##### Table of Contents

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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



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(Mark One)



|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- |  | ----------------------------------------------------------------------------------------



For the quarterly period ended March 31, 2003



OR



| ̈ |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|- |  | -----------------------------------------------------------------------------------------



For the transition period
fromto.



(Commission file number 001-15305)



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BlackRock, Inc.

(Exact name of registrant as specified in its charter)



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|Delaware                                                      |  | 51-0380803                          
|------------------------------------------------------------- |  | ------------------------------------
|(State or
other jurisdiction ofincorporation or organization) |  | (I.R.S. Employer Identification No.)



40
East 52ndStreet, New York, NY 10022

(Address of principal executive offices)

(Zip Code)



(212) 754-5300

(Registrants telephone number, including area code)



(Former name, former address and former fiscal year, if changed since last report)



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Indicate by check mark whether the registrant: (1)  has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the proceeding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    Yes  x    No ̈



Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.)     Yes  x    No ̈



As of April 30, 2003, there were 18,696,872 shares of the registrants class A common stock outstanding and 46,359,649 shares of the registrants class B common stock outstanding.



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##### Table of Contents



BlackRock Inc.

Index to Form 10-Q



PART I



FINANCIAL
INFORMATION



|                                                                                              |  | Page
|--------------------------------------------------------------------------------------------- |  | ----
|                                                                                             
|Item 1.
Financial Statements                                                                  |  |     
|                                                                                             
|Consolidated Statements of Financial Condition                                                |  | 1   
|                                                                                             
|Consolidated Statements of Income                                                             |  | 2   
|                                                                                             
|Consolidated Statements of Cash Flows                                                         |  | 3   
|                                                                                             
|Notes to Consolidated Financial Statements                                                    |  | 4   
|                                                                                             
|Item 2.
Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12  
|                                                                                             
|Item 3.
Quantitative and Qualitative Disclosures About Market Risk                            |  | 34  
|                                                                                             
|Item 4.
Controls and Procedures                                                               |  | 34  
|                                                                                             
|PART II                                                                                       |  |     
|                                                                                             
|OTHER INFORMATION                                                                             |  |     
|                                                                                             
|Item 6.
Exhibits and Reports on Form 8-K                                                      |  | 35  



- i -



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##### Table of Contents

PART IFINANCIAL INFORMATION

Item 1. Financial Statements



BlackRock, Inc.

Consolidated Statements of Financial Condition

(Dollar amounts in thousands)



|                                                                                  |  | March 31, 2003 |         |   | December 31, 2002 |  
|--------------------------------------------------------------------------------- |  | -------------- | ------- | - | ----------------- | -
|                                                                                  |  | (unaudited)    |         |   |                   |  
|Assets                                                                            |  |                |         |   |                   |  
|Cash and cash equivalents                                                         |  | $              | 191,214 |   |                   | $
|Accounts receivable                                                               |  |                | 115,020 |   |                   |  
|Investments (cost: $246,158 and $211,325, respectively)                           |  |                | 244,637 |   |                   |  
|Property and equipment, net                                                       |  |                | 92,215  |   |                   |  
|Intangible assets, net                                                            |  |                | 182,855 |   |                   |  
|Receivable from affiliates                                                        |  |                | 507     |   |                   |  
|Other assets                                                                      |  |                | 9,949   |   |                   |  
|                                                                                  |  |                |         |   |                   |  
|Total assets                                                                      |  | $              | 836,397 |   |                   | $
|                                                                                  |  |                |         |   |                   |  
|Liabilities                                                                       |  |                |         |   |                   |  
|Accrued compensation                                                              |  | $              | 92,581  |   |                   | $
|Accounts payable and accrued liabilities                                          |  |                |         |   |                   |  
|Affiliate                                                                         |  |                | 39,628  |   |                   |  
|Other                                                                             |  |                | 16,302  |   |                   |  
|Acquired management contract obligation                                           |  |                | 6,578   |   |                   |  
|Other liabilities                                                                 |  |                | 13,106  |   |                   |  
|                                                                                  |  |                |         |   |                   |  
|Total liabilities                                                                 |  |                | 168,195 |   |                   |  
|                                                                                  |  |                |         |   |                   |  
|Stockholders equity                                                              |  |                |         |   |                   |  
|Common stock, class A, 18,839,368 and 17,606,801 shares issued,
respectively      |  |                | 188     |   |                   |  
|Common stock, class B, 46,658,154 and 47,629,373 shares issued,
respectively      |  |                | 466     |   |                   |  
|Additional paidin capital                                                        |  |                | 202,601 |   |                   |  
|Retained earnings                                                                 |  |                | 476,067 |   |                   |  
|Unearned compensation                                                             |  |                | (1,226  | ) |                   |  
|Accumulated other comprehensive loss                                              |  |                | 318     |   |                   |  
|Treasury stock, class A, at cost, 142,496 and 38,714 shares issued,
respectively  |  |                | (5,911  | ) |                   |  
|Treasury stock, class B, at cost, 298,505 and 281,281 shares issued,
respectively |  |                | (4,301  | ) |                   |  
|                                                                                  |  |                |         |   |                   |  
|Total stockholders equity                                                        |  |                | 668,202 |   |                   |  
|                                                                                  |  |                |         |   |                   |  
|Total liabilities and stockholders equity                                        |  | $              | 836,397 |   |                   | $
|                                                                                  |  |                |         |   |                   |  



See
accompanying notes to consolidated financial statements.



1



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



BlackRock, Inc.

Consolidated Statements of Income

(Dollar amounts in thousands, except share data)

(unaudited)



|                                            |  | Three months endedMarch 31, |           
|------------------------------------------- |  | --------------------------- | ----------
|                                            |  | 2003                        |           
|Revenue                                     |  |                             |           
|Investment advisory and administration fees |  |                             |           
|Mutual funds                                |  | $                           | 48,740    
|Separate accounts                           |  |                             | 77,625    
|Other income                                |  |                             |           
|Affiliate                                   |  |                             | 1,250     
|Other                                       |  |                             | 15,136    
|                                            |  |                             |           
|Total revenue                               |  |                             | 142,751   
|                                            |  |                             |           
|Expense                                     |  |                             |           
|Employee compensation and benefits          |  |                             | 55,386    
|Fund administration and servicing costs     |  |                             |           
|Affiliate                                   |  |                             | 6,943     
|Other                                       |  |                             | 1,015     
|General and administration                  |  |                             |           
|Affiliate                                   |  |                             | 2,061     
|Other                                       |  |                             | 23,048    
|Amortization of intangible assets           |  |                             | 232       
|                                            |  |                             |           
|Total expense                               |  |                             | 88,685    
|                                            |  |                             |           
|Operating income                            |  |                             | 54,066    
|Non-operating income (expense)              |  |                             |           
|Investment income                           |  |                             | 3,529     
|Interest expense                            |  |                             | (164      
|                                            |  |                             |           
|Total non-operating income                  |  |                             | 3,365     
|                                            |  |                             |           
|Income before income taxes                  |  |                             | 57,431    
|Income taxes                                |  |                             | 22,111    
|                                            |  |                             |           
|Net income                                  |  | $                           | 35,320    
|                                            |  |                             |           
|Earnings per share                          |  |                             |           
|Basic                                       |  | $                           | 0.54      
|Diluted                                     |  | $                           | 0.54      
|Weighted-average shares outstanding         |  |                             |           
|Basic                                       |  |                             | 65,056,537
|Diluted                                     |  |                             | 65,867,032



See
accompanying notes to consolidated financial statements.



2



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



BlackRock, Inc.

Consolidated Statements of Cash Flow

(Dollar amounts in thousands)

(unaudited)



|                                                                              |  | Three months endedMarch 31, |        
|----------------------------------------------------------------------------- |  | --------------------------- | -------
|                                                                              |  | 2003                        |        
|Cash flows from operating activities                                          |  |                             |        
|Net income                                                                    |  | $                           | 35,320 
|Adjustments to reconcile net income to net cash used in operating
activities: |  |                             |        
|Depreciation and amortization                                                 |  |                             | 5,295  
|Stock-based compensation                                                      |  |                             | 2,614  
|Deferred income taxes                                                         |  |                             | 1,101  
|Tax benefit from stock-based compensation                                     |  |                             | 4,167  
|Purchase of investments, trading, net                                         |  |                             | (17,836
|Net gain on investments                                                       |  |                             | (248   
|Changes in operating assets and liabilities:                                  |  |                             |        
|Increase in accounts receivable                                               |  |                             | (1,231 
|Increase in receivable from affiliates                                        |  |                             | (226   
|(Increase) decrease in other assets                                           |  |                             | (558   
|Decrease in accrued compensation                                              |  |                             | (75,071
|Increase in accounts payable and accrued liabilities                          |  |                             | 16,866 
|Increase in other liabilities                                                 |  |                             | 1,160  
|                                                                              |  |                             |        
|Cash used in operating activities                                             |  |                             | (28,647
|                                                                              |  |                             |        
|Cash flows from investing activities                                          |  |                             |        
|Purchase of property and equipment                                            |  |                             | (3,355 
|Purchase of investments                                                       |  |                             | (17,368
|Acquisition of business, net of cash acquired                                 |  |                             | (260   
|                                                                              |  |                             |        
|Cash used in investing activities                                             |  |                             | (20,983
|                                                                              |  |                             |        
|Cash flows from financing activities                                          |  |                             |        
|Issuance of class A common stock                                              |  |                             | 562    
|Purchase of treasury stock                                                    |  |                             | (16,463
|Reissuance of treasury stock                                                  |  |                             | 1,866  
|                                                                              |  |                             |        
|Cash used in financing activities                                             |  |                             | (14,035
|                                                                              |  |                             |        
|Effect of exchange rate changes on cash and cash equivalents                  |  |                             | (355   
|Net decrease in cash and cash equivalents                                     |  |                             | (64,020
|Cash and cash equivalents, beginning of period                                |  |                             | 255,234
|                                                                              |  |                             |        
|Cash and cash equivalents, end of period                                      |  | $                           | 191,214
|                                                                              |  |                             |        



3



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



BlackRock, Inc.

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2003 and 2002

(Dollar amounts in thousands, except share data)

(unaudited)



1. Significant Accounting Policies



Basis of Presentation



The consolidated
interim financial statements of BlackRock, Inc. and its subsidiaries (BlackRock or the Company) included herein have been prepared in accordance with accounting principles generally accepted in the United States of America
for interim financial information and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. These consolidated
financial statements are unaudited and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2002. The Company
follows the same accounting policies in the preparation of interim reports as set forth in the annual report. In the opinion of management, the consolidated financial statements reflect all adjustments, which are of a normal recurring nature,
necessary for a fair presentation of the financial position, results of operations and cash flows of BlackRock for the interim periods presented and are not necessarily indicative of a full years results.



In preparing the consolidated financial statements, management is required to
make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates.



Investments



The Companys investments are classified as trading and available for sale. Investments, trading, primarily represent investments made by the Company
and held in a Rabbi trust with respect to senior employee elections under the BlackRock Voluntary and Involuntary Deferred Compensation Plans and are recorded at fair market value with unrealized gains and losses included in the accompanying
consolidated statements of income as investment income (expense). Investments, available for sale, consist primarily of investments in BlackRock funds, municipal bonds and certain alternative investment products and are stated at market values.
Securities which are not readily marketable (alternative investment products) are stated at their estimated fair market value as determined by the Companys management.



The resulting unrealized gains and losses on investments, available for sale, are included in the accumulated other
comprehensive income or loss component of stockholders equity, net of tax. Realized gains and losses on trading and available for sale investments are calculated on a specific identification basis and, along with interest and dividend income,
are included in investment income (expense) in the accompanying consolidated statements of income. The Companys management periodically assesses impairment on investments to determine if it is other than temporary. Several of the
Companys available for sale investments represent equity interests in collateralized debt obligations in which the Company acts in the capacity of collateral manager. The Company reviews cash flow estimates throughout the life of each
collateralized debt obligation to determine if an impairment charge is required to be taken through current earnings. If the updated estimate of future cash flows (taking into account both timing and amounts) is less than the last revised estimate
and the reduction in estimated future cash flows is deemed to be other than temporary, an impairment is recognized based on the excess of the carrying amount of the



4



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



Investments (continued)



investment over its fair value. In evaluating impairments on all other available for sale securities, the Company considers the length of time and the
extent to which the securitys market value has been less than its cost, the financial condition and near-term prospects of the securitys issuer and the Companys intended holding period for the security. Any impairment on
investments which is deemed other than temporary is recorded in non-operating income (expense) on the consolidated statements of income.



Stock-Based Compensation



Prior to 2003, the Company accounted for stock-based employee compensation plans under the recognition and measurement provisions of Accounting Principles
Board Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations. Stock compensation recorded prior to 2003 primarily represents the grant of restricted common stock to employees. Effective January 1, 2003, the
Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No. 148, Accounting for Stock-Based
Compensation-Transition and Disclosure, prospectively to all employee awards granted, modified or settled after January 1, 2003. Awards under the Companys plans vest over periods ranging from two to four years. Therefore, the cost
related to stock-based employee compensation included in net income for the three month period ended March 31, 2003 is less than that which would have been recognized if the fair value based method had been applied to all awards since the original
effective date of SFAS No. 123. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested awards in each period.



|                                                                                                                                      |  | Three months endedMarch 31, |       
|------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------
|                                                                                                                                      |  | 2003                        |       
|Net income, as reported                                                                                                               |  | $                           | 35,320
|Add: Stock-based employee compensation expense included in reported net income, net of
related tax effects                            |  |                             | 240   
|Deduct: Total stock-based employee compensation expense determined under fair value
method for all awards, net of related tax effects |  |                             | (3,658
|                                                                                                                                      |  |                             |       
|Pro forma net income                                                                                                                  |  | $                           | 31,902
|                                                                                                                                      |  |                             |       
|Earnings per share:                                                                                                                   |  |                             |       
|Basicas reported                                                                                                                     |  | $                           | 0.54  
|Basicpro forma                                                                                                                       |  | $                           | 0.49  
|                                                                                                                                     
|Dilutedas reported                                                                                                                   |  | $                           | 0.54  
|Dilutedpro forma                                                                                                                     |  | $                           | 0.48  



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



Consolidation of Variable Interest Entities



In January 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation (FIN) No. 46, Consolidation of
Variable Interest Entities. FIN No. 46 addresses the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to variable interest entities (VIE) and generally would require that the
assets, liabilities and results of operations of a VIE be consolidated into the financial statements of the enterprise that has a controlling financial interest in it. The interpretation provides a framework for determining whether an entity should
be evaluated for consolidation based on voting interests or significant financial support provided to the entity (variable interests).



An entity is classified as a VIE if total equity is not sufficient to permit the entity to finance its activities without additional subordinated
financial support or its equity investors lack the direct or indirect ability to make decisions about an entitys activities through voting rights, absorb the expected losses of the entity if they occur or receive the expected residual returns
of the entity if they occur. Once an entity is determined to be a VIE, its assets, liabilities and results of operations should be consolidated with those of its primary beneficiary. The primary beneficiary of a VIE is the entity which either will
absorb a majority of the VIEs expected losses or has the right to receive a majority of the VIEs expected residual returns. The expected losses and residual returns of a VIE include expected variability in its net income or loss, fees to
decision makers and fees to guarantors of substantially all VIE assets or liabilities, and are calculated in accordance with Statement of Financial Accounting Concept No. 7, Using Cash Flow Information and Present Value in Accounting
Measurements.



A public enterprise with a variable interest
in a VIE created before January 31, 2003 must apply FIN No. 46 to that VIE as of the beginning of the first interim or annual reporting period beginning after June 15, 2003. Additionally, if it is reasonably possible that an enterprise will
consolidate or disclose information about a VIE when the guidance becomes effective, there are several disclosure requirements effective for all financial statements issued after January 31, 2003.



Management is in the process of finalizing changes to the equity ownership
and/or control structure of certain hedge funds previously identified in the Companys 2002 Form 10-K that management believes will remove them from the scope of FIN No. 46. As a result these entities will not be required to be consolidated in
the third quarter of 2003.



Pursuant to the conceptual framework
set forth in FIN No. 46, the Companys management has concluded that the consolidation of the assets, liabilities and results of operations of four collateralized bond obligation funds (CBOs) and one collateralized loan obligation
fund (CLO) organized as corporations or limited liability companies in its consolidated financial statements as of and for the period ended September 30, 2003 is reasonably possible. The funds invest in high yield securities and offer
opportunity for high return and are subject to greater risk than traditional investment products. These funds are structured to take advantage of the yield differential between their assets and liabilities and have terms to maturity from eight to
twelve years. At March 31, 2003, aggregate assets and debt in the CBOs and CLO was approximately $2.2 billion and $2.1 billion, respectively. BlackRocks equity ownership in these funds was approximately $11.3 million at March 31, 2003.
BlackRocks maximum potential loss related to these VIEs is limited to the amount of its respective equity ownership in each of these investment vehicles and consequently BlackRock has no risk of loss with respect to the debt of these
investment vehicles. Additionally, the Company has neither guaranteed nor is contractually liable for any of the VIEs obligations.



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



Consolidation of Variable Interest Entities (continued)



Assuming the consolidation of the CBOs and CLOs assets, liabilities and results of operations effective July 1, 2003, the Company will record
a cumulative effect of change in accounting principle estimated to range from $6 million to $10 million. This charge represents the difference between the carrying amounts of BlackRocks investments in these entities accounted for under SFAS
No. 115, Accounting for Certain Investments in Debt and Equity Securities, the Companys current accounting treatment, and FIN No. 46.



Commencing in 2003, BlackRock acts as trading adviser and special member to an entity which has created a series of municipal securities trusts in which
it has retained interests. These trusts purchase fixed-rate, long-term, highly rated, insured or escrowed municipal bonds financed by the issuance of trust certificates. The trust certificates entitle the holder to receive future payments of
principal and variable interest and to tender such certificates at the option of the holder on a periodic basis. A third party acts as placement agent for the entity and the trusts and as liquidity provider to the trusts. The aggregate assets and
debt in this entity (including the trusts) was approximately $96 million and $63 million, respectively. BlackRocks equity ownership was approximately $5.0 million at March 31, 2003. Based on its preliminary assessment, the Companys
management has concluded that BlackRock is not the primary beneficiary of this entity and therefore will not consolidate the entity upon the Companys adoption of FIN No. 46.



Management will continue to assess this interpretations final impact on its consolidated financial statements.
Therefore, additional entities may be subject to consolidation upon BlackRocks final adoption of FIN No. 46.



7



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



1. Significant Accounting Policies



Reclassification of Prior Periods Statements



Certain items previously reported have been reclassified to conform with the current period presentation.



2. Investments, Trading and Available for Sale



A summary of the cost and fair market value of investments is as follows:



|March 31, 2003                                    |  | Cost  |         | Gross Unrealized |   | Fair Market Value
|------------------------------------------------- |  | ----- | ------- | ---------------- | - | -----------------
|                                                  |  | Gains |         | Losses           |  
|                                                  |  |       |         |                  |   |                  
|Mutual funds                                      |  | $     | 11,466  |                  | $ | 0                
|Equity securities                                 |  |       | 5,973   |                  |   | 158              
|Other                                             |  |       | 17,900  |                  |   |                 
|                                                  |  |       |         |                  |   |                  
|Total investments, trading                        |  |       | 35,339  |                  |   | 158              
|                                                  |  |       |         |                  |   |                  
|                                                 
|Mutual funds                                      |  |       | 178,250 |                  |   |                 
|Municipal debt securities                         |  |       | 5,428   |                  |   | 27               
|Collateralized bond obligations                   |  |       | 11,947  |                  |   |                 
|Other                                             |  |       | 15,194  |                  |   | 252              
|                                                  |  |       |         |                  |   |                  
|Total investments, available for sale             |  |       | 210,819 |                  |   | 279              
|                                                  |  |       |         |                  |   |                  
|Total investments, trading and available for sale |  | $     | 246,158 |                  |   | 437              
|                                                  |  |       |         |                  |   |                  



|December 31, 2002                                 |  | Cost  |         | Gross Unrealized |   | Fair Market Value
|------------------------------------------------- |  | ----- | ------- | ---------------- | - | -----------------
|                                                  |  | Gains |         | Losses           |  
|                                                  |  |       |         |                  |   |                  
|Mutual funds                                      |  | $     | 5,461   |                  | $ | 0                
|Other                                             |  |       | 11,889  |                  |   |                 
|                                                  |  |       |         |                  |   |                  
|Total investments, trading                        |  |       | 17,350  |                  |   |                 
|                                                  |  |       |         |                  |   |                  
|                                                 
|Mutual funds                                      |  |       | 158,262 |                  |   | 156              
|Municipal debt securities                         |  |       | 13,823  |                  |   | 448              
|Collateralized bond obligations                   |  |       | 12,108  |                  |   |                 
|Other                                             |  |       | 9,782   |                  |   |                 
|                                                  |  |       |         |                  |   |                  
|Total investments, available for sale             |  |       | 193,975 |                  |   | 604              
|                                                  |  |       |         |                  |   |                  
|Total investments, trading and available for sale |  | $     | 211,325 |                  | $ | 604              
|                                                  |  |       |         |                  |   |                  



All municipal debt
securities have a maturity date in excess of ten years and an investment rating (provided by major rating agencies) of AAA or its equivalent.



BlackRock acts as investment advisor to all these investments.



8



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



3. Other Income



Other income consists of the following:



|                                               |  | Three months endedMarch 31,
|---------------------------------------------- |  | ---------------------------
|                                               |  | 2003                       
|Risk management and investment system services |  | $                          
|Other                                          |  |                            
|                                               |  |                            
|                                               |  | $                          
|                                               |  |                            



4. Common Stock



BlackRocks class A, $0.01 par value, common stock
authorized was 250,000,000 shares as of March 31, 2003 and December 31, 2002, respectively. BlackRocks class B, $0.01 par value, common stock authorized was 100,000,000 shares as of March 31, 2003 and December 31, 2002, respectively.



The Companys common stock issued and outstanding and
related activity during the three month period ended March 31, 2003 consists of the following:



|                                             |  | Shares issued       |  |            | Shares outstanding    | 
|-------------------------------------------- |  | ------------------- |  | ---------- | --------------------- | 
|                                             |  | Common shares Class |  |            | Treasury shares Class | 
|                                             |  | A                   |  | B          |                       | 
|December 31, 2002                            |  | 17,606,801          |  | 47,629,373 |                       | 
|Conversion of class B stock to class A stock |  | 765,786             |  | (971,219   | )                     | 
|Issuance of class A common stock             |  | 466,781             |  |           |                       | 
|Treasury stock transactions                  |  |                    |  |           |                       | 
|                                             |  |                     |  |            |                       | 
|March 31, 2003                               |  | 18,839,368          |  | 46,658,154 |                       | 
|                                             |  |                     |  |            |                       | 



9



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



|5. |  | Comprehensive Income
|-- |  | --------------------



|                                                                 |  | Three months endedMarch 31, |       
|---------------------------------------------------------------- |  | --------------------------- | ------
|                                                                 |  | 2003                        |       
|Net income                                                       |  | $                           | 35,320
|Other comprehensive income gain (loss):                          |  |                             |       
|Unrealized gain (loss) from investments, available for sale, net |  |                             | 442   
|Foreign currency translation loss                                |  |                             | (355  
|                                                                 |  |                             |       
|Comprehensive income                                             |  | $                           | 35,407
|                                                                 |  |                             |       



|6. |  | Earnings Per Share
|-- |  | ------------------



The following table sets forth the computation of basic and diluted earnings per share:



|                                             |  | Three months endedMarch 31,
|-------------------------------------------- |  | ---------------------------
|                                             |  | 2003                       
|Net income                                   |  | $                          
|                                             |  |                            
|Basic weighted-average shares outstanding    |  |                            
|Dilutive potential shares from forward sales |  |                            
|Dilutive potential shares from stock options |  |                            
|                                             |  |                            
|Dilutive weighted-average shares outstanding |  |                            
|                                             |  |                            
|Basic earnings per share                     |  | $                          
|                                             |  |                            
|Diluted earnings per share                   |  | $                          
|                                             |  |                            



10



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 1. Financial Statements (continued)



7. Supplemental Statements of Cash Flow Information



Supplemental disclosure of cash flow information:



|                           |  | Three months endedMarch 31,
|-------------------------- |  | ---------------------------
|                           |  | 2003                       
|Cash paid for income taxes |  | $                          
|                           |  |                            



Supplemental schedule of
noncash transactions:



|                         |  | Three months endedMarch 31,
|------------------------ |  | ---------------------------
|                         |  | 2003                       
|Stock-based compensation |  | $                          
|                         |  |                            



11



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



BlackRock, Inc., a Delaware corporation (together, with its subsidiaries, BlackRock or the Company), is one of the largest
publicly traded investment management firms in the United States with approximately $273.6 billion of assets under management at March 31, 2003. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety
of equity, fixed income, liquidity and alternative investment separate accounts and mutual funds, including BlackRock Funds and BlackRock Provident Institutional Funds(BPIF). In addition, BlackRock provides risk management
and investment system services and products to institutional investors under the BlackRock Solutions name. BlackRock is a majority-owned indirect subsidiary of The PNC Financial Services Group, Inc. (PNC), one of the largest
diversified financial services companies in the United States, operating businesses engaged in regional community banking, corporate banking, real estate finance, asset-based lending, wealth management, asset management and global fund services. As
of March 31, 2003, PNC indirectly owned approximately 69% of BlackRock.



The following table summarizes BlackRocks operating performance for the three months ended March 31, 2003, March 31, 2002 and December 31, 2002:



BlackRock, Inc.

Financial Highlights

(Dollar amounts in thousands, except share
data or otherwise stated)

(unaudited)



|                                        |  | Three months ended |            |   | Variance vs.      |  
|--------------------------------------- |  | ------------------ | ---------- | - | ----------------- | -
|                                        |  | March 31,          |            |   | December 31, 2002 |  
|                                        |  | 2003               |            |   | 2002              |  
|Total revenue                           |  | $                  | 142,751    |   |                   | $
|Total expense                           |  | $                  | 88,685     |   |                   | $
|Operating income                        |  | $                  | 54,066     |   |                   | $
|Net income                              |  | $                  | 35,320     |   |                   | $
|Diluted earnings per share              |  | $                  | 0.54       |   |                   | $
|Average diluted shares outstanding      |  |                    | 65,867,032 |   |                   |  
|Operating margin (a)                    |  |                    | 40.1       | % |                   |  
|Assets under management ($ in millions) |  | $                  | 273,599    |   |                   | $

---

|(a) |  | Operating income divided by total revenue less fund administration and servicing costs. Computations for all periods presented include affiliated and non-affiliated
fund administration and servicing expense reported as a separate income statement line item and are derived from the Companys consolidated financial statements, as follows:
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                      |  | Three months ended |        
|--------------------------------------------------------------------- |  | ------------------ | -------
|                                                                      |  | March 31,          |        
|                                                                      |  | 2003               |        
|Operating income, as reported                                         |  | $                  | 54,066 
|                                                                      |  |                    |        
|Revenue, as reported                                                  |  |                    | 142,751
|Less: fund administration and servicing costs                         |  |                    | (7,958 
|                                                                      |  |                    |        
|Revenue used for operating margin measurement                         |  |                    | 134,793
|                                                                      |  |                    |        
|Operating margin                                                      |  |                    | 37.9   
|Add back: Impact of excluding fund administration and servicing costs |  |                    | 2.2    
|                                                                      |  |                    |        
|Operating margin, as reported                                         |  |                    | 40.1   
|                                                                      |  |                    |        



We believe that
operating margin, as reported, is an effective indicator of managements ability to effectively employ the Companys resources. Fund administration and servicing costs have been excluded from operating margin because these costs are a
fixed, asset-based expense which can fluctuate based on the discretion of a third party.



12



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##### Table of Contents

PART IFINANCIAL INFORMATION (continued)

|Item |  | 2. Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)
|---- |  | ----------------------------------------------------------------------------------------------------



General



BlackRock derives a substantial portion of its revenue from investment advisory and administration fees, which are recognized
as the services are performed. Such fees are primarily based on predetermined percentages of the market value of assets under management and are affected by changes in assets under management, including market appreciation or depreciation and net
subscriptions or redemptions. Net subscriptions or redemptions represent the sum of new client assets, additional fundings from existing clients, withdrawals of assets from and termination of client accounts and purchases and redemptions of mutual
fund shares.



Investment advisory agreements for certain separate
accounts and BlackRocks alternative investment products provide for performance fees in addition to fees based on assets under management. Performance fees are earned when investment performance exceeds a contractual threshold and,
accordingly, may increase the volatility of BlackRocks revenue and earnings.



BlackRock provides a variety of risk management and investment system services to insurance companies, finance companies, pension funds, foundations, consultants, mutual fund sponsors, REITs, commercial and mortgage banks,
savings institutions and government agencies. These services are provided under the brand name BlackRock Solutions and include a wide array of risk management services and enterprise investment system outsourcing to clients. Fees earned for
BlackRock Solutions services are either based on predetermined percentages of the market value of assets subject to the services or on fixed monthly or quarterly payments. The fees earned on risk management advisory and investment system
assignments are recorded as other income.



Operating expense
primarily consists of employee compensation and benefits, fund administration and servicing costs, and general and administration expense. Employee compensation and benefits expense reflects salaries, deferred and incentive compensation and related
benefit costs. Fund administration and servicing costs expense reflects payments made to PNC affiliated entities and third parties, primarily associated with the administration and servicing of client investments in the BlackRock Funds and
BlackRock Closed-end Funds. Intangible assets at March 31, 2003 and December 31, 2002 were approximately $182.9 million and approximately $182.8 million, respectively, with amortization expense of approximately $0.2 million for the three months
ended March 31, 2003 and 2002, respectively. Intangible assets reflect PNCs acquisition of BlackRock Financial Management, L.P. (BFM) on February 28, 1995, a management contract acquired in connection with the agreement and plan of
merger of CORE Cap, Inc. with Anthracite Capital, Inc., a BlackRock managed REIT, on May 15, 2000 and the acquisition of certain assets and liabilities of Cyllenius Capital Management on November 4, 2002.



13



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##### Table of Contents

PART I  FINANCIAL INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)



Assets Under Management



Assets under management (AUM) increased approximately $35.4
billion, or 15%, to $273.6 billion at March 31, 2003, compared with $238.1 billion at March 31, 2002. The growth in assets under management was attributable to an increase of $40.6 billion or 26% in separate accounts, partially offset by a decrease
of $5.1 billion or 6% in mutual fund assets.



The increase in
separate accounts at March 31, 2003, as compared with March 31, 2002, was the result of net subscriptions of $29.0 billion and market appreciation of $11.6 billion. Net subscriptions largely reflected fixed income and equity sales which were $29.0
billion (despite significant rebalancing by institutional investors out of bonds) and $2.5 billion, respectively, and were partially offset by $3.2 billion in liquidity-securities lending accounts net redemptions during the period. The rise in fixed
income separate account assets was attributable to new client sales and increased fundings from existing clients as the Company continued to deliver solid relative investment performance. Net subscriptions in equity accounts primarily represented
new international equity business concentrated in the European Equity product. The decrease in liquidity-securities lending separate accounts represents lower levels of cash collateral managed by BlackRock for PFPC Worldwide, Inc., a PNC affiliate.
Market appreciation of $11.6 billion in separate accounts largely reflected appreciation in fixed income assets of $14.9 billion due to declining interest rates, partially offset by market depreciation in equity assets of $3.0 billion.



The $5.1 billion decrease in mutual fund assets since March 31, 2002 reflected
net redemptions of $4.1 billion and market depreciation of $1.0 billion. Net redemptions in BPIF and the BlackRock Funds since March 31, 2002 were $4.0 billion and $2.7 billion, respectively, and were partially offset by $2.3 billion in net
subscriptions in the closed-end funds. The decrease in BPIF assets primarily reflects stable short-term rates and lower absolute yields versus a year ago. These factors may result in additional declines in BPIF assets for 2003 compared to 2002. Net
redemptions in the BlackRock Fundssince March 31, 2002 were primarily due to PNC-related net redemptions of approximately $3.5 billion, which were partially offset by $0.8 billion in sales to third party customers. The increase in closed-end
funds was the result of the Companys offering of new closed-end fund assets totaling $2.9 billion, partially offset by a term trust maturity of $0.6 billion.



BlackRock experienced $0.8 billion in net redemptions for the first quarter of 2003 reflecting separate account net
subscriptions of $9.5 billion offset by $10.3 billion of mutual fund redemptions. Net subscriptions in separate accounts primarily consisted of fundings in fixed income and liquidity accounts totaling $8.9 billion and $0.5 billion, respectively.
Mutual fund net redemptions for the first quarter of 2003 were primarily attributable to $11.1 billion in net redemptions in BPIF. As previously discussed, net redemptions in BPIF reflect stable short-term rates and lower absolute yields versus
investment alternatives.



14



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



BlackRock, Inc.

Assets Under Management

(Dollar amounts in millions)

(unaudited)



|                                |  | March 31, |         | December 31,2002
|------------------------------- |  | --------- | ------- | ----------------
|                                |  | 2003      |         | 2002            
|All Accounts                    |  |           |         |                 
|Fixed income                    |  | $         | 188,058 |                 
|Liquidity                       |  |           | 67,978  |                 
|Equity                          |  |           | 12,165  |                 
|Alternative investment products |  |           | 5,398   |                 
|                                |  |           |         |                 
|Total                           |  | $         | 273,599 |                 
|                                |  |           |         |                 
|Separate Accounts               |  |           |         |                 
|Fixed income                    |  | $         | 167,778 |                 
|Liquidity                       |  |           | 6,040   |                 
|Liquidity-Securities lending    |  |           | 6,344   |                 
|Equity                          |  |           | 8,995   |                 
|Alternative investment products |  |           | 5,398   |                 
|                                |  |           |         |                 
|Subtotal                        |  |           | 194,555 |                 
|                                |  |           |         |                 
|Mutual Funds                    |  |           |         |                 
|Fixed income                    |  |           | 20,280  |                 
|Liquidity                       |  |           | 55,594  |                 
|Equity                          |  |           | 3,170   |                 
|                                |  |           |         |                 
|Subtotal                        |  |           | 79,044  |                 
|                                |  |           |         |                 
|Total                           |  | $         | 273,599 |                 
|                                |  |           |         |                 



15



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Assets Under Management (continued)



The following tables present the component changes in
BlackRocks assets under management for the three months ended March 31, 2003 and 2002, respectively. The data reflects certain reclassifications to conform with the current years presentation.



BlackRock, Inc.

Component Changes in Assets Under Management

(Dollar amounts in millions)

(unaudited)



|                                   |  | Period endedMarch 31, |        
|---------------------------------- |  | --------------------- | -------
|                                   |  | 2003                  |        
|All Accounts                       |  |                       |        
|Beginning assets under management  |  | $                     | 272,841
|Net redemptions                    |  |                       | (788   
|Market appreciation (depreciation) |  |                       | 1,546  
|                                   |  |                       |        
|Ending assets under management     |  | $                     | 273,599
|                                   |  |                       |        
|Separate Accounts                  |  |                       |        
|Beginning assets under management  |  | $                     | 183,513
|Net subscriptions                  |  |                       | 9,521  
|Market appreciation                |  |                       | 1,521  
|                                   |  |                       |        
|Ending assets under management     |  |                       | 194,555
|                                   |  |                       |        
|Mutual Funds                       |  |                       |        
|Beginning assets under management  |  |                       | 89,328 
|Net redemptions                    |  |                       | (10,309
|Market appreciation (depreciation) |  |                       | 25     
|                                   |  |                       |        
|Ending assets under management     |  |                       | 79,044 
|                                   |  |                       |        
|Total                              |  | $                     | 273,599
|                                   |  |                       |        



16



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



BlackRock, Inc.

Assets Under Management

Quarterly Trend

(Dollar amounts in millions)

(unaudited)



|                                   |  | 2002     |         |   | 2003    |  
|---------------------------------- |  | -------- | ------- | - | ------- | -
|                                   |  | March 31 |         |   | June 30 |  
|Separate Accounts                  |  |          |         |   |         |  
|Fixed Income                       |  |          |         |   |         |  
|Beginning assets under management  |  | $        | 119,488 |   |         | $
|Net subscriptions                  |  |          | 4,437   |   |         |  
|Market appreciation                |  |          | 58      |   |         |  
|                                   |  |          |         |   |         |  
|Ending assets under management     |  |          | 123,983 |   |         |  
|                                   |  |          |         |   |         |  
|Liquidity                          |  |          |         |   |         |  
|Beginning assets under management  |  |          | 6,831   |   |         |  
|Net subscriptions (redemptions)    |  |          | (1,395  | ) |         |  
|Market appreciation (depreciation) |  |          | 5       |   |         |  
|                                   |  |          |         |   |         |  
|Ending assets under management     |  |          | 5,441   |   |         |  
|                                   |  |          |         |   |         |  
|LiquiditySecurities lending       |  |          |         |   |         |  
|Beginning assets under management  |  |          | 10,781  |   |         |  
|Net subscriptions (redemptions)    |  |          | (1,237  | ) |         |  
|                                   |  |          |         |   |         |  
|Ending assets under management     |  |          | 9,544   |   |         |  
|                                   |  |          |         |   |         |  
|Equity                             |  |          |         |   |         |  
|Beginning assets under management  |  |          | 9,577   |   |         |  
|Net subscriptions (redemptions)    |  |          | (80     | ) |         |  
|Market appreciation (depreciation) |  |          | (52     | ) |         |  
|                                   |  |          |         |   |         |  
|Ending assets under management     |  |          | 9,445   |   |         |  
|                                   |  |          |         |   |         |  
|Alternative investment products    |  |          |         |   |         |  
|Beginning assets under management  |  |          | 5,309   |   |         |  
|Net subscriptions (redemptions)    |  |          | 164     |   |         |  
|Market appreciation (depreciation) |  |          | 68      |   |         |  
|                                   |  |          |         |   |         |  
|Ending assets under management     |  |          | 5,541   |   |         |  
|                                   |  |          |         |   |         |  
|Total Separate Accounts            |  |          |         |   |         |  
|Beginning assets under management  |  |          | 151,986 |   |         |  
|Net subscriptions                  |  |          | 1,889   |   |         |  
|Market appreciation                |  |          | 79      |   |         |  
|                                   |  |          |         |   |         |  
|Ending assets under management     |  | $        | 153,954 |   |         | $
|                                   |  |          |         |   |         |  





17



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



BlackRock, Inc.

Assets Under Management

Quarterly Trend

(Dollar amounts in millions)

(unaudited)



|                                   |  | 2002     |        |   | 2003    |  
|---------------------------------- |  | -------- | ------ | - | ------- | -
|                                   |  | March 31 |        |   | June 30 |  
|Mutual Funds                       |  |          |        |   |         |  
|Fixed Income                       |  |          |        |   |         |  
|Beginning assets under management  |  | $        | 15,754 |   |         | $
|Net subscriptions                  |  |          | 644    |   |         |  
|Market appreciation (depreciation) |  |          | (128   | ) |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  |          | 16,270 |   |         |  
|                                   |  |          |        |   |         |  
|Liquidity                          |  |          |        |   |         |  
|Beginning assets under management  |  |          | 62,141 |   |         |  
|Net subscriptions (redemptions)    |  |          | (2,147 | ) |         |  
|Market appreciation                |  |          |       |   |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  |          | 59,994 |   |         |  
|                                   |  |          |        |   |         |  
|Equity                             |  |          |        |   |         |  
|Beginning assets under management  |  |          | 8,703  |   |         |  
|Net redemptions                    |  |          | (697   | ) |         |  
|Market appreciation (depreciation) |  |          | (108   | ) |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  |          | 7,898  |   |         |  
|                                   |  |          |        |   |         |  
|Total Mutual Funds                 |  |          |        |   |         |  
|Beginning assets under management  |  |          | 86,598 |   |         |  
|Net subscriptions (redemptions)    |  |          | (2,200 | ) |         |  
|Market appreciation (depreciation) |  |          | (236   | ) |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  | $        | 84,162 |   |         | $
|                                   |  |          |        |   |         |  



18



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



BlackRock, Inc.

Assets Under Management

Quarterly Trend

(Dollar amounts in millions)

(unaudited)



|                                   |  | 2002     |        |   | 2003    |  
|---------------------------------- |  | -------- | ------ | - | ------- | -
|                                   |  | March 31 |        |   | June 30 |  
|Mutual Funds                       |  |          |        |   |         |  
|BlackRock Funds                    |  |          |        |   |         |  
|Beginning assets under management  |  | $        | 24,195 |   |         | $
|Net subscriptions (redemptions)    |  |          | (1,830 | ) |         |  
|Market appreciation (depreciation) |  |          | (189   | ) |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  |          | 22,176 |   |         |  
|                                   |  |          |        |   |         |  
|BlackRock Global Series            |  |          |        |   |         |  
|Beginning assets under management  |  |          | 149    |   |         |  
|Net subscriptions (redemptions)    |  |          | 95     |   |         |  
|Market appreciation (depreciation) |  |          | 3      |   |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  |          | 247    |   |         |  
|                                   |  |          |        |   |         |  
|BPIF                               |  |          |        |   |         |  
|Beginning assets under management  |  |          | 53,167 |   |         |  
|Net subscriptions (redemptions)    |  |          | (633   | ) |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  |          | 52,534 |   |         |  
|                                   |  |          |        |   |         |  
|Closed-end Funds                   |  |          |        |   |         |  
|Beginning assets under management  |  |          | 8,512  |   |         |  
|Net subscriptions                  |  |          | 149    |   |         |  
|Market appreciation (depreciation) |  |          | (50    | ) |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  |          | 8,611  |   |         |  
|                                   |  |          |        |   |         |  
|Short Term Investment Funds (STIF) |  |          |        |   |         |  
|Beginning assets under management  |  |          | 575    |   |         |  
|Net subscriptions (redemptions)    |  |          | 19     |   |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  |          | 594    |   |         |  
|                                   |  |          |        |   |         |  
|Total Mutual Funds                 |  |          |        |   |         |  
|Beginning assets under management  |  |          | 86,598 |   |         |  
|Net subscriptions (redemptions)    |  |          | (2,200 | ) |         |  
|Market appreciation (depreciation) |  |          | (236   | ) |         |  
|                                   |  |          |        |   |         |  
|Ending assets under management     |  | $        | 84,162 |   |         | $
|                                   |  |          |        |   |         |  



19



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Operating results for the three months ended
March 31, 2003 as compared with the three months ended March 31, 2002.



Revenue



Total revenue for the three
months ended March 31, 2003 decreased $3.4 million or 2% to $142.8 million, compared with $146.1 million for the three months ended March 31, 2002. Investment advisory and administration fees decreased $5.4 million or 4%to $126.4 million for
the three months ended March 31, 2003, compared with $131.8 million for the three months ended March 31, 2002. The decrease in investment advisory and administration fees was primarily due to decreases in mutual fund assets under management and
alternative investment product performance fees, partially offset by increases in separate account base fees. Other income of $16.4 million increased $2.0 million or 14% for the three months ended March 31, 2003 compared with $14.3 million for the
three months ended March 31, 2002 primarily due to increased sales of BlackRock Solutionsproducts and services and increased earnings from the Companys joint venture, Nomura BlackRock Asset Management Co., Ltd.



|                                                  |  | Three months endedMarch 31, |         | Variance |  
|------------------------------------------------- |  | --------------------------- | ------- | -------- | -
|                                                  |  | 2003                        |         | 2002     |  
|Dollar amounts in thousands                       |  | (unaudited)                 |         |          |  
|Investment advisory and administration fees:      |  |                             |         |          |  
|Mutual funds                                      |  | $                           | 48,740  |          | $
|Separate accounts                                 |  |                             | 77,625  |          |  
|                                                  |  |                             |         |          |  
|Total investment advisory and administration fees |  |                             | 126,365 |          |  
|Other income                                      |  |                             | 16,386  |          |  
|                                                  |  |                             |         |          |  
|Total revenue                                     |  | $                           | 142,751 |          | $
|                                                  |  |                             |         |          |  



Mutual fund advisory and
administration fees decreased $6.5 million to $48.7 million for the three months ended March 31, 2003, compared with $55.3 million for the three months ended March 31, 2002. The decrease in mutual fund revenue was the result of a $9.5 million
decrease in BlackRock Funds revenue, partially offset by increases in BPIF and closed-end fund revenue of $1.1 million and $1.8 million, respectively. The decrease in BlackRock Funds revenue was attributable to a decrease in assets of
$4.2 billion or 19% primarily due to net redemptions in PNC-related assets over the last twelve months of $3.5 billion and market depreciation of $1.5 billion. The increase in BPIF revenue was due to increases in average assets under management and
fees compared with the first quarter of 2002. Based on current asset levels, BPIF revenue for the second quarter of 2003 could decline by 5% or more from first quarter 2003 results. The rise in closed-end fund revenue was a result of an increase in
assets of $2.7 billion or 31% at March 31, 2003 due to the Companys new fund offerings and market appreciation.



20



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Operating results for the three months ended
March 31, 2003 as compared with the three months ended March 31, 2002. (continued)



Revenue (continued)



Separate
account revenue increased $1.1 million or 1% to $77.6 million for the three months ended March 31, 2003, compared with $76.5 million for the three months ended March 31, 2002. Excluding performance fees, advisory fees on separate accounts increased
$12.0 million or 19% to $74.5 million for the three months ended March 31, 2003, compared with $62.5 million for the three months ended March 31, 2002, as a result of a $40.6 billion or 24% increase in separate account assets under management.
Performance fees of $3.1 million for the three months ended March 31, 2003 decreased $10.9 million or 78%, compared with $14.0 million for the three months ended March 31, 2002 primarily due to lower performance fees earned on alternative investment
products, primarily the Companys fixed income hedge fund which declined by $11.8 million or 98%. The Company expects to earn minimal performance fees from its fixed income hedge fund during 2003 until positive investment performance exceeds a
high water mark established in 2002.



|                                                  |  | Three months endedMarch 31, |         | Variance |  
|------------------------------------------------- |  | --------------------------- | ------- | -------- | -
|                                                  |  | 2003                        |         | 2002     |  
|Dollar amounts in thousands                       |  | (unaudited)                 |         |          |  
|Mutual funds revenue                              |  |                             |         |          |  
|BlackRock Funds                                   |  | $                           | 16,187  |          | $
|Closed-end Funds                                  |  |                             | 11,312  |          |  
|BPIF                                              |  |                             | 20,999  |          |  
|STIF                                              |  |                             | 242     |          |  
|                                                  |  |                             |         |          |  
|Total mutual funds revenue                        |  |                             | 48,740  |          |  
|                                                  |  |                             |         |          |  
|Separate accounts revenue                         |  |                             |         |          |  
|Separate accounts base fees                       |  |                             | 74,514  |          |  
|Separate accounts performance fees                |  |                             | 3,111   |          |  
|                                                  |  |                             |         |          |  
|Total separate accounts revenue                   |  |                             | 77,625  |          |  
|                                                  |  |                             |         |          |  
|Total investment advisory and administration fees |  |                             | 126,365 |          |  
|                                                  |  |                             |         |          |  
|Other income                                      |  |                             | 16,386  |          |  
|                                                  |  |                             |         |          |  
|Total revenue                                     |  | $                           | 142,751 |          | $
|                                                  |  |                             |         |          |  



Expense



The operating margin for the first quarter of 2003 was
40.1% compared with 37.6% for the first quarter of 2002. The increase in operating margin was attributable to a reduction of total expense of $7.5 million or 8% to $88.7 million for the three months ended March 31, 2003, compared with $96.2 million
for the three months ended March 31, 2002. The change primarily reflects decreases in incentive compensation expense and fund administration and servicing costs, partially offset by an increase in general and administration expense.



21



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Operating results for the three months ended
March 31, 2003 as compared with the three months ended March 31, 2002. (continued)



Expense (continued)



|                                        |  | Three months endedMarch 31, |        | Variance |  
|--------------------------------------- |  | --------------------------- | ------ | -------- | -
|                                        |  | 2003                        |        | 2002     |  
|Dollar amounts in thousands             |  | (unaudited)                 |        |          |  
|Employee compensation and benefits      |  | $                           | 55,386 |          | $
|Fund administration and servicing costs |  |                             |        |          |  
|Affiliates                              |  |                             | 6,943  |          |  
|Other                                   |  |                             | 1,015  |          |  
|General and administration              |  |                             | 25,109 |          |  
|Amortization of intangible assets       |  |                             | 232    |          |  
|                                        |  |                             |        |          |  
|Total expense                           |  | $                           | 88,685 |          | $
|                                        |  |                             |        |          |  

---

|NM |  | Not meaningful
|-- |  | --------------



Employee compensation and benefits decreased $5.0 million primarily due to a decrease of $7.5 million in direct incentives on alternative product
performance fees, partially offset by $2.7 million in salary and benefits. Salary and benefit costs rose reflecting increased headcount to support business growth. For the three months ended March 31, 2003, total fund administration and servicing
costs declined $5.2 million or 40% compared with the three months ended March 31, 2003. The decrease consisted of $6.2 million related to lower levels of PNC client assets invested in the BlackRock investment products, partially offset by a $1.0
million increase in related new closed-end fund servicing provided by third parties. Due to the significant increase in non-affiliated fund servicing fees associated with new closed-end fund issuances, these expenses, which were previously included
in general and administration expense, have been disclosed as a separate line item. General and administration expenses increased $2.7 million or 12% to $25.1 million for the three months ended March 31, 2003 compared with $22.4 million for the
three months ended March 31, 2002, largely due to new business activity and corporate facilities investments.



|                                         |  | Three months endedMarch 31, |        | Variance |  
|---------------------------------------- |  | --------------------------- | ------ | -------- | -
|                                         |  | 2003                        |        | 2002     |  
|Dollar amounts in thousands              |  | (unaudited)                 |        |          |  
|General and administration expense:      |  |                             |        |          |  
|Marketing and promotional                |  | $                           | 6,667  |          | $
|Occupancy expense                        |  |                             | 5,612  |          |  
|Technology                               |  |                             | 4,579  |          |  
|Other general and administration         |  |                             | 8,251  |          |  
|                                         |  |                             |        |          |  
|Total general and administration expense |  | $                           | 25,109 |          | $
|                                         |  |                             |        |          |  



22



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Operating results for the three months ended
March 31, 2003 as compared with the three months ended March 31, 2002. (continued)



Expense (continued)



Marketing
and promotional expenses of $6.7 million for the three months ended March 31, 2003 increased $0.8 million or 13% primarily due to increased costs for institutional marketing activities and higher marketing costs related to the closing of the
BlackRock Preferred Opportunity Trust, a new closed-end fund, in the first quarter of 2003. Occupancy expense of $5.6 million for the three months ended March 31, 2003 increased $0.9 million due to office expansion, higher real estate taxes and
operating expense escalations related to the Companys New York headquarters. Other expense increased $0.9 million or 12% for the three months ended March 31, 2003 primarily due to increased subadvisory expenses as well as equipment and other
expenses related to office expansion.



Operating Income and
Net Income



Operating income was $54.1 million for the three
months ended March 31, 2003, representing a $4.1 million or 8% increase compared with the three months ended March 31, 2002. Non-operating income increased $0.5 million to $3.4 million for the three months ended March 31, 2003 as compared with the
three months ended March 31, 2002. The rise was due to increased interest and dividend income primarily due to higher balances of corporate cash and investments. Subsequent to March 31, 2003, the Company invested approximately $45 million in
highly-rated municipal securities. Income tax expense was $22.1 million and $21.4 million, representing effective tax rates of 38.5% and 40.5% for the three months ended March 31, 2003 and March 31, 2002, respectively. The decrease in the
Companys effective tax rate, which increased net income by approximately $1.0 million, is due to a previously disclosed decision that the Company will file certain combined and unitary state income tax returns with PNC Bank, National
Association (PNC Bank), and/or one or more PNC Bank subsidiaries. Net income totaled $35.3 million for the three months ended March 31, 2003 compared with $31.4 million for the three months ended March 31, 2002, representing an increase
of $3.9 million or 12%.



Liquidity and Capital Resources



BlackRock meets its working capital requirements through
cash generated by its operating activities. Cash used in the Companys operating activities totaled $28.6 million for the three months ended March 31, 2003. Operating activities included an annual incentive payment of $93.2 million related to
2002 employee bonuses and net purchases of investments, trading, of approximately $17.8 million for the three months ended March 31, 2003 which represented investments related to senior employee elections under the Companys Voluntary and
Involuntary Deferred Compensation Plans and seed investments in two quantitative equity strategies.



Net cash flow used in investing activities was $21.0 million for the three months ended March 31, 2003 primarily consisting of net investment purchases. During the three months ended March 31, 2003,
investment activity primarily reflected an incremental investment in the Companys fixed income mutual funds of $20.0 million and a seed investment in a new alternative investment product of approximately $5.0 million.



23



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Operating results for the three months ended
March 31, 2003 as compared with the three months ended March 31, 2002. (continued)



Liquidity and Capital Resources (continued)



Net cash flow used in financing activities was $14.0 million for the three months ended March 31, 2003. Financing activities primarily represented treasury stock activity for the three months ended March 31, 2003. During the three
months ended March 31, 2003, the Company repurchased 248,100 shares in open market purchases at a total cost of $10.2 million pursuant to a one million share repurchase program approved by the Board of Directors. The Company may repurchase an
additional 706,300 shares under this authorization. On January 31, 2003, in connection with the BlackRock Long-Term Deferred Compensation Plan, BlackRock repurchased approximately 139,000 shares of class A common stock at a fair market value of
$42.25 per share from certain employees to facilitate required employee income tax payments.



Total capital at March 31, 2003 was $668.2 million and was comprised entirely of stockholders equity.



Contractual Obligations and Commercial Commitments



The Company leases its primary office space under agreements which expire through 2017. In connection with certain lease agreements, the Company is
responsible for escalation payments.



In connection with the
management contract acquired associated with the agreement and plan of merger of CORE Cap, Inc. with Anthracite Capital, Inc., a BlackRock managed REIT, the Company recorded an $8.0 million liability using an imputed interest rate of 10%. For the
quarter ended March 31, 2003, the related expense was $0.2 million. At March 31, 2003, the future commitment under the agreement was $9.5 million.



The Company has entered into a commitment to invest $7.7 million in Carbon Capital, Inc., an alternative investment fund sponsored by BlackRock, of which
$5.0 million remained unfunded at March 31, 2003.



In the
ordinary course of business, BlackRock enters into contracts with third parties pursuant to which the third parties provide services on behalf of BlackRock. In many of the contracts, BlackRock agrees to indemnify the third party service provider
under certain circumstances. The terms of the indemnity vary from contract to contract and the amount of indemnification liability, if any, cannot be determined.



24



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Operating results for the three months ended
March 31, 2003 as compared with the three months ended March 31, 2002. (continued)



Contractual Obligations and Commercial Commitments (continued)



On November 4, 2002, the Company acquired certain assets and liabilities of Cyllenius Capital Management LLC (Cyllenius), an equity hedge fund manager, for $1.9 million in cash at closing.
The ultimate purchase price for Cyllenius may include future contingent payments which are performance-based and are not subject to a maximum or the continued employment of former Cyllenius employees with the Company. The contingent payments, if
applicable, will be made on or about August 31, 2003 and January 30, 2004. Based on current asset levels, the payment to be made on or about August 31, 2003 is expected to be in the range of $3 million to $5 million. The Company is unable to
estimate its potential commitment at January 30, 2004 at this time.



Summary of Commitments (unaudited):



|Dollar amounts in thousands  |  | Total |         | 2003 |   | 2004   |  | 2005 |        | 2006 |   | 2007   |  | Thereafter
|---------------------------- |  | ----- | ------- | ---- | - | ------ |  | ---- | ------ | ---- | - | ------ |  | ----------
|Lease Commitments            |  | $     | 169,899 |      | $ | 8,671  |  | $    | 11,425 |      | $ | 10,843 |  | $         
|Acquired Management Contract |  |       | 9,500   |      |   | 1,500  |  |      | 1,500  |      |   | 1,500  |  |           
|Investment Commitments       |  |       | 4,983   |      |   | 4,983  |  |      |       |      |   |       |  |           
|                             |  |       |         |      |   |        |  |      |        |      |   |        |  |           
|Total Commitments            |  | $     | 184,382 |      | $ | 15,154 |  | $    | 12,925 |      | $ | 12,343 |  | $         
|                             |  |       |         |      |   |        |  |      |        |      |   |        |  |           



Subsequent to March 31,
2003, the Company entered into a binding agreement with HPB Management, LLC (HPB), an investment manager of a fund of hedge funds, to purchase 80% of its outstanding equity for approximately $4.0 million in cash. Additionally, the
Company has committed to purchase the remaining equity of HPB on March 31, 2008. The purchase price of this remaining interest is performance-based and is not subject to a maximum or the continued employment of former HPB employees with the Company.
The Company is unable to estimate its potential obligation at this time.



Critical Accounting Policies



The
preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Management
considers the following accounting policies critical to an informed review of BlackRocks consolidated financial statements. A summary of additional accounting policies is included in the Companys 2002 Form 10-K.



Investments



The Companys investments are classified as trading and available for
sale. Investments, trading, primarily represent investments made by the Company and held in a Rabbi trust with respect to senior employee elections under the BlackRock Voluntary and Involuntary Deferred Compensation Plans and are recorded at fair
market value with unrealized gains and losses included in the accompanying consolidated statements of income as investment income (expense). Investments, available for sale, consist primarily of investments in BlackRock funds, municipal bonds and
certain alternative investment products and are stated at market values. Securities that are not readily marketable (alternative investment products) are stated at their estimated fair market value as determined by the Companys management.



25



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Critical Accounting Policies (continued)



Investments (continued)



The resulting unrealized gains and losses on investments, available for sale,
are included in the accumulated other comprehensive income or loss component of stockholders equity, net of tax. Realized gains and losses on trading and available for sale investments are calculated on a specific identification basis and,
along with interest and dividend income, are included in investment income (expense) on the accompanying consolidated statements of income.The Companys management periodically assesses impairment on investments to determine if it is
other than temporary. Several of the Companys available for sale investments represent equity interests in collateralized debt obligations in which the Company acts in the capacity of collateral manager. The Company reviews cash flow estimates
throughout the life of each collateralized debt obligation to determine if an impairment charge is required to be taken through current earnings. If the updated estimate of future cash flows (taking into account both timing and amounts) is less than
the last revised estimate and the reduction in estimated future cash flows is deemed to be other than temporary, an impairment is recognized based on the excess of the carrying amount of the investment over its fair value. In evaluating impairments
on all other available for sale securities, the Company considers the length of time and the extent to which the securitys market value has been less than its cost, the financial condition and near-term prospects of the securitys issuer
and the Companys intended holding period for the security. Any impairment on investments which is deemed other than temporary is recorded in non-operating income (expense) on the consolidated statements of income.



Property and Equipment



Property and equipment is recorded at cost less accumulated depreciation.
Depreciation generally is provided on the straight-line method over the estimated useful lives of the various classes of property and equipment. Accelerated methods are used for income tax purposes. Leasehold improvements are amortized using the
straight-line method over their estimated useful lives or lease terms, whichever is shorter.



Income Taxes



The Company accounts for income taxes under the liability method prescribed by Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes. Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to the differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis.



26



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Critical Accounting Policies (continued)



Stock-Based Compensation



Prior to 2003, the Company accounted for stock-based employee compensation
plans under the recognition and measurement provisions of Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees, and related Interpretations. Stock compensation recorded prior to 2003
primarily represents the grant of restricted common stock to employees. Effective January 1, 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, as amended by SFAS No.
148, Accounting for Stock-Based Compensation-Transition and Disclosure, prospectively to all employee awards granted, modified or settled after January 1, 2003. Awards under the Companys plans vest over periods ranging from two to
four years. Therefore, the cost related to stock-based employee compensation included in net income for the three month period ended March 31, 2003 is less than that which would have been recognized if the fair value based method had been applied to
all awards since the original effective date of SFAS No. 123. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested awards in each period.



|                                                                                                                                      |  | Three months endedMarch 31, |       
|------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------
|                                                                                                                                      |  | 2003                        |       
|Dollar amounts in thousands                                                                                                           |  | (unaudited)                 |       
|Net income, as reported                                                                                                               |  | $                           | 35,320
|Add: Stock-based employee compensation expense included in reported net income, net of
related tax effects                            |  |                             | 240   
|Deduct: Total stock-based employee compensation expense determined under fair value
method for all awards, net of related tax effects |  |                             | (3,658
|                                                                                                                                      |  |                             |       
|Pro forma net income                                                                                                                  |  | $                           | 31,902
|                                                                                                                                      |  |                             |       
|Earnings per share:                                                                                                                   |  |                             |       
|Basicas reported                                                                                                                     |  | $                           | 0.54  
|Basicpro forma                                                                                                                       |  | $                           | 0.49  
|Dilutedas reported                                                                                                                   |  | $                           | 0.54  
|Dilutedpro forma                                                                                                                     |  | $                           | 0.48  



27



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Related Party Transactions



The Company and its consolidated subsidiaries provide investment advisory and
administration services to the BlackRock Funds, BPIF, the BlackRock Closed-end Funds and other commingled funds.



Revenues for services provided to these mutual funds are as follows:



|                                             |  | Three months endedMarch 31,
|-------------------------------------------- |  | ---------------------------
|                                             |  | 2003                       
|Dollar amounts in thousands                  |  | (unaudited)                
|Investment advisory and administration fees: |  |                            
|BlackRock Open-end Funds:                    |  |                            
|PNC                                          |  | $                          
|Other                                        |  |                            
|BlackRock Closed-end FundsOther             |  |                            
|BlackRock Provident Institutional Funds      |  |                            
|PNC                                          |  |                            
|Other*                                       |  |                            
|STIFPNC                                     |  |                            
|                                             |  |                            
|                                             |  | $                          
|                                             |  |                            

---

|* |  | Includes the International Dollar Reserve Fund I, Ltd., a Cayman Islands open-ended limited liability company.
|- |  | --------------------------------------------------------------------------------------------------------------



The Company provides investment advisory and administration services to
certain PNC subsidiaries, Nomura Asset Management Co., Ltd. (Nomura), a strategic joint venture partner, and affilaites of Nomura for a fee, based on assets under management. In addition, the Company provides risk management and private
client services to PNC.



Revenues for such services are as
follows:



|                                 |  | Three months endedMarch 31,
|-------------------------------- |  | ---------------------------
|                                 |  | 2003                       
|Dollar amounts in thousands      |  | (unaudited)                
|Separate accountsPNC            |  | $                          
|Separate accountsNomura         |  |                            
|Private client servicesPNC      |  |                            
|Other income-risk managementPNC |  |                            
|                                 |  |                            
|                                 |  | $                          
|                                 |  |                            



Total revenue earned by
BlackRock for providing asset management and other services to PNC subsidiaries or PNC related accounts for the three month periods ended March 31, 2003 and 2002 totaled $17,933 and $25,882, respectively.



28



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Related Party Transactions (continued)



PNC subsidiaries and PNC related accounts had the following
investments in BlackRock sponsored mutual funds or separate accounts.



|                                        |  | March 31,  
|--------------------------------------- |  | -----------
|                                        |  | 2003       
|Dollar amounts in millions              |  | (unaudited)
|BlackRock Open-end Funds                |  | $          
|BlackRock Provident Institutional Funds |  |            
|STIF                                    |  |            
|Separate accounts                       |  |            
|                                        |  |            
|                                        |  | $          
|                                        |  |            



The Company has entered
into various memoranda of understanding and co-administration agreements with affiliates of PNC pursuant to which the Company pays administration fees for BPIF and certain other commingled funds and service fees for PNC Advisors (PNCs
wealth management business) clients invested in the BlackRock Funds.



PNC also provides general and administration services to the Company. Charges for such services were based on actual usage or on defined formulas which, in managements view, resulted in reasonable allocations.



Aggregate expenses included in the consolidated financial statements for
transactions with related parties are as follows:



|                                                   |  | Three months endedMarch 31,
|-------------------------------------------------- |  | ---------------------------
|                                                   |  | 2003                       
|Dollar amounts in millions                         |  | (unaudited)                
|Fund administration and servicing costs-affiliates |  | $                          
|General and administration                         |  |                            
|General and administration-consulting              |  |                            
|                                                   |  |                            
|                                                   |  | $                          
|                                                   |  |                            



Additionally, an
indirect wholly owned subsidiary of PNC acts as a financial intermediary associated with the sale of back-end loaded shares of certain BlackRock funds. This entity finances broker sales commissions and receives all associated sales charges.



Included in accounts receivable is approximately $7,620 and
$5,434 at March 31, 2003 and December 31, 2002, respectively, which primarily represents investment and administration services provided to Nomura, PNC subsidiaries and affiliates.



Receivable from affiliates was approximately $507 and $281 at March 31, 2003 and December 31, 2002, respectively. These
amounts primarily represent reimbursed expenses due from the BlackRock Funds and affiliates.



29



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Related Party Transactions (continued)



Payable to affiliates was $39,628 and $23,977 at March 31,
2003 and December 31, 2002, respectively. These amounts primarily represent income taxes payable and fund administration and servicing costs-affiliates payable. These amounts do not bear interest.



Consolidation of Variable Interest Entities



In January 2003, the Financial Accounting Standards Board (FASB)
issued FASB Interpretation (FIN) No. 46, Consolidation of Variable Interest Entities. FIN No. 46 addresses the application of Accounting Research Bulletin No. 51, Consolidated Financial Statements, to variable
interest entities (VIE) and generally would require that the assets, liabilities and results of operations of a VIE be consolidated into the financial statements of the enterprise that has a controlling financial interest in it. The
interpretation provides a framework for determining whether an entity should be evaluated for consolidation based on voting interests or significant financial support provided to the entity (variable interests).



An entity is classified as a VIE if total equity is not sufficient to permit
the entity to finance its activities without additional subordinated financial support or its equity investors lack the direct or indirect ability to make decisions about an entitys activities through voting rights, absorb the expected losses
of the entity if they occur or receive the expected residual returns of the entity if they occur. Once an entity is determined to be a VIE, its assets, liabilities and results of operations should be consolidated with those of its primary
beneficiary. The primary beneficiary of a VIE is the entity which either will absorb a majority of the VIEs expected losses or has the right to receive a majority of the VIEs expected residual returns. The expected losses and residual
returns of a VIE include expected variability in its net income or loss, fees to decision makers and fees to guarantors of substantially all VIE assets or liabilities and are calculated in accordance with Statement of Financial Accounting Concept
No. 7, Using Cash Flow Information and Present Value in Accounting Measurements.



A public enterprise with a variable interest in a VIE created before January 31, 2003 must apply FIN No. 46 to that VIE as of the beginning of the first interim or annual reporting period beginning
after June 15, 2003. Additionally, if it is reasonably possible that an enterprise will consolidate or disclose information about a VIE when the guidance becomes effective, there are several disclosure requirements effective for all financial
statements issued after January 31, 2003.



Management is in the
process of finalizing changes to the equity ownership and/or control structure of certain hedge funds previously identified in the Companys 2002 Form 10-K that management believes will remove them from the scope of FIN No. 46. As a result
these entities will not be required to be consolidated in the third quarter of 2003.



Pursuant to the conceptual framework set forth in FIN No. 46, the Companys management has concluded that the consolidation of the assets, liabilities and results of operations of four collateralized bond obligation
funds (CBOs) and one collateralized loan obligation fund (CLO) organized as corporations or limited liability companies in its consolidated financial statements as of and for the period ended September 30, 2003 is reasonably
possible. The funds invest in high yield securities and offer opportunity for high return and are subject to greater risk than traditional investment products. These funds are structured to take advantage of the yield differential between their
assets and liabilities and have terms to maturity from eight to twelve years. At March 31, 2003, aggregate assets and debt in the CBOs and CLO was approximately $2.2 billion and $2.1 billion, respectively. BlackRocks equity ownership in these
funds was approximately $11.3 million at March 31, 2003. BlackRocks maximum potential loss related to these VIEs is limited to the amount of its respective equity ownership in each of these investment vehicles and consequently BlackRock has no
risk of loss with respect to the debt of these investment vehicles. Additionally, the Company has neither guaranteed nor is contractually liable for any of the VIEs obligations.



30



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Consolidation of Variable Interest Entities
(continued)



Assuming the consolidation of the CBOs
and CLOs assets, liabilities and results of operations effective July 1, 2003, the Company will record a cumulative effect of change in accounting principle estimated to range from $6 million to $10 million. This charge represents the
difference between the carrying amounts of BlackRocks investments in these entities accounted for under SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities, the Companys current accounting
treatment, and FIN No. 46.



Commencing in 2003, BlackRock acts as
trading adviser and special member to an entity which has created a series of municipal securities trusts in which it has retained interests. These trusts purchase fixed-rate, long-term, highly rated, insured or escrowed municipal bonds financed by
the issuance of trust certificates. The trust certificates entitle the holder to receive future payments of principal and variable interest and to tender such certificates at the option of the holder on a periodic basis. A third party acts as
placement agent for the entity and the trusts and as liquidity provider to the trusts. The aggregate assets and debt in this entity (including the trusts) was approximately $96 million and $63 million, respectively. BlackRocks equity ownership
was approximately $5.0 million at March 31, 2003. Based on its preliminary assessment, the Companys management has concluded that BlackRock is not the primary beneficiary of this entity and therefore will not consolidate the entity upon the
Companys adoption of FIN No. 46.



Management will continue
to assess this interpretations final impact on its consolidated financial statements. Therefore, additional entities may be subject to consolidation upon BlackRocks final adoption of FIN No. 46.



Interest Rates



The value of assets under management is affected by, among other things,
changes in interest rates. Since BlackRock derives the majority of its revenues from investment advisory fees based on the value of assets under management, BlackRocks revenues may be adversely affected by changing interest rates. In a period
of rapidly rising interest rates, BlackRocks assets under management would likely be negatively affected by reduced asset values and increased redemptions.



Inflation



The majority of BlackRocks revenues are based on the value of assets under management. There is no predictable relationship between the rate of
inflation and the value of assets under management by BlackRock, except as inflation may affect interest rates. BlackRock does not believe inflation will significantly affect its compensation costs, as they are substantially variable in nature.
However, the rate of inflation may affect BlackRocks expenses such as information technology and occupancy costs. To the extent inflation results in rising interest rates and has other effects upon the securities markets, it may adversely
affect BlackRocks results of operations by reducing BlackRocks assets under management, revenues or otherwise.



31



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##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(continued)



Forward Looking Statements



This report, and other documents filed by BlackRock, contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act with respect to BlackRocks fixed income hedge fund investment performance, potential new business opportunities, liquidity asset levels and other future financial or
business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as trend, potential, opportunity, pipeline, believe,
comfortable, expect, current, intention, estimate, position, assume, potential, outlook, continue, remain,
maintain, sustain, seek, achieve, and similar expressions, or future or conditional verbs such as will, would, should, could, may and similar
expressions.



BlackRock cautions that forward-looking statements
are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to update forward-looking statements. Actual results could differ
materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.



In addition to factors previously disclosed in BlackRocks Securities and Exchange Commission (the SEC) reports and those identified
elsewhere in this report, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives
and strategies; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management;
(3) the investment performance of BlackRocks advised or sponsored investment products and separately managed accounts; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future
acquisitions; (7) the unfavorable resolution of legal proceedings; (8) the extent and timing of any share repurchases; (9) the impact, extent and timing of technological changes and the adequacy of intellectual property protection; (10) the impact
of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock or PNC; (11) terrorist activities and international hostilities, which may adversely affect the general
economy, financial and capital markets, specific industries, and BlackRock; and (12) the ability to attract and retain highly talented professionals.



BlackRocks Annual Report on Form 10-K for the year ended December 31, 2002 and BlackRocks subsequent reports filed with the SEC, accessible on
the SECs website at <http://www.sec.gov>, discuss these factors in more detail and identify additional factors that can affect forward-looking statements.



32



---

##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 3. Quantitative and Qualitative Disclosures About Market Risk



In the normal course of its business, BlackRock is exposed to the risk of interest rate, securities market and general economic fluctuations.



BlackRocks investments, available for sale, consist primarily of
BlackRock Funds, municipal debt securities and certain alternative investment products. Occasionally, BlackRock invests in new mutual funds or advisory accounts (seed investments) sponsored by BlackRock in order to provide
investable cash to the new mutual fund or advisory account to establish a performance history. As of March 31, 2003 and December 31, 2002, the fair market value of seed investments was $33.4 million and $27.5 million, respectively. The fair market
value of BlackRocks other investments included in the mutual funds total, as stated below, was $171.4 million and $151.1 million as of March 31, 2003 and December 31, 2002, respectively, and is comprised of fixed income portfolios of the
BlackRock Funds. These investments expose BlackRock to equity price risk. BlackRock does not hold any derivative securities to hedge its investments. The following table summarizes the fair market values of the investments and provides a
sensitivity analysis of the estimated fair market values of all financial instruments subject to equity price risk, assuming a 10% increase or decrease in equity prices:



|                                                  |  | Fair MarketValue |         | Fair market valueassuming 10%increase inmarket
price |   | Fair market valueassuming 10%decrease inmarket
price
|------------------------------------------------- |  | ---------------- | ------- | ---------------------------------------------------- | - | ----------------------------------------------------
|March 31, 2003                                    |  |                  |         |                                                      |   |                                                     
|Mutual funds                                      |  | $                | 11,020  |                                                      | $ | 12,122                                              
|Equity securities                                 |  |                  | 6,131   |                                                      |   | 6,744                                               
|Other                                             |  |                  | 17,167  |                                                      |   | 18,884                                              
|                                                  |  |                  |         |                                                      |   |                                                     
|Total investments, trading                        |  |                  | 34,318  |                                                      |   | 37,750                                              
|                                                  |  |                  |         |                                                      |   |                                                     
|Mutual funds                                      |  |                  | 178,149 |                                                      |   | 195,964                                             
|Collateralized bond obligations                   |  |                  | 11,269  |                                                      |   | 12,396                                              
|Other                                             |  |                  | 15,194  |                                                      |   | 16,713                                              
|                                                  |  |                  |         |                                                      |   |                                                     
|                                                  |  |                  | 204,612 |                                                      |   | 225,073                                             
|                                                  |  |                  |         |                                                      |   |                                                     
|Total investments, trading and available for sale |  | $                | 238,930 |                                                      | $ | 262,823                                             
|                                                  |  |                  |         |                                                      |   |                                                     
|December 31, 2002                                 |  |                  |         |                                                      |   |                                                     
|Mutual funds                                      |  | $                | 5,131   |                                                      | $ | 5,644                                               
|Other                                             |  |                  | 10,766  |                                                      |   | 11,843                                              
|                                                  |  |                  |         |                                                      |   |                                                     
|Total investments, trading                        |  |                  | 15,897  |                                                      |   | 17,487                                              
|                                                  |  |                  |         |                                                      |   |                                                     
|Mutual funds                                      |  |                  | 158,418 |                                                      |   | 174,260                                             
|Collateralized bond obligations                   |  |                  | 10,375  |                                                      |   | 11,413                                              
|Other                                             |  |                  | 9,782   |                                                      |   | 10,760                                              
|                                                  |  |                  |         |                                                      |   |                                                     
|Total investments, available for sale             |  |                  | 178,575 |                                                      |   | 196,433                                             
|                                                  |  |                  |         |                                                      |   |                                                     
|Total investments, trading and available for sale |  | $                | 194,472 |                                                      | $ | 213,919                                             
|                                                  |  |                  |         |                                                      |   |                                                     



33



---

##### Table of Contents



PART IFINANCIAL
INFORMATION (continued)

Item 3. Quantitative and Qualitative Disclosures About Market Risk (continued)



As discussed previously, total investments, trading, primarily reflects
investments by BlackRock with respect to senior employee elections under BlackRocks Voluntary and Involuntary Deferred Compensation Plans. At March 31, 2003, equity securities represents a seed investment made by the Company during 2003 in two
quantitative equity strategies. Therefore, any change in the fair market value of these investments is offset by a corresponding change in the related deferred compensation liability.



The following table summarizes the fair market value of the Companys investments in municipal debt securities, which
expose BlackRock to interest rate risk, at March 31, 2003 and December 31, 2002. The table also provides a sensitivity analysis of the estimated fair market value of these financial instruments, assuming 100 basis point upward and downward parallel
shifts in the yield curve:



|                          |  | Fair MarketValue |        | Fair market valueassuming +100basis point shift |   | Fair market valueassuming - 100basis point shift
|------------------------- |  | ---------------- | ------ | ----------------------------------------------- | - | ------------------------------------------------
|March 31, 2003            |  |                  |        |                                                 |   |                                                 
|Municipal debt securities |  | $                | 5,455  |                                                 | $ | 4,323                                           
|                          |  |                  |        |                                                 |   |                                                 
|December 31, 2002         |  |                  |        |                                                 |   |                                                 
|Municipal debt securities |  | $                | 14,271 |                                                 | $ | 10,921                                          
|                          |  |                  |        |                                                 |   |                                                 



Item 4. Controls and Procedures



|(a) |  | Evaluation of Disclosure Controls and Procedures. The Companys Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the
Companys disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Companys disclosure controls and procedures are effective in alerting them on a timely basis
to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Companys report filed or submitted under the Exchange Act.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) |  | Changes in Internal Controls. Since the Evaluation Date, there have not been any significant changes in the Companys internal controls or in other factors that
could significantly affect such controls.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



34



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##### Table of Contents



PART IIOTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K





|(a) |  | Exhibits    |  |                                                                                                                                                                                                                
|--- |  | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Exhibit No. |  | Description                                                                                                                                                                                                    
|   
|    |  | 3.1(1)      |  | Amended and Restated Certificate of Incorporation of the Registrant.                                                                                                                                           
|   
|    |  | 3.2(8)      |  | Amended and Restated Bylaws of the Registrant.                                                                                                                                                                 
|   
|    |  | 3.3(8)      |  | Amendment No. 1 to the Amended and Restated Bylaws of the Registrant.                                                                                                                                          
|   
|    |  | 3.4(8)      |  | Amendment No. 2 to the Amended and Restated Bylaws of the Registrant.                                                                                                                                          
|   
|    |  | 4.1(1)      |  | Specimen of Common Stock Certificate (per class).                                                                                                                                                              
|   
|    |  | 4.2(1)      |  | Amended and Restated Stockholders Agreement, dated September 30, 1999, by and among the Registrant, PNC Asset
Management, Inc. and certain employees of the Registrant and its affiliates.                     
|   
|    |  | 4.3(9)      |  | Amendment No. 1 to the Amended and Restated Stockholders Agreement, dated October 10, 2002, by and among the
Registrant, PNC Asset Management, Inc. and certain employees of the Registrant and its affiliates.
|   
|    |  | 10.1(1)     |  | Tax Disaffiliation Agreement, dated October 6, 1999, among BlackRock, Inc., PNC Asset Management, Inc. and The PNC
Financial Services Group, Inc., formerly PNC Bank Corp.                                     
|   
|    |  | 10.2(1)     |  | 1999 Stock Award and Incentive Plan. +                                                                                                                                                                         
|   
|    |  | 10.3(1)     |  | 1999 Annual Incentive Performance Plan. +                                                                                                                                                                      
|   
|    |  | 10.4(1)     |  | Nonemployee Directors Stock Compensation Plan. +                                                                                                                                                               
|   
|    |  | 10.5(1)     |  | Initial Public Offering Agreement, dated September 30, 1999, among the Registrant, The PNC Financial Services Group,
Inc., formerly PNC Bank Corp. and PNC Asset Management, Inc.                              
|   
|    |  | 10.6(1)     |  | Registration Rights Agreement, dated October 6, 1999, among the Registrant, PNC Asset Management, Inc. and certain
holders of class B common stock of the Registrant.                                          
|   
|    |  | 10.7(1)     |  | Services Agreement, dated October 6, 1999, between the Registrant and The PNC Financial Services Group, Inc., formerly
PNC Bank Corp.                                                                          
|   
|    |  | 10.8(2)     |  | BlackRock, Inc. Amended and Restated Long-Term Deferred Compensation Plan. +                                                                                                                                   
|   
|    |  | 10.9(2)     |  | BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation Plan. +                                                                                                                     
|   
|    |  | 10.10(3)    |  | Agreement of Lease, dated May 3, 2000, between 40 East 52ndStreet L.P. and the Registrant.                                                                                                                     
|   
|    |  | 10.11(4)    |  | Amendment No. 1 to the 1999 Stock Award and Incentive Plan. +                                                                                                                                                  
|   
|    |  | 10.12(4)    |  | Amendment No. 1 to the BlackRock, Inc. Amended and Restated Long-Term Deferred Compensation Plan.
+                                                                                                            
|   
|    |  | 10.13(4)    |  | Amendment No. 1 to the BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation Plan.
+                                                                                              
|   
|    |  | 10.14(5)    |  | Agreement of Lease, dated September 4, 2001, between 40 East 52ndStreet L.P. and the Registrant.                                                                                                               
|   
|    |  | 10.15(6)    |  | BlackRock, Inc. 2001 Employee Stock Purchase Plan. +                                                                                                                                                           
|   
|    |  | 10.16(11)   |  | Amended and Restated BlackRock, Inc. Voluntary Deferred Compensation Plan. +                                                                                                                                   
|   
|    |  | 10.17(11)   |  | Amended and Restated BlackRock, Inc. Involuntary Deferred Compensation Plan. +                                                                                                                                 
|   
|    |  | 10.18(7)    |  | Amendment No. 2 to the BlackRock, Inc. 1999 Stock Award and Incentive Plan. +                                                                                                                                  
|   
|    |  | 10.19(9)    |  | BlackRock, Inc. 2002 Long Term Retention and Incentive Plan. +                                                                                                                                                 
|   
|    |  | 10.20(9)    |  | Share Surrender Agreement, dated October 10, 2002, among the Registrant, PNC Asset Management, Inc., and The PNC
Financial Services Group, Inc.                                                                
|   
|    |  | 10.21(9)    |  | Employment Agreement, between the Registrant and Laurence Fink, dated October 10, 2002 +                                                                                                                       
|   
|    |  | 10.22(9)    |  | Amendment No. 1 to the Initial Public Offering Agreement, dated October 10, 2002, among The PNC Financial Services
Group, Inc., PNC Asset Management, Inc. and the Registrant.                                 
|   
|    |  | 10.23(9)    |  | Amendment No. 1 to the Registration Rights Agreement, dated October 10, 2002, among the Registrant, PNC Asset
Management, Inc. and certain holders of class B common stock of the Registrant.                  
|   
|    |  | 10.24(11)   |  | Amended and Restated 1999 Annual Incentive Performance Plan. +                                                                                                                                                 
|   
|    |  | 10.25(10)   |  | The PNC Financial Services Group, Inc.s Incentive Savings Plan, as amended as of January 1, 2001.
+                                                                                                           
|   
|    |  | 10.26(10)   |  | First Amendment to The PNC Financial Services Group, Inc.s Incentive Savings Plan. +                                                                                                                          
|   
|    |  | 10.27(10)   |  | Second Amendment to The PNC Financial Services Group, Inc.s Incentive Savings
Plan. +                                                                                                                         
|   
|    |  | 99.1        |  | Certification of Chief Executive Officer and Chief Financial
Officer.                                                                                                                                          

---

|(1) |  | Incorporated by Reference to the Registrants Registration Statement on Form S-1 (Registration No. 333-78367), as amended, originally filed with the Securities
and Exchange Commission on May 13, 1999.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Incorporated by Reference to the Registrants Registration Statement on Form S-8 (Registration No. 333-32406), originally filed with the Securities and
Exchange Commission on March 14, 2000.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended March 31, 2000.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------



35



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##### Table of Contents



PART IIOTHER
INFORMATION

Item 6. Exhibits and Reports on Form 8-K





|  
|--
|(a
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  
|  

---

|+ |  | Denotes compensatory plan.
|- |  | --------------------------



|(b) |  | Reports on Form 8-K
|--- |  | -------------------



Since December 31, 2002, the Company has filed the following Current Reports on Form 8-K: Form 8-K dated as of April 15, 2003, reporting
the Companys Results of Operations and Financial Condition, filed pursuant to Item 12 of Form 8-K.



36



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##### Table of Contents



SIGNATURES



Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                   |  | BLACKROCK, INC.
|------------------ |  | ---------------
|                   |  |                
|                  
|Date: May 15, 2003 |  | By:            
|                   |  |                



CEO
CERTIFICATION



I, Laurence D. Fink, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of BlackRock, Inc.;
|-- |  | ----------------------------------------------------------------------



|2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



37



---

##### Table of Contents



|6. |  | The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                  
|------------------
|Date: May 15, 2003
|                  



CFO
CERTIFICATION



I, Paul L. Audet, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of BlackRock, Inc.;
|-- |  | ----------------------------------------------------------------------



|2. |  | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. |  | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. |  | The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report
(the Evaluation Date); and
| | -- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) |  | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation
Date;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. |  | The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to record, process, summarize
and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) |  | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal controls; and
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



38



---

##### Table of Contents



|6. |  | The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                  
|------------------
|Date: May 15, 2003
|                  



39



---

##### Table of Contents



EXHIBIT INDEX



|Exhibit No. |  | Description                                                                                                                                                                                                    
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           
|3.1(1)      |  | Amended and Restated Certificate of Incorporation of the
Registrant.                                                                                                                                           
|           
|3.2(8)      |  | Amended and Restated Bylaws of the Registrant.                                                                                                                                                                 
|           
|3.3(8)      |  | Amendment No. 1 to the Amended and Restated Bylaws of the
Registrant.                                                                                                                                          
|           
|3.4(8)      |  | Amendment No. 2 to the Amended and Restated Bylaws of the
Registrant.                                                                                                                                          
|           
|4.1(1)      |  | Specimen of Common Stock Certificate (per class).                                                                                                                                                              
|           
|4.2(1)      |  | Amended and Restated Stockholders Agreement, dated September 30, 1999, by and among
the Registrant, PNC Asset Management, Inc. and certain employees of the Registrant and its affiliates.                     
|           
|4.3(9)      |  | Amendment No. 1 to the Amended and Restated Stockholders Agreement, dated October 10,
2002, by and among the Registrant, PNC Asset Management, Inc. and certain employees of the Registrant and its affiliates.
|           
|10.1(1)     |  | Tax Disaffiliation Agreement, dated October 6, 1999, among BlackRock, Inc., PNC Asset
Management, Inc. and The PNC Financial Services Group, Inc., formerly PNC Bank Corp.                                     
|           
|10.2(1)     |  | 1999 Stock Award and Incentive Plan. +                                                                                                                                                                         
|           
|10.3(1)     |  | 1999 Annual Incentive Performance Plan. +                                                                                                                                                                      
|           
|10.4(1)     |  | Nonemployee Directors Stock Compensation Plan. +                                                                                                                                                               
|           
|10.5(1)     |  | Initial Public Offering Agreement, dated September 30, 1999, among the Registrant,
The PNC Financial Services Group, Inc., formerly PNC Bank Corp. and PNC Asset Management, Inc.                              
|           
|10.6(1)     |  | Registration Rights Agreement, dated October 6, 1999, among the Registrant, PNC Asset
Management, Inc. and certain holders of class B common stock of the Registrant.                                          
|           
|10.7(1)     |  | Services Agreement, dated October 6, 1999, between the Registrant and The PNC
Financial Services Group, Inc., formerly PNC Bank Corp.                                                                          
|           
|10.8(2)     |  | BlackRock, Inc. Amended and Restated Long-Term Deferred Compensation Plan.
+                                                                                                                                   
|           
|10.9(2)     |  | BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation
Plan. +                                                                                                                     
|           
|10.10(3)    |  | Agreement of Lease, dated May 3, 2000, between 40 East 52ndStreet L.P. and the Registrant.                                                                                                                     
|           
|10.11(4)    |  | Amendment No. 1 to the 1999 Stock Award and Incentive Plan. +                                                                                                                                                  
|           
|10.12(4)    |  | Amendment No. 1 to the BlackRock, Inc. Amended and Restated Long-Term Deferred
Compensation Plan. +                                                                                                            
|           
|10.13(4)    |  | Amendment No. 1 to the BlackRock International, Ltd. Amended and Restated Long-Term
Deferred Compensation Plan. +                                                                                              
|           
|10.14(5)    |  | Agreement of Lease, dated September 4, 2001, between 40 East 52ndStreet L.P. and the Registrant.                                                                                                               
|           
|10.15(6)    |  | BlackRock, Inc. 2001 Employee Stock Purchase Plan. +                                                                                                                                                           
|           
|10.16(11)   |  | Amended and Restated BlackRock, Inc. Voluntary Deferred Compensation Plan.
+                                                                                                                                   
|           
|10.17(11)   |  | Amended and Restated BlackRock, Inc. Involuntary Deferred Compensation Plan.
+                                                                                                                                 
|           
|10.18(7)    |  | Amendment No. 2 to the BlackRock, Inc. 1999 Stock Award and Incentive Plan.
+                                                                                                                                  
|           
|10.19(9)    |  | BlackRock, Inc. 2002 Long Term Retention and Incentive Plan. +                                                                                                                                                 
|           
|10.20(9)    |  | Share Surrender Agreement, dated October 10, 2002, among the Registrant, PNC Asset
Management, Inc., and The PNC Financial Services Group, Inc.                                                                
|           
|10.21(9)    |  | Employment Agreement, between the Registrant and Laurence Fink, dated October 10,
2002 +                                                                                                                       
|           
|10.22(9)    |  | Amendment No. 1 to the Initial Public Offering Agreement, dated October 10, 2002,
among The PNC Financial Services Group, Inc., PNC Asset Management, Inc. and the Registrant.                                 
|           
|10.23(9)    |  | Amendment No. 1 to the Registration Rights Agreement, dated October 10, 2002, among
the Registrant, PNC Asset Management, Inc. and certain holders of class B common stock of the Registrant.                  
|           
|10.24(11)   |  | Amended and Restated 1999 Annual Incentive Performance Plan. +                                                                                                                                                 
|           
|10.25(10)   |  | The PNC Financial Services Group, Inc.s Incentive Savings Plan, as amended as
of January 1, 2001. +                                                                                                           
|           
|10.26(10)   |  | First Amendment to The PNC Financial Services Group, Inc.s Incentive Savings
Plan. +                                                                                                                          
|           
|10.27(10)   |  | Second Amendment to The PNC Financial Services Group, Inc.s Incentive Savings
Plan. +                                                                                                                         
|           
|99.1        |  | Certification of Chief Executive Officer and Chief Financial
Officer.                                                                                                                                          

---

|(1) |  | Incorporated by Reference to the Registrants Registration Statement on Form S-1 (Registration No. 333-78367), as amended, originally filed with the Securities
and Exchange Commission on May 13, 1999.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Incorporated by Reference to the Registrants Registration Statement on Form S-8 (Registration No. 333-32406), originally filed with the Securities and
Exchange Commission on March 14, 2000.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended March 31, 2000.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2000.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2001.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | Incorporated by Reference to the Registrants Registration Statement on Form S-8 (Registration No. 333-68670), originally filed with the Securities and Exchange
Commission on August 30, 2001.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) |  | Incorporated by Reference to the Registrants Registration Statement on Form S-8 (Registration No. 333-68666), originally filed with the Securities and Exchange
Commission on August 30, 2001.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) |  | by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended June 30, 2002.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------



---

##### Table of Contents



EXHIBIT INDEX (continued)



|(9) |  | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended September 30, 2002.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) |  | Incorporated by reference to The PNC Financial Services Group, Inc.s Annual Report on Form 10-K (Commission File No. 001-9718) for the year ended December 31,
2002.
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(11) |  | Incorporated by reference to the Registrants Annual Report on Form 10-K (Commission File No. 001-15305) for the year ended December 31, 2002.
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------



|+ |  | Denotes compensatory plan.
|- |  | --------------------------