Item 6.
SELECTED FINANCIAL DATA The selected financial data presented below has been derived in part from, and should be read in conjunction with, the consolidated financial statements of BlackRock and Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Form 10-K.
Prior year data reflects certain reclassifications to conform to the current year presentation.
## Table 0 ##
December 31,
## Table 1 ##
Income Tax Expense
## Table 2 ##
The Company’s tax rate is affected by tax rates in foreign jurisdictions and the relative amount of income earned in those jurisdictions, which the Company expects to be fairly consistent in the near term.
The significant foreign jurisdictions, which have lower statutory tax rates than the U. S.  federal statutory rate of 35%, include the United Kingdom, Luxembourg, Canada and the Netherlands.
U. S.  income taxes were not provided for certain undistributed foreign earnings intended to be indefinitely reinvested outside the United States.2012.
The GAAP effective tax rate of 29.5% for 2012 included a $21 million benefit related to the resolution of certain outstanding tax positions and a $50 million net non-cash benefit related to the revaluation of certain deferred income tax liabilities including tax legislation enacted in the United Kingdom and the state and local income tax effect resulting from changes in the Company’s organizational structure.
The as adjusted effective tax rate of 31.0% for 2012 excluded the $50 million net non-cash tax benefit mentioned above.2011.
The GAAP effective tax rate of 25.4% for 2011 included a $24 million benefit related to the resolution of certain outstanding tax positions and $198 million of net non-cash tax benefits due to a state tax election and enacted U. K. , Japan, U. S.  state and local tax legislation.
The 2011 as adjusted effective tax rate of 31.7% included the $24 million benefit related to the revaluation of certain deferred income tax liabilities and excluded the $198 million net non-cash benefit.2010.
The GAAP effective tax rate of 32.0% for 2010 included a $30 million non-cash tax benefit related to the revaluation of certain net deferred income tax liabilities primarily related to acquired intangible assets due to enacted U. K.  tax legislation.
In addition, 2010 included the effect of favorable tax rulings and the resolution of certain outstanding tax positions.
The as adjusted effective tax rate of 33.0% for 2010 excluded the $30 million non-cash tax benefit mentioned above.
Balance Sheet Overview As Adjusted Balance Sheet The following table presents a reconciliation of the Company’s consolidated statement of financial condition presented on a GAAP basis to the Company’s consolidated statement of financial condition excluding the impact of separate account assets and collateral held under securities lending agreements (directly related to lending securities held by separate account assets) and separate account liabilities and collateral liabilities under securities lending agreements, consolidated variable interest entities (“VIEs”) and consolidated sponsored investment funds.
The Company presents the as adjusted balance sheet as additional information to enable investors to eliminate gross presentation of certain assets that have equal and offsetting liabilities or non-controlling interests and ultimately do not have an impact on stockholders’ equity (excluding appropriated retained earnings related to consolidated collateralized loan obligations) or cash flows.
Management reviews the Company’s as adjusted balance sheet, a non-GAAP financial measure, as an economic presentation of its 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 Collateral Held under Securities Lending Agreements The separate account assets are maintained by 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.
In accordance with GAAP, 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 Company’s consolidated statements of income.
While
At December 31, 2012 and 2011, as a result of consolidation of various investment products deemed to be voting rights entities, including products where BlackRock owns 50% of greater of the voting rights of the product, under the consolidation policies described above, the Company had the following balances on its consolidated statements of financial condition:
## Table 3 ##
The Company retained the specialized accounting of these investment funds pursuant to ASC 810-10.
VIEs, including a consolidated sponsored investment fund and CLOs, were excluded from the balances above as these balances are reported separately on the consolidated statements of financial condition.
Investments Equity Method Investments.
For equity investments where BlackRock does not control the investee, and where it is not the PB of a VIE, but can exert significant influence over the financial and operating policies of the investee, the Company follows the equity method of accounting.
The evaluation of whether the Company exerts control or significant influence over the financial and operational policies of its investees requires significant judgment based on the facts and circumstances surrounding each individual investment.
Factors considered in these evaluations may include the type of investment, the legal structure of the investee, the terms and structure of the investment agreement, including investor voting or other rights, the terms of BlackRock’s advisory agreement or other agreements with the investee, any influence BlackRock may have on the governing board of the investee, the legal rights of other investors in the entity pursuant to the fund’s operating documents and the relationship between BlackRock and other investors in the entity.
Substantially all of BlackRock’s equity method investees are investment companies that record their underlying investments at fair value.
Therefore, under the equity method of accounting, BlackRock’s share of the investee’s underlying net income predominantly represents fair value adjustments in the investments held by the equity method investees.
BlackRock’s share of the investee’s underlying net income or loss is based upon the most currently available information and is recorded as non-operating income (expense) for investments in investment companies, or as other revenue for operating advisory company investments, which are recorded in other assets, since such investees are considered to be an extension of BlackRock’s core business.
At December 31, 2012, the Company had $604 million and $124 million of equity method investments, including equity method investments held for deferred compensation, reflected within investments and other assets, respectively, and at December 31, 2011, the Company had $476 million and $80 million of equity method investees reflected in investments and other assets, respectively.
Impairment of Investments.
The Company’s management periodically assesses its equity method, available-forsale, held-to-maturity and cost investments for impairment.
If circumstances indicate that impairment may exist, investments are evaluated using market values, where available, or the expected future cash flows of the investment.
If the undiscounted expected future cash flows are lower than the Company’s carrying value of the investment, an impairment charge is recorded in the consolidated statement of income.
When the fair value of available-for-sale securities is lower than cost, the Company evaluates the security to determine whether the impairment is considered to be “other-than-temporary”.
In making this determination for equity securities, the Company considers, among other factors, the length of time the security has been in a loss position, the extent to which the security’s market value is less than cost, the financial condition and near-term prospects of the security’s issuer and the Company’s ability and intent to hold the security for a length of time sufficient to allow for recovery of such unrealized losses.
If the impairment is considered other-than-temporary, an impairment charge is recorded in non-operating income (expense) on the consolidated statement of income.
In making this determination for debt securities, the Company considers whether: (1) it has the intent to sell the security, (2) it is more likely than not that it will be required to sell the security before recovery or (3) it expects to recover the entire amortized cost basis of the security.
If the Company does not intend to sell a security and it is not more likely than not that it will be required to sell the security, but the security has suffered a credit loss, the credit loss will be bifurcated from the total
KIMCO REALTY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Investment in Retail Store Leases The Company has interests in various retail store leases relating to the anchor store premises in neighborhood and community shopping centers.
These premises have been sublet to retailers who lease the stores pursuant to net lease agreements.
Income from the investment in these retail store leases during the years ended December 31, 2008, 2007 and 2006, was approximately $2.7 million, $1.2 million and $1.3 million, respectively.
These amounts represent sublease revenues during the years ended December 31, 2008, 2007 and 2006, of approximately $7.1 million, $7.7 million and $8.2 million, respectively, less related expenses of $4.4 million, $5.1 million and $5.7 million, respectively, and an amount which, in management’s estimate, reasonably provides for the recovery of the investment over a period representing the expected remaining term of the retail store leases.
The Company’s future minimum revenues under the terms of all non-cancelable tenant subleases and future minimum obligations through the remaining terms of its retail store leases, assuming no new or renegotiated leases are executed for such premises, for future years are as follows (in millions): 2009, $5.6 and $3.8; 2010, $5.4 and $3.7; 2011, $4.5 and $3.1; 2012, $2.3 and $2.1; 2013, $1.0 and $1.3 and thereafter, $1.4 and $0.5, respectively.
Leveraged Lease During June 2002, the Company acquired a 90% equity participation interest in an existing leveraged lease of 30 properties.
The properties are leased under a long-term bond-type net lease whose primary term expires in 2016, with the lessee having certain renewal option rights.
The Company’s cash equity investment was approximately $4.0 million.
This equity investment is reported as a net investment in leveraged lease in accordance with SFAS No.13, Accounting for Leases (as amended).
From 2002 to 2007, 18 of these properties were sold, whereby the proceeds from the sales were used to pay down the mortgage debt by approximately $31.2 million.
As of December 31, 2008, the remaining 12 properties were encumbered by third-party non-recourse debt of approximately $42.8 million that is scheduled to fully amortize during the primary term of the lease from a portion of the periodic net rents receivable under the net lease.
As an equity participant in the leveraged lease, the Company has no recourse obligation for principal or interest payments on the debt, which is collateralized by a first mortgage lien on the properties and collateral assignment of the lease.
Accordingly, this obligation has been offset against the related net rental receivable under the lease.
At December 31, 2008 and 2007, the Company’s net investment in the leveraged lease consisted of the following (in millions)

Tables referenced above, in order (Table 0 first):
<table><tr><td></td><td colspan="5">Year ended December 31,</td></tr><tr><td><i>(Dollar amounts in millions, except per share data)</i></td><td>2012</td><td>2011</td><td>2010 -1</td><td>2009</td><td>2008</td></tr><tr><td> Income statement data:</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td> Revenue</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Related parties<sup>-2</sup></td><td>$5,501</td><td>$5,431</td><td>$5,025</td><td>$2,716</td><td>$3,006</td></tr><tr><td>Other third parties</td><td>3,836</td><td>3,650</td><td>3,587</td><td>1,984</td><td>2,058</td></tr><tr><td>Total revenue</td><td>9,337</td><td>9,081</td><td>8,612</td><td>4,700</td><td>5,064</td></tr><tr><td> Expenses</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Restructuring charges</td><td>—</td><td>32</td><td>—</td><td>22</td><td>38</td></tr><tr><td>Other operating expenses</td><td>5,813</td><td>5,800</td><td>5,614</td><td>3,400</td><td>3,433</td></tr><tr><td>Total expenses</td><td>5,813</td><td>5,832</td><td>5,614</td><td>3,422</td><td>3,471</td></tr><tr><td>Operating income</td><td>3,524</td><td>3,249</td><td>2,998</td><td>1,278</td><td>1,593</td></tr><tr><td> Total non-operating income (expense)</td><td>-54</td><td>-114</td><td>23</td><td>-6</td><td>-577</td></tr><tr><td>Income before income taxes</td><td>3,470</td><td>3,135</td><td>3,021</td><td>1,272</td><td>1,016</td></tr><tr><td>Income tax expense</td><td>1,030</td><td>796</td><td>971</td><td>375</td><td>387</td></tr><tr><td>Net income</td><td>2,440</td><td>2,339</td><td>2,050</td><td>897</td><td>629</td></tr><tr><td>Less: Net income (loss) attributable to non-controlling interests</td><td>-18</td><td>2</td><td>-13</td><td>22</td><td>-155</td></tr><tr><td>Net income attributable to BlackRock, Inc.</td><td>$2,458</td><td>$2,337</td><td>$2,063</td><td>$875</td><td>$784</td></tr><tr><td> Per share data:<sup>-3</sup></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic earnings</td><td>$14.03</td><td>$12.56</td><td>$10.67</td><td>$6.24</td><td>$5.86</td></tr><tr><td>Diluted earnings</td><td>$13.79</td><td>$12.37</td><td>$10.55</td><td>$6.11</td><td>$5.78</td></tr><tr><td>Book value<sup>-4</sup></td><td>$148.20</td><td>$140.07</td><td>$136.09</td><td>$128.86</td><td>$92.91</td></tr><tr><td>Common and preferred cash dividends</td><td>$6.00</td><td>$5.50</td><td>$4.00</td><td>$3.12</td><td>$3.12</td></tr></table>
<table><tr><td></td><td colspan="5"> December 31,</td><td></td></tr><tr><td><i>(Dollar amounts in millions)</i></td><td> 2012</td><td> 2011</td><td> 2010</td><td> 2009<sup>-1</sup></td><td> 2008</td><td></td></tr><tr><td> Balance sheet data:</td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Cash and cash equivalents</td><td>$4,606</td><td>$3,506</td><td>$3,367</td><td>$4,708</td><td>$2,032</td><td></td></tr><tr><td>Goodwill and intangible assets, net</td><td>30,312</td><td>30,148</td><td>30,317</td><td>30,346</td><td>11,974</td><td></td></tr><tr><td>Total assets<sup>-5</sup></td><td>200,451</td><td>179,896</td><td>178,459</td><td>178,124</td><td>19,924</td><td></td></tr><tr><td><i>Less:</i></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Separate account assets<sup>-6</sup></td><td>134,768</td><td>118,871</td><td>121,137</td><td>119,629</td><td>2,623</td><td><i></i></td></tr><tr><td><i>Collateral held under securities lendingagreements<sup>-6</sup></i></td><td>23,021</td><td>20,918</td><td>17,638</td><td>19,335</td><td>—</td><td><i></i></td></tr><tr><td><i>Consolidated investment vehicles<sup>-7</sup></i></td><td>2,813</td><td>2,006</td><td>1,610</td><td>282</td><td>502</td><td><i></i></td></tr><tr><td>Adjusted total assets</td><td>$39,849</td><td>$38,101</td><td>$38,074</td><td>$38,878</td><td>$16,799</td><td></td></tr><tr><td>Short-term borrowings</td><td>$100</td><td>$100</td><td>$100</td><td>$2,234</td><td>$200</td><td></td></tr><tr><td>Convertible debentures</td><td>—</td><td>—</td><td>67</td><td>243</td><td>245</td><td></td></tr><tr><td>Long-term borrowings</td><td>5,687</td><td>4,690</td><td>3,192</td><td>3,191</td><td>697</td><td></td></tr><tr><td>Total borrowings</td><td>$5,787</td><td>$4,790</td><td>$3,359</td><td>$5,668</td><td>$1,142</td><td></td></tr><tr><td>Total stockholders’ equity</td><td>$25,403</td><td>$25,048</td><td>$26,094</td><td>$24,329</td><td>$12,069</td><td></td></tr></table>
<table><tr><td></td><td colspan="3">GAAP</td><td colspan="3"> As adjusted</td></tr><tr><td><i>(Dollar amounts in millions)</i></td><td>2012</td><td>2011</td><td>2010</td><td>2012</td><td>2011</td><td> 2010</td></tr><tr><td>Income before income taxes<sup>-1</sup></td><td>$3,488</td><td>$3,133</td><td>$3,034</td><td>$3,532</td><td>$3,279</td><td>$3,192</td></tr><tr><td>Income tax expense</td><td>$1,030</td><td>$796</td><td>$971</td><td>$1,094</td><td>$1,040</td><td>$1,053</td></tr><tr><td>Effective tax rate</td><td>29.5%</td><td>25.4%</td><td>32.0%</td><td>31.0%</td><td>31.7%</td><td>33.0%</td></tr></table>
<table><tr><td><i>(Dollar amounts in millions)</i></td><td>December 31, 2012</td><td>December 31, 2011</td></tr><tr><td>Cash and cash equivalents</td><td>$133</td><td>$196</td></tr><tr><td>Investments:</td><td></td><td></td></tr><tr><td>Trading investments</td><td>123</td><td>214</td></tr><tr><td>Other investments</td><td>401</td><td>373</td></tr><tr><td>Other assets</td><td>25</td><td>5</td></tr><tr><td>Other liabilities</td><td>-65</td><td>-37</td></tr><tr><td>Non-controlling interests</td><td>-187</td><td>-276</td></tr><tr><td>BlackRock’s net interests in consolidated investment funds</td><td>$430</td><td>$475</td></tr></table>

Question: What will Total expenses reach in 2013 if it continues to grow at its current rate? (in million)
Answer: 5794.06
Reasoning program: subtract(5813,5832), divide(#0,5832), add(const_1,#1), multiply(#2,5813)