# BLACKROCK INVESTMENTS, LLC X-17A-5 (2020-02-28) — Broker-dealer annual report - Company: BLACKROCK INVESTMENTS, LLC - Form: X-17A-5 - Filed: 2020-02-28 - Period: 2019-12-31 - Accession: 0000948037-20-000001 - CIK: 948037 - File #: 8-48436 - Material weakness: No - Auditor: Deloitte & Touche LLP - Auditor location: New York, NY - Contact: Lauren Bradley - Phone: 646-231-1332 - Signed by: Lauren Bradley (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/948037/000094803720000001/BRIL2019STMTFINCONDNOTES.pdf --- {0}------------------------------------------------ ## **BLACKROCK INVESTMENTS, LLC** # **STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2019 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** {1}------------------------------------------------ #### **Contents** | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------|---| | Statement of Financial Condition | 2 | | Notes to Statement of Financial Condition | 3 | {2}------------------------------------------------ {3}------------------------------------------------ # BlackRock Investments, LLC Statement of Financial Condition December 31, 2019 (Dollar amounts in thousands) | Assets | | |------------------------------------------|---------------| | Cash and cash equivalents | \$
49,966 | | Due from related parties | 41,669 | | Deferred sales commissions, net | 5,577 | | Other assets | 4,167 | | Total assets | \$
101,379 | | | | | Liabilities | | | Due to broker-dealers | \$
35,049 | | Due to related parties | 729 | | Accounts payable and accrued liabilities | 1,028 | | Total liabilities | 36,806 | | | | | Member's equity | 64,573 | | Total liabilities and member's equity | \$
101,379 | | | | See accompanying notes to statement of financial condition. {4}------------------------------------------------ ### **1. Organization** BlackRock Investments, LLC (the "Company"), a Delaware limited liability company, is a wholly owned subsidiary of BlackRock Financial Management, Inc., which is an indirect, wholly owned subsidiary of BlackRock, Inc. (together, with its subsidiaries "BLK"). The Company is a registered broker-dealer under the Securities Exchange Act of 1934 (the "Act") and is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. The Company is the distributor or placement agent of various BLK-sponsored mutual funds, *iShares*® exchange-traded funds, other BLK-sponsored privately placed funds, and certain municipal securities (collectively, the "Funds"). #### **2. Significant Accounting Policies** #### **Basis of Presentation** The statement of financial condition has been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The preparation of the statement of financial condition 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 statement of financial condition. Actual results could differ from those estimates. ### **Cash and Cash Equivalents** Cash and cash equivalents consist of cash and an investment in a money market fund. Cash and cash equivalents are carried at either cost or amortized cost, which approximates fair value due to their short-term maturities. #### **Fair Value Measurements** 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. {5}------------------------------------------------ Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories: - Level 1 Inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date. - Level 2 Inputs: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and inputs other than quoted prices that are observable, such as models or other valuation methodologies. - Level 3 Inputs: Unobservable inputs for the valuation of the asset or liability, which may include nonbinding broker quotes. The Company's financial assets measured at fair value consist of an investment in a third-party money market fund, which is included in cash and cash equivalents on the statement of financial condition and had a fair value of \$31.3 million as of December 31, 2019. At December 31, 2019 and during the year then ended, the Company's investment in the third-party money market fund was classified as Level 1. The carrying value of the money market fund approximates its fair value, which was based on a quoted market price. ### **Deferred Sales Commissions** The Company pays selling broker-dealers an up-front sales commission upon the selling brokerdealer delivering an investment into the Funds. For certain share classes, this sales commission is initially recorded by the Company as a deferred sales commission ("DSC") asset representing the Company's right to future distribution and service fees. ### **Income Taxes** The Company is a disregarded entity for U.S. tax purposes and generally is not subject to income taxes. BLK is individually liable for income taxes, if any, on the Company's net taxable income. Accordingly, no income tax provision has been recorded. A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position would be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized. The Company has not recorded any income tax liabilities on its statement of financial condition at December 31, 2019. {6}------------------------------------------------ #### **3. Related Party Transactions** As a distributor of certain Funds, the Company receives distribution and service fees from the Funds. Pursuant to these arrangements, \$35.5 million and \$36.5 million, was due from Funds as of December 31, 2019 and December 31, 2018, respectively. The Company provides certain distribution services for a fee to a wholly owned subsidiary of BLK. Pursuant to these arrangements, \$6.2 million and \$4.9 million, was due from the related party as of December 31, 2019 and December 31, 2018, respectively. Certain wholly owned subsidiaries of BLK provide general and administration services to the Company. The total amount due to related parties pertaining to these transactions was \$0.7 million at December 31, 2019. Outstanding amounts related to the above transactions are recorded on a net basis (by counterparty) in the due to and due from related parties line items in the statement of financial condition where the legal right and intent to offset exists. #### **4. Indemnifications, Commitments and Contingencies** In the normal course of business, the Company may enter into contracts and agreements that contain a variety of representations, warranties and general indemnifications. The Company's maximum exposure under these arrangements cannot be quantified as this could involve future claims that may be made against the Company that have not yet occurred. Management believes that the likelihood of any material liability arising under these arrangements is remote. No related liability has been recorded in the statement of financial condition. In the normal course of business, the Company may be named as a defendant in various lawsuits and may be involved in certain regulatory investigations and proceedings. Some of these matters may involve claims of substantial amounts. It is the opinion of management, after consultation with legal counsel, that there are no matters pending against the Company that would have a material effect on the statement of financial condition of the Company at December 31, 2019. ### **5. Net Capital Requirements** The Company calculates its net capital using the alternative method under Rule 15c3-1 of the Act, which requires the Company to maintain minimum net capital of the greater of \$250 thousand or 2% of aggregate debits, as defined in the Act. At December 31, 2019, the Company had net capital of approximately \$33.2 million, which was \$32.9 million in excess of its required net capital of \$250 thousand. {7}------------------------------------------------ #### **6. Subsequent Events** The Company conducted a review for subsequent events through the date this statement of financial condition was issued and determined that no subsequent events had occurred that would require accrual or additional disclosures. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.