Annual Report 2010

Business Highlights

  • BlackRock's financial results were strong in 2010, capturing early benefits of the BGI Transaction.* Revenue increased 83% to $8.6 billion, earnings per share, as adjusted,* rose 53% to $10.94.
  • Financial discipline enabled us to double adjusted operating income* to $3.2 billion and increase adjusted operating margin* by more than 2 percentage points to 39%.
  • Net new business in long-term products was $131.2 billion,* helping to fuel an increase in assets under management ("AUM") to $3.561 trillion at year-end.
  • Investment performance remained competitive with 70% of our active AUM outperforming their benchmarks or peer medians and over 97% of our index AUM achieving tracking errors within established tolerances.*
  • At year-end 2010, BlackRock served institutional, retail and high net worth investors in more than 100 countries. AUM managed for clients located outside of the U.S. totaled 44%, and 41% of our employees were based outside the U.S. We expect these figures to approach 50% over the coming years.
  • At year-end 2010, products invested primarily in long-term assets represented 88% of total AUM or $3.131 trillion, of which 54% were equity mandates, 36% fixed income accounts, 6% multi-asset class portfolios and 4% alternative investments. The remaining AUM was in cash management products and advisory mandates.
  • The BGI Transaction included an at-scale index business that materially changed BlackRock's AUM mix. Index AUM, including institutional and iShares® products, increased from 4% of AUM at year-end 2008 (prior to the BGI Transaction) to 54% of AUM at December 31, 2010.
  • Equity and fixed income AUM include a wide range of active and passive strategies. In total, equity AUM increased $158.4 billion or 10% to $1.694 trillion at year-end 2010. Fixed income AUM ended 2010 at $1.41 trillion, up $85.7 billion or 8% relative to December 31, 2009.
  • Institutional AUM is well diversified by product and region — we serve institutional investors on six continents, with 55% of AUM managed on behalf of investors in the Americas, 32% in Europe, the Middle East and Africa ("EMEA") and 13% in Asia-Pacific.
  • At December 31, 2010, assets managed for retail and high net worth investors totaled
    $414.7 billion, up 8%, or $31.3 billion, versus year-end 2009.
  • During 2010, we launched BlackRock Alternative Investors ("BAI") to coordinate our alternative investment efforts, including product management, business development and client service. At year-end, we managed $109.7 billion of AUM in hedge funds, funds of funds, real estate, commodities and currencies.
  • iShares is the leading exchange traded fund ("ETF") provider in the world, with $590.2 billion of AUM at December 31, 2010, an increase of $96.0 billion or 19% since year-end 2009. We were the top asset gatherer globally in 2010, with $44.0 billion of net inflows complemented by $52.0 billion of market appreciation. We also introduced 78 new exchange traded products during the year, maintaining our dual commitment to innovation and responsible product structuring.
  • Demand for BlackRock Solutions® continued to be robust — adding 62 net new assignments and increasing Aladdin® revenue 14% year over year largely as a result of continued strong demand for risk management services. We ended the year with over $10 trillion of positions processed on our system for nearly 150 clients.

* Important Notes

On December 1, 2009, BlackRock acquired from Barclays Bank PLC all of the outstanding equity interests of subsidiaries of Barclays conducting the business of Barclays Global Investors ("BGI") ("the BGI Transaction").

Diluted earnings per share, operating income and net income are presented on an adjusted basis. See page 43 of the BlackRock 2010 Annual Report for GAAP reconciliation.

2010 adjusted operating margin as compared to the 2009 pro forma adjusted operating margin related to the BGI Transaction.

Unless stated otherwise, net new business figures are before giving effect to merger related outflows resulting from manager concentration considerations and scientific active equity performance totaling $121.0 billion, or 7%, of the $1.8 trillion of AUM acquired in the BGI Transaction — well within overall tolerances in BlackRock's valuation model.

Past performance is not indicative of future results. The performance information for actively managed accounts reflects U.S. open-end and closed-end mutual funds and similar EMEA-based products with respect to peer median comparisons, and actively managed institutional and high net worth separate accounts and funds located globally with respect to benchmark comparisons, as determined using objectively based internal parameters, using the most current verified information available as of December 31, 2010. Accounts terminated prior to December 31, 2010 are not included. If such terminated and other accounts had been included, the performance information may have substantially differed from that shown. The performance information does not include funds or accounts that are not measured against a benchmark, private equity products, CDOs, or accounts managed by BlackRock's Financial Markets Advisory Group. Comparisons are based on gross-of-fee performance for U.S. retail, institutional and high net worth separate accounts and EMEA institutional separate accounts and net of fee performance for EMEA based retail products. The performance tracking information for institutional index accounts is based on gross-of-fee performance as of December 31, 2010, and includes all institutional accounts globally using an index strategy. AUM information is based on AUM for each account or fund in the asset class shown without adjustment for overlapping management of the same account or fund, as of December 31, 2010. Source of performance information and peer medians is BlackRock, Inc. and is based in part on data from Lipper Inc. for U.S. funds and Morningstar, Inc. for non-U.S. funds. Fund performance reflects the reinvestment of dividends and distributions, but does not reflect sales charges.

These opinions, expressed through page 40 of the 2010 BlackRock Annual Report, are those of BlackRock, Inc. as of April 2011 and are subject to change.

This is an interactive electronic version of the BlackRock 2010 Annual Report to Shareholders. The contents of this version are qualified in their entirety by reference to the printed version. A reproduction of the printed version is available in PDF in the "Investor Relations" section on this Web site.