Six Months Ended								Three Months Ended						Six Months Ended
			June 30,						June 30,								June 30,						June 30,
(in millions)			2019			2018			2019			2018					2020			2019			2020			2019
Derivative Instruments		Statement of Income Classification	Gains (Losses)						Gains (Losses)							Statement of Income Classification	Gains (Losses)						Gains (Losses)

Total return swaps		Nonoperating income (expense)	$	(14	)	$	2		$	(64	)	$	7			Nonoperating income (expense)	$	(91	)	$	(14	)	$	51		$	(64	)
Forward foreign currency exchange contracts		Other general and administration expense		(49	)		(93	)		(13	)		(63	)		General and administration expense		(10	)		(49	)		(98	)		(13	)
Total gain (loss) from derivative instruments	Total gain (loss) from derivative instruments		$	(63	)	$	(91	)	$	(77	)	$	(56	)	Total gain (loss) from derivative instruments		$	(101	)	$	(63	)	$	(47	)	$	(77	)

The Company consolidates certain sponsored investment funds, which may utilize derivative instruments as a part of the funds’ investment strategies. The ~~change~~changes in fair value of such derivatives, which isare recorded in nonoperating income (expense), ~~was~~were not material for the three and six months ended June 30, ~~2019~~2020 and ~~2018.~~2019.

See Note ~~13,~~15, Borrowings, in the ~~2018~~2019 Form 10-K for more information on the Company’s net investment hedge.

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

Goodwill activity during the six months ended June 30, ~~2019~~2020 was as follows:

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

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

The following table presents operating leases included on the condensed consolidated statement of financial condition:

At December 31, 2019, the Company accounted for its interest in PennyMac Financial Services, Inc. (“PennyMac”) as an equity method investment, which was included in other assets on the condensed consolidated statements of financial condition. The carrying value and market value of the Company’s interest (approximately 20% or 16 million shares) were approximately $451 million and $530 million, respectively, at December 31, 2019. The market value of the Company’s interest reflected the PennyMac stock price at December 31, 2019 (a Level 1 input).

On February 13, 2020, BlackRock established The BlackRock Foundation (the “Foundation”) and contributed its remaining 20% stake in PennyMac to the Foundation and the BlackRock Charitable Fund, which BlackRock established in 2013 (together, the “Charitable Contribution”). The Charitable Contribution resulted in an operating expense of $589 million, which was offset by a $122 million noncash, nonoperating pre-tax gain on the contributed shares and a tax benefit of $241 million in the condensed consolidated statement of income for the six months ended June 30, 2020.

On March 10, 2020, in connection with a recapitalization of iCapital Network, Inc. (“iCapital”), BlackRock received additional stock in exchange for certain securities it held, which resulted in a nonoperating pre-tax gain of approximately $240 million in the condensed consolidated statement of income for the six months ended June 30, 2020. Following this transaction, the Company accounts for its interest in iCapital as an equity method investment, which is included in other assets on the condensed consolidated statements of financial condition. At June 30, 2020, the carrying value of the Company’s interest in iCapital was approximately $300 million.

~~2019~~2020 Revolving Credit Facility. The Company’s credit facility has an aggregate commitment amount of $4.0 billion and was amended in March ~~2019~~2020 to extend the maturity date to March ~~2024~~2025 (the ~~“2019~~“2020 credit facility”). The ~~2019~~2020 credit facility permits the Company to request up to an additional $1.0 billion of borrowing capacity, subject to lender credit approval, increasing the overall size of the ~~2019~~2020 credit facility to an aggregate principal amount not to exceed $5.0 billion. Interest on borrowings outstanding accrues at a rate based on the applicable London Interbank Offered Rate plus a spread. The ~~2019~~2020 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 June 30, ~~2019.~~2020. The ~~2019~~2020 credit facility provides back-up liquidity to fund ongoing working capital for general corporate purposes and various investment opportunities. At June 30, ~~2019,~~2020, the Company had no0 amount outstanding under the 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 $4.0 billion. The commercial paper program is currently supported by the ~~2019~~2020 credit facility. At June 30, ~~2019,~~2020, BlackRock had no0 CP Notes outstanding.

The carrying value and fair value of long-term borrowings determined using market prices and EUR/USD foreign exchange rate at June 30, ~~2019~~2020 included the following:

(in millions)	Maturity Amount		Unamortized Discount and Debt Issuance Costs			Carrying Value		Fair Value		Maturity Amount		Unamortized Discount and Debt Issuance Costs			Carrying Value		Fair Value
5.00% Notes due 2019	$	1,000	$	—		$	1,000	$	1,011
4.25% Notes due 2021		750		(1	)		749		780	$	750	$	—		$	750	$	776
3.375% Notes due 2022		750		(2	)		748		777		750		(2	)		748		792
3.50% Notes due 2024		1,000		(5	)		995		1,062		1,000		(3	)		997		1,101
1.25% Notes due 2025		797		(6	)		791		849		786		(4	)		782		828
3.20% Notes due 2027		700		(5	)		695		731		700		(5	)		695		791
3.25% Notes due 2029		1,000		(14	)		986		1,047		1,000		(13	)		987		1,147
2.40% Notes due 2030											1,000		(7	)		993		1,077
1.90% Notes due 2031											1,250		(12	)		1,238		1,275
Total Long-term Borrowings	$	5,997	$	(33	)	$	5,964	$	6,257	$	7,236	$	(46	)	$	7,190	$	7,787

~~2029~~2030 Notes. In ~~April 2019,~~ January 2020, the Company issued ~~$1.0~~$1 billion in aggregate principal amount of ~~3.25%~~2.40% senior unsecured and unsubordinated notes maturing on April 30, ~~2029~~2030 (the ~~“2029~~“2030 Notes”). The net proceeds of the 2030 Notes were used for general corporate purposes. Interest of approximately $24 million per year is payable semi-annually on April 30 and October 30 of each year, ~~commencing October~~which commenced on April 30, ~~2019, and is approximately $33 million per year.~~2020. The ~~2029~~2030 Notes may be redeemed prior to January 30, ~~2029~~2030 in whole or in part at any time, at the option of the Company, at a “make-whole” redemption price or at ~~par~~100% of the principal amount of the 2030 Notes thereafter. The unamortized discount and debt issuance costs are being amortized over the remaining term of the ~~2029~~2030 Notes.

2031 Notes. In April 2020, the Company issued $1.25 billion in aggregate principal amount of 1.90% senior unsecured and unsubordinated notes maturing on January 28, 2031 (the “2031 Notes”). The net proceeds of the 2031 Notes are being used for general corporate purposes, which may include the future repayment of all or a portion of the $750 million 4.25% Notes due May 2021. Interest of approximately $24 million per year is payable semi-annually on January 28 and July 28 of each year, commencing on July 28, 2020. The 2031 Notes may be redeemed prior to October 28, 2030 in whole or in part at any time, at the option of the Company, at a “make-whole” redemption price or at 100% of the principal amount of the 2031 Notes thereafter. The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2031 Notes.

See Note ~~13,~~15, Borrowings, in the ~~2018~~2019 Form 10-K for more information regarding the Company’s borrowings.

Investment Commitments. At June 30, ~~2019,~~2020, the Company had ~~$605~~$656 million of various capital commitments to fund sponsored investment ~~funds,~~products, including consolidated ~~VIEs.~~sponsored investment products. These ~~funds~~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.

~~Lease Commitment.~~ As of June 30, 2019, there were no material changes to the lease commitments as reported in the 2018 Form 10-K. At December 31, 2018, future minimum commitments under the operating leases were as follows:

In May 2017, the Company entered into an agreement with 50 HYMC Owner LLC, for the lease of approximately 847,000 square feet of office space located at 50 Hudson Yards, New York, New York. The term of the lease is twenty years from the date that rental payments begin, expected to occur in May 2023, with the option to renew for a specified term. The lease requires annual base rental payments of approximately $51 million per year during the first five years of the lease term, increasing every five years to $58 million, $66 million and $74 million per year (or approximately $1.2 billion in base rent over its twenty-year term).

Contingent Payments Related to Business Acquisitions. In connection with certain acquisitions, BlackRock is required to make contingent payments, subject to achieving specified performance targets, which may include revenue related to acquired contracts or new capital commitments for certain products. The fair value of the remaining aggregate contingent payments at June 30, ~~2019~~2020 totaled ~~$168~~$37 million and is included in other liabilities on the condensed consolidated statements of financial condition.

Other Contingent Payments. The Company acts as the portfolio manager in a series of derivative ~~transaction~~transactions and has a maximum potential exposure of $17 million between the Company and counterparty. See Note 9, Derivatives and Hedging, for further discussion.

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 ~~inquiries.~~matters. 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.

On May 27, 2014, certain investors in the BlackRock Global Allocation Fund, Inc. and the BlackRock Equity Dividend Fund (collectively, the “Funds”) filed a consolidated complaint (the “Consolidated Complaint”) in the US District Court for the District of New Jersey against BlackRock Advisors, LLC, BlackRock Investment Management, LLC and BlackRock International Limited under the caption In re BlackRock Mutual Funds Advisory Fee Litigation. In the lawsuit, which purports to be brought derivatively on behalf of the Funds, the plaintiffs allege that the defendants violated Section 36(b) of the Investment Company Act by receiving allegedly excessive investment advisory fees from the Funds. On June 13, 2018, the court granted in part and denied in part the defendants’ motion for summary judgment. On July 25, 2018, the plaintiffs served a pleading that supplemented the time period of their alleged damages to run through the date of trial. The lawsuit seeks, among other things, to recover on behalf of the Funds all allegedly excessive advisory fees received by the defendants beginning twelve months preceding the start of the lawsuit with respect to each Fund and ending on the date of judgment, along with purported lost investment returns on those amounts, plus interest. The ~~defendants believe the claims in this lawsuit are without merit. The~~ trial on the remaining issues was completed on August 29, 2018. On February 8, 2019, the court issued an order dismissing the claims in their entirety. On May 28, 2020, the Third Circuit Court of Appeals affirmed the trial court’s summary judgment and trial rulings. On June 26, 2020, Plaintiffs petitioned the appeals court for a rehearing, which was denied July 9, 2020. The ~~plaintiffs filed a notice of appeal on March 8, 2019, which remains pending.~~defendants continue to believe the claims in this lawsuit are without merit.

On June 16, 2016,iSharesTrust, BlackRock, Inc. and certain of its advisory subsidiaries, and the directors and certain officers of the iShares ETFs were named as defendants in a purported class action lawsuit filed in California state court. The lawsuit was filed by investors in certainiShares ETFs (the "ETFs"), and alleges the defendants violated the federal securities laws by failing to adequately disclose in prospectuses issued by the ETFs the risks to the ETFs’ shareholders in the event of a "flash crash." The plaintiffs seek unspecified monetary and rescission damages. The plaintiffs’ complaint was dismissed in December 2016 and on January 6, 2017, the plaintiffs filed an amended complaint. On April 27, 2017, the court partially granted the defendants’ motion for judgment on the pleadings, dismissing certain of the plaintiffs’ claims. On September 18, 2017, the court issued a decision dismissing the remainder of the lawsuit after a one-day bench trial. On December 1, 2017, the plaintiffs appealed the dismissal of their lawsuit ~~which is pending.~~and, on January 23, 2020, the California Court of Appeal affirmed the trial court’s dismissal. On May 27, 2020, the California Supreme Court denied plaintiffs’ petition for further review of the appeal. The defendants continue to believe the claims in this lawsuit are without merit.

October 18, 2017, the plaintiffs filed an Amended Complaint, which, among other things, added as defendants certain current and former members of the BlackRock Retirement and Investment Committees. The Amended Complaint also included a new purported class claim on behalf of investors in certain ~~Collective Trust Funds (“CTFs”)~~CTFs managed by BTC. Specifically, the plaintiffs allege that BTC, as fiduciary to the CTFs, engaged in self-dealing by, most significantly, selecting itself as the securities lending agent on terms that the plaintiffs claim were excessive. The Amended Complaint also alleged that BlackRock took undue risks in its management of securities lending cash reinvestment vehicles during the financial crisis. On August 23, 2018, the court granted permission to the plaintiffs to file a Second Amended Complaint (“SAC”) which added as defendants the BlackRock, Inc. Management Development and Compensation Committee, the Plan’s independent investment consultant and the Plan’s Administrative Committee and its members. On October 22, 2018, BlackRock filed a motion to dismiss the SAC, and on June 3, 2019, the plaintiffs filed a motion seeking to certify both the Plan and the CTF classes. ~~Both motions are pending.~~On September 3, 2019, the court granted BlackRock’s motion to dismiss part of the plaintiffs’ claim seeking to recover alleged losses in the securities lending vehicles but denied the motion to dismiss in all other respects. On February 11, 2020, the court denied the plaintiffs’ motion to certify the CTF class and granted their motion to certify the Plan class. On April 27, 2020, the Ninth Circuit denied plaintiffs’ request to immediately appeal the class certification ruling. The defendants believe the claims in this lawsuit are without merit.

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 ~~issued certain indemnifications~~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. AtThe amount of securities on loan as of June 30, ~~2019,~~2020 and subject to this type of indemnification was $234 billion. In the ~~Company indemnified certain of its clients for their securities~~Company’s capacity as lending ~~loan balances of approximately $205 billion. The Company held, as~~ agent, cash and securities totaling ~~$219~~$251 billion were held as collateral for indemnified securities on loan at June 30, ~~2019.~~2020. The fair value of these indemnifications was not material at June 30, ~~2019.~~2020.

The table below presents detail of revenue for the three and six months ended June 30, 2020 and 2019 and ~~2018. See Note 2,~~ ~~Significant Accounting Policies, in~~includes the ~~2018 Form 10-K for more information on the Company’s~~product mix of investment advisory, administration fees and securities lending revenue ~~recognition.~~(collectively “base fees”) and performance fees.

	Three Months Ended					Six Months Ended				Three Months Ended				Six Months Ended
	June 30,					June 30,				June 30,				June 30,
(in millions)	2019		2018			2019		2018		2020		2019		2020		2019
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	385	$	426		$	760	$	864	$	381	$	385	$	779	$	760
iShares ETFs		870		911			1,717		1,837		792		870		1,671		1,717
Non-ETF Index		163		187			327		363		178		163		341		327
Equity subtotal		1,418		1,524			2,804		3,064		1,351		1,418		2,791		2,804
Fixed income:
Active		474		458			931		914		464		474		945		931
iShares ETFs		234		207			454		415		261		234		520		454
Non-ETF Index		98		101			195		194		129		98		241		195
Fixed income subtotal		806		766			1,580		1,523		854		806		1,706		1,580
Multi-asset		288		295			564		591		270		288		563		564
Alternatives:
Illiquid alternatives		118		83			228		160		128		118		276		228
Liquid alternatives		102		93			196		194		117		102		229		196
Currency and commodities⁽¹⁾		24		26			48		51		35		24		67		48
Alternatives subtotal		244		202			472		405		280		244		572		472
Long-term		2,756		2,787			5,420		5,583
Long-Term											2,755		2,756		5,632		5,420
Cash management		147		157			288		308		211		147		389		288
Total base fees		2,903		2,944			5,708		5,891		2,966		2,903		6,021		5,708
Investment advisory performance fees:
Equity		4		43			4		61		23		4		25		4
Fixed income		—		(1	)		2		2		2		—		4		2
Multi-asset		6		9			6		14		2		6		3		6
Alternatives:
Illiquid alternatives		15		2			35		2		32		15		49		35
Liquid alternatives		39		38			43		82		53		39		72		43
Alternatives subtotal		54		40			78		84		85		54		121		78
Total performance fees		64		91			90		161		112		64		153		90
Technology services revenue		237		198			441		382		278		237		552		441
Distribution fees:
Retrocessions		164		181			325		373		162		164		331		325
12b-1 fees (US mutual funds distribution fees)		88		103			177		211
12b-1 fees (US mutual fund distribution fees)											78		88		169		177
Other		15		10			27		21		13		15		29		27
Total distribution fees		267		294			529		605		253		267		529		529
Advisory and other revenue:
Advisory		22		33			41		54		17		22		34		41
Other		31		45			61		95		22		31		69		61
Total advisory and other revenue		53		78			102		149		39		53		103		102
Total revenue	$	3,524	$	3,605		$	6,870	$	7,188	$	3,648	$	3,524	$	7,358	$	6,870

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

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
(in millions)	2019		2018		2019		2018		2020		2019		2020		2019
By client type:
Retail	$	846	$	858	$	1,672	$	1,713	$	825	$	846	$	1,697	$	1,672
iShares ETFs		1,128		1,143		2,219		2,301		1,089		1,128		2,259		2,219
Institutional:
Active		537		511		1,037		1,038		546		537		1,120		1,037
Index		245		275		492		531		295		245		556		492
Total institutional		782		786		1,529		1,569		841		782		1,676		1,529
Long-term		2,756		2,787		5,420		5,583
Long-Term										2,755		2,756		5,632		5,420
Cash management		147		157		288		308		211		147		389		288
Total	$	2,903	$	2,944	$	5,708	$	5,891	$	2,966	$	2,903	$	6,021	$	5,708

By investment style:
Active	$	1,365	$	1,352	$	2,672	$	2,717	$	1,354	$	1,365	$	2,781	$	2,672
Index and iShares ETFs		1,391		1,435		2,748		2,866		1,401		1,391		2,851		2,748
Long-term		2,756		2,787		5,420		5,583
Long-Term										2,755		2,756		5,632		5,420
Cash management		147		157		288		308		211		147		389		288
Total	$	2,903	$	2,944	$	5,708	$	5,891	$	2,966	$	2,903	$	6,021	$	5,708

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 June 30, ~~2019~~2020 and ~~2018:~~2019:

The table below presents changes in the deferred carried interest liability, ~~(including the portion related to consolidated VIEs),~~ which is included in other ~~liabilities/other~~ liabilities ~~of consolidated VIEs~~ on the condensed consolidated statements of financial condition, for the three and six months ended June 30, ~~2019~~2020 and ~~2018:~~2019:

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
(in millions)	2019			2018			2019			2018			2020			2019			2020			2019
Beginning balance	$	327		$	224		$	293		$	219		$	535		$	327		$	483		$	293
Net increase (decrease) in unrealized allocations		48			22			99			27			(87	)		48			(25	)		99
Performance fee revenue recognized		(10	)		(4	)		(27	)		(4	)		(30	)		(10	)		(40	)		(27	)
Ending balance	$	365		$	242		$	365		$	242		$	418		$	365		$	418		$	365

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 June 30, ~~2019~~2020 and ~~2018:~~2019:

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 June 30, ~~2019,~~2020, the estimated fixed minimum fees for the remainder of ~~2019 for currently outstanding contracts~~the year approximated ~~$303 million. As of June 30, 2018, the estimated fixed minimum fees for the remainder of 2018 for currently outstanding contracts approximated $258~~$330 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 six months ended June 30, 2020 and 2019, which is included in other liabilities on the condensed consolidated statements of financial ~~condition, for the three and six months ended June 30, 2019 and 2018:~~condition:

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
(in millions)	2019			2018			2019			2018			2020			2019			2020			2019
Beginning balance	$	73		$	66		$	70		$	62		$	114		$	73		$	116		$	70
Acquisition, net of revenue recognized⁽¹⁾		24			—			24			—
Acquisition⁽¹⁾⁽²⁾														—			24			—			24
Additions(2)		12			8			23			20			28			12			58			23
Revenue recognized that was included in the beginning balance		(9	)		(10	)		(17	)		(18	)		(34	)		(9	)		(66	)		(17	)
Ending balance	$	100		$	64		$	100		$	64		$	108		$	100		$	108		$	100

Restricted stock and restricted stock units (“RSUs”) activity for the six months ended June 30, ~~2019~~2020 is summarized below.

Outstanding at	Restricted Stock and RSUs			Weighted- Average Grant Date Fair Value		Restricted Stock and RSUs			Weighted- Average Grant Date Fair Value
December 31, 2018		2,139,890		$	429.19
December 31, 2019							2,236,452		$	444.02
Granted		1,166,382		$	413.22		935,337		$	532.09
Converted		(954,315	)	$	375.09		(873,774	)	$	425.37
Forfeited		(49,190	)	$	420.81		(61,736	)	$	476.20
June 30, 2019⁽¹⁾		2,302,767		$	443.70
June 30, 2020⁽¹⁾							2,236,279		$	487.25

In January ~~2019,~~2020, the Company granted ~~674,206~~504,403 RSUs or shares of restricted stock to employees as part of ~~2018~~2019 annual incentive compensation that vest ratably over three years from the date of grant and ~~377,291~~393,161 RSUs or shares of restricted stock to employees that cliff vest 100% on January 31, ~~2022.~~2023. The Company values restricted stock and RSUs at their grant-date fair value as measured by BlackRock’s common stock price. The total fair market value of RSUs/restricted stock granted to employees during the six months ended June 30, ~~2019~~2020 was ~~$482~~$498 million.

At June 30, ~~2019,~~2020, the intrinsic value of outstanding RSUs was ~~$1.1~~$1.2 billion, reflecting a closing stock price of ~~$469.30.~~$544.09.

At June 30, ~~2019,~~2020, total unrecognized stock-based compensation expense related to unvested RSUs was ~~$512~~$587 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of ~~1.5~~1.6 years.

Performance-based RSU activity for the six months ended June 30, ~~2019~~2020 is summarized below.

In January ~~2019,~~2020, the Company granted ~~283,014~~238,478 performance-based RSUs to certain employees that cliff vest 100% on January 31, ~~2022.~~2023. 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 ~~2019,~~2020, the Company also granted ~~2,117~~30,600 additional RSUs related to prior awards to certain employees based on the attainment of Company performance measures during the performance period.

The Company initially 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 six months ended June 30, ~~2019~~2020 was ~~$117~~$139 million.

At June 30, ~~2019,~~2020, the intrinsic value of outstanding performance-based RSUs was ~~$356~~$381 million, reflecting a closing stock price of ~~$469.30.~~$544.09.

At June 30, ~~2019,~~2020, total unrecognized stock-based compensation expense related to unvested performance-based awards was ~~$161 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period 1.6 years.~~

~~See Note 16,~~ ~~Stock-Based Compensation,~~ ~~in the 2018 Form 10-K for more information on performance-based RSUs.~~

~~Long-Term Incentive Plans Funded by PNC.~~ Under a share surrender agreement, PNC committed to provide up to 4 million shares of BlackRock stock, held by PNC, to fund certain BlackRock long-term incentive plans, including performance-based and market performance-based RSUs. The share surrender agreement commits PNC to provide BlackRock Series C nonvoting participating preferred stock to fund the remaining committed shares. On January 31, 2019, PNC surrendered its remaining 143,458 shares to BlackRock and has completed its share delivery obligation in connection with the agreement.

~~Stock options outstanding at both June 30, 2019 and December 31, 2018 were 2,106,482 with a weighted average exercise price of $513.50.~~

~~At June 30, 2019, total unrecognized stock-based compensation expense related to unvested performance-based stock options was $148~~$175 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of ~~4.4~~1.7 years.

See Note ~~16,~~18, Stock-Based Compensation, in the ~~2018~~2019 Form 10-K for more information on performance-based RSUs.

Stock option activity for the six months ended June 30, 2020 is summarized below.

At June 30, 2020, total unrecognized stock-based compensation expense related to unvested performance-based stock options was $98 million. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of 3.4 years.

See Note 18, Stock-Based Compensation, in the 2019 Form 10-K for more information on performance-based stock options.

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 June 30, ~~2019,~~2020, the Company was required to maintain approximately ~~$1.8~~$2.1 billion in net capital in certain regulated subsidiaries, including ~~BlackRock Institutional Trust Company, N.A.~~BTC (a wholly owned subsidiary of the Company that is chartered as a national bank whose powers are limited to trust and other fiduciary activities and which is subject to regulatory capital requirements administered by the Office of the Comptroller of the Currency), entities regulated by the Financial Conduct Authority and Prudential Regulation Authority in the United Kingdom, and the Company’s broker-dealers. The Company was in compliance with all applicable regulatory net capital requirements.

The following table presents changes in accumulated other comprehensive income (loss) for the three and six months ended June 30, ~~2019~~2020 and ~~2018:~~2019:

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
(in millions)	2019			2018			2019			2018			2020			2019			2020			2019
Beginning balance	$	(623	)	$	(301	)	$	(691	)	$	(432	)	$	(810	)	$	(623	)	$	(571	)	$	(691	)
Foreign currency translation adjustments⁽¹⁾		(41	)		(274	)		27			(137	)		29			(41	)		(210	)		27
Reclassification as a result of adoption of accounting guidance		—			—			—			(6	)
Ending balance	$	(664	)	$	(575	)	$	(664	)	$	(575	)	$	(781	)	$	(664	)	$	(781	)	$	(664	)

Nonvoting Participating Preferred Stock. The Company’s preferred shares authorized, issued and outstanding consisted of the following:

	June 30,		December 31,		June 30,		December 31,
	2019		2018		2020		2019
Series A
Shares authorized, $0.01 par value		20,000,000		20,000,000		20,000,000		20,000,000
Shares issued and outstanding		—		—		—		—
Series B
Shares authorized, $0.01 par value		150,000,000		150,000,000		150,000,000		150,000,000
Shares issued and outstanding⁽¹⁾		823,188		823,188		—		823,188
Series C
Shares authorized, $0.01 par value		6,000,000		6,000,000		6,000,000		6,000,000
Shares issued and outstanding⁽¹⁾		—		143,458
Shares issued and outstanding						—		—
Series D
Shares authorized, $0.01 par value		20,000,000		20,000,000		20,000,000		20,000,000
Shares issued and outstanding		—		—		—		—

May 2020 PNC Secondary Offering and Share Repurchase. On May 15, 2020, a subsidiary of The PNC Financial Services Group, Inc. (“PNC”) completed the secondary offering of 31,628,573 shares of the Company’s common stock at a price of $420 per share, which included 823,188 shares of common stock issued upon the conversion of the Company’s Series B Convertible Participating Preferred Stock and 2,875,325 shares of common stock under the fully exercised underwriters’ option to purchase additional shares. Also on May 15, 2020, PNC completed the sale of 2,650,857 shares to the Company at a price of $414.96 per share. The shares repurchased by the Company were in addition to the share repurchase authorization under the Company’s existing share repurchase program. The secondary offering and the Company’s share repurchase resulted in PNC’s exit of its entire ownership position in the Company, other than 500,000 shares that PNC contributed to The PNC Foundation.

Share Repurchases. During the six months ended June 30, ~~2019,~~2020, the Company repurchased ~~3.8~~0.8 million common shares in open market transactions under the share repurchase program for approximately ~~$1.6 billion, including a $1.3 billion private transaction that closed on March 25, 2019.~~$412 million. At June 30, ~~2019,~~2020, there were ~~6.1~~5.1 million shares still authorized to be repurchased.

~~PNC Capital Contribution~~. On January 31, 2019, PNC surrendered to BlackRock its remaining 143,458 of BlackRock Series C Preferred shares and has completed its share delivery obligation in connection with its share surrender agreement.

A restructuring charge of $60 million ($47 million after-tax), comprised of $53 million of severance and $7 million of expense related to the accelerated amortization of previously granted equity compensation awards, was recorded in the fourth quarter of 2018 in connection with an initiative to modify the size and shape of the workforce.

~~The table below presents a rollforward of the Company’s restructuring liability, which is included in other liabilities on the condensed consolidated statements of financial condition, for~~ During the six months ended June 30, ~~2019:~~2020, the Company has repurchased an aggregate of approximately $1.5 billion of common shares, including the repurchase from PNC described above.

The six months ended June 30, ~~2019~~2020 income tax benefit included a discrete tax benefit of $241 million recognized in connection with the Charitable Contribution.

The six months ended June 30, 2020 and ~~2018~~2019 income tax expense (benefit) included ~~$22~~$66 million and ~~$58~~$14 million, respectively, of discrete tax benefits, including benefits related to stock-based compensation awards that vested in the first quarter of each ~~respective~~ year.

Due to the similarities in terms between BlackRock nonvoting participating preferred stock and the Company’s common stock, the Company considers its participating preferred stock to be a common stock equivalent for purposes of earnings per share (“EPS”) calculations. As such, the Company has included the outstanding nonvoting participating preferred stock in the calculation of average basic and diluted shares outstanding. As of June 30, 2020, there were 0 shares of preferred stock outstanding.

The following table sets forth the computation of basic and diluted EPS for the three and six months ended June 30, ~~2019~~2020 and ~~2018~~2019 under the treasury stock method:

	Three Months Ended				Six Months Ended				Three Months Ended				Six Months Ended
	June 30,				June 30,				June 30,				June 30,
(in millions, except shares and per share data)	2019		2018		2019		2018		2020		2019		2020		2019
Net income attributable to BlackRock	$	1,003	$	1,073	$	2,056	$	2,162	$	1,214	$	1,003	$	2,020	$	2,056
Basic weighted-average shares outstanding		155,354,552		160,980,960		156,803,244		161,114,746		153,732,878		155,354,552		154,488,079		156,803,244
Dilutive effect of nonparticipating RSUs and stock options		1,006,189		1,180,977		1,050,467		1,417,891		979,154		1,006,189		1,068,108		1,050,467
Total diluted weighted-average shares outstanding		156,360,741		162,161,937		157,853,711		162,532,637		154,712,032		156,360,741		155,556,187		157,853,711
Basic earnings per share	$	6.46	$	6.67	$	13.11	$	13.42	$	7.90	$	6.46	$	13.08	$	13.11
Diluted earnings per share	$	6.41	$	6.62	$	13.02	$	13.30	$	7.85	$	6.41	$	12.99	$	13.02

The amount of anti-dilutive RSUs was immaterial for the three and six months ended June 30, 2020 and 2019. In addition, performance-based RSUs and stock options are excluded from potential dilution until the designated performance conditions are met.

The Company’s management directs BlackRock’s operations as ~~one~~1 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 six months ended June 30, ~~2019~~2020 and ~~2018~~2019 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				Six Months Ended				Three Months Ended				Six Months Ended
(in millions)	June 30,				June 30,				June 30,				June 30,
Revenue	2019		2018		2019		2018		2020		2019		2020		2019
Americas	$	2,366	$	2,337	$	4,606	$	4,661	$	2,470	$	2,366	$	4,950	$	4,606
Europe		995		1,082		1,938		2,175		1,020		995		2,087		1,938
Asia-Pacific		163		186		326		352		158		163		321		326
Total revenue	$	3,524	$	3,605	$	6,870	$	7,188	$	3,648	$	3,524	$	7,358	$	6,870

See Note ~~15,~~16, 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 June 30, ~~2019~~2020 and December 31, ~~2018~~2019 by geographic region. These amounts are aggregated on a legal entity basis and do not necessarily reflect where the asset is physically located.

(in millions)	June 30,		December 31,		June 30,		December 31,
Long-lived Assets	2019		2018		2020		2019
Americas	$	13,791	$	13,780	$	13,811	$	13,830
Europe		1,292		303		1,355		1,360
Asia-Pacific		87		86		87		87
Total long-lived assets	$	15,170	$	14,169	$	15,253	$	15,277

Americas is primarily comprised of the United States, Latin America and Canada, while Europe is primarily comprised of the United Kingdom, the Netherlands and Luxembourg. Asia-Pacific is primarily comprised of Hong Kong, Australia, Japan and Singapore.

In July 2020, the United Kingdom enacted legislation increasing its corporate tax rate. The ~~Company continues to strategically invest~~legislation will result in ~~illiquid alternatives to drive future growth. On August 5, 2019, the Company adopted~~ a carried interest retention incentive program referred to as the BlackRock Leadership Retention Carry Plan (the “Plan”), pursuant to which senior-level employees (but not including the Chief Executive Officer), as may be determined by the Company from time to time, will be eligible to receive a portionrevaluation of certain of the ~~cash payments, based on their percentage points,~~Company’s deferred tax assets and liabilities, which will result in a noncash net income tax expense of approximately $55 million in the ~~total carried interest distributions payable to the Company from participating carry funds. Participating carry funds shall consist~~third quarter of ~~BlackRock carry vehicles that (i) had an initial close during the period commencing in the year of grant and ending on the participant’s termination and (ii) are listed in the award documentation.~~

Carried interest generally represents the right to receive distributions only if (i) distributions are made to investors in the participating carry funds following the realization of an investment and (ii) a specified return is achieved with respect to such investments. Consequently, the actual amount of any potential carried interest distribution received by the Company, and the participants in the Plan, is solely a function of the performance of the eligible carry fund and the realization of its underlying investments. The Plan is not expected to have a material financial impact on the Company.

Cash payments, if any, with respect to these percentage points will be made following the recipient’s termination of employment due to qualified retirement, death or disability, subject to his or her execution of a release of claims and continued compliance with his or her restrictive covenant obligations following termination. Any payments received under the Plan will be treated as ordinary income and not long term capital gains.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the BlackRock Leadership Retention Carry Plan and the Form of Percentage Points Award Agreement under the BlackRock Leadership Retention Carry Plan, which are filed as Exhibits 10.1 and 10.2, respectively, to this Periodic Report on Form 10-Q and incorporated herein by reference.2020.

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

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

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 (“SEC”) 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) a pandemic or health crisis, including the COVID-19 pandemic, and its impact on financial institutions, the global economy or capital markets, as well as BlackRock’s products, clients, vendors and employees, and BlackRock’s results of operations, the full extent of which may be unknown; (2) the introduction, withdrawal, success and timing of business initiatives and strategies; ~~(2)~~(3) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management (“AUM”); ~~(3)~~(4) the relative and absolute investment performance of BlackRock’s investment products; ~~(4)~~(5) BlackRock’s ability to develop new products and services that address client preferences; (6) the impact of increased competition; ~~(5)~~(7) the impact of future acquisitions or divestitures; ~~(6)~~(8) BlackRock’s ability to integrate acquired businesses successfully; (9) the unfavorable resolution of legal proceedings; ~~(7)~~(10) the extent and timing of any share repurchases; ~~(8)~~(11) the impact, extent and timing of technological changes and the adequacy of intellectual property, information and cyber security protection; ~~(9)~~(12) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; ~~(10)~~(13) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to ~~BlackRock or The PNC Financial Services Group, Inc. (“PNC”); (11)~~BlackRock; (14) changes in law and policy and uncertainty pending any such changes; ~~(12)~~(15) terrorist activities, international hostilities and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; ~~(13)~~(16) the ability to attract and retain highly talented professionals; ~~(14)~~(17) fluctuations in the carrying value of BlackRock’s economic investments; ~~(15)~~(18) 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; ~~(16)~~(19) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; ~~(17)~~(20) the failure by a key vendor of BlackRock to fulfill its obligations to the Company; ~~(18)~~(21) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded funds (“ETF”) platform; ~~(19)~~(22) 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 ~~(20)~~(23) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions.

BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) is a leading publicly traded investment management firm with ~~$6.84~~$7.32 trillion of AUM at June 30, ~~2019.~~2020. With approximately ~~16,000~~16,300 employees in more than 30 countries, BlackRock provides a broad range of investment management and technology services to institutional and retail clients worldwide.

BlackRock’s diverse platform of alpha-seeking active, index and cash management investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. Products are offered directly and through intermediaries in a variety of vehicles, including open-end and closed-end mutual funds, iShares^® ETFs, separate accounts, collective ~~investment trusts~~trust funds (“CTFs”) and other pooled investment vehicles. BlackRock also offers technology services, including the investment and risk management technology platform, Aladdin^®, Aladdin Wealth, eFront, Cachematrix and FutureAdvisor, as well as advisory services and solutions to a broad base of institutional and wealth management clients.

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,~~sponsors; and retail investors.

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.

~~At June 30, 2019,~~On May 15, 2020, a subsidiary of The PNC ~~held 22.0%~~Financial Services Group, Inc. (“PNC”) completed the secondary offering of 31,628,573 shares of the Company’s ~~voting~~ common stock ~~and 22.4%~~at a price of $420 per share, which included 823,188 shares of common stock issued upon the conversion of the Company’s ~~capital~~Series B Convertible Participating Preferred Stock and 2,875,325 shares of common stock ~~which includes outstanding common~~under the fully exercised underwriters’ option to purchase additional shares. Also on May 15, 2020, PNC completed the sale of 2,650,857 shares to the Company at a price of $414.96 per share. The shares repurchased by the Company were in addition to the share repurchase authorization under the Company’s existing share repurchase program. The secondary offering and ~~nonvoting preferred stock.~~the Company’s share repurchase resulted in PNC’s exit of its entire ownership position in the Company, other than 500,000 shares that PNC contributed to The PNC Foundation.

Certain ~~items previously reported have been~~prior period presentations and disclosures, while not required to be recast, were reclassified to ~~conform to the~~ensure comparability with current period classifications.

The COVID-19 pandemic continues to result in authorities implementing numerous measures attempting to contain the spread and impact of COVID-19, such as travel bans and restrictions, quarantines, shelter in place orders, and limitations on business activity, including closures. These measures may continue to, among other things, severely restrict global economic activity, which can disrupt supply chains, lower asset valuations, significantly increase unemployment and underemployment levels, decrease liquidity in markets for certain securities and cause significant volatility and disruption in the financial markets.

Towards the end of the first quarter of 2020 the pandemic began to impact our business. While global markets have recovered to varying degrees since then, the effects of the pandemic are ongoing, and such impact may continue in future quarters if conditions persist or worsen. Should current economic conditions persist or deteriorate, there may be an ongoing adverse effect on our business, including our operations and financial condition, as a result of, among other things:

The extent to which COVID-19, and the related global economic crisis, affect our business, results of operations and financial condition, will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and any recovery period, future actions taken by governmental authorities, central banks and other third parties (including new financial regulation and other regulatory reform) in response to the pandemic, and the effects on our products, clients, vendors and employees. BlackRock continues to service clients amid uncertainty and disruption linked to COVID-19 and is actively managing its business to respond to the impact.

Following the June 2016 vote to exit the European Union (“EU”), commonly referred to as Brexit, the United Kingdom (“UK”) ~~served notice under Article 50 of the Treaty on European Union on March 29, 2017 to initiate the process of exiting from~~left the EU ~~commonly referred to as "Brexit". At the Emergency EU Summit held~~ on ~~April 10, 2019,~~January 31, 2020 and entered an ~~agreement was reached to extend the deadline by~~eleven-month transition period during which the UK, ~~is required to exit~~and UK-based entities, will retain the rights and obligations of EU ~~to October 31, 2019. If a withdrawal agreement between the UK and EU is ratified prior to October 31, 2019, the UK will withdraw from the EU on the first day of the month following such agreement.~~membership.

Substantial uncertainty remains surrounding the ~~terms upon which~~future relationship between the UK ~~will ultimately exit~~and the ~~EU. As~~EU, but the UK government has indicated its preference for negotiating a ~~result, the UK’s relationship~~trade deal with the EU ~~as well as whether a withdrawal agreement will be reached, remains unclear. Moreover,~~before the ~~passage~~end of ~~time without a resolution in place has become a source of economic, political and regulatory instability.~~the transition period rather than continuing Single Market or Customs Union membership. BlackRock is implementing a number of steps to prepare for various outcomes, including the potential failure of the UK and the EU to negotiate an agreement before the transition period expires. These steps, many of which are time consuming and costly, include effecting organizational, governance and operational changes, applying for and receiving licenses and permissions in the EU, and engaging in client ~~communications. These steps, many of which have been time-consuming~~communications, and ~~costly,~~ are expected to add complexity to BlackRock’s European operations. In addition, depending on the terms of the ~~UK’s exit from~~future relationship between the UK and the EU, BlackRock may experience further organizational and operational challenges and incur additional costs in connection with its European operations during the transition period and post-Brexit, which may impede the Company’s growth or impact its financial performance.

On May 10, 2019, the Company acquired 100% of the equity interests of eFront Holding SAS (“eFront Transaction” or “eFront”), a leading alternative investment management software and solutions provider for approximately $1.3 billion, excluding the settlement of eFront’s outstanding debt. The acquisition of eFront will expand ~~Aladdin’s illiquid alternative capabilities and enable BlackRock to provide individual alternative or whole-portfolio technology solutions to clients.~~

On February 13, 2020, BlackRock announced the establishment of The BlackRock Foundation (the “Foundation”) and the contribution of its remaining 20% stake in PennyMac Financial Services, Inc. (“PennyMac”) to the Foundation and the BlackRock Charitable Fund, which BlackRock established in 2013 (together, the “Charitable Contribution”). The Charitable Contribution resulted in an operating expense of $589 million, which was offset by a $122 million noncash, nonoperating pre-tax gain on the contributed shares and a tax benefit of $241 million in the condensed consolidated statement of income for the six months ended June 30, 2020. The Charitable Contribution provides long-term funding for BlackRock’s philanthropic investments and partnerships. The general and administration expense, nonoperating gain and associated tax benefit related to the Charitable Contribution have been excluded from as adjusted results.

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
(in millions, except shares and per share data)	2019			2018			2019			2018			2020			2019			2020			2019
GAAP basis:
Total revenue	$	3,524		$	3,605		$	6,870		$	7,188		$	3,648		$	3,524		$	7,358		$	6,870
Total expense		2,246			2,165			4,359			4,373			2,242			2,246			5,268			4,359
Operating income	$	1,278		$	1,440		$	2,511		$	2,815		$	1,406		$	1,278		$	2,090		$	2,511
Operating margin		36.3	%		39.9	%		36.6	%		39.2	%		38.5	%		36.3	%		28.4	%		36.6	%
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests		47			(29	)		165			(50	)		169			47			277			165
Income tax expense		(322	)		(338	)		(620	)		(603	)
Income tax benefit (expense)														(361	)		(322	)		(347	)		(620	)
Net income attributable to BlackRock	$	1,003		$	1,073		$	2,056		$	2,162		$	1,214		$	1,003		$	2,020		$	2,056
Diluted earnings per common share	$	6.41		$	6.62		$	13.02		$	13.30		$	7.85		$	6.41		$	12.99		$	13.02
Effective tax rate		24.3	%		24.0	%		23.2	%		21.8	%		22.9	%		24.3	%		14.7	%		23.2	%
As adjusted⁽¹⁾:
Operating income	$	1,278		$	1,443		$	2,511		$	2,821		$	1,406		$	1,278		$	2,679		$	2,511
Operating margin		43.1	%		45.2	%		42.5	%		44.7	%		43.7	%		43.1	%		42.7	%		42.5	%
Nonoperating income (expense), less net income (loss) attributable to noncontrolling interests	$	47		$	(29	)	$	165		$	(50	)	$	169		$	47		$	155		$	165
Net income attributable to BlackRock	$	1,003		$	1,080		$	2,056		$	2,172		$	1,214		$	1,003		$	2,246		$	2,056
Diluted earnings per common share	$	6.41		$	6.66		$	13.02		$	13.36		$	7.85		$	6.41		$	14.44		$	13.02
Effective tax rate		24.3	%		23.7	%		23.2	%		21.7	%		22.9	%		24.3	%		20.7	%		23.2	%
Other:
Assets under management (end of period)	$	6,842,482		$	6,299,706		$	6,842,482		$	6,299,706		$	7,317,949		$	6,842,482		$	7,317,949		$	6,842,482
Diluted weighted-average common shares outstanding⁽²⁾		156,360,741			162,161,937			157,853,711			162,532,637			154,712,032			156,360,741			155,556,187			157,853,711
Common and preferred shares outstanding (end of period)		155,366,861			160,779,596			155,366,861			160,779,596
Shares outstanding (end of period)														152,460,239			155,366,861			152,460,239			155,366,861
Book value per share⁽³⁾	$	205.28		$	199.84		$	205.28		$	199.84		$	214.68		$	205.28		$	214.68		$	205.28
Cash dividends declared and paid per share	$	3.30		$	2.88		$	6.60		$	5.76		$	3.63		$	3.30		$	7.26		$	6.60

THREE MONTHS ENDED JUNE 30, ~~2019~~2020 COMPARED WITH THREE MONTHS ENDED JUNE 30, ~~2018~~2019

GAAP. Operating income of ~~$1,278 million decreased $162~~$1,406 million and operating margin of ~~36.3% decreased 360~~38.5% increased $128 million and 220 bps, respectively, from the second quarter of ~~2018. The decline in operating~~2019. Operating income and operating margin reflected ~~lower~~higher base fees, driven ~~in part~~ by ~~lower~~organic growth and higher securities lending revenue, ~~and lower~~higher performance fees ~~partially offset by~~and 17% growth in technology services revenue. The ~~decline~~increase in operating income also reflected ~~$61~~lower general and administration expense, including the impact of $59 million of product launch costs ~~associated with~~in the ~~close~~second quarter of ~~the $1.4 billion BlackRock Science and Technology Trust II, a closed-end active equity fund~~2019. . Nonoperating income (expense) less net income (loss) attributable to noncontrolling interests (“NCI”) increased ~~$76~~$122 million from the second quarter of ~~2018,~~2019, primarily driven by ~~the~~mark-to-market gains on un-hedged seed capital investments and revaluation of ~~certain~~a corporate minority ~~investments and higher marks on un-hedged fixed income seed capital investments.~~investment.

Earnings per diluted common share ~~decreased $0.21,~~increased $1.44, or 3%22%, from the second quarter of ~~2018,~~2019, driven primarily by ~~lower~~higher operating and nonoperating income, ~~and~~ a ~~higher~~lower effective tax rate ~~in the current quarter, partially offset by higher nonoperating income~~ and a lower diluted share count in the current quarter.

As Adjusted. Operating ~~income of $1,278 million decreased $165 million and operating~~ margin of ~~43.1% decreased 210~~43.7% increased 60 bps from the second quarter of ~~2018. Earnings per diluted common share decreased $0.25, or 4%, from the second quarter of 2018~~.2019.

SIX MONTHS ENDED JUNE 30, ~~2019~~2020 COMPARED WITH SIX MONTHS ENDED JUNE 30, ~~2018~~2019

GAAP. Operating income of ~~$2,511~~$2,090 million decreased ~~$304~~$421 million and operating margin of ~~36.6%~~28.4% decreased ~~260~~820 bps from the six months ended June 30, ~~2018. The decline in operating~~2019. Operating income and operating margin reflected ~~lower~~higher base ~~and performance~~ fees, ~~and lower advisory and other revenue, partially offset by higher~~ technology services revenue and ~~lower employee compensation and benefits, and volume-related~~performance fees, which were more than offset by higher expense,~~. Operating income for~~ primarily driven by the ~~six months ended June 30, 2019 also included~~impact of $589 million related to the ~~previously mentioned $61 million of product launch costs associated with the close of a closed-end fund.~~ Charitable Contribution.

Nonoperating income (expense) less net income (loss) attributable to NCI increased ~~$215~~$112 million from the six months ended June 30, ~~2018,~~2019, driven by ~~higher marks~~the impact of a pre-tax gain of approximately $240 million in connection with a recapitalization of iCapital Network, Inc. (“iCapital”) and $122 million pre-tax gain related to the Charitable Contribution, partially offset by mark-to-market losses on un-hedged seed capital ~~investments and the revaluation of certain strategic minority~~ investments.

Income tax expense for the six months ended June 30, 2020 and 2019 ~~and 2018~~ included ~~$22~~$66 million and ~~$58~~$14 million, respectively, of discrete tax benefits, including benefits related to stock-based compensation awards that vested in the first quarter of each ~~respective~~ year. Income tax benefit (expense) for the six months ended June 30, 2020 included a discrete tax benefit of $241 million recognized in connection with the Charitable Contribution. See Income Tax Expense within Discussion of Financial Results for more information.

Earnings per diluted common share decreased ~~$0.28, or 2%,~~$0.03 from the six months ended June 30, ~~2018, driven primarily by lower operating income and a higher effective tax rate,~~2019, reflecting the impact of the Charitable Contribution, partially offset by higher revenue, higher nonoperating income, a lower effective tax rate and a lower diluted share count for the six months ended June 30, 2020.

As Adjusted. Operating income of ~~$2,511~~$2,679 million ~~decreased $310~~increased $168 million and operating margin of ~~42.5% decreased 220~~42.7% increased 20 bps from the six months ended June 30, ~~2018.~~2019. Earnings per diluted common share ~~decreased $0.34,~~increased $1.42, or 3%11%, from the six months ended June 30, ~~2018~~2019, primarily due to higher operating income, a lower effective tax rate and a lower diluted share count in the six months ended June 30, 2020. The financial impact related to the Charitable Contribution has been excluded from as adjusted results.

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“).

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

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. Management reviews non-GAAP financial measures to assess ongoing operations and considers them to be helpful, for both management and investors, in evaluating BlackRock’s financial performance over time. Management also uses non-GAAP financial measures as a benchmark to compare its performance with other companies and to enhance the comparability of this information for the reporting periods presented. Non-GAAP measures may pose limitations because they do not include all of BlackRock’s revenue and expense. BlackRock’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Non-GAAP measures may not be comparable to other similarly titled measures of other companies.

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

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

	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,
(in millions)	2019			2018			2019			2018			2020			2019			2020			2019
Operating income, GAAP basis	$	1,278		$	1,440		$	2,511		$	2,815		$	1,406		$	1,278		$	2,090		$	2,511
Non-GAAP expense adjustment:
PNC LTIP funding obligation		—			3			—			6
Charitable Contribution														—			—			589			—
Operating income, as adjusted		1,278			1,443			2,511			2,821			1,406			1,278			2,679			2,511
Product launch costs and commissions		61			—			61			12			—			61			87			61
Operating income used for operating margin measurement	$	1,339		$	1,443		$	2,572		$	2,833		$	1,406		$	1,339		$	2,766		$	2,572
Revenue, GAAP basis	$	3,524		$	3,605		$	6,870		$	7,188		$	3,648		$	3,524		$	7,358		$	6,870
Non-GAAP adjustment:
Distribution and servicing costs		(416	)		(415	)		(820	)		(847	)
Non-GAAP adjustments:
Distribution fees														(253	)		(267	)		(529	)		(529	)
Investment advisory fees														(176	)		(149	)		(345	)		(291	)
Revenue used for operating margin measurement	$	3,108		$	3,190		$	6,050		$	6,341		$	3,219		$	3,108		$	6,484		$	6,050
Operating margin, GAAP basis		36.3	%		39.9	%		36.6	%		39.2	%		38.5	%		36.3	%		28.4	%		36.6	%
Operating margin, as adjusted		43.1	%		45.2	%		42.5	%		44.7	%		43.7	%		43.1	%		42.7	%		42.5	%

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

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

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

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

See aforementioned discussion regarding operating income, as adjusted, ~~and~~ operating margin, as adjusted, and nonoperating income (expense), less net income (loss) attributable to NCI, as adjusted, for information on the ~~PNC LTIP funding obligation.~~Charitable Contribution.

~~For each period presented, the non-GAAP adjustment related to the PNC LTIP funding obligation was~~The six months ended June 30, 2020 included a discrete tax ~~effected at the respective blended rates applicable to the adjustment. Amounts for income tax matters represent net noncash (benefits) expense primarily associated~~benefit of $241 million recognized in connection with the ~~revaluation of certain deferred~~Charitable Contribution. The discrete tax ~~liabilities related to intangible assets and goodwill as a result of tax rate changes. Amounts have~~benefit has been excluded from ~~the~~ as adjusted results ~~as these items will not have a cash flow impact and~~due to ~~ensure comparability among periods presented.~~the non-recurring nature of the Charitable Contribution.

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

~~(3)~~(4) Nonvoting participating preferred stock is considered to be a common stock equivalent for purposes of determining basic and diluted earnings per share calculations.

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)
	June 30,		March 31,		December 31,		June 30,		Three Months Ended June 30,			Six Months Ended June 30,			Twelve Months Ended June 30,			June 30,		March 31,		December 31,		June 30,		Three Months Ended June 30,			Six Months Ended June 30,			Twelve Months Ended June 30,
(in millions)	2019		2019		2018		2018		2019			2019			2019			2020		2020		2019		2019		2020			2020			2020
Retail	$	664,906	$	646,355	$	610,850	$	636,825	$	1,914		$	1,101		$	(2,002	)	$	695,154	$	608,824	$	703,297	$	664,906	$	16,210		$	14,684		$	29,393
iShares ETFs		2,008,867		1,924,710		1,731,425		1,776,765		36,096			66,785			181,860			2,162,597		1,852,190		2,240,065		2,008,867		50,970			64,802			181,509
Institutional:
Active		1,272,532		1,160,150		1,079,979		1,123,388		73,174			88,540			81,390			1,341,610		1,230,092		1,338,670		1,272,532		2,513			651			11,567
Index		2,413,191		2,327,080		2,103,230		2,304,764		14,181			27,938			(22,680	)		2,482,336		2,178,499		2,599,882		2,413,191		(7,486	)		(36,589	)		(27,626	)
Institutional subtotal		3,685,723		3,487,230		3,183,209		3,428,152		87,355			116,478			58,710			3,823,946		3,408,591		3,938,552		3,685,723		(4,973	)		(35,938	)		(16,059	)
Long-term		6,359,496		6,058,295		5,525,484		5,841,742		125,365			184,364			238,568			6,681,697		5,869,605		6,881,914		6,359,496		62,207			43,548			194,843
Cash management		481,208		455,271		448,565		457,054		25,621			31,287			22,864			619,351		594,089		545,949		481,208		24,198			76,639			138,426
Advisory⁽¹⁾		1,778		1,779		1,769		910		(1	)		-			888			16,901		2,974		1,770		1,778		13,812			15,019			15,021
Total	$	6,842,482	$	6,515,345	$	5,975,818	$	6,299,706	$	150,985		$	215,651		$	262,320		$	7,317,949	$	6,466,668	$	7,429,633	$	6,842,482	$	100,217		$	135,206		$	348,290

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)
	June 30,		March 31,		December 31,		June 30,		Three Months Ended June 30,			Six Months Ended June 30,			Twelve Months Ended June 30,			June 30,		March 31,		December 31,		June 30,		Three Months Ended June 30,			Six Months Ended June 30,			Twelve Months Ended June 30,
(in millions)	2019		2019		2018		2018		2019			2019			2019			2020		2020		2019		2019		2020			2020			2020
Active	$	1,853,393	$	1,724,875	$	1,617,780	$	1,682,794	$	74,981		$	88,585		$	75,193		$	1,943,828	$	1,758,548	$	1,947,222	$	1,853,393	$	18,563		$	9,618		$	30,924
Index and iShares ETFs		4,506,103		4,333,420		3,907,704		4,158,948		50,384			95,779			163,375			4,737,869		4,111,057		4,934,692		4,506,103		43,644			33,930			163,919
Long-term		6,359,496		6,058,295		5,525,484		5,841,742		125,365			184,364			238,568			6,681,697		5,869,605		6,881,914		6,359,496		62,207			43,548			194,843
Cash management		481,208		455,271		448,565		457,054		25,621			31,287			22,864			619,351		594,089		545,949		481,208		24,198			76,639			138,426
Advisory⁽¹⁾		1,778		1,779		1,769		910		(1	)		-			888			16,901		2,974		1,770		1,778		13,812			15,019			15,021
Total	$	6,842,482	$	6,515,345	$	5,975,818	$	6,299,706	$	150,985		$	215,651		$	262,320		$	7,317,949	$	6,466,668	$	7,429,633	$	6,842,482	$	100,217		$	135,206		$	348,290

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)
	June 30,		March 31,		December 31,		June 30,		Three Months Ended June 30,			Six Months Ended June 30,			Twelve Months Ended June 30,			June 30,		March 31,		December 31,		June 30,		Three Months Ended June 30,			Six Months Ended June 30,			Twelve Months Ended June 30,
(in millions)	2019		2019		2018		2018		2019			2019			2019			2020		2020		2019		2019		2020			2020			2020
Equity	$	3,485,869	$	3,375,885	$	3,035,825	$	3,366,480	$	5,915		$	(20,163	)	$	(9,135	)	$	3,519,225	$	2,959,662	$	3,820,329	$	3,485,869	$	(4,414	)	$	(1,252	)	$	47,264
Fixed income		2,191,130		2,029,966		1,884,417		1,858,609		110,392			190,315			216,323			2,411,092		2,235,815		2,315,392		2,191,130		60,266			24,894			98,158
Multi-asset		523,728		499,520		461,884		481,666		6,192			4,537			15,061			551,362		494,177		568,121		523,728		(4,754	)		(363	)		13,988
Alternatives:
Illiquid alternatives		67,910		66,462		59,827		50,734		982			6,920			11,126			76,607		75,101		75,349		67,910		1,585			4,152			11,335
Liquid alternatives		55,514		53,118		51,718		52,034		1,377			1,279			3,225			63,120		58,127		59,048		55,514		1,395			2,956			5,634
Currency and commodities⁽²⁾		35,345		33,344		31,813		32,219		507			1,476			1,968			60,291		46,723		43,675		35,345		8,129			13,161			18,464
Alternatives subtotal		158,769		152,924		143,358		134,987		2,866			9,675			16,319			200,018		179,951		178,072		158,769		11,109			20,269			35,433
Long-term		6,359,496		6,058,295		5,525,484		5,841,742		125,365			184,364			238,568			6,681,697		5,869,605		6,881,914		6,359,496		62,207			43,548			194,843
Cash management		481,208		455,271		448,565		457,054		25,621			31,287			22,864			619,351		594,089		545,949		481,208		24,198			76,639			138,426
Advisory⁽¹⁾		1,778		1,779		1,769		910		(1	)		-			888			16,901		2,974		1,770		1,778		13,812			15,019			15,021
Total	$	6,842,482	$	6,515,345	$	5,975,818	$	6,299,706	$	150,985		$	215,651		$	262,320		$	7,317,949	$	6,466,668	$	7,429,633	$	6,842,482	$	100,217		$	135,206		$	348,290

The following table presents the component changes in AUM by client type and product type for the three months ended June 30, ~~2019.~~2020.

	March 31,		Net inflows			Market			FX			June 30,		Average		March 31,		Net inflows			Market		FX			June 30,		Average
(in millions)	2019		(outflows)			change			impact⁽¹⁾			2019		AUM⁽²⁾		2020		(outflows)			change		impact⁽¹⁾			2020		AUM⁽²⁾
Retail:
Equity	$	225,992	$	(1,813	)	$	8,966		$	(716	)	$	232,429	$	226,710	$	204,742	$	7,134		$	41,803	$	425		$	254,104	$	234,908
Fixed income		281,566		5,350			4,623			233			291,772		286,163		278,057		8,656			13,721		726			301,160		290,404
Multi-asset		117,898		(3,039	)		3,345			(69	)		118,135		117,275		101,032		(1,345	)		12,127		120			111,934		107,444
Alternatives		20,899		1,416			253			2			22,570		21,829		24,993		1,765			1,158		40			27,956		26,315
Retail subtotal		646,355		1,914			17,187			(550	)		664,906		651,977		608,824		16,210			68,809		1,311			695,154		659,071
iShares ETFs:
Equity		1,423,204		4,175			33,511			1,733			1,462,623		1,435,308		1,253,690		(14,249	)		226,848		4,025			1,470,314		1,384,781
Fixed income		471,161		31,502			10,221			959			513,843		486,433		554,009		57,306			20,451		2,332			634,098		594,631
Multi-asset		4,171		159			107			5			4,442		4,260		4,499		52			503		20			5,074		4,850
Alternatives		26,174		260			1,502			23			27,959		26,038		39,992		7,861			5,205		53			53,111		46,967
iShares ETFs subtotal		1,924,710		36,096			45,341			2,720			2,008,867		1,952,039		1,852,190		50,970			253,007		6,430			2,162,597		2,031,229
Institutional:
Active:
Equity		118,653		2,920			4,470			(159	)		125,884		121,308		112,440		(316	)		20,937		871			133,932		124,521
Fixed income		571,313		59,307			18,831			473			649,924		599,153		625,345		4,978			33,808		2,562			666,693		646,344
Multi-asset		369,046		9,740			13,332			983			393,101		378,608		381,416		(3,337	)		45,012		3,462			426,553		406,737
Alternatives		101,138		1,207			1,274			4			103,623		102,269		110,891		1,188			1,787		566			114,432		112,512
Active subtotal		1,160,150		73,174			37,907			1,301			1,272,532		1,201,338		1,230,092		2,513			101,544		7,461			1,341,610		1,290,114
Index:
Equity		1,608,036		633			55,824			440			1,664,933		1,626,540		1,388,790		3,017			261,528		7,540			1,660,875		1,555,131
Fixed income		705,926		14,233			18,456			(3,024	)		735,591		717,001		778,404		(10,674	)		38,702		2,709			809,141		795,846
Multi-asset		8,405		(668	)		261			52			8,050		8,113		7,230		(124	)		682		13			7,801		7,628
Alternatives		4,713		(17	)		(74	)		(5	)		4,617		4,610		4,075		295			153		(4	)		4,519		4,229
Index subtotal		2,327,080		14,181			74,467			(2,537	)		2,413,191		2,356,264		2,178,499		(7,486	)		301,065		10,258			2,482,336		2,362,834
Institutional subtotal		3,487,230		87,355			112,374			(1,236	)		3,685,723		3,557,602		3,408,591		(4,973	)		402,609		17,719			3,823,946		3,652,948
Long-term		6,058,295		125,365			174,902			934			6,359,496		6,161,618		5,869,605		62,207			724,425		25,460			6,681,697		6,343,248
Cash management		455,271		25,621			746			(430	)		481,208		462,001		594,089		24,198			143		921			619,351		621,985
Advisory⁽³⁾		1,779		(1	)		(15	)		15			1,778		1,772		2,974		13,812			94		21			16,901		10,546
Total	$	6,515,345	$	150,985		$	175,633		$	519		$	6,842,482	$	6,625,391	$	6,466,668	$	100,217		$	724,662	$	26,402		$	7,317,949	$	6,975,779

The following table presents the component changes in AUM by investment style and product type for the three months ended June 30, ~~2019.~~ 2020.

	March 31,		Net inflows			Market			FX			June 30,		Average		March 31,		Net inflows			Market		FX			June 30,		Average
(in millions)	2019		(outflows)			change			impact⁽¹⁾			2019		AUM⁽²⁾		2020		(outflows)			change		impact⁽¹⁾			2020		AUM⁽²⁾
Active:
Equity	$	278,944	$	530		$	10,651		$	(255	)	$	289,870	$	281,490	$	252,758	$	7,647		$	51,204	$	1,200		$	312,809	$	287,991
Fixed income		836,950		65,127			23,077			943			926,097		869,698		887,458		12,645			46,761		3,279			950,143		919,877
Multi-asset		486,944		6,701			16,677			914			511,236		495,883		482,450		(4,682	)		57,139		3,582			538,489		514,181
Alternatives		122,037		2,623			1,524			6			126,190		124,097		135,882		2,953			2,946		606			142,387		138,826
Active subtotal		1,724,875		74,981			51,929			1,608			1,853,393		1,771,168		1,758,548		18,563			158,050		8,667			1,943,828		1,860,875
Index and iShares ETFs:
iShares ETFs:
Equity		1,423,204		4,175			33,511			1,733			1,462,623		1,435,308		1,253,690		(14,249	)		226,848		4,025			1,470,314		1,384,781
Fixed income		471,161		31,502			10,221			959			513,843		486,433		554,009		57,306			20,451		2,332			634,098		594,631
Multi-asset		4,171		159			107			5			4,442		4,260		4,499		52			503		20			5,074		4,850
Alternatives		26,174		260			1,502			23			27,959		26,038		39,992		7,861			5,205		53			53,111		46,967
iShares ETFs subtotal		1,924,710		36,096			45,341			2,720			2,008,867		1,952,039		1,852,190		50,970			253,007		6,430			2,162,597		2,031,229
Non-ETF Index:
Equity		1,673,737		1,210			58,609			(180	)		1,733,376		1,693,068		1,453,214		2,188			273,064		7,636			1,736,102		1,626,569
Fixed income		721,855		13,763			18,833			(3,261	)		751,190		732,619		794,348		(9,685	)		39,470		2,718			826,851		812,717
Multi-asset		8,405		(668	)		261			52			8,050		8,113		7,228		(124	)		682		13			7,799		7,628
Alternatives		4,713		(17	)		(71	)		(5	)		4,620		4,611		4,077		295			152		(4	)		4,520		4,230
Non-ETF Index subtotal		2,408,710		14,288			77,632			(3,394	)		2,497,236		2,438,411		2,258,867		(7,326	)		313,368		10,363			2,575,272		2,451,144
Index & iShares ETFs subtotal		4,333,420		50,384			122,973			(674	)		4,506,103		4,390,450		4,111,057		43,644			566,375		16,793			4,737,869		4,482,373
Long-term		6,058,295		125,365			174,902			934			6,359,496		6,161,618		5,869,605		62,207			724,425		25,460			6,681,697		6,343,248
Cash management		455,271		25,621			746			(430	)		481,208		462,001		594,089		24,198			143		921			619,351		621,985
Advisory⁽³⁾		1,779		(1	)		(15	)		15			1,778		1,772		2,974		13,812			94		21			16,901		10,546
Total	$	6,515,345	$	150,985		$	175,633		$	519		$	6,842,482	$	6,625,391	$	6,466,668	$	100,217		$	724,662	$	26,402		$	7,317,949	$	6,975,779

The following table presents the component changes in AUM by product type for the three months ended June 30, ~~2019.~~2020.

	March 31,		Net inflows			Market			FX			June 30,		Average		March 31,		Net inflows			Market			FX		June 30,		Average
(in millions)	2019		(outflows)			change			impact⁽¹⁾			2019		AUM⁽²⁾		2020		(outflows)			change			impact⁽¹⁾		2020		AUM⁽²⁾
Equity	$	3,375,885	$	5,915		$	102,771		$	1,298		$	3,485,869	$	3,409,866	$	2,959,662	$	(4,414	)	$	551,116		$	12,861	$	3,519,225	$	3,299,341
Fixed income		2,029,966		110,392			52,131			(1,359	)		2,191,130		2,088,750		2,235,815		60,266			106,682			8,329		2,411,092		2,327,225
Multi-asset		499,520		6,192			17,045			971			523,728		508,256		494,177		(4,754	)		58,324			3,615		551,362		526,659
Alternatives:
Illiquid alternatives		66,462		982			518			(52	)		67,910		67,059		75,101		1,585			(365	)		286		76,607		75,954
Liquid alternatives		53,118		1,377			1,020			(1	)		55,514		54,370		58,127		1,395			3,280			318		63,120		60,226
Currency and commodities⁽⁴⁾		33,344		507			1,417			77			35,345		33,317		46,723		8,129			5,388		��	51		60,291		53,843
Alternatives subtotal		152,924		2,866			2,955			24			158,769		154,746		179,951		11,109			8,303			655		200,018		190,023
Long-term		6,058,295		125,365			174,902			934			6,359,496		6,161,618		5,869,605		62,207			724,425			25,460		6,681,697		6,343,248
Cash management		455,271		25,621			746			(430	)		481,208		462,001		594,089		24,198			143			921		619,351		621,985
Advisory⁽³⁾		1,779		(1	)		(15	)		15			1,778		1,772		2,974		13,812			94			21		16,901		10,546
Total	$	6,515,345	$	150,985		$	175,633		$	519		$	6,842,482	$	6,625,391	$	6,466,668	$	100,217		$	724,662		$	26,402	$	7,317,949	$	6,975,779

AUM increased ~~$327.1~~$851.3 billion to ~~$6.84~~$7.32 trillion at June 30, ~~2019,~~ 2020, driven by net market appreciation, ~~and~~ positive net ~~inflows.~~inflows and the positive impact of foreign exchange movements.

Net market appreciation of ~~$175.6~~$724.7 billion was ~~primarily~~ driven by ~~higher US and~~ global equity ~~markets~~ and fixed income market appreciation.

Long-term net inflows of ~~$125.4~~$62.2 billion included ~~$87.4 billion, $36.1~~$51.0 billion and ~~$1.9~~$16.2 billion net inflows into iShares ETFs and retail, respectively, partially offset by net outflows of $5.0 billion from institutional ~~clients,~~ ~~iShares~~ ~~ETFs and retail clients, respectively.~~clients. Net flows in long-term products are described below.

Cash management AUM increased to ~~$481.2~~$619.4 billion, driven by net inflows of ~~$25.6~~$24.2 billion.

AUM increased ~~$0.5~~$26.4 billion due to the positive impact of foreign exchange movements, primarily due to the weakening of the US dollar, largely against the ~~Euro and Japanese yen, partially offset by the strengthening of the US dollar against the British pound.~~Euro.

The following table presents the component changes in AUM by client type and product type for the six months ended June 30, ~~2019.~~2020.

	December 31,		Net inflows			Market			FX			June 30,		Average		December 31,		Net inflows			Market			FX			June 30,		Average
(in millions)	2018		(outflows)			change			impact⁽¹⁾			2019		AUM⁽²⁾		2019		(outflows)			change			impact⁽¹⁾			2020		AUM⁽²⁾
Retail:
Equity	$	205,714	$	(5,426	)	$	32,335		$	(194	)	$	232,429	$	222,547	$	252,413	$	16,236		$	(11,177	)	$	(3,368	)	$	254,104	$	240,942
Fixed income		271,588		11,279			8,723			182			291,772		281,920		305,265		243			(977	)		(3,371	)		301,160		298,574
Multi-asset		113,417		(6,731	)		11,430			19			118,135		116,985		120,439		(4,903	)		(3,048	)		(554	)		111,934		112,349
Alternatives		20,131		1,979			479			(19	)		22,570		21,200		25,180		3,108			(207	)		(125	)		27,956		26,277
Retail subtotal		610,850		1,101			52,967			(12	)		664,906		642,652		703,297		14,684			(15,409	)		(7,418	)		695,154		678,142
iShares ETFs:
Equity		1,274,262		2,553			184,612			1,196			1,462,623		1,399,504		1,632,972		(3,801	)		(153,420	)		(5,437	)		1,470,314		1,467,523
Fixed income		427,596		63,706			22,231			310			513,843		468,436		565,790		55,670			14,040			(1,402	)		634,098		587,842
Multi-asset		4,485		(477	)		427			7			4,442		4,240		5,210		76			(191	)		(21	)		5,074		4,990
Alternatives		25,082		1,003			1,856			18			27,959		26,065		36,093		12,857			4,174			(13	)		53,111		43,199
iShares ETFs subtotal		1,731,425		66,785			209,126			1,531			2,008,867		1,898,245		2,240,065		64,802			(135,397	)		(6,873	)		2,162,597		2,103,554
Institutional:
Active:
Equity		110,976		(2,617	)		17,411			114			125,884		119,236		141,118		708			(6,342	)		(1,552	)		133,932		129,527
Fixed income		538,961		72,299			37,772			892			649,924		575,948		651,368		(8,930	)		27,735			(3,480	)		666,693		652,186
Multi-asset		336,237		12,330			44,013			521			393,101		366,519		434,233		4,857			(8,281	)		(4,256	)		426,553		418,451
Alternatives		93,805		6,528			3,179			111			103,623		100,016		111,951		4,016			(492	)		(1,043	)		114,432		112,359
Active subtotal		1,079,979		88,540			102,375			1,638			1,272,532		1,161,719		1,338,670		651			12,620			(10,331	)		1,341,610		1,312,523
Index:
Equity		1,444,873		(14,673	)		233,741			992			1,664,933		1,590,518		1,793,826		(14,395	)		(104,885	)		(13,671	)		1,660,875		1,629,613
Fixed income		646,272		43,031			44,277			2,011			735,591		695,377		792,969		(22,089	)		61,750			(23,489	)		809,141		802,752
Multi-asset		7,745		(585	)		861			29			8,050		8,110		8,239		(393	)		(49	)		4			7,801		7,981
Alternatives		4,340		165			84			28			4,617		4,539		4,848		288			(541	)		(76	)		4,519		4,406
Index subtotal		2,103,230		27,938			278,963			3,060			2,413,191		2,298,544		2,599,882		(36,589	)		(43,725	)		(37,232	)		2,482,336		2,444,752
Institutional subtotal		3,183,209		116,478			381,338			4,698			3,685,723		3,460,263		3,938,552		(35,938	)		(31,105	)		(47,563	)		3,823,946		3,757,275
Long-term		5,525,484		184,364			643,431			6,217			6,359,496		6,001,160		6,881,914		43,548			(181,911	)		(61,854	)		6,681,697		6,538,971
Cash management		448,565		31,287			1,422			(66	)		481,208		456,185		545,949		76,639			(117	)		(3,120	)		619,351		587,844
Advisory⁽³⁾		1,769		-			(12	)		21			1,778		1,775		1,770		15,019			142			(30	)		16,901		6,798
Total	$	5,975,818	$	215,651		$	644,841		$	6,172		$	6,842,482	$	6,459,120	$	7,429,633	$	135,206		$	(181,886	)	$	(65,004	)	$	7,317,949	$	7,133,613

The following table presents the component changes in AUM by investment style and product type for the six months ended June 30, 2020.

	December 31,		Net inflows			Market			FX			June 30,		Average
(in millions)	2019		(outflows)			change			impact⁽¹⁾			2020		AUM⁽²⁾
Active:
Equity	$	316,145	$	11,554		$	(12,073	)	$	(2,817	)	$	312,809	$	296,949
Fixed income		939,275		(9,016	)		25,926			(6,042	)		950,143		933,514
Multi-asset		554,672		(44	)		(11,329	)		(4,810	)		538,489		530,799
Alternatives		137,130		7,124			(699	)		(1,168	)		142,387		138,635
Active subtotal		1,947,222		9,618			1,825			(14,837	)		1,943,828		1,899,897
Index and iShares ETFs:
iShares ETFs:
Equity		1,632,972		(3,801	)		(153,420	)		(5,437	)		1,470,314		1,467,523
Fixed income		565,790		55,670			14,040			(1,402	)		634,098		587,842
Multi-asset		5,210		76			(191	)		(21	)		5,074		4,990
Alternatives		36,093		12,857			4,174			(13	)		53,111		43,199
iShares ETFs subtotal		2,240,065		64,802			(135,397	)		(6,873	)		2,162,597		2,103,554
Non-ETF Index
Equity		1,871,212		(9,005	)		(110,331	)		(15,774	)		1,736,102		1,703,133
Fixed income		810,327		(21,760	)		62,582			(24,298	)		826,851		819,998
Multi-asset		8,239		(395	)		(49	)		4			7,799		7,982
Alternatives		4,849		288			(541	)		(76	)		4,520		4,407
Non-ETF Index subtotal		2,694,627		(30,872	)		(48,339	)		(40,144	)		2,575,272		2,535,520
Index & iShares ETFs subtotal		4,934,692		33,930			(183,736	)		(47,017	)		4,737,869		4,639,074
Long-term		6,881,914		43,548			(181,911	)		(61,854	)		6,681,697		6,538,971
Cash management		545,949		76,639			(117	)		(3,120	)		619,351		587,844
Advisory⁽³⁾		1,770		15,019			142			(30	)		16,901		6,798
Total	$	7,429,633	$	135,206		$	(181,886	)	$	(65,004	)	$	7,317,949	$	7,133,613

The following table presents the component changes in AUM by product type for the six months ended June 30, 2020.

~~The following table presents component changes in AUM by investment style and product type for the six months ended June 30, 2019.~~

December 31,

Net
inflows

Market

FX

June 30,

Average

(in millions)
2018

(outflows)

change

impact⁽¹⁾

2019

AUM⁽²⁾

Active:

Equity
$
258,205

$
(8,934
)

$
40,543

$
56

$
289,870

$
277,193

Fixed income

795,985

83,412

45,602

1,098

926,097

842,447

Multi-asset

449,654

5,600

55,443

539

511,236

483,504

Alternatives

113,936

8,507

3,656

91

126,190

121,216

Active subtotal

1,617,780

88,585

145,244

1,784

1,853,393

1,724,360

Index and iShares ETFs:

iShares ETFs:

Equity

1,274,262

2,553

184,612

1,196

1,462,623

1,399,504

Fixed income

427,596

63,706

22,231

310

513,843

468,436

Multi-asset

4,485

(477
)

427

7

4,442

4,240

Alternatives

25,082

1,003

1,856

18

27,959

26,065

iShares ETFs subtotal

1,731,425

66,785

209,126

1,531

2,008,867

1,898,245

Non-ETF Index

Equity

1,503,358

(13,782
)

242,944

856

1,733,376

1,655,108

Fixed income

660,836

43,197

45,170

1,987

751,190

710,798

Multi-asset

7,745

(586
)

861

30

8,050

8,110

Alternatives

4,340

165

86

29

4,620

4,539

Non-ETF Index subtotal

2,176,279

28,994

289,061

2,902

2,497,236

2,378,555

Index & iShares ETFs subtotal

3,907,704

95,779

498,187

4,433

4,506,103

4,276,800

Long-term

5,525,484

184,364

643,431

6,217

6,359,496

6,001,160

Cash management

448,565

31,287

1,422

(66
)

481,208

456,185

Advisory⁽³⁾

1,769

-

(12
)

21

1,778

1,775

Total
$
5,975,818

$
215,651

$
644,841

$
6,172

$
6,842,482

$
6,459,120

~~The following table presents component changes in AUM by product type for the six months ended June 30, 2019.~~

⁽¹⁾ ~~Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.~~

⁽²⁾ ~~Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing seven months.~~

⁽³⁾ ~~Advisory AUM represents long-term portfolio liquidation assignments.~~

AUM ~~increased $866.7~~decreased $111.7 billion to ~~$6.84~~$7.32 trillion at June 30, ~~2019,~~2020, driven by net market ~~appreciation~~depreciation and the negative impact of foreign exchange movements, partially offset by positive net inflows.

Net market ~~appreciation~~depreciation of ~~$644.8~~$181.9 billion was primarily driven by ~~higher US and~~the impact of first quarter global equity ~~markets and~~market declines, partially offset by fixed income market appreciation.

Long-term net inflows of ~~$184.4~~$43.5 billion primarily included ~~$116.5 billion, $66.8~~$64.8 billion and ~~$1.1~~$14.7 billion of net inflows into iShares ETFs and retail, respectively, partially offset by net outflows $36.6 billion from institutional ~~clients,~~ ~~iShares~~ ~~ETFs and retail clients, respectively.~~index clients. Net flows in long-term products are described below.

Cash management AUM increased to ~~$481.2~~$619.4 billion, ~~primarily~~driven by ~~due to~~ net inflows of ~~$31.3~~$76.6 billion.

AUM ~~increased $6.2~~decreased $65.0 billion due to the negative impact of foreign exchange movements, primarily due to the ~~weakening~~strengthening of the US dollar, largely against the ~~Canadian dollar and Japanese yen, partially offset by the strengthening of the US dollar against the~~ British ~~pound and Euro.~~pound.

The following table presents the component changes in AUM by client type and product type for the twelve months ended June 30, ~~2019.~~2020.

	June 30,		Net inflows			Acquisitions and			Market			FX				June 30,		Average		June 30,		Net inflows			Market			FX			June 30,		Average
(in millions)	2018		(outflows)			dispositions⁽¹⁾			change			impact⁽²⁾				2019		AUM⁽³⁾		2019		(outflows)			change			impact⁽¹⁾			2020		AUM⁽²⁾
Retail:
Equity	$	232,617	$	(6,019	)	$	2,137		$	5,930		$	(2,236	)		$	232,429	$	226,117	$	232,429	$	21,011		$	2,307		$	(1,643	)	$	254,104	$	238,057
Fixed income		266,987		6,542			14,070			5,711			(1,538	)			291,772		277,967		291,772		10,186			2,182			(2,980	)		301,160		297,562
Multi-asset		119,299		(5,772	)		2,519			2,530			(441	)			118,135		118,757		118,135		(7,463	)		1,660			(398	)		111,934		114,692
Alternatives		17,922		3,247			1,628			(117	)		(110	)			22,570		20,392		22,570		5,659			(177	)		(96	)		27,956		24,917
Retail subtotal		636,825		(2,002	)		20,354			14,054			(4,325	)			664,906		643,233		664,906		29,393			5,972			(5,117	)		695,154		675,228
iShares ETFs:
Equity		1,346,288		84,277			-			34,624			(2,566	)			1,462,623		1,386,175		1,462,623		58,351			(45,191	)		(5,469	)		1,470,314		1,476,916
Fixed income		401,731		95,478			-			18,198			(1,564	)			513,843		440,536		513,843		104,309			17,688			(1,742	)		634,098		563,566
Multi-asset		3,767		502			-			170			3				4,442		4,030		4,442		666			(17	)		(17	)		5,074		4,833
Alternatives		24,979		1,603			-			1,381			(4	)	��		27,959		25,057		27,959		18,183			6,981			(12	)		53,111		38,367
iShares ETFs subtotal		1,776,765		181,860			-			54,373			(4,131	)			2,008,867		1,855,798		2,008,867		181,509			(20,539	)		(7,240	)		2,162,597		2,083,682
Institutional:
Active:
Equity		134,986		(9,003	)		(4,296	)		5,321			(1,124	)			125,884		123,053		125,884		5,176			3,793			(921	)		133,932		129,091
Fixed income		550,444		58,586			2,417			40,684			(2,207	)			649,924		563,219		649,924		(26,222	)		45,319			(2,328	)		666,693		652,323
Multi-asset		350,545		20,476			(1,593	)		26,501			(2,828	)			393,101		359,706		393,101		21,311			16,119			(3,978	)		426,553		410,295
Alternatives		87,413		11,331			3,374			2,061			(556	)			103,623		95,532		103,623		11,302			179			(672	)		114,432		109,375
Active subtotal		1,123,388		81,390			(98	)		74,567			(6,715	)			1,272,532		1,141,510		1,272,532		11,567			65,410			(7,899	)		1,341,610		1,301,084
Index:
Equity		1,652,589		(78,390	)		4,749			94,042			(8,057	)			1,664,933		1,618,260		1,664,933		(37,274	)		41,472			(8,256	)		1,660,875		1,651,852
Fixed income		639,447		55,717			2,051			47,758			(9,382	)			735,591		668,056		735,591		9,885			73,443			(9,778	)		809,141		786,774
Multi-asset		8,055		(145	)		(243	)		353			30				8,050		8,002		8,050		(526	)		293			(16	)		7,801		8,011
Alternatives		4,673		138			1			(175	)		(20	)			4,617		4,585		4,617		289			(353	)		(34	)		4,519		4,490
Index subtotal		2,304,764		(22,680	)		6,558			141,978			(17,429	)			2,413,191		2,298,903		2,413,191		(27,626	)		114,855			(18,084	)		2,482,336		2,451,127
Institutional subtotal		3,428,152		58,710			6,460			216,545			(24,144	)			3,685,723		3,440,413		3,685,723		(16,059	)		180,265			(25,983	)		3,823,946		3,752,211
Long-term		5,841,742		238,568			26,814			284,972			(32,600	)			6,359,496		5,939,444		6,359,496		194,843			165,698			(38,340	)		6,681,697		6,511,121
Cash management		457,054		22,864			686			2,601			(1,997	)			481,208		454,495		481,208		138,426			1,516			(1,799	)		619,351		552,549
Advisory⁽⁴⁾⁽³⁾		910		888			-			(16	)		(4	)			1,778		1,629		1,778		15,021			136			(34	)		16,901		4,472
Total	$	6,299,706	$	262,320		$	27,500		$	287,557		$	(34,601	)		$	6,842,482	$	6,395,568	$	6,842,482	$	348,290		$	167,350		$	(40,173	)	$	7,317,949	$	7,068,142

The following table presents the component changes in AUM by investment style and product type for the twelve months ended June 30, ~~2019.~~2020.

	June 30,		Net inflows			Acquisitions and			Market			FX			June 30,		Average		June 30,		Net inflows			Market			FX			June 30,		Average
(in millions)	2018		(outflows)			dispositions⁽¹⁾			change			impact⁽²⁾			2019		AUM⁽³⁾		2019		(outflows)			change			impact⁽¹⁾			2020		AUM⁽²⁾
Active:
Equity	$	304,098	$	(17,983	)	$	(2,160	)	$	8,184		$	(2,269	)	$	289,870	$	285,012	$	289,870	$	17,570		$	7,084		$	(1,715	)	$	312,809	$	295,079
Fixed income		803,515		63,894			16,487			45,518			(3,317	)		926,097		826,162		926,097		(17,456	)		46,473			(4,971	)		950,143		933,192
Multi-asset		469,845		14,704			926			29,030			(3,269	)		511,236		478,463		511,236		13,849			17,780			(4,376	)		538,489		524,986
Alternatives		105,336		14,578			5,002			1,940			(666	)		126,190		115,924		126,190		16,961			4			(768	)		142,387		134,291
Active subtotal		1,682,794		75,193			20,255			84,672			(9,521	)		1,853,393		1,705,561		1,853,393		30,924			71,341			(11,830	)		1,943,828		1,887,548
Index and iShares ETFs:
iShares ETFs:
Equity		1,346,288		84,277			-			34,624			(2,566	)		1,462,623		1,386,175		1,462,623		58,351			(45,191	)		(5,469	)		1,470,314		1,476,916
Fixed income		401,731		95,478			-			18,198			(1,564	)		513,843		440,536		513,843		104,309			17,688			(1,742	)		634,098		563,566
Multi-asset		3,767		502			-			170			3			4,442		4,030		4,442		666			(17	)		(17	)		5,074		4,833
Alternatives		24,979		1,603			-			1,381			(4	)		27,959		25,057		27,959		18,183			6,981			(12	)		53,111		38,367
iShares ETFs subtotal		1,776,765		181,860			-			54,373			(4,131	)		2,008,867		1,855,798		2,008,867		181,509			(20,539	)		(7,240	)		2,162,597		2,083,682
Non-ETF Index:
Equity		1,716,094		(75,429	)		4,750			97,109			(9,148	)		1,733,376		1,682,418		1,733,376		(28,657	)		40,488			(9,105	)		1,736,102		1,723,921
Fixed income		653,363		56,951			2,051			48,635			(9,810	)		751,190		683,080		751,190		11,305			74,471			(10,115	)		826,851		803,467
Multi-asset		8,054		(145	)		(243	)		354			30			8,050		8,002		8,050		(527	)		292			(16	)		7,799		8,012
Alternatives		4,672		138			1			(171	)		(20	)		4,620		4,585		4,620		289			(355	)		(34	)		4,520		4,491
Non-ETF Index subtotal		2,382,183		(18,485	)		6,559			145,927			(18,948	)		2,497,236		2,378,085		2,497,236		(17,590	)		114,896			(19,270	)		2,575,272		2,539,891
Index & iShares ETFs subtotal		4,158,948		163,375			6,559			200,300			(23,079	)		4,506,103		4,233,883		4,506,103		163,919			94,357			(26,510	)		4,737,869		4,623,573
Long-term		5,841,742		238,568			26,814			284,972			(32,600	)		6,359,496		5,939,444		6,359,496		194,843			165,698			(38,340	)		6,681,697		6,511,121
Cash management		457,054		22,864			686			2,601			(1,997	)		481,208		454,495		481,208		138,426			1,516			(1,799	)		619,351		552,549
Advisory⁽⁴⁾⁽³⁾		910		888			-			(16	)		(4	)		1,778		1,629		1,778		15,021			136			(34	)		16,901		4,472
Total	$	6,299,706	$	262,320		$	27,500		$	287,557		$	(34,601	)	$	6,842,482	$	6,395,568	$	6,842,482	$	348,290		$	167,350		$	(40,173	)	$	7,317,949	$	7,068,142

The following table presents the component changes in AUM by product type for the twelve months ended June 30, ~~2019.~~2020.

	June 30,		Net inflows			Acquisitions and		Market			FX			June 30,		Average		June 30,		Net inflows		Market			FX			June 30,		Average
(in millions)	2018		(outflows)			dispositions⁽¹⁾		change			impact⁽²⁾			2019		AUM⁽³⁾		2019		(outflows)		change			impact⁽¹⁾			2020		AUM⁽²⁾
Equity	$	3,366,480	$	(9,135	)	$	2,590	$	139,917		$	(13,983	)	$	3,485,869	$	3,353,605	$	3,485,869	$	47,264	$	2,381		$	(16,289	)	$	3,519,225	$	3,495,916
Fixed income		1,858,609		216,323			18,538		112,351			(14,691	)		2,191,130		1,949,778		2,191,130		98,158		138,632			(16,828	)		2,411,092		2,300,225
Multi-asset		481,666		15,061			683		29,554			(3,236	)		523,728		490,495		523,728		13,988		18,055			(4,409	)		551,362		537,831
Alternatives:
Illiquid alternatives		50,734		11,126			4,968		1,449			(367	)		67,910		60,697		67,910		11,335		(2,147	)		(491	)		76,607		73,083
Liquid alternatives		52,034		3,225			28		586			(359	)		55,514		52,683		55,514		5,634		2,246			(274	)		63,120		58,510
Currency and commodities⁽⁵⁾⁽⁴⁾		32,219		1,968			7		1,115			36			35,345		32,186		35,345		18,464		6,531			(49	)		60,291		45,556
Alternatives subtotal		134,987		16,319			5,003		3,150			(690	)		158,769		145,566		158,769		35,433		6,630			(814	)		200,018		177,149
Long-term		5,841,742		238,568			26,814		284,972			(32,600	)		6,359,496		5,939,444		6,359,496		194,843		165,698			(38,340	)		6,681,697		6,511,121
Cash management		457,054		22,864			686		2,601			(1,997	)		481,208		454,495		481,208		138,426		1,516			(1,799	)		619,351		552,549
Advisory⁽⁴⁾⁽³⁾		910		888			-		(16	)		(4	)		1,778		1,629		1,778		15,021		136			(34	)		16,901		4,472
Total	$	6,299,706	$	262,320		$	27,500	$	287,557		$	(34,601	)	$	6,842,482	$	6,395,568	$	6,842,482	$	348,290	$	167,350		$	(40,173	)	$	7,317,949	$	7,068,142

⁽¹⁾ ~~Amounts include net AUM impact from the TCP Transaction, the Citibanamex Transaction, the Aegon Transaction and the DSP Transaction.~~

⁽²⁾ ~~Foreign exchange reflects the impact of translating non-US dollar denominated AUM into US dollars for reporting purposes.~~

⁽³⁾ ~~Average AUM is calculated as the average of the month-end spot AUM amounts for the trailing thirteen months.~~

⁽⁴⁾ ~~Advisory AUM represents long-term portfolio liquidation assignments.~~

AUM increased ~~$542.8~~$475.5 billion to ~~$6.84~~$7.32 trillion at June 30, ~~2019,~~2020, driven by ~~net market appreciation,~~positive net inflows and net ~~AUM added from strategic transactions,~~market appreciation, partially offset by the negative impact of foreign exchange movements.

Net market appreciation of ~~$287.6~~$167.4 billion was primarily driven by ~~higher US equity markets and~~ fixed income market appreciation.

Long-term net inflows of ~~$238.6~~$194.8 billion were comprised of net inflows of ~~$181.9~~$181.5 billion, $29.4 billion and ~~$58.7~~$11.5 billion ~~from~~into iShares ETFs, retail and institutional ~~clients,~~active products, respectively, partially offset by net outflows of ~~$2.0~~$27.6 billion from ~~retail clients.~~institutional index products. Net flows in long-term products are described below.

Cash management AUM increased to ~~$481.2~~$619.4 billion, ~~primarily~~ due to net inflows of ~~$22.9~~$138.4 billion.

AUM decreased ~~$34.6~~$40.2 billion due to the negative impact of foreign exchange movements, primarily resulting from the strengthening of the US dollar, largely against the British pound and ~~Euro, partially offset by~~ the ~~weakening of the US dollar against the Japanese yen.~~Euro.

The Company’s results of operations for the three and six months ended June 30, ~~2019~~2020 and ~~2018~~2019 are discussed below. For a further description of the Company’s revenue and expense, see the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (“~~2018~~2019 Form 10-K”).

The table below presents detail of revenue for the three and six months ended June 30, ~~2019~~2020 and ~~2018~~2019 and includes the ~~asset~~product type mix of investment advisory, administration fees and securities lending revenue (collectively “base fees”). and performance fees.

	Three Months Ended					Six Months Ended				Three Months Ended				Six Months Ended
	June 30,					June 30,				June 30,				June 30,
(in millions)	2019		2018			2019		2018		2020		2019		2020		2019
Investment advisory, administration fees and securities lending revenue:
Equity:
Active	$	385	$	426		$	760	$	864	$	381	$	385	$	779	$	760
iShares ETFs		870		911			1,717		1,837		792		870		1,671		1,717
Non-ETF Index		163		187			327		363		178		163		341		327
Equity subtotal		1,418		1,524			2,804		3,064		1,351		1,418		2,791		2,804
Fixed income:
Active		474		458			931		914		464		474		945		931
iShares ETFs		234		207			454		415		261		234		520		454
Non-ETF Index		98		101			195		194		129		98		241		195
Fixed income subtotal		806		766			1,580		1,523		854		806		1,706		1,580
Multi-asset		288		295			564		591		270		288		563		564
Alternatives:
Illiquid alternatives		118		83			228		160		128		118		276		228
Liquid alternatives		102		93			196		194		117		102		229		196
Currency and commodities⁽¹⁾		24		26			48		51		35		24		67		48
Alternatives subtotal		244		202			472		405		280		244		572		472
Long-term		2,756		2,787			5,420		5,583
Long-Term											2,755		2,756		5,632		5,420
Cash management		147		157			288		308		211		147		389		288
Total base fees		2,903		2,944			5,708		5,891		2,966		2,903		6,021		5,708
Investment advisory performance fees:
Equity		4		43			4		61		23		4		25		4
Fixed income		—		(1	)		2		2		2		—		4		2
Multi-asset		6		9			6		14		2		6		3		6
Alternatives:
Illiquid alternatives		15		2			35		2		32		15		49		35
Liquid alternatives		39		38			43		82		53		39		72		43
Alternatives subtotal		54		40			78		84		85		54		121		78
Total performance fees		64		91			90		161		112		64		153		90
Technology services revenue		237		198			441		382		278		237		552		441
Distribution fees:
Retrocessions		164		181			325		373		162		164		331		325
12b-1 fees (US mutual funds distribution fees)		88		103			177		211
12b-1 fees (US mutual fund distribution fees)											78		88		169		177
Other		15		10			27		21		13		15		29		27
Total distribution fees		267		294			529		605		253		267		529		529
Advisory and other revenue:
Advisory		22		33			41		54		17		22		34		41
Other		31		45			61		95		22		31		69		61
Total advisory and other revenue		53		78			102		149		39		53		103		102
Total revenue	$	3,524	$	3,605		$	6,870	$	7,188	$	3,648	$	3,524	$	7,358	$	6,870

	Three Months Ended June 30,												Six Months Ended June 30,												Three Months Ended June 30,												Six Months Ended June 30,
	Mix of Base Fees						Mix of Average AUM by Asset Class⁽¹⁾						Mix of Base Fees						Mix of Average AUM by Asset Class⁽²⁾						Mix of Base Fees						Mix of Average AUM by Product Type⁽¹⁾						Mix of Base Fees						Mix of Average AUM by Asset Class⁽²⁾
	2019			2018			2019			2018			2019			2018			2019			2018			2020			2019			2020			2019			2020			2019			2020			2019
Equity:
Active		13	%		15	%		4	%		5	%		13	%		15	%		4	%		5	%		13	%		13	%		4	%		4	%		12	%		13	%		4	%		4	%
iShares ETFs		30	%		31	%		22	%		21	%		30	%		31	%		22	%		21	%		27	%		30	%		20	%		22	%		28	%		30	%		21	%		22	%
Non-ETF Index		6	%		6	%		25	%		27	%		6	%		6	%		25	%		27	%		6	%		6	%		24	%		25	%		6	%		6	%		24	%		25	%
Equity subtotal		49	%		52	%		51	%		53	%		49	%		52	%		51	%		53	%		46	%		49	%		48	%		51	%		46	%		49	%		49	%		51	%
Fixed income:
Active		17	%		16	%		14	%		13	%		17	%		16	%		13	%		13	%		16	%		17	%		12	%		14	%		16	%		17	%		12	%		13	%
iShares ETFs		8	%		7	%		7	%		6	%		8	%		7	%		7	%		6	%		9	%		8	%		9	%		7	%		9	%		8	%		8	%		7	%
Non-ETF Index		3	%		3	%		11	%		10	%		3	%		3	%		11	%		10	%		4	%		3	%		12	%		11	%		4	%		3	%		12	%		11	%
Fixed income subtotal		28	%		26	%		32	%		29	%		28	%		26	%		31	%		29	%		29	%		28	%		33	%		32	%		29	%		28	%		32	%		31	%
Multi-asset		10	%		10	%		8	%		8	%		10	%		10	%		8	%		8	%		9	%		10	%		8	%		8	%		9	%		10	%		8	%		8	%
Alternatives:
Illiquid alternatives		4	%		3	%		1	%		1	%		4	%		3	%		1	%		1	%		4	%		4	%		1	%		1	%		5	%		4	%		1	%		1	%
Liquid alternatives		3	%		3	%		1	%		1	%		3	%		3	%		1	%		1	%		4	%		3	%		1	%		1	%		4	%		3	%		1	%		1	%
Currency and commodities(3)		1	%		1	%		0	%		1	%		1	%		1	%		1	%		1	%		1	%		1	%		1	%		—	%		1	%		1	%		1	%		1	%
Alternatives subtotal		8	%		7	%		2	%		3	%		8	%		7	%		3	%		3	%		9	%		8	%		3	%		2	%		10	%		8	%		3	%		3	%
Long-term		95	%		95	%		93	%		93	%		95	%		95	%		93	%		93	%		93	%		95	%		92	%		93	%		94	%		95	%		92	%		93	%
Cash management		5	%		5	%		7	%		7	%		5	%		5	%		7	%		7	%		7	%		5	%		8	%		7	%		6	%		5	%		8	%		7	%
Total excluding Advisory AUM		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%

Three Months Ended June 30, ~~2019~~2020 Compared with Three Months Ended June 30, ~~2018~~2019

Revenue ~~decreased $81~~increased $124 million, or 2%4%, from the three months ended June 30, ~~2018,~~2019, primarily driven by ~~lower base fees,~~organic growth, higher securities lending revenue and performance fees, and 17% growth in technology services revenue.

Investment advisory, administration fees and ~~other~~securities lending revenue of $2,966 million increased $63 million from $2,903 million for the three months ended June 30, 2019, primarily driven by organic growth and higher securities lending revenue, partially offset by the negative impact of equity beta and foreign exchange movements on average AUM, and strategic pricing changes to certain products. Securities lending revenue of $210 million in the current quarter increased $60 million from $150 million in second quarter of 2019, primarily reflecting higher asset spreads and average balances of securities on loan.

Investment advisory performance fees of $112 million increased $48 million from $64 million for the three months ended June 30, 2019, primarily reflecting higher revenue from alternative and long-only equity products.

Technology services revenue of $278 million increased $41 million from $237 million for the three months ended June 30, 2019, primarily reflecting higher revenue from Aladdin.

Advisory and other revenue of $39 million decreased $14 million from $53 million for the three months ended June 30, 2019, primarily reflecting the impact of the previously discussed Charitable Contribution of the remaining 20% stake in PennyMac in the first quarter of 2020.

Revenue increased $488 million, or 7%, from the six months ended June 30, 2019, reflecting higher base and performance fees and higher technology services revenue.

Investment advisory, administration fees and securities lending revenue of ~~$2,903~~$6,021 million ~~decreased $41~~increased $313 million from ~~$2,944~~$5,708 million for the ~~three~~six months ended June 30, ~~2018,~~ 2019, primarily driven by ~~lower securities lending revenue, as well as~~organic growth, partially offset by the negative impact of ~~divergent~~ equity beta and foreign exchange movements on average AUM, ~~mix shift toward fixed income and cash,~~ and strategic ~~price~~pricing changes to certain ~~products, partially offset by the positive impact of acquisitions and organic growth.~~products. Securities lending revenue of ~~$150 million in the current quarter compared with $183 million in the second quarter of 2018, primarily reflecting reduced borrowing demand, lower cash spreads and reduced European seasonal demand.~~

~~Investment advisory performance fees~~ ~~of $64 million decreased $27 million from $91 million for the three months ended June 30, 2018, primarily reflecting lower revenue from long-only equity products.~~

~~Technology services revenue~~ ~~of $237~~$368 million increased ~~$39~~$70 million from ~~$198 million for the three months ended June 30, 2018, primarily reflecting higher revenue from~~ ~~Aladdin~~ ~~and the impact of the eFront acquisition.~~

~~Advisory and other revenue~~ ~~of $53 million decreased $25 million from $78 million for the three months ended June 30, 2018, primarily reflecting lower fees from advisory and transition management assignments.~~

Revenue decreased $318 million, or 4%, from the six months ended June 30, 2018, primarily driven by lower base fees, performance fees and advisory and other revenue, partially offset by higher technology services revenue.

~~Investment advisory, administration fees and securities lending revenue~~ ~~of $5,708 million decreased $183 million from $5,891 million for the six months ended June 30, 2018,~~ primarily driven by the impact of negative markets and foreign exchange movements on average AUM, mix shift toward fixed income and cash, strategic price changes to certain products and lower securities lending revenue, partially offset by the positive impact of acquisitions and organic growth. Securities lending revenue of $298 million for the six months ended June 30, 2019, primarily reflecting higher asset spreads and average balances of securities on loan.

Investment advisory performance fees ~~compared with $338~~of $153 million increased $63 million from $90 million for the six months ended June 30, ~~2018,~~2019, primarily reflecting ~~reduced European seasonal demand~~higher revenue from alternative and ~~lower cash spreads.~~long-only equity products.

~~Investment advisory performance fees~~Technology services revenue of ~~$90~~$552 million ~~decreased $71~~increased $111 million from ~~$161~~$441 million for the six months ended June 30, ~~2018, primarily reflecting lower revenue from long-only equity products and liquid alternatives, partially offset by higher revenue from illiquid alternatives.~~

~~Technology services revenue~~ ~~of $441 million increased $59 million from $382 million for the six months ended June 30, 2018,~~2019, primarily reflecting higher revenue from Aladdinand the impact of the eFront ~~acquisition.~~acquisition, which closed in May of 2019.

~~Advisory and other revenue~~ of $102 million decreased $47 million from $149 million for the six months ended June 30, 2018, primarily reflecting lower earnings from an equity method investment and lower fees from advisory and transition management assignments.

	Three Months Ended					Six Months Ended				Three Months Ended					Six Months Ended
	June 30,					June 30,				June 30,					June 30,
(in millions)	2019		2018			2019		2018		2020			2019		2020		2019
Expense, GAAP:
Expense:
Employee compensation and benefits	$	1,083	$	1,082		$	2,147	$	2,203	$	1,152		$	1,083	$	2,289	$	2,147
Distribution and servicing costs:
Retrocessions		164		181			325		373		162			164		331		325
12b-1 costs		88		101			176		207		75			88		164		176
Other		164		133			319		267		192			164		379		319
Total distribution and servicing costs		416		415			820		847		429			416		874		820
Direct fund expense		252		264			494		525		246			252		523		494
General and administration:
Marketing and promotional		81		91			162		176		39			81		108		162
Occupancy and office related		75		73			149		147		80			75		158		149
Portfolio services		65		73			127		143		65			65		130		127
Technology		67		58			136		111		92			67		180		136
Professional services		44		37			77		69		41			44		85		77
Communications		10		9			19		19		14			10		26		19
Foreign exchange remeasurement		12		4			20		5		1			12		6		20
Contingent consideration fair value adjustments		13		(1	)		19		5		(2	)		13		23		19
Product launch costs		59		—			59		11		—			59		84		59
Charitable Contribution											—			—		589		—
Other general and administration		44		49			90		90		58			44		141		90
Total general and administration expense		470		393			858		776		388			470		1,530		858
Amortization of intangible assets		25		11			40		22		27			25		52		40
Total expense, GAAP	$	2,246	$	2,165		$	4,359	$	4,373
Less non-GAAP expense adjustments:
Employee compensation and benefits:
PNC LTIP funding obligation		—		3			—		6
Expense, as adjusted:
Employee compensation and benefits	$	1,083	$	1,079		$	2,147	$	2,197
Distribution and servicing costs		416		415			820		847
Direct fund expense		252		264			494		525
General and administration		470		393			858		776
Amortization of intangible assets		25		11			40		22
Total expense, as adjusted	$	2,246	$	2,162		$	4,359	$	4,367
Total expense										$	2,242		$	2,246	$	5,268	$	4,359

Three Months Ended June 30, ~~2019~~2020 Compared with Three Months Ended June 30, ~~2018~~2019

~~GAAP~~. Expense ~~increased $81~~decreased $4 million from the three months ended June 30, ~~2018,~~2019, primarily driven by ~~higher~~lower general and ~~administrative~~administration expense, ~~which reflected product launch costs~~largely offset by higher employee compensation and ~~acquisition-related expense in the current quarter.~~benefits expense.

~~General~~Employee compensation and ~~administration~~benefits expense increased ~~$77~~$69 million from the three months ended June 30, ~~2018,~~2019, primarily ~~due to $59~~reflecting higher base and incentive compensation, driven in part by higher performance fees.

General and administration expense decreased $82 million ~~of previously mentioned product launch costs. The increase also reflected~~from the three months ended June 30, 2019, reflecting lower marketing and promotional expense, lower contingent consideration fair value adjustments related to prior acquisitions and ~~professional fees~~lower foreign exchange remeasurement expense, partially offset by higher technology expense, including certain costs related to COVID-19 and a $12 million impairment of a fixed asset incurred in ~~connection with the eFront Transaction.~~

~~Amortization of intangible assets expense~~ ~~increased $14 million from~~ the three months ended June 30, ~~2018, primarily reflecting amortization~~2020. The decrease also reflected the impact of ~~intangible assets associated with the eFront Transactionand the acquisition~~$59 million of ~~TCP.~~

~~As Adjusted. Expense, as adjusted, increased $84 million, or 4%, to $2,246 million from $2,162 million for~~product launch costs incurred in the three months ended June 30, 2018. The increase in total expense, as adjusted, is driven primarily by higher general and administrative expense, including the previously described product launch costs, and amortization of intangible assets.2019.

Six Months Ended June 30, ~~2019~~2020 Compared with Six Months Ended June 30, ~~2018~~2019

~~GAAP~~. Expense ~~decreased $14~~increased $909 million from the six months ended June 30, ~~2018,~~2019, primarily driven ~~primarily~~ by ~~lower~~higher general and administration expense, including the impact of the Charitable Contribution, higher employee compensation and benefits expense, and ~~lower~~higher volume-related ~~expense, partially offset by higher general and administration expense, which reflected the previously mentioned product launch costs.~~expense.

Employee compensation and benefits expense ~~decreased $56~~increased $142 million from the six months ended June 30, ~~2018,~~2019, primarily reflecting ~~lower~~higher base and incentive compensation, driven in part by ~~lower~~higher operating ~~income, partially offset by higher headcount.~~income.

~~Distribution and servicing costs~~Direct fund expense ~~decreased $27~~increased $29 million from the six months ended June 30, ~~2018,~~2019, reflecting ~~lower~~higher average AUM.

~~Direct fund~~General and administration expense ~~decreased $31~~increased $672 million from the six months ended June 30, ~~2018, reflecting~~2019, primarily driven by the ~~negative impact~~$589 million of ~~markets~~expense related to the Charitable Contribution, higher product launch costs and higher technology expense, including certain costs related to COVID-19, costs related to certain legal matters, including Aviron Capital, LLC., and a $12 million impairment of a fixed asset. The increase was partially offset by lower marketing and promotional expense and lower foreign exchange ~~movements on average AUM.~~

~~General and administration~~remeasurement expense ~~increased $82 million from~~ in the six months ended June 30, 2018, primarily due to higher product launch costs, technology expense and the impact of foreign exchange remeasurement expense, partially offset by lower portfolio services and marketing and promotional expense. The increase also reflected higher contingent consideration fair value adjustments related to prior acquisitions and professional fees incurred in connection with the eFront Transaction.2020.

~~Amortization of intangible assets expense~~ ~~increased $18 million from the six months ended June 30, 2018, primarily reflecting amortization of intangible assets associated with the eFront Transaction and the acquisition of TCP.~~

~~As Adjusted~~. Expense, as adjusted, decreased $8 million for the six months ended June 30, 2018. The decrease in total expense, as adjusted, is driven primarily by lower employee compensation and benefits expense and lower volume-related expense, partially offset by higher general and administration expense.

The summary ~~and reconciliation~~ of ~~GAAP nonoperating income (expense) to~~ nonoperating income (expense), ~~as adjusted~~less net income (loss) attributable to NCI for the three and six months ended June 30, ~~2019~~2020 and ~~2018~~2019 was as follows:

	Three Months Ended					Six Months Ended						Three Months Ended						Six Months Ended
	June 30,					June 30,						June 30,						June 30,
(in millions)	2019		2018			2019		2018			(in millions)	2020			2019			2020		2019
Nonoperating income (expense), GAAP basis⁽¹⁾	$	57	$	(24	)	$	182	$	(40	)	$		357	$		57	$		286	$	182
Less: Net income (loss) attributable to NCI		10		5			17		10				188			10			9		17
Nonoperating income (expense), as adjusted, net of NCI⁽²⁾⁽³⁾	$	47	$	(29	)	$	165	$	(50	)
Nonoperating income (expense), net of NCI⁽²⁾											$		169	$		47	$		277	$	165

~~The components of nonoperating income (expense), as adjusted, for the three and six months ended June 30, 2019 and 2018 were as follows:~~

	GAAP												As Adjusted												GAAP												As Adjusted⁽¹⁾
	Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
	June 30,						June 30,						June 30,						June 30,						June 30,						June 30,						June 30,						June 30,
(in millions)	2019			2018			2019			2018			2019			2018			2019			2018			2020			2019			2020			2019			2020			2019			2020			2019
Operating income⁽¹⁾	$	1,278		$	1,440		$	2,511		$	2,815		$	1,278		$	1,443		$	2,511		$	2,821		$	1,406		$	1,278		$	2,090		$	2,511		$	1,406		$	1,278		$	2,679		$	2,511
Total nonoperating income (expense)⁽¹⁾⁽²⁾		47			(29	)		165			(50	)		47			(29	)		165			(50	)	$	169		$	47		$	277		$	165		$	169		$	47		$	155		$	165
Income before income taxes⁽²⁾	$	1,325		$	1,411		$	2,676		$	2,765		$	1,325		$	1,414		$	2,676		$	2,771		$	1,575		$	1,325		$	2,367		$	2,676		$	1,575		$	1,325		$	2,834		$	2,676
Income tax expense	$	322		$	338		$	620		$	603		$	322		$	334		$	620		$	599		$	361		$	322		$	347		$	620		$	361		$	322		$	588		$	620
Effective tax rate		24.3	%		24.0	%		23.2	%		21.8	%		24.3	%		23.7	%		23.2	%		21.7	%		22.9	%		24.3	%		14.7	%		23.2	%		22.9	%		24.3	%		20.7	%		23.2	%

2020. The six months ended June 30, ~~2019 and 2018~~2020 income tax expense (benefit) included ~~$22~~a discrete tax benefit of $241 million recognized in connection with the Charitable Contribution, which was excluded from as adjusted results, and ~~$58~~$66 million ~~respectively,~~ of discrete tax benefits, including benefits related to stock-based compensation awards that vested in the first quarter of ~~each respective year.~~2020.

2019. The six months ended June 30, 2019 included $14 million of discrete tax benefits, including benefits related to stock-based compensation awards that vested in the first quarter of 2019.

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.

The Company presents the as adjusted ~~balance sheet~~statement of financial condition as additional information to enable investors to exclude certain assets that have equal and offsetting liabilities or noncontrolling interests that ultimately do not have an impact on stockholders’ equity or cash flows. Management views the as adjusted ~~balance sheet, a~~statement of financial condition, which contains non-GAAP financial ~~measure,~~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, 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 received under BlackRock Life Limited securities lending arrangements 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.

The Company consolidates certain sponsored investment products accounted for as variable interest entities (“VIEs”) and voting rights entities (“VREs”) ~~and VIEs,~~, (collectively, ~~“Consolidated Sponsored Investment Products”~~“consolidated sponsored investment products”). See Note 2, Significant Accounting Policies, in the notes to the consolidated financial statements contained in the ~~2018~~2019 Form 10-K for more information on the Company’s consolidation policy.

The Company cannot readily access cash and cash equivalents or other assets held by ~~Consolidated Sponsored Investment Products~~consolidated sponsored investment products to use in its operating activities. In addition, the Company cannot readily sell investments held by ~~Consolidated Sponsored Investment Products~~consolidated sponsored investment products in order to obtain cash for use in the Company’s operations.

	June 30, 2019									June 30, 2020
(in millions)	GAAP Basis		Separate Account Assets/ Collateral⁽¹⁾		Consolidated Sponsored Investment Products⁽²⁾			As Adjusted		GAAP Basis		Separate Account Assets/ Collateral⁽¹⁾		Consolidated Sponsored Investment Products⁽²⁾		As Adjusted
Assets
Cash and cash equivalents	$	3,920	$	—	$	13		$	3,907	$	5,466	$	—	$	275	$	5,191
Accounts receivable		2,863		—		—			2,863		2,990		—		—		2,990
Investments		1,989		—		34			1,955		5,171		—		1,317		3,854
Assets of consolidated VIEs:
Cash and cash equivalents		103		—		103			—
Investments		2,431		—		772			1,659
Other assets		63		—		63			—
Separate account assets and collateral held under securities lending agreements		115,253		115,253		—			—		106,297		106,297		—		—
Other assets⁽³⁾		3,737		—		(8	)		3,745		4,545		—		104		4,441
Subtotal		130,359		115,253		977			14,129		124,469		106,297		1,696		16,476
Goodwill and intangible assets, net		32,988		—		—			32,988		32,873		—		—		32,873
Total assets	$	163,347	$	115,253	$	977		$	47,117	$	157,342	$	106,297	$	1,696	$	49,349
Liabilities
Accrued compensation and benefits	$	1,078	$	—	$	—		$	1,078	$	1,189	$	—	$	—	$	1,189
Accounts payable and accrued liabilities		1,277		—		—			1,277		914		—		—		914
Liabilities of consolidated VIEs		644		—		644			—
Borrowings		5,964		—		—			5,964		7,190		—		—		7,190
Separate account liabilities and collateral liabilities under securities lending agreements		115,253		115,253		—			—		106,297		106,297		—		—
Deferred income tax liabilities⁽⁴⁾		3,825		—		—			3,825		3,664		—		—		3,664
Other liabilities		2,646		—		(434	)		3,080		4,054		—		392		3,662
Total liabilities		130,687		115,253		210			15,224		123,308		106,297		392		16,619
Equity
Total stockholders’ equity		31,893		—		—			31,893		32,730		—		—		32,730
Noncontrolling interests		767		—		767			—		1,304		—		1,304		—
Total equity		32,660		—		767			31,893		34,034		—		1,304		32,730
Total liabilities and equity	$	163,347	$	115,253	$	977		$	47,117	$	157,342	$	106,297	$	1,696	$	49,349

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 June 30, ~~2019~~2020 and December 31, ~~2018~~2019 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 June 30, ~~2019~~2020 and December 31, ~~2018~~2019 included ~~$13~~$275 million and ~~$59~~$141 million, respectively, of cash held by consolidated ~~VREs~~sponsored investment products (see Liquidity and Capital Resources for details on the change in cash and cash equivalents during the six months ended June 30, ~~2019)~~2020).

Accounts receivable at June 30, ~~2019 increased $206~~2020 decreased $189 million from December 31, ~~2018,~~2019, primarily due to lower receivables from base fees, partially offset by higher securities lending and technology services ~~and base fees~~ receivables. Investments, ~~were $1,989~~including the impact of consolidated sponsored investment products, decreased $318 million ~~at June 30,~~from December 31, 2019 (for more information see Investments herein). Goodwill and intangible assets ~~increased $1,623~~decreased $58 million from December 31, ~~2018,~~2019, primarily due to ~~the eFront Transaction, partially offset by~~ amortization of intangible assets. Other assets (including operating lease right-of-use ~~(“ROU”)~~ assets and property and equipment) increased ~~$966~~$661 million from December 31, ~~2018,~~2019, primarily due to ~~the recognition of the operating lease ROU assets related to the adoption of the new lease accounting guidance, and~~ an increase in unit trust receivables (substantially offset by an increase in unit trust payables recorded within other liabilities)., partially offset by a net decrease in certain corporate minority investments, primarily related to the previously discussed Charitable Contribution of the remaining 20% stake in PennyMac.

Liabilities. Accrued compensation and benefits at June 30, ~~2019~~2020 decreased ~~$910~~$868 million from December 31, ~~2018,~~2019, primarily due to ~~2018~~2019 incentive compensation cash payments in the first quarter of ~~2019,~~2020, partially offset by ~~2019~~2020 incentive compensation accruals. ~~Other~~Accounts payable and accrued liabilities ~~increased $757~~at June 30, 2020 decreased $253 million from December 31, ~~2018,~~2019, primarily due to ~~the recognition of the operating lease~~lower current income taxes payables. Other liabilities ~~related~~increased $584 million from December 31, 2019, primarily due to ~~the adoption of the new lease accounting guidance and~~ higher unit trust payables (substantially offset by an increase in unit trust receivables recorded within other assets), partially offset by lower contingent ~~liability payments in connection with~~liabilities related to certain ~~prior~~ acquisitions. Net deferred income tax liabilities at June 30, ~~2019 increased $254~~2020 decreased $70 million from December 31, ~~2018,~~2019, primarily due to the effects of temporary differences associated with investment income and the ~~eFront Transaction,~~income tax benefit related to the Charitable Contribution, partially offset by the effects of temporary differences associated with stock-based ~~compensation and investment income.~~compensation.

The Company’s investments ~~and investments of consolidated VIEs (collectively, “Total Investments”)~~ were ~~$1,989~~$5,171 million and ~~$2,431~~$5,489 million ~~respectively,~~ at June 30, ~~2019. Total~~2020 and December 31, 2019, respectively. Investments include consolidated investments held by sponsored investment products accounted for as VREs and VIEs. Management reviews BlackRock’s ~~Total Investments~~investments on an “economic” basis, which eliminates the portion of ~~Total Investments~~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 ~~Total Investments,~~investments, as adjusted, to enable investors to understand the portion of ~~Total Investments~~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 compensation investments and hedged investments, to reflect another helpful measure for investors. The economic impact of ~~Total Investments~~investments held pursuant to deferred compensation arrangements is offset by a change in compensation expense. The impact of certain investments is substantially mitigated by swap hedges. 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.

The following table represents the carrying value of the Company’s economic investment exposure, by asset type, at June 30, ~~2019~~2020 and December 31, ~~2018:~~2019:

	June 30,		December 31,		June 30,		December 31,
(in millions)	2019		2018		2020		2019
Equity⁽¹⁾					$	651	$	609
Fixed income⁽²⁾						913		1,008
Multi-asset⁽³⁾						147		178
Alternatives:
Private equity	$	232	$	305		394		355
Real assets		356		377		279		322
Other alternatives⁽¹⁾		231		199
Other investments⁽²⁾		1,717		1,504
Other alternatives⁽⁴⁾						246		235
Alternatives subtotal						919		912
Total “economic” investment exposure	$	2,536	$	2,385	$	2,630	$	2,707

As adjusted investment activity for the six months ended June 30, ~~2019~~2020 was as follows:

(in millions)	Six Months Ended June 30, 2019			Six Months Ended June 30, 2020
Total Investments, as adjusted, beginning balance	$	3,381
Purchases/capital contributions/acquisitions		387
Investments, as adjusted, beginning balance				$	3,995
Purchases/capital contributions					657
Sales/maturities		(365	)		(489	)
Distributions⁽¹⁾		(77	)		(135	)
Market appreciation(depreciation)/earnings from equity method investments		234			(77	)
Carried interest capital allocations/(distributions)		54			(70	)
Total Investments, as adjusted, ending balance	$	3,614
Other⁽²⁾					(27	)
Investments, as adjusted, ending balance				$	3,854

BlackRock Cash Flows Excluding the Impact of Consolidated Sponsored Investment Products

The condensed consolidated statements of cash flows include the cash flows of the ~~Consolidated Sponsored Investment~~consolidated sponsored investment ~~Products.~~products. The Company uses an adjusted cash flow statement, which excludes the impact of ~~Consolidated Sponsored Investment~~consolidated sponsored investment ~~Products,~~products, as a supplemental non-GAAP measure to assess liquidity and capital requirements. The Company believes that its cash flows, excluding the impact of the ~~Consolidated Sponsored Investment~~consolidated sponsored investment ~~Products,~~products, 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 ~~Consolidated Sponsored Investment~~consolidated sponsored investment ~~Products:~~products:

(in millions)	GAAP Basis			Impact on Cash Flows of Consolidated Sponsored Investment Products			Cash Flows Excluding Impact of Consolidated Sponsored Investment Products			GAAP Basis			Cash Flows of Consolidated Sponsored Investment Products			Cash Flows Excluding Impact of Consolidated Sponsored Investment Products
Cash, cash equivalents and restricted cash, December 31, 2018	$	6,505		$	245		$	6,260
Cash, cash equivalents and restricted cash, December 31, 2019										$	4,846		$	141		$	4,705
Net cash provided by/(used in) operating activities		697			(534	)		1,231			769			(661	)		1,430
Net cash provided by/(used in) investing activities		(1,663	)		(97	)		(1,566	)		(158	)		(40	)		(118	)
Net cash provided by/(used in) financing activities		(1,508	)		502			(2,010	)		106			835			(729	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		9			—			9			(80	)		—			(80	)
Net increase/(decrease) in cash, cash equivalents and restricted cash		(2,465	)		(129	)		(2,336	)		637			134			503
Cash, cash equivalents and restricted cash, June 30, 2019	$	4,040		$	116		$	3,924
Cash, cash equivalents and restricted cash, June 30, 2020										$	5,483		$	275		$	5,208

Sources of BlackRock’s operating cash primarily include investment advisory, administration 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 expense, interest and principal on borrowings, income taxes, dividends on BlackRock’s capital stock, 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 of cash flows contained in Part I, Item 1 of this filing.

Cash flows provided byby/(used in) operating activities, excluding the impact of ~~Consolidated Sponsored Investment Products,~~consolidated sponsored investment products, primarily include the receipt of investment advisory and administration fees, securities lending revenue and performance fees offset by the payment of operating expenses incurred in the normal course of business, including year-end incentive compensation accrued for in the prior year.

Cash flows used in investing activities, excluding the impact of ~~Consolidated Sponsored Investment Products,~~consolidated sponsored investment products, for the six months ended June 30, ~~2019~~2020 were ~~$1,566~~$118 million and ~~primarily~~ reflected ~~$1.5 billion of cash outflow related to the eFront Transaction, $73~~$111 million of net investment purchases and ~~$105~~$100 million of purchases of property and equipment, partially offset by ~~$71~~$93 million of ~~net proceeds~~distributions of capital from ~~sales and maturities of certain investments.~~equity method investees.

Cash flows used in financing activities, excluding the impact of ~~Consolidated Sponsored Investment Products,~~consolidated sponsored investment products, for the six months ended June 30, ~~2019~~2020 were ~~$2,010~~$729 million, primarily resulting from $1.8 billion of share repurchases, including ~~$300~~$1.1 billion from PNC, $412 million in open market transactions ~~a $1.3 billion private transaction~~ and ~~$229~~$270 million of employee tax withholdings related to employee stock transactions, and ~~$1.1~~$1.2 billion of cash dividend payments, partially offset by ~~$992 million~~$2.2 billion of proceeds from long-term borrowings.

The Company manages its financial condition and funding to maintain appropriate liquidity for the business. Liquidity resources at June 30, ~~2019~~2020 and December 31, ~~2018~~2019 were as follows:

	June 30,			December 31,			June 30,			December 31,
(in millions)	2019			2018			2020			2019
Cash and cash equivalents⁽¹⁾	$	3,920		$	6,302		$	5,466		$	4,829
Cash and cash equivalents held by consolidated VREs⁽²⁾		(13	)		(59	)
Cash and cash equivalents held by consolidated sponsored investment products⁽²⁾								(275	)		(141	)
Subtotal		3,907			6,243			5,191			4,688
Credit facility – undrawn		4,000			4,000			4,000			4,000
Total liquidity resources⁽³⁾	$	7,907		$	10,243		$	9,191		$	8,688

Total liquidity resources ~~decreased $2,336~~increased $503 million during the six months ended June 30, ~~2019,~~2020, primarily reflecting ~~cash payments of 2018 year-end incentive awards, share repurchases of $1.8~~$2.2 billion reflecting the impact of a $1.3 billion private transaction, approximately $1.5 billion of cash outflow related to the eFront Transaction, and cash dividend payments of $1.1 billion, partially offset by $992 million of proceeds from long-term borrowings and cash flows from other operating ~~activities.~~activities, partially offset by cash payments of 2019 year-end incentive awards, share repurchases of $1.8 billion, including $1.1 billion from PNC, and cash dividend payments of $1.2 billion.

A significant portion of the Company’s ~~$3,614~~$3,854 million of ~~Total Investments,~~investments, as adjusted, is illiquid in nature and, as such, cannot be readily convertible to cash.

The Company continues to monitor its liquidity and capital resources due to the current pandemic. The Company’s liquidity and capital resources were not materially impacted by COVID-19 and related economic conditions during the six months ended June 30, 2020.

Share Repurchases. ~~In January 2019,~~During the ~~Board of Directors~~six months ended June 30, 2020, the Company repurchased 0.8 million common shares in open market transactions under the share repurchase program for approximately $412 million. At June 30, 2020, there were 5.1 million shares still authorized to be repurchased.

Including the repurchase ~~of an additional seven million shares~~from PNC, which was in addition to the share repurchase authorization under the Company’s existing share repurchase program, ~~for a total up to~~the Company has repurchased an aggregate of approximately ~~9.9 million~~$1.5 billion of its common shares ~~of BlackRock common stock.~~

~~During~~during the six months ended June 30, 2019, the Company repurchased 3.8 million common shares under the share repurchase program for approximately $1.6 billion, including a $1.3 billion private transaction that closed on March 25, 2019. The Company2020 and has now completed its targeted level of share repurchases for the year, but will remain opportunistic should relative valuation opportunities arise. ~~At June 30, 2019, there were 6.1 million shares still authorized to be repurchased.~~

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 Office of the Comptroller of the Currency.

At ~~both~~ June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company was required to maintain approximately ~~$1.8~~$2.1 billion and $1.9 billion, respectively, in net capital in certain regulated subsidiaries, including BTC, entities regulated by the Financial Conduct Authority and Prudential Regulation Authority in the United Kingdom, and the Company’s broker-dealers. The Company was in compliance with all applicable regulatory net capital requirements.

At June 30, ~~2019,~~2020, the principal amount of long-term borrowings outstanding was ~~$6.0~~$7.2 billion. See Note ~~13,~~15, Borrowings, in the ~~2018~~2019 Form 10-K for more information on borrowings outstanding as of December 31, ~~2018.~~2019.

During the six months ended June 30, ~~2019,~~2020, the Company paid approximately ~~$92~~$90 million of interest on long-term borrowings. Future principal repayments and interest requirements at June 30, ~~2019~~2020 were as follows:

(in millions)
Year	Principal		Interest		Total Payments		Principal		Interest		Total Payments
Remainder of 2019	$	1,000	$	99	$	1,099
2020		—		157		157
Remainder of 2020							$	—	$	91	$	91
2021		750		141		891		750		189		939
2022		750		113		863		750		160		910
2023		—		100		100		—		147		147
2024		1,000		83		1,083		1,000		130		1,130
2025⁽¹⁾								786		112		898
Thereafter⁽¹⁾		2,497		212		2,709		3,950		386		4,336
Total	$	5,997	$	905	$	6,902	$	7,236	$	1,215	$	8,451

In ~~April 2019,~~January 2020, the Company issued ~~$1.0~~$1 billion in aggregate principal amount of ~~3.25%~~2.40% senior unsecured and unsubordinated notes maturing on April 30, ~~2029~~2030 (the ~~“2029~~“2030 Notes”). The net proceeds of the 2030 Notes were used for general corporate purposes. Interest of approximately $24 million per year is payable semi-annually on April 30 and October 30 of each year, ~~commencing October~~which commenced on April 30, ~~2019, and is approximately $33 million per year.~~2020. The ~~2029~~2030 Notes may be redeemed prior to January 30, ~~2029~~2030 in whole or in part at any time, at the option of the Company, at a “make-whole” redemption price or at ~~par~~100% of the principal amount of the 2030 Notes thereafter. The unamortized discount and debt issuance costs are being amortized over the remaining term of the ~~2029~~2030 Notes.

In April 2020, the Company issued $1.25 billion in aggregate principal amount of 1.90% senior unsecured and unsubordinated notes maturing on January 28, 2031 (the “2031 Notes”). The net proceeds of the 2031 Notes are being used for general corporate purposes, which may include the future repayment of all or a portion of the $750 million 4.25% Notes due May 2021. Interest of approximately $24 million per year is payable semi-annually on January 28 and July 28 of each year, commencing on July 28, 2020. The 2031 Notes may be redeemed prior to October 28, 2030 in whole or in part at any time, at the option of the Company, at a “make-whole” redemption price or at 100% of the principal amount of the 2031 Notes thereafter. The unamortized discount and debt issuance costs are being amortized over the remaining term of the 2031 Notes.

Investment Commitments. At June 30, ~~2019,~~2020, the Company had ~~$605~~$656 million of various capital commitments to fund sponsored investment products, including consolidated ~~VIEs.~~sponsored investment products. These ~~funds~~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.

Carried Interest Clawback. As a general partner in certain investment products, including private equity partnerships and certain hedge funds, the Company may receive carried interest cash distributions from the partnerships in accordance with distribution provisions of the partnership agreements. The Company may, from time to time, be required to return all or a portion of such distributions to the limited partners in the event the limited partners do not achieve a return as specified in the various partnership agreements. Therefore, BlackRock records carried interest subject to such clawback provisions in ~~Total Investments,~~investments, or ~~cash/~~cash ~~of consolidated VIEs~~and cash equivalents to the extent that it is distributed, and as a deferred carried interest ~~liability/other liabilities of consolidated VIEs~~liability on its condensed consolidated statements of financial condition. Carried interest is recorded as performance fees on BlackRock’s condensed consolidated statements of income when ~~the~~ fees are no longer probable of significant reversal.

Indemnifications. On behalf of certain clients, the Company lends securities to highly rated banks and broker-dealers. In these securities lending transactions, the borrower is required to provide and maintain collateral at or above regulatory minimums. Securities on loan are marked to market daily to determine if the borrower is required to pledge additional collateral. BlackRock has ~~issued certain indemnifications~~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. AtThe amount of securities on loan as of June 30, ~~2019,~~2020 and subject to this type of indemnification was $234 billion. In the ~~Company indemnified certain of its clients for their securities~~Company’s capacity as lending ~~loan balances of approximately $205 billion. The Company held, as~~ agent, cash and securities totaling ~~$219~~$251 billion were held as collateral for indemnified securities on loan at June 30, ~~2019.~~2020. The fair value of these indemnifications was not material at June 30, ~~2019.~~2020.

While the collateral pledged by a borrower is intended to be sufficient to offset the borrower’s obligations to return securities borrowed and any other amounts owing to the lender under the relevant securities lending agreement, in the event of a borrower default, the Company can give no assurance that the collateral pledged by the borrower will be sufficient to fulfill such obligations. If the amount of such pledged collateral is not sufficient to fulfill such obligations to a client for whom the Company has provided indemnification, BlackRock would be responsible for the amount of the shortfall. These indemnifications cover only the collateral shortfall described above, and do not in any way guarantee, assume or otherwise insure the investment performance or return of any cash collateral vehicle into which securities lending cash collateral is invested.

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. Management considers the following critical accounting policies important to understanding the condensed consolidated financial statements. For a summary of these and additional accounting policies see Note 2, Significant Accounting Policies, in the notes to the condensed consolidated financial ~~statements, including information regarding the adoption of Accounting Standards Update 2016-02,~~ ~~Leases~~.statements. In addition, see Critical Accounting Policies in Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2, Significant Accounting Policies, in the ~~2018~~2019 Form 10-K for further information.

Consolidation. In the normal course of business, the Company is the manager of various types of sponsored investment vehicles. The Company performs an analysis for investment products to determine if the product is a VIE or a VRE. Assessing whether an entity is a VIE or a VRE involves judgment and analysis. Factors considered in this assessment include the entity’s legal organization, the entity’s capital structure and equity ownership, and any related party or de facto agent implications of the Company’s involvement with the entity. Investments 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. ~~See Note 6,~~ ~~Consolidated Voting Rights Entities, in the notes to the condensed consolidated financial statements for more information.~~ Investments that are determined to be VIEs are consolidated if the Company is the primary beneficiary (“PB”) of the entity. BlackRock is deemed to be the PB of a VIE if it has the power to direct the activities that most significantly impact the entities’ economic performance and has the obligation to absorb losses or the right to receive benefits that potentially could be significant to the VIE. The Company generally consolidates VIEs in which it holds an ~~equity ownership~~economic interest of 10% or greater and deconsolidates such VIEs once equity ownership falls below 10%. See Note 7,6, ~~Variable Interest Entities~~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, in the notes to the condensed consolidated financial statements for more information on fair value measurements.

~~Leases.~~ The Company determines if a contract is a lease or contains a lease at inception. The identification of whether a contract contains a lease requires judgment, including determining whether there are identified assets in the contract and whether the Company has control over such identified assets.

~~Fixed lease payments are included in ROU assets and lease liabilities on the condensed consolidated statement of financial condition.~~The Company recognizes ROU assets and lease liabilities based on the present value of the future lease payments over the lease term at the commencement date discounted using the Company’s incremental borrowing rate (“IBR”). Management judgment is required in determining a Company’s IBR, including assessing the Company’s credit rating using various financial metrics, including revenue, operating margin and revenue growth, and, as appropriate, performing market analysis of yields on publicly traded bonds (secured or unsecured) of comparable companies. See Note 2, ~~Significant Accounting Policies, in the notes to the condensed consolidated financial statements for more information on leases.~~

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. These performance fees are dependent upon exceeding specified relative or absolute investment return thresholds, which may 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 amount of AUM becomes known as of 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 judgement 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 fees are dependent on the market and thus are highly susceptible to factors outside the Company’s influence; (2) the fees have a large number and a broad range of possible amounts; and (3) the funds or separately managed accounts have the ability to invest or reinvest their sales proceeds.

The Company is allocated 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 ~~funds.~~products. Carried interest subject to such clawback provisions is recorded in ~~investments/~~investments ~~of consolidated VIEs~~ or ~~cash/~~cash ~~of consolidated VIEs~~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 June 30, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company had ~~$365~~$418 million and ~~$293~~$483 million, respectively, of deferred carried interest recorded in other ~~liabilities/other~~ liabilities ~~of consolidated VIEs~~ on the condensed consolidated statements of financial condition. A portion of the deferred carried interest may also be paid to certain employees. The ultimate timing of the recognition of performance fee revenue

and related compensation expense, if any, for these products is unknown. See Note 1516, Revenue, in the notes to the condensed consolidated financial statements for detailed changes in the deferred carried interest liability balance for the three and six months ended June 30, ~~2019~~2020 and ~~2018.~~2019.

For accounting pronouncements that the Company adopted during the six months ended June 30, ~~2019,~~2020, see Note 2, Significant Accounting Policies, in the notes to the condensed consolidated financial statements.

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 June 30, ~~2019,~~2020, 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 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 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 compensation plans or for regulatory purposes. Currently, the Company has a seed capital hedging program in which it enters into swaps to hedge market and interest rate exposure to certain investments. At June 30, ~~2019,~~2020, the Company had outstanding total return swaps with an aggregate notional value of approximately ~~$522~~$667 million. At June 30, ~~2019,~~2020, there were no outstanding interest rate swaps.

At June 30, ~~2019,~~2020, approximately ~~$2.9~~$3.4 billion of BlackRock’s ~~Total Investments~~investments were maintained in consolidated sponsored investment ~~funds~~products accounted for as ~~VREs~~VIEs and ~~VIEs.~~VREs. Excluding the impact of the Federal Reserve Bank stock, carried interest, investments made to hedge exposure to certain deferred compensation plans and certain investments that are hedged via the seed capital hedging program, the Company’s economic exposure to its investment portfolio is ~~$2,536 million.~~$2.6 billion. See ~~Balance Sheet Overview- Investments and Investments~~Statement of ~~Consolidated VIEs~~Financial Condition Overview-Investments in Management’s Discussion and Analysis of Financial Condition and Results of Operations for further information on the Company’s ~~Total Investments.~~investments.

Equity Market Price Risk. At June 30, ~~2019,~~2020, the Company’s net exposure to equity market price risk in its investment portfolio was approximately ~~$1,023~~$755 million of the Company’s total economic investment exposure. Investments subject to market price risk include 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 ~~$102~~$76 million in the carrying value of such investments.

Interest Rate/Credit Spread Risk. At June 30, ~~2019,~~2020, the Company was exposed to interest-rate risk and credit spread risk as a result of approximately ~~$1,513~~$1,875 million of ~~Total Investments~~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 ~~$44~~$36 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 ~~$733~~$827 million at June 30, ~~2019.~~2020. A 10% adverse change in the applicable foreign exchange rates would result in approximately a ~~$73~~$83 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 June 30, ~~2019,~~2020, the Company had outstanding forward foreign currency exchange contracts with an aggregate notional value of approximately ~~$2.1~~$2.6 billion.

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 June 30, ~~2019~~2020 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. In addition, there was no material impact to our internal control over financial reporting while most of our employees are working remotely due to the COVID-19 pandemic. The Company is continually monitoring and assessing the COVID-19 situation to determine any potential impact on the design and operating effectiveness of our internal control over financial reporting.

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 ~~inquiries.~~matters. 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.

On June 16, 2016,iShares Trust, BlackRock, Inc. and certain of its advisory subsidiaries, and the directors and certain officers of the iShares ETFs were named as defendants in a purported class action lawsuit filed in California state court. The lawsuit was filed by investors in certain iShares ETFs (the "ETFs"), and alleges the defendants violated the federal securities laws by failing to adequately disclose in prospectuses issued by the ETFs the risks to the ETFs’ shareholders in the event of a "flash crash." The plaintiffs seek unspecified monetary and rescission damages. The plaintiffs’ complaint was dismissed in December 2016 and on January 6, 2017, the plaintiffs filed an amended complaint. On April 27, 2017, the court partially granted the defendants’ motion for judgment on the pleadings, dismissing certain of the plaintiffs’ claims. On September 18, 2017, the court issued a decision dismissing the remainder of the lawsuit after a one-day bench trial. On December 1, 2017, the plaintiffs appealed the dismissal of their lawsuit ~~which is pending.~~and, on January 23, 2020, the California Court of Appeal affirmed the trial court’s dismissal. On May 27, 2020, the California Supreme Court denied plaintiffs’ petition for further review of the appeal. The defendants continue to believe the claims in this lawsuit are without merit.

On April 5, 2017, BlackRock, Inc., BlackRock Institutional Trust Company, N.A. (“BTC”), the BlackRock, Inc. Retirement Committee and various sub-committees, and a BlackRock employee were named as defendants in a purported class action lawsuit brought in the US District Court for the Northern District of California by a former employee on behalf of all participants and beneficiaries in the BlackRock employee 401(k) Plan (the “Plan”) from April 5, 2011 to the present. The lawsuit generally alleges that the defendants breached their duties towards Plan participants in violation of the Employee Retirement Income Security Act of 1974 by, among other things, offering investment options that were overly expensive, underperformed unaffiliated peer funds, focused disproportionately on active versus passive strategies, and were unduly concentrated in investment options managed by BlackRock. On October 18, 2017, the plaintiffs filed an Amended Complaint, which, among other things, added as defendants certain current and former members of the BlackRock Retirement and Investment Committees. The Amended Complaint also included a new purported class claim on behalf of investors in certain Collective Trust Funds (“CTFs”) managed by BTC. Specifically, the plaintiffs allege that BTC, as fiduciary to the CTFs, engaged in self-dealing by, most significantly, selecting itself as the securities lending agent on terms that the plaintiffs claim were excessive. The Amended Complaint also alleged that BlackRock took undue risks in its management of securities lending cash reinvestment vehicles during the financial crisis. On August 23, 2018, the court granted permission to the plaintiffs to file a Second Amended Complaint (“SAC”) which added as defendants the BlackRock, Inc. Management Development and Compensation Committee, the Plan’s independent investment consultant and the Plan’s Administrative Committee and

its members. On October 22, 2018, BlackRock filed a motion to dismiss the SAC, and on June 3, 2019, the plaintiffs filed a motion seeking to certify both the Plan and the CTF classes. ~~Both motions are pending.~~On September 3, 2019, the court granted BlackRock’s motion to dismiss part of the plaintiffs’ claim seeking to recover alleged losses in the securities lending vehicles but denied the motion to dismiss in all other respects. On February 11, 2020, the court denied the plaintiffs’ motion to certify the CTF class and granted their motion to certify the Plan class. On April 27, 2020, the Ninth Circuit denied plaintiffs’ request to immediately appeal the class certification ruling. The defendants believe the claims in this lawsuit are without merit.

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.

In addition to the risk factors previously disclosed in BlackRock’s Annual Report on Form 10-K for the year ended December 31, 2019, BlackRock’s business, financial condition or results of operations could be materially adversely affected by any of the following risks.

The COVID-19 pandemic has caused and is causing significant harm to the global economy and may adversely affect our business, including our operations and financial condition, and may cause our assets under management (“AUM”), revenue and earnings to decline. The COVID-19 pandemic continues to result in authorities implementing numerous measures attempting to contain the spread and impact of COVID-19, such as travel bans and restrictions, quarantines, shelter in place orders, and limitations on business activity, including closures. These measures may continue to, among other things, severely restrict global economic activity, which can disrupt supply chains, lower asset valuations, significantly increase unemployment and underemployment levels, decrease liquidity in markets for certain securities and cause significant volatility and disruption in the financial markets.

The extent to which COVID-19, and the related global economic crisis, affect our business, results of operations and financial condition, will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and any recovery period, future actions taken by governmental authorities, central banks and other third parties (including new financial regulation and other regulatory reform) in response to the pandemic, and the effects on our products, clients, vendors and employees. Moreover, the effects of the COVID-19 pandemic may heighten the other risks described in the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent report filed with the Securities and Exchange Commission.

During the three months ended June 30, ~~2019,~~2020, the Company made the following purchases of its common stock, which is registered pursuant to Section 12(b) of the Exchange Act.

~~On August 5, 2019, the Company adopted a carried interest retention incentive program. For further information, see Note 24,~~ ~~Subsequent Events, to the condensed consolidated financial statements included in Part I of this Form 10-Q.~~

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.

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

		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	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4239

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7572

Item 4.	Controls and Procedures	7673

Item 1.	Legal Proceedings	7774

Item 1A.	Risk Factors	76

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	79

~~Item 5.~~	~~Other Information~~	7977

Item 6.	Exhibits	8078


	~~Six Months Ended~~ ~~June 30, 2019~~
~~Lease term and discount rate:~~
~~Weighted-average remaining lease term~~		9	~~years~~
~~Weighted-average discount rate~~		3	%

(in millions)
Year	Amount
2019 (excluding the six months ended June 30, 2019)	$	32
2020		60
2021		58
2022		64
2023		70
Thereafter		384
Total	$	668

(in millions)	March 31, 2018		Realized and Unrealized Gains (Losses)		Purchases		Sales and Maturities			Issuances and other Settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3			June 30, 2018		Total Net Unrealized Gains (Losses) Included in Earnings⁽²⁾
Assets:
Investments:
Debt securities:
Available-for-sale securities⁽³⁾	$	26	$	—	$	—	$	—		$	—		$	—	$	(26	)	$	—
Trading		5		—		—		—			—			—		(5	)		—
Total investments		31		—		—		—			—			—		(31	)		—
Assets of consolidated VIEs - Private equity		116		—		—		(12	)		—			—		—			104
Total Level 3 assets	$	147	$	—	$	—	$	(12	)	$	—		$	—	$	(31	)	$	104	$	—
Liabilities:
Other liabilities⁽⁴⁾	$	242	$	3	$	—	$	—		$	(16	)	$	—	$	—		$	223	$	3

(in millions)	Three Months Ended June 30, 2019		Six Months Ended June 30, 2019
Lease cost:
Operating lease cost⁽¹⁾	$	34	$	68
Variable lease cost⁽²⁾		10		18
Total lease cost	$	44	$	86

(in millions)	Statement of Financial Condition Classification	June 30, 2019
Statement of Financial Condition information:
Operating lease ROU assets	Other assets	$	646
Operating lease liabilities	Other liabilities	$	754

(in millions)	Six Months Ended June 30, 2019
Supplemental cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	70

Supplemental noncash information:
ROU assets in exchange for operating lease liabilities in connection with the adoption of ASU 2016-02	$	661
ROU assets in exchange for operating lease liabilities	$	44

(in millions)
Maturity of operating lease liabilities at June 30, 2019	Amount⁽¹⁾
Remainder of 2019	$	72
2020		143
2021		135
2022		123
2023		73
Thereafter		312
Total lease payments	$	858
Less: imputed interest		104
Present value of lease liabilities	$	754

(in millions)	Indefinite-lived		Finite-lived			Total
December 31, 2018	$	17,578	$	261		$	17,839
Amortization expense		—		(40	)		(40	)
Acquisition⁽¹⁾		—		678			678
June 30, 2019	$	17,578	$	899		$	18,477

	Statement of
	Financial Condition	June 30,		December 31,
(in millions)	Classification	2020		2019
Statement of Financial Condition information:
Operating lease right-of-use ("ROU") assets	Other assets	$	663	$	669
Operating lease liabilities	Other liabilities	$	774	$	776

	Remainder of
(in millions)	2020			2021		2022		2023	Thereafter		Total
Investment advisory and administration fees:
Alternatives⁽¹⁾⁽²⁾	$	63	$	114	$	98	$	84	$	55	$	414

Outstanding at	Performance- Based RSUs			Weighted- Average Grant Date Fair Value
December 31, 2018		845,285		$	386.13
Granted		283,014		$	410.32
Additional shares granted due to attainment of performance measures		2,117		$	296.57
Converted		(360,927	)	$	296.57
Forfeited		(11,024	)	$	456.66
June 30, 2019		758,465		$	436.50

Outstanding at	Shares Under Option			Weighted Average Exercise Price
December 31, 2019		1,941,145		$	513.50
Forfeited		(25,353	)	$	513.50
June 30, 2020		1,915,792		$	513.50

	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
April 1, 2019 through April 30, 2019		2,631	$	427.38		—		6,077,434
May 1, 2019 through May 31, 2019		6,095	$	478.99		—		6,077,434
June 1, 2019 through June 30, 2019		8,486	$	426.59		—		6,077,434
Total		17,212	$	445.27		—

Exhibit No.		Description

~~10.1~~10.1(1)		Stock Repurchase Agreement, dated May 11, 2020, between BlackRock, Inc. ~~Leadership Retention Carry Plan. +~~

~~10.2~~		~~Form of Percentage Points Award Agreement pursuant to the BlackRock,~~and PNC Bancorp, Inc. ~~Leadership Retention Carry Plan. +~~

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)

	BLACKROCK, INC.
	(Registrant)

	By:	/s/ Gary S. Shedlin
Date: August ~~8, 2019~~7, 2020		Gary S. Shedlin
		Senior Managing Director & Chief Financial Officer