Blackrock, Inc. · NYSE:BLK
Blackrock — New BlackRock — Lehman Brothers Financial Services Conference 2006
22 slides from Blackrock's conference presentation, Sep 13, 2006
Slide 1: Lehman Brothers Financial Services Conference
Laurence D. Fink Chairman & CEO Lehman Brothers Financial Services Conference September 12, 2006
Slide 2: Forward-Looking Statement
Forward-Looking Statement This presentation, and other statements that BlackRock may make, including statements about the benefits of the transaction with Merrill Lynch, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRo
Slide 3: BlackRock Update
BlackRock Update Second quarter results reported July 18, 2006 Institutional investor quandary slowed bond flows industry-wide “Penalty box” further slowed BlackRock new business Remain comfortable with 2007 guidance given in release 2 * Included in the GAAP diluted earnings per share range is expec
Slide 4: Merger Update: Costs and Synergies
Merger Update One-time merger-related costs and net synergies on target Likely to come in under original estimate of $200 million one-time costs Still expect fully phased in net synergies of $140 million, with approximately half realized in 2007 Closing now expected to occur on or prior to 3rd quart
Slide 5: Merger Update: Integration Progress
Merger Update Tremendous progress preparing for integration Post-close investment and client teams determined and communicated to clients Global internal and external branding ready for launch Aladdin ® implementation: fixed income running in parallel; US equity expected by year-end and all other by
Slide 6: "New" BlackRock
“New” BlackRock 5
Slide 7: A More Powerful Product Platform
$1.046 trillion 6/30/06 A More Powerful Product Platform Broad product capabilities across asset classes Extensive separate account and fund offerings worldwide Competitive investment performance (85 funds with Overall Morningstar Ratings of 4 or 5 stars*) * The ratings are based on historical risk-
Slide 8: BlackRock Solutions: A Key Differentiator
$ in millions BlackRock Solutions: A Key Differentiator Vital role in establishing a unified platform for “new” BlackRock Surpassed 100 third party client assignments Transformational prospects in the pipeline * Includes BlackRock Solutions and Investment Accounting revenue 7 BRS Revenue* BRS Ongoin
Slide 9: A Substantially Greater Global Presence
A Substantially Greater Global Presence Clients in over 50 countries Over one-third of employees based outside the US Investment centers in the US, UK, Japan and Australia $1.046 trillion 6/30/06 8 Pro Forma Combined AUM by Client Geography
Slide 10: Scale & Talent: Vital for the Future
Scale & Talent: Vital for the Future Delivering exceptional products and services Helping clients solve problems Capitalizing on the changing landscape Globalization Eventual reversal of “dollarization” Twin retirement challenges: population aging & shifting the burden Significant investment challen
Slide 11: Globalization: The Defining Trend of Our Times
Globalization: The Defining Trend of Our Times Discussion often focuses on the flattening of the world Technology minimizes time zone differences and physical distance Technology facilitates having a global workforce BUT…the technology and infrastructure are very expensive 10
Slide 12: Globalization: A Capital Markets Perspective
$ in trillions Globalization: A Capital Markets Perspective Explosive growth in the capital markets, particularly outside the US Requires broad credit and equity research, extensive risk management capabilities and robust global technology € in billions Sources: McKinsey Global Institute; Lehman Eur
Slide 13: Globalization: Greater Interdependencies
Globalization: Greater Interdependencies Fundamental implications for markets and policies International reliance on the US consumer US reliance on foreign buyers of US bonds US $805b Oil Exporters $328b Japan Euro $153b $24b Rest of World* $92b China Emg Asia $140b $68b * Rest of world includes sta
Slide 14: "Dollarization" Will End Eventually
* Sources: Bloomberg – National Bureau of Statistics, China; Lehman Brothers U.S. High Yield Index, JP Morgan Emerging Market Bond Index “Dollarization” Will End Eventually Driven by current accounts, foreign exchange policies and oil prices The effect on US rates and credit spreads could be devasta
Slide 15: Twin Retirement Challenges
* Ratio of number of people over age 65 to number of people age 15 - 64 Source: United Nations Population Division, World Population Prospects, 2004 Twin Retirement Challenges Population aging in developed nations and China Shifting of the financial burden from employers to employees How will indivi
Slide 16: At the Same Time…
Persistent low rates are problematic Investors worldwide looking for higher returns Insurance companies and banks reaching for yield Pension fund immunization prohibitively expensive (thus, US pension reform expected to have little immediate impact) Array of “new” approaches Explosive growth of alte
Slide 17: Today's Search for Alpha & Yield
* Institutions includes corporations, foundations, endowments, pension funds and fund of funds Source: Hennessee Group LLC, IFSL estimates Today’s Search for Alpha & Yield… Could be the basis for the next major shock to the market Having the tools to understand and manage risk is essential $ in bill
Slide 18: Old Models Won't Work
Old Models Won’t Work Globalization requires new organizational paradigms and processes Our business model was evolving, and the merger forces us to adapt more quickly There are no precise formulas to follow We will need to find the right regional/functional balance over time We will need to develop
Slide 19: In Summary, the Merger Remains on Track
In Summary, the Merger Remains on Track Costs are as expected or lower Synergies are on target Client attrition is minimal Hitting milestones on integration plan Although early, cultural integration is off to a good start The working relationships with Merrill Lynch and PNC are strong Important to u
Slide 20: Strong Potential to Create Shareholder Value
Strong Potential to Create Shareholder Value We have the opportunity to truly differentiate BlackRock We will have multiple engines for future growth Bonds and equities Relative and absolute value Institutional and retail BlackRock Solutions Much more global We will have the scale and talent to buil
Slide 21: NYSE:BLK 20
NYSE:BLK 20
Slide 22: Morningstar Disclosure
MORNINGSTAR DISCLOSURE Source of data on page 6: Morningstar, Inc. Past performance is no guarantee of future results. For each fund with at least a 3-year history, Morningstar calculates a Morningstar Rating TM based on a Morningstar Risk- Adjusted Return measure that accounts for variation in a fu
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