In the first quarter of 2022, BlackRock (BLK), an investment management firm, began making new adjustments that makes its performance appear more favorable to investors. It should be to no one’s surprise the new profitability calculations— which were recently recast for 2021— resulted in significant profit increases. Specifically, BlackRock has changed the way it calculates adjusted operating income, adjusted operating margin, and adjusted net income.

The company says it now makes adjustments related to amortization of intangible assets, other acquisition-related costs, including compensation costs for nonrecurring retention-related deferred compensation, and contingent consideration fair value adjustments incurred in connection with certain acquisitions.

We found additional adjustments not included on BlackRock’s list.

For example, in the latest quarterly filing BlackRock excluded the impact of product launch costs from adjusted operating income in the first quarter of 2021. Investors who Google “BlackRock launches” will find 12.3 million search results illustrating the company is a prolific launcher of new products. These costs are hardly nonrecurring and should be added back when analyzing BlackRock’s performance.

The company is also excluding the cost to lease its corporate headquarters.

The new calculation methods had a significant impact on 2021 performance. Recast under the new treatment, BlackRock’s new calculations:

—Increased adjusted operating income by $269 million, or 3.59%
—Increased adjusted operating margin 160 basis points (bps)
—Increased adjusted net income attributable to BlackRock by $205 million, or 3.38%

The three metrics— as well as the new way they’re figured— will be used to determine the long-term and annual compensation of BlackRock’s senior-level employees.