Good morning. My name is Jennifer, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the BlackRock Incorporated First Quarter 2016 Earnings Teleconference. Our hosts for today’s call will be Chairman and Chief Executive Officer, Laurence D. Fink, Chief Financial Officer, Gary S. Shedlin, President, Robert S. Kapito and General Counsel, Christopher J. Meade. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer period. [Operator Instructions] Thank you. Mr. Meade, you may begin your conference.

Thank you. Good morning, everyone. I’m Chris Meade, the General Counsel of BlackRock. Before we begin, I’d like to remind you that during the course of this call, we may make a number of forward-looking statements. We call your attention to the fact that BlackRock’s actual results, may of course differ from these statements. As you know, BlackRock has filed reports with the SEC, which lists some of the factors that may cause the results of BlackRock to differ materially from what we see today. BlackRock assumes no duty and does not undertake to update any forward-looking statements. So, with that, let’s begin.

Thanks, Chris and good morning everyone. It’s my pleasure to present results for the first quarter of 2016. Before I turn it over to Larry to offer his comments, I’ll review our quarterly financial performance and business results. As usual, I will be focusing primarily on as adjusted results. In the context of continued market challenges over the last 12 months including global equity markets down high single-digits, emerging markets and natural resources each down over 20%, and a continuation of a low and in many cases negative rate environment. The differentiation in strength of BlackRock’s broad global investment platform enabled us to deliver another quarter of positive organic asset growth. While, we are not immune to market headwinds, consistent organic growth and prudent expensed business allowed us to deliver relatively stable base fees and increase margins from a year ago and continue to consistently return capital to shareholders. Our first quarter results highlights the value of the investments we’ve made to assemble the industry’s broadest offering of an active and indexed investment products, and to deliver differentiated customized investment solutions of our clients. The diversity of our platform positions us to serve our clients’ needs in a variety of market environments, helping to drive consistent and differentiated organic growth. As we stated last quarter, we remain committed to investing in a number of strategic initiatives that will further enhance our client value proposition and generate long-term value for shareholders. Doing so requires us to be smarter at reallocating resources in challenging markets. With that in mind this quarter we undertook restructuring to streamline and simplify the organization. For the goal of efficiently optimizing growth, it will also create new opportunities for our strongest people. This resulted in a restructuring charge of $76 million during the quarter, primarily comprised of…

Thank you, Gary. Good morning everyone and thank you for joining the call. Our first quarter results demonstrates that BlackRock continues to earn our clients’ trust in an uncertain market environments, as we manage risk and deliver investment solutions to achieve our clients’ long-term investment goals. Economic, social and geopolitical instability drove dramatic market swing in the first quarter. Here is a global recession and the risk of Chinese currency devaluation drove stocks lower to start the year. Investors continue to struggle to digest lower energy prices, negative rate spreads in Europe and Japan, and uncertainty grew from political development country including the United States, Germany, Spain, Brazil and the pending vote in the UK on whether to lead the European Union. Cushing global markets down more than double-digit percentages in the opening weeks of the year. In February stabilizing commodity prices a more dovish commentary from the Federal Reserve helps spark a risk on rotation. Despite continued policy uncertainties and questions surrounding global growth. As Gary mentioned, given the fact that we earned fees on average AUM, we did not realize much of the financial benefit of the market upswing in the first quarter, while we’re positioned to benefit from the tailwinds going into the second quarter. It is especially in times like this marked by volatility and investor uncertainty that more clients are looking to BlackRock for their investment guidance. Our goal is not to just sell them individual products, but rather to understand the client’s objectives, their needs and to fashion a cohesive solution that helps achieve those goals. While many firms claim to do the same, no other asset manager draws on the same breadth of active index and alternative strategies. Investment styles across asset classes and regions, risk management and technology and focus on long-term…

[Operator Instruction] Your first question comes from Dan Fannon with Jefferies.

I guess Larry, you could expand on your DOL comments and maybe discuss in more detail what some of the changes or/and preferences that your distribution partners as you highlighted might be undertaking and maybe just kind of characterize how well prepared you think the industry is for these changes coming forth?

Well let's start up with the contacts for a second. Well probably most importantly BlackRock has supported the changes to the financial ecosystem, if we can enhance confidence with investors, I believe through that mechanism is going to increase and promote more investing, less savings in their bank accounts. So the more investing and the more money clients are putting to work with greater confidence and then it's a benefit actually for the entire industry. And I think that’s one of the big points that haven't been part of a dialog and I think that’s a really important point. We need to have more investor confidence, I think one of the great problems we have with longevity, we in human agent process and importantly with the inability of so many people investing what I would call properly too much cash by their over emphasis in bonds. If they believe the DOL rules will give them better transparency, better certainty that we are treated like, and they invest more money for the long run. It's better for the country, it's better for their financial future and it's really very good for the entire industry. And I think that message is totally lost in the conversation. Directly to the issue around how this is going to play out, first of all, it's a very lengthy rule, it's going to take a quite some time for everyone to determine, how it meets their business model. But I would say to position BlackRock given the breath of our product platform in both active and index and the investments we made in technology and I really want to underscore technology and risk management. We are having really deep conversations with more of our distribution partners and helping them work on solutions for them and their clients. It's still too early to determine the outcome for the DOL rule more broadly, but I think we are as better positioned than any organization. I do believe it's going to require much greater compliance and risk management so it is very powerful for Aladdin platform. We believe it can be very powerful for our entire BlackRock solutions product suite, including FutureAdvisor and I think if it means more business than in passive we will be benefited, if it means more business in active we’re going to be benefiting too, so I will just leave it at that and I actually have a happy general council with that answer. Sorry Chris.

Your next question comes from Ken Worthington with JPMorgan.

So BlackRock has been in the press with the lay-offs indicated and also some of the hiring that you’re pursuing and you mentioned in the prepared remarks asset or resource allocation changes. From a higher level perspective can you give us the sense of may be what’s getting less and what’s getting more in terms of resources. And in particular I’m interested in the resource increases you’re making to technology, what I think you highlighted in your letter to shareholders. So both as it relates to the how Aladdin is going to evolve, as well as how you’re thinking about expanding other technology related services to clients?

Yes let my allow Gary to answer that and then I’ll give a little color after that.

Great, Ken thanks so much, so Ken I think as you started out as we stated last quarter, we’re really, we are maintaining our commitment to investing in a variety of strategic initiatives that will further enhance our client value proposition and generate long-term value for shareholders. And obviously we’re all mindful that in challenging markets as Larry and I both have said that we need to make tougher and smarter decisions especially when it comes to reallocating those invest dollars. And one thing I want to make very clear is this restruction was not about cost cutting, it was about streamlining and simplifying the organization so that we can use those savings to reinvest more efficiently in those strategic growth areas, and as mentioned also to create new stretch opportunities for our strongest people. It’s important to understand that we’re really not deemphasizing any particular business, rather I would say we’re looking to ensure that the foundation of our businesses are really running it as efficiently as possible so we can take those reallocated resources and maximize our investment in the higher growth areas that you mentioned. I say there are probably four or five of those and I will let Larry and Rob in particular to chime in and many of those have been mentioned in some of the remarks today. Illiquid alternatives in particular the real asset platform which includes our infrastructure business factor based Larry mentioned over $125 billion there across smart beta and enhanced factor products. A sustainable investing where we have $200 billion across exclusionary screens, ESG factors and impact of that. Obviously continuing to invest in our iShares business which we believe continues to have significant runway in growth from both new users and importantly fixed income which Larry also mentioned in this comments. And then you mentioned technology as well and I think before that Larry comment the issue there on technology is it really impacts everything we do across the organization, it impacts how we invest in particular big data and alike scheme learning, language and alike that Larry mentioned which is importantly critically important for improvements in our active platform, as well as technology to enhance serving our clients whether it be to allow them for wealth FutureAdvisor and the others. So I think those are a number of the areas that we’re really looking to make sure that we’re continuing to see because we think there is incremental and differentiated growth available to us.

I would just add one more point because I think Gary said it pretty clearly probably said it better than I could, that is can’t underscore enough how the ecosystem is changing, that’s going to require more of capital market participants of your insurance company or asset managers, they are going to -- the need for better risk management technology is slowly increasing. The need for better interfacing with clients is only going to be more and more important. And I do believe we have great solutions at BlackRock to help and assist these organizations in terms for them to raise their bar to be a stronger fiduciary towards our clients. And so we believe our Aladdin system, our FutureAdvisor product are going to be, we’ll see even more accelerated growth, if we can handle the growth, but importantly also as we are -- we believe there is a great need to develop better information flows for better investment insights and so these are the areas where we are really emphasizing, where we are growing alongside the areas that Gary discussed.

Your next question comes from Bill Katz with Citigroup.

You mentioned twice now of the focus on smart beta, can you just elaborate a little bit more on that, may be take us down level in terms of product geography and even pricing and then just anecdotally we have been hearing that some distributors have been anticipating invoking a rev share for ETFs so we are wondering if could comment on what you might be seeing there as well?

Sure, I am going to let Rob talk about it.

Well when there are you know when we have this type volatility people are looking to add alpha in other ways. And the smart beta category is one of these ways. We have made some very substantial hires in this area. We have hired the person that wrote the book in this area and this is Dr. Andrew Ang and he is the Head of our factor based strategies group and he is going to help us to grow our presence in this group and he has already had significant experience with some of our largest clients in the portfolio construction using a very established model based investment skill. And when we combine what he has done with the analytical power that we have with Aladdin, we think that we’re able to offer some of the best solutions to our clients. So this is a way of breaking down the performance within an active category to areas that can provide that additional performance. Now we currently managed about 125 billion in these factor based strategies and within that about 150 billion is smart beta. So we think this is going to grow BlackRock’s iShares, smart beta ETFs are leading the industry now with about 8.5 billion of net inflows in the first quarter, including about 7 billion into the iShares minimum volatility strategies. So these are in asset strategies that take advantage of various sectors and factors in the marketplace and additional value. So we’re adding a lot of people in this category, adding a lot of technology. And we think that it’s going to be a very good way a successful way for our active managers to add additional alpha.

Bill to add one more point, you asked about geography. We’ve had dialogues in probably every region in the world. The demand for information of connectivity and health related to this is beyond our imagination. It’s from Asia to all throughout Europe, Middle East and all throughout the Americas. It is so much on the minds with our investors as a way of rethinking how they invest. I think this will become a larger component of the landscape of investing and investors are going to utilize us with separate accounts, they are going to utilize these types of products through ETFs. But the application and understanding the analysis is really shocking how much people are interested studying this and hopefully the enormity of our meetings is going to translate into future flows.

Your next question comes from Michael Cyprys with Morgan Stanley.

Could you talk a little bit about how you see negative rates around the world impacting asset allocations and also touch upon how you’re managing your bond funds and vehicles for negative rates and the opportunity set for BlackRock here in particular on the multi-asset front?

Well I did write quite a bit about it this week in my annual letter which is getting beyond what I thought sort of in terms of commentary by any publications worldwide. Well negative rates, if you think about 70% of our clients more, our pension funds, I was some form of retirement and insurance companies. We hear worldwide how negative interest rates or low interest rates have been impactful in how they are actually harming their objectives of attaining an asset base to meet their liability needs. In fact last week, we were with one of the largest New York State funds, a U.S. State funds, not in New York State funds, one of the largest U.S. State funds it happened to be in New York City after our meeting we had and they were in the top deciles of performance last year and because of lower negative interest rates and their discounting rate, they actually deteriorated their asset and liability gap. We’re hearing this worldwide, we’re hearing from savers worldwide they’re not going to meet the needs of building their pool of savings to meet the needs of retirement. We’re hearing some insurance companies that they’re going to have a really hard time meeting their liabilities. And so as they are looking for more advice, importantly what we saw especially in the first six weeks of the year when you had major selling pressure in many components of the world. We saw huge insurance company interest in buying we saw widening of spreads, we talk about infrastructure if we could find large opportunities for infrastructure globally we have the demand, so clients are looking for more opportunities, they are looking to invest in different types of products. I believe our platform is giving us more connectivity with our clients. And I do believe this by shareholder, Larry stated, I believe a lower negative interest rates has served a great purpose in the short run. But I don’t believe lower negative interest rate was supposed to be a permitted feature of the investment landscape. We are now entering the eighth year, and I believe that we are going to have a stronger more robust economy and the IMS has lowered their forecast even more, all right. I think the fifth time in a row we are going to need a policy of responses by governments. And I think the dependency on Central Bank behavior is one of the problems that we have in the world and we need policy of response by governments related to fiscal policy.

Your next question comes from Brennan Hawken with UBS.

So just wanted to touch base quickly on, how much momentum you guys are seeing in some of the structural changes that you all have spoken in the past about as far as bond ETFs and allowing owners to treat them not just as equity but rather as fixed income? Are you guys seeing any momentum there, are you getting in-roads not only from the customer base but potential regulatory getting over potential regulatory hurdles, what's the outlook there?

So this is probably the largest growth area that we are experiencing right now and what we expect to experience going forward. I think it's actually quite incredible the amount of cash that’s sitting in banks today, earning zero and that money has typically vanished from the fixed income market. And in order to have access to fixed income, our clients are using more and more ETFs because of all the features that they see which is the liquidity, the low cost, the tax efficiency and it's just easier access and this is where the money is going to flow first, and most people have more their money in fixed income than they do in equities anyway. So this has been the growth in the first quarter, we are set by having a wide variety of types of fixed income ETFs that they can invest in and we do see a lot more secondary trading that is going on in these. But we are seeing investment grade and high yield profit bond ETF assets under management grow from about 5 billion to 165 billion and that’s from 2007 through 2015. And this is going to be a very strategic growth area for us and as Larry cited in his opening, we saw a record 27 billion of net inflows into the fixed income ETFs in the first quarter. So this is really, I think the big growth area. We have a very long-term history at BlackRock in fixed income, and we are using that historical background in the technology that we build to even enhance our reputation more in this business.

I would just like to add one more thing. As ecosystem of bonds and secondary bonds and liquidity continues to be changing and we are seeing phase of more illiquidity. The utilization of ETFs has a mechanism to find liquidity and to have the ability to navigate the factors that impact valuations of fixed income whether that’s duration or in subsidy or credit, a navigation with the utilization of ETFs is going to -- it enhances the opportunities for returns and so we believe as I said in my prepared remark, the utilization, the implementation of fixed income as a fixed income ETFs as a component of the fixed income strategy that clients are employing are going to be larger and larger in the coming years.

Your next question is from Craig Siegenthaler with Credit Suisse.

So just on the back of the BRS FutureAdvisor win this week, I am just wondering if you can help us to think about the underlying economics for the business-to-business global advisor platform, and then also think about what type of products they will be using in this platform?

I will let Gary answer that then I will spin a color for it later.

So there is a variety of different drivers of momentum behind this, Craig. We talked about technology is having increasingly a significant impact on the retail space. And obviously we are enhancing our technology for our retail clients. FutureAdvisor is just one, where we are foreseeing the digital, this type of a digital end, but we are also using and leveraging Aladdin to bring portfolio construction, and risk analytics tools to financial advisors as well as private bankers and we are doing that with a number of different areas of growth whether it be Aladdin portfolio or to the portfolio of construction services or Aladdin for wealth accordingly. And we are streamlining our sales process used with technology and to enhance yielding greater efficiency and effectiveness through doing that. FutureAdvisor in particular which as you know operates within BlackRock solutions allows us to strengthen relationships with our distribution partners by offering their clients high quality technology enabled device. And most importantly backed by BlackRock’s broad investment platform or Aladdin risk analytics, our proprietary retirement technology and obviously our longstanding experience as enterprise technology partners to other financial institutions, I think that is probably the key differentiating factor for us at the moment because what we are noticing whether it’s the commercial arrangement announced this week or some others that frankly we have signed but haven’t publically announced. This looks like a very long-term and complicated implementation that frankly is exactly what we have been doing with Aladdin over the last couple of decades. And so while there are certain competitors I think we are trying to mimic or follow or in many cases replicate the type of strategies that we are doing here. The real difference is that we have been involved in client implementation very complex client implementations for…

Your last question comes from Brian Bedell with Deutsche Bank.

Larry just may be if you can drew in on the define contribution business, you have I think about a 9% plus market share of that in organic growth which is very strong for you, and last year it was a 6% pace, maybe if you can elaborate on whether you think the Department of Labor rules longer term will accelerate the shift to DCIO and how do you think behaviors which means among planned sponsors and how you are positioning in the second half?

Well, the first of all, we are just interpreting what the DOL have said related to DC and I am going to let Rob answer it. But more importantly it looks to us that you are not going to see rollovers as fast, and people are going to stay within their define contribution plan longer. So, this is an initial view, we are studying this more and more but obviously as you suggested DC is a very important component where we are and we believe we are well positioned, I am going to let Rob discuss.

Yes, I think Larry said it there, I thing that the big issue with DC and you know that with a number one DCO by an industry of about 639 billion of assets under management. And what we are seeing is the increasing need for open architecture. So we are seeing the increasing need for indexed target date and also high performing active strategies and these are really trends that are driving the market share changes in the DC space. And that’s why we have been building that infrastructure to try to meet that. And now once we get a better view of the changes on how does the DOL and in terms of these I think their ability to place into that infrastructure is very, very well, but how soon the movement of assets takes place is something that we are still trying to figure out and thus you know.

So let me thank all of you for joining us this morning and for your continued interest in BlackRock. I think our first quarter results once again highlights the investments we made to enhance and differentiate BlackRock’s diverse global platform. We’re continuing to take a long-term view. We’re trying to stay ahead of our clients’ needs. We’re trying to stay ahead of our competition. We’re trying to navigate these near-term developments in the financial economic landscape, but we’re doing this on behalf of our clients to making sure that we are providing them with a service that they require from us, a more volatile world it plays to our advantage that clients are looking for BlackRock by providing more information, by helping them navigate the complexity that we’re living in a world of a low and negative interest rates. And we’re trying to help them navigate the balance between investing in more illiquid products to achieve the yields and the returns that they need and the balance of how to build a better financial future for all our clients. I think we have done that in the first quarter and we’re doing that again in the second quarter. Look forward to seeing and hearing from all of you at the end of the second quarter. Have a good April-May-June.

Thank you for your participation. This does conclude today’s conference call. You may now disconnect.