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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



(Mark One)

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



For the quarterly period ended June 30, 2004



OR



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



For the transition period from  to
.



(Commission file number 001-15305)



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BlackRock, Inc.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 51-0380803                          
|(State or other jurisdiction of incorporation 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 preceding 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 July 31, 2004, there were 18,604,515 shares of the registrants
class A common stock outstanding and 45,046,662 shares of the registrants class B common stock outstanding.



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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 |  | [18  | ]
|        |  |                                                                                      
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | [45  | ]
|        |  |                                                                                      
|Item 4. |  | Controls and Procedures                                                               |  | [47  | ]
|        |  |                                                                                      
|        |  | PART II                                                                               |  |      |  
|        |  |                                                                                      
|        |  | OTHER INFORMATION                                                                     |  |      |  
|        |  |                                                                                      
|Item 1. |  | Legal Proceedings                                                                     |  | [48  | ]
|        |  |                                                                                      
|Item 2. |  | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities      |  | [49  | ]
|        |  |                                                                                      
|Item 4. |  | Submission of Matters to a Vote of Security Holders                                   |  | [50  | ]
|        |  |                                                                                      
|Item 6. |  | Exhibits and Reports on Form 8-K                                                      |  | [51  | ]



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PART I  FINANCIAL INFORMATION

Item 1. Financial Statements



BlackRock, Inc.

Consolidated Statements of Financial Condition

(Dollar amounts in thousands)



|                                                                                |  |               |         |   |                  |   |         |  
|------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                |  | June 30, 2004 |         |   | December 31,2003 |  
|                                                                                |  | (unaudited)   |         |   |                  |  
|Assets                                                                          |  |               |         |   |                  |   |         |  
|Cash and cash equivalents                                                       |  | $             | 296,696 |   |                  | $ | 315,941 |  
|Accounts receivable                                                             |  |               | 145,895 |   |                  |   | 127,235 |  
|Investments                                                                     |  |               | 236,369 |   |                  |   | 234,923 |  
|Property and equipment, net                                                     |  |               | 88,098  |   |                  |   | 87,006  |  
|Intangible assets, net                                                          |  |               | 185,592 |   |                  |   | 192,079 |  
|Receivable from affiliates                                                      |  |               | 290     |   |                  |   | 81      |  
|Other assets                                                                    |  |               | 13,512  |   |                  |   | 9,958   |  
|                                                                                |  |               |         |   |                  |   |         |  
|Total assets                                                                    |  | $             | 966,452 |   |                  | $ | 967,223 |  
|                                                                                |  |               |         |   |                  |   |         |  
|Liabilities                                                                     |  |               |         |   |                  |   |         |  
|Accrued compensation                                                            |  | $             | 135,577 |   |                  | $ | 172,447 |  
|Accounts payable and accrued liabilities                                        |  |               |         |   |                  |   |         |  
|Affiliate                                                                       |  |               | 28,288  |   |                  |   | 40,668  |  
|Other                                                                           |  |               | 21,631  |   |                  |   | 19,430  |  
|Acquired management contract obligation                                         |  |               | 4,810   |   |                  |   | 5,736   |  
|Other liabilities                                                               |  |               | 11,906  |   |                  |   | 14,395  |  
|                                                                                |  |               |         |   |                  |   |         |  
|Total liabilities                                                               |  |               | 202,212 |   |                  |   | 252,676 |  
|                                                                                |  |               |         |   |                  |   |         |  
|Minority interest                                                               |  |               | 8,987   |   |                  |   | 1,239   |  
|                                                                                |  |              
|Stockholders equity                                                            |  |               |         |   |                  |   |         |  
|Common stock, class A, 19,243,878 shares issued                                 |  |               | 192     |   |                  |   | 192     |  
|Common stock, class B, 45,842,196 and 46,120,737 shares issued, respectively    |  |               | 459     |   |                  |   | 461     |  
|Additional paid - in capital                                                    |  |               | 183,991 |   |                  |   | 196,446 |  
|Retained earnings                                                               |  |               | 641,981 |   |                  |   | 570,535 |  
|Unearned compensation                                                           |  |               | (7,288  | ) |                  |   | (10,270 | )
|Accumulated other comprehensive income                                          |  |               | 5,203   |   |                  |   | 6,027   |  
|Treasury stock, class A, at cost, 669,118 and 954,067 shares held, respectively |  |               | (36,321 | ) |                  |   | (45,054 | )
|Treasury stock, class B, at cost, 795,261 and 313,626 shares held, respectively |  |               | (32,964 | ) |                  |   | (5,029  | )
|                                                                                |  |               |         |   |                  |   |         |  
|Total stockholders equity                                                      |  |               | 755,253 |   |                  |   | 713,308 |  
|                                                                                |  |               |         |   |                  |   |         |  
|Total liabilities and stockholders equity                                      |  | $             | 966,452 |   |                  | $ | 967,223 |  
|                                                                                |  |               |         |   |                  |   |         |  



See accompanying notes to
consolidated financial statements.



- 1 -



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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 ended June 30, |            |   | Six months ended June 30, |  
|                                                     |  | 2004                        |            |   | 2003                      |   |            | 2004 |  |   | 2003       |  
|Revenue                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Investment advisory and administration fees          |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Mutual funds                                         |  | $                           | 54,981     |   |                           | $ | 48,496     |      |  | $ | 111,427    |   |  | $ | 97,236     |  
|Separate accounts                                    |  |                             | 107,032    |   |                           |   | 79,517     |      |  |   | 210,904    |   |  |   | 157,142    |  
|Other income                                         |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Affiliate                                            |  |                             | 1,378      |   |                           |   | 1,250      |      |  |   | 2,636      |   |  |   | 2,500      |  
|Other                                                |  |                             | 20,421     |   |                           |   | 14,643     |      |  |   | 40,668     |   |  |   | 29,779     |  
|                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total revenue                                        |  |                             | 183,812    |   |                           |   | 143,906    |      |  |   | 365,635    |   |  |   | 286,657    |  
|                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Expense                                              |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Employee compensation and benefits                   |  |                             | 81,618     |   |                           |   | 55,819     |      |  |   | 147,687    |   |  |   | 111,205    |  
|Fund administration and servicing costs - affiliates |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Affiliate                                            |  |                             | 4,948      |   |                           |   | 6,686      |      |  |   | 10,016     |   |  |   | 13,629     |  
|Other                                                |  |                             | 3,070      |   |                           |   | 892        |      |  |   | 6,362      |   |  |   | 1,907      |  
|General and administration                           |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Affiliate                                            |  |                             | 1,411      |   |                           |   | 1,984      |      |  |   | 5,336      |   |  |   | 4,045      |  
|Other                                                |  |                             | 29,952     |   |                           |   | 23,492     |      |  |   | 57,326     |   |  |   | 46,540     |  
|Amortization of intangible assets                    |  |                             | 232        |   |                           |   | 231        |      |  |   | 463        |   |  |   | 463        |  
|Impairment of intangible assets                      |  |                             |           |   |                           |   |           |      |  |   | 6,097      |   |  |   |           |  
|                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total expense                                        |  |                             | 121,231    |   |                           |   | 89,104     |      |  |   | 233,287    |   |  |   | 177,789    |  
|                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Operating income                                     |  |                             | 62,581     |   |                           |   | 54,802     |      |  |   | 132,348    |   |  |   | 108,868    |  
|                                                     |  |                             |            |  
|Non-operating income (expense)                       |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Investment income                                    |  |                             | 16,038     |   |                           |   | 8,233      |      |  |   | 22,935     |   |  |   | 11,762     |  
|Interest expense                                     |  |                             | (550       | ) |                           |   | (151       | )    |  |   | (1,634     | ) |  |   | (315       | )
|                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Total non-operating income                           |  |                             | 15,488     |   |                           |   | 8,082      |      |  |   | 21,301     |   |  |   | 11,447     |  
|                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Income before income taxes and minority interest     |  |                             | 78,069     |   |                           |   | 62,884     |      |  |   | 153,649    |   |  |   | 120,315    |  
|Income taxes                                         |  |                             | 26,521     |   |                           |   | 24,210     |      |  |   | 46,610     |   |  |   | 46,321     |  
|                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Income before minority interest                      |  |                             | 51,548     |   |                           |   | 38,674     |      |  |   | 107,039    |   |  |   | 73,994     |  
|Minority interest                                    |  |                             | 3,552      |   |                           |   |           |      |  |   | 3,836      |   |  |   |           |  
|                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Net income                                           |  | $                           | 47,996     |   |                           | $ | 38,674     |      |  | $ | 103,203    |   |  | $ | 73,994     |  
|                                                     |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Earnings per share                                   |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Basic                                                |  | $                           | 0.75       |   |                           | $ | 0.59       |      |  | $ | 1.62       |   |  | $ | 1.14       |  
|Diluted                                              |  | $                           | 0.73       |   |                           | $ | 0.58       |      |  | $ | 1.57       |   |  | $ | 1.12       |  
|                                                     |  |                             |            |  
|Cash dividends declared per share                    |  | $                           | 0.25       |   |                           |   |           |      |  | $ | 0.50       |   |  |   |           |  
|                                                     |  |                             |            |  
|Weighted-average shares outstanding                  |  |                             |            |   |                           |   |            |      |  |   |            |   |  |   |            |  
|Basic                                                |  |                             | 63,647,316 |   |                           |   | 65,028,337 |      |  |   | 63,701,625 |   |  |   | 65,042,359 |  
|Diluted                                              |  |                             | 65,766,979 |   |                           |   | 66,164,326 |      |  |   | 65,776,975 |   |  |   | 66,018,501 |  



See accompanying notes to
consolidated financial statements.



- 2 -



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PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



BlackRock, Inc.

Consolidated Statements of Cash Flows

(Dollar amounts in thousands)

(unaudited)



|                                                                                  |  |                           |         |   |      |   |          |  
|--------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | -------- | -
|                                                                                  |  | Six months ended June 30, |        
|                                                                                  |  | 2004                      |         |   | 2003 |  
|Cash flows from operating activities                                              |  |                           |         |   |      |   |          |  
|Net income                                                                        |  | $                         | 103,203 |   |      | $ | 73,994   |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                           |         |   |      |   |          |  
|Depreciation and amortization                                                     |  |                           | 10,105  |   |      |   | 10,464   |  
|Impairment of intangible assets                                                   |  |                           | 6,097   |   |      |   |         |  
|Minority interest                                                                 |  |                           | 3,836   |   |      |   |         |  
|Stock-based compensation                                                          |  |                           | 6,942   |   |      |   | 4,610    |  
|Deferred income taxes                                                             |  |                           | 7,210   |   |      |   | 2,278    |  
|Tax benefit from stock-based compensation                                         |  |                           | 1,761   |   |      |   | 4,167    |  
|Net gain on investments                                                           |  |                           | (11,889 | ) |      |   |         |  
|Changes in operating assets and liabilities:                                      |  |                           |         |   |      |   |          |  
|Increase in accounts receivable                                                   |  |                           | (19,783 | ) |      |   | (5,307   | )
|Increase in investments, trading                                                  |  |                           | (9,156  | ) |      |   | (22,085  | )
|Decrease (increase) in receivable from affiliates                                 |  |                           | (209    | ) |      |   | 177      |  
|Increase in other assets                                                          |  |                           | (914    | ) |      |   | (3,756   | )
|Decrease in accrued compensation                                                  |  |                           | (36,870 | ) |      |   | (49,452  | )
|(Decrease) increase in accounts payable and accrued liabilities                   |  |                           | (18,069 | ) |      |   | 6,936    |  
|(Decrease) increase in other liabilities                                          |  |                           | (2,489  | ) |      |   | 759      |  
|                                                                                  |  |                           |         |   |      |   |          |  
|Cash provided by operating activities                                             |  |                           | 39,775  |   |      |   | 22,785   |  
|                                                                                  |  |                           |         |   |      |   |          |  
|Cash flows from investing activities                                              |  |                           |         |   |      |   |          |  
|Purchase of property and equipment                                                |  |                           | (9,892  | ) |      |   | (6,299   | )
|Purchase of investments                                                           |  |                           | (36,006 | ) |      |   | (103,448 | )
|Sale of investments                                                               |  |                           | 89,742  |   |      |   | 35,967   |  
|Deemed cash contribution upon consolidation of VIE                                |  |                           | 6,412   |   |      |   |         |  
|Consolidation of sponsored investment funds                                       |  |                           | (41,193 | ) |      |   |         |  
|Acquisitions, net of cash acquired                                                |  |                           | (73     | ) |      |   | (4,584   | )
|                                                                                  |  |                           |         |   |      |   |          |  
|Cash provided by (used in) investing activities                                   |  |                           | 8,990   |   |      |   | (78,364  | )
|                                                                                  |  |                           |         |   |      |   |          |  
|Cash flows from financing activities                                              |  |                           |         |   |      |   |          |  
|Issuance of class A common stock                                                  |  |                           |        |   |      |   | 623      |  
|Dividends paid                                                                    |  |                           | (31,757 | ) |      |   |         |  
|Distributions paid to minority interest holders                                   |  |                           | (3,975  | ) |      |   |         |  
|Subscriptions to consolidated sponsored investment funds                          |  |                           | 5,000   |   |      |   |         |  
|Purchase of treasury stock                                                        |  |                           | (47,429 | ) |      |   | (22,333  | )
|Reissuance of treasury stock                                                      |  |                           | 10,049  |   |      |   | 2,661    |  
|Acquired management contract obligation payment                                   |  |                           | (926    | ) |      |   | (842     | )
|                                                                                  |  |                           |         |   |      |   |          |  
|Cash used in financing activities                                                 |  |                           | (69,038 | ) |      |   | (19,891  | )
|                                                                                  |  |                           |         |   |      |   |          |  
|Effect of exchange rate changes on cash and cash equivalents                      |  |                           | 1,028   |   |      |   | 1,069    |  
|                                                                                  |  |                          
|Net decrease in cash and cash equivalents                                         |  |                           | (19,245 | ) |      |   | (74,401  | )
|Cash and cash equivalents, beginning of period                                    |  |                           | 315,941 |   |      |   | 255,234  |  
|                                                                                  |  |                           |         |   |      |   |          |  
|Cash and cash equivalents, end of period                                          |  | $                         | 296,696 |   |      | $ | 180,833  |  
|                                                                                  |  |                           |         |   |      |   |          |  



See accompanying notes to consolidated financial statements.



- 3 -



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PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



BlackRock, Inc.

Notes to Consolidated Financial Statements

Three and Six Months Ended June 30, 2004 and 2003

(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 condensed 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, 2003. 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 and 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.



Use of Estimates



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



Readily Marketable Securities



The accounting method used for the Companys readily marketable securities is dependent upon the Companys ownership level. If the Company does not possess
significant influence over the issuers operations, the securities are classified as trading or available for sale, depending on the Companys ability and intent to hold the security. Investments, trading, are recorded at fair market value
with unrealized gains and losses included in the accompanying consolidated statements of income as investment income (expense), net. Investments, available for sale, consist primarily of corporate investments in BlackRock funds and municipal bonds.
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. If the Company holds significant influence over the
issuer of a readily marketable equity security, the investment is accounted for under the equity method of accounting and included in investments, other. The Companys share of the investees net income is included in investment income
(expense), net.



- 4 -



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PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



1. Significant Accounting Policies (continued)



Investments
(continued)



Nonmarketable Equity Securities



Items classified as investments, other, consist primarily of certain institutional and
private placement portfolios (alternative investment products) and operating joint ventures undertaken by the Company and are accounted for using the cost or equity methods of accounting. If the Company has significant influence over the
investees operations, the equity method of accounting is used and the Companys share of the investees net income is recorded as investment income (expense), net, for alternative investment products and other income for operating
joint ventures. If the Company does not maintain significant influence over the investees operations, the cost method of accounting is used.



Occasionally, the Company will acquire a controlling equity interest in a sponsored investment fund as a seed investment. These funds are organized as investment
companies, as defined in the American Institute of Certified Public Accountants Audit and Accounting Guide, Audits of Investment Companies (the IC Guide). As required by the IC Guide, all investments are carried at fair value,
regardless of the Companys ownership and the availability of a readily determinable market value for the investment, with the corresponding changes in the securities fair values reflected in investment income in the Companys
consolidated statement of income. In the absence of a publicly-available market value, fair value for an investment is estimated in good faith by the Companys management based on such factors as the liquidity, financial condition and current
and projected operating performance of the investment and, in the case of private investment fund investments, the net asset value provided by the funds investment manager. At June 30, 2004, these investments represent 17%, or approximately
$41,000, of total investments.



Realized gains and losses on trading, available
for sale and other investments are calculated on a specific identification basis and, along with interest and dividend income, are included in investment income (expense), net, in the 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 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 amount) is less than the last revised estimate, 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 and other securities, the Company considers the length of time and the extent to which the securitys market value, if determinable, 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 investment income (expense), net, on the consolidated statements of income as a
realized loss.



- 5 -



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PART I  FINANCIAL INFORMATION (continued)

|Item 1. | Financial Statements (continued)
|------- | --------------------------------



1. Significant Accounting Policies (continued)



Stock-Based Compensation



The Company accounts for stock-based employee compensation plans under 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 and six month periods ended
June 30, 2004 and 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 ended June 30, |        |   | Six months ended June 30, |  
|                                                                                                                                      |  | 2004                        |        |   | 2003                      |   |        | 2004 |  |   | 2003    |  
|Net income, as reported                                                                                                               |  | $                           | 47,996 |   |                           | $ | 38,674 |      |  | $ | 103,203 |   |  | $ | 73,994 |  
|Add: Stock-based employee compensation expense included in reported net income, net of related tax effects                            |  |                             | 1,075  |   |                           |   | 297    |      |  |   | 2,336   |   |  |   | 538    |  
|Deduct: Total stock-based employee compensation expense determined under fair value method for all awards, net of related tax
effects |  |                             | (3,746 | ) |                           |   | (3,659 | )    |  |   | (8,056  | ) |  |   | (7,319 | )
|                                                                                                                                      |  |                             |        |   |                           |   |        |      |  |   |         |   |  |   |        |  
|Pro forma net income                                                                                                                  |  | $                           | 45,325 |   |                           | $ | 35,312 |      |  | $ | 97,483  |   |  | $ | 67,213 |  
|                                                                                                                                      |  |                             |        |   |                           |   |        |      |  |   |         |   |  |   |        |  
|Earnings per share:                                                                                                                   |  |                             |        |   |                           |   |        |      |  |   |         |   |  |   |        |  
|Basic - as reported                                                                                                                   |  | $                           | 0.75   |   |                           | $ | 0.59   |      |  | $ | 1.62    |   |  | $ | 1.14   |  
|Basic - pro forma                                                                                                                     |  | $                           | 0.71   |   |                           | $ | 0.54   |      |  | $ | 1.53    |   |  | $ | 1.03   |  
|                                                                                                                                      |  |                             |        |  
|Diluted - as reported                                                                                                                 |  | $                           | 0.73   |   |                           | $ | 0.58   |      |  | $ | 1.57    |   |  | $ | 1.12   |  
|Diluted - pro forma                                                                                                                   |  | $                           | 0.69   |   |                           | $ | 0.53   |      |  | $ | 1.48    |   |  | $ | 1.02   |  



Segment Reporting



Historically, the Companys management has viewed BlackRock as one business segment,
the asset management business. The Company also offers risk management and investment systems services under the BlackRock Solutions brand name as a means to offset its technology-related expenses. As a result of recent changes in
BlackRocks corporate governance structure and potential growth in BlackRock Solutions revenue, management has commenced a process to determine the basis under which historical and future operations of BlackRock would be evaluated based
on two segments (Asset Management and BlackRock Solutions). Currently, the Company does not prepare nor does the Companys chief operating decision maker receive any financial results specific to the BlackRock Solutions business.



- 6 -



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PART I  FINANCIAL INFORMATION (continued)



Item 1. Financial Statements (continued)



1. Significant Accounting Policies (continued)



Segment Reporting (continued)



Accordingly, segment financial information for BlackRock Solutionsmay be included in the Companys future filings with the Securities and Exchange
Commission. Third party revenue for BlackRock Solutionsproducts and services is disclosed in Note 3 to these consolidated financial statements.



Recent Accounting Development



In December 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable
Interest Entities (FIN 46R). FIN 46R 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 Concepts No. 7, Using Cash Flow Information and Present Value in Accounting Measurements.



A public enterprise with a variable interest in a VIE must apply FIN 46R to
that VIE no later than the end of the first reporting period that ends after March 15, 2004, with the exception of special purpose entities (SPEs), as defined. A public enterprise with a variable interest in an SPE which has been deemed
a VIE must apply FIN 46R to that VIE no later than the end of the first reporting period that ends after December 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. The Company has included the required disclosures for VIEs in which it has significant involvement in Note 10
to these consolidated financial statements.



- 7 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



1. Significant Accounting Policies (continued)



Recent
Accounting Development



Pursuant to the conceptual framework set forth in
FIN 46R, the Companys management has concluded that BlackRock is the primary beneficiary of a strategic joint venture which was previously treated as an equity method investment. The aggregate statement of financial condition for the joint
venture consolidated on January 1, 2004 is as follows:



|                                         |  |                 |       
|---------------------------------------- |  | --------------- | ------
|                                         |  | January 1, 2004
|Assets                                   |  |                 |       
|Cash and cash equivalents                |  | $               | 6,412 
|Accounts receivable                      |  |                 | 2,564 
|Property and equipment, net              |  |                 | 842   
|Other assets                             |  |                 | 936   
|                                         |  |                 |       
|Total assets                             |  | $               | 10,754
|                                         |  |                 |       
|Liabilities and Minority Interest        |  |                 |       
|Accounts payable and accrued liabilities |  | $               | 4,499 
|Other liabilities                        |  |                 | 75    
|                                         |  |                 |       
|Total liabilities                        |  |                 | 4,574 
|                                         | 
|Minority interest                        |  |                 | 3,906 
|                                         |  |                 |       
|Total liabilities and minority interest  |  | $               | 8,480 
|                                         |  |                 |       



Reclassification of Prior
Periods Statements



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



- 8 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



2. Investments



A summary of the cost and carrying value of
investments, available for sale, is as follows:



|                                      |  |      |         |                  |   |        |  |    |               |   |  |   |        
|------------------------------------- |  | ---- | ------- | ---------------- | - | ------ |  | -- | ------------- | - |  | - | -------
|                                      |  |      |         | Gross Unrealized |   |        | 
|June 30, 2004                         |  | Cost |         | Gains            |   | Losses |  |    | CarryingValue
|Mutual funds                          |  | $    | 50,869  |                  | $ | 14     |  | ($ | 614           | ) |  | $ | 50,269 
|Municipal debt securities             |  |      | 48,833  |                  |   | 12     |  |    | (1,300        | ) |  |   | 47,545 
|Collateralized debt obligations       |  |      | 10,743  |                  |   | 2,021  |  |    |              |   |  |   | 12,764 
|                                      |  |      |         |                  |   |        |  |    |               |   |  |   |        
|Total investments, available for sale |  | $    | 110,445 |                  | $ | 2,047  |  | ($ | 1,914         | ) |  | $ | 110,578
|                                      |  |      |         |                  |   |        |  |    |               |   |  |   |        
|                                      |  |      |         |                 
|December 31, 2003                     |  |      |         |                  |   |        |  |    |              
|Mutual funds                          |  | $    | 78,913  |                  | $ | 147    |  | ($ | 834           | ) |  | $ | 78,226 
|Municipal debt securities             |  |      | 77,061  |                  |   | 638    |  |    | (721          | ) |  |   | 76,978 
|Collateralized debt obligations       |  |      | 11,752  |                  |   | 4,070  |  |    |              |   |  |   | 15,822 
|                                      |  |      |         |                  |   |        |  |    |               |   |  |   |        
|Total investments, available for sale |  | $    | 167,726 |                  | $ | 4,855  |  | ($ | 1,555         | ) |  | $ | 171,026
|                                      |  |      |         |                  |   |        |  |    |               |   |  |   |        



At June 30, 2004, municipal bonds with
a carrying value of $26,033 have a maturity date in excess of ten years while the remaining municipal bonds mature in two to four years. All municipal debt securities have an investment rating (provided by major rating agencies) of AAA
or its equivalent.



- 9 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



2. Investments (continued)



A summary of the cost and carrying
value of investments, trading and other, is as follows:



|                                     |  |      |         |               |   |        
|------------------------------------ |  | ---- | ------- | ------------- | - | -------
|June 30, 2004                        |  | Cost |         | CarryingValue
|U.S. government securities           |  | $    | 18,930  |               | $ | 18,991 
|Mutual funds                         |  |      | 14,022  |               |   | 14,900 
|Equity securities                    |  |      | 5,977   |               |   | 8,492  
|                                     |  |      |         |               |   |        
|Total investments, trading           |  |      | 38,929  |               |   | 42,383 
|                                     |  |      |         |               |   |        
|Mutual funds                         |  |      | 4,995   |               |   | 6,011  
|Other                                |  |      | 76,871  |               |   | 77,397 
|                                     |  |      |         |               |   |        
|Total investments, other             |  |      | 81,866  |               |   | 83,408 
|                                     |  |      |         |               |   |        
|Total investments, trading and other |  | $    | 120,795 |               | $ | 125,791
|                                     |  |      |         |               |   |        
|                                     |  |     
|December 31, 2003                    |  |      |         |              
|Mutual funds                         |  | $    | 9,573   |               | $ | 10,648 
|Equity securities                    |  |      | 5,976   |               |   | 8,021  
|                                     |  |      |         |               |   |        
|Total investments, trading           |  |      | 15,549  |               |   | 18,669 
|                                     |  |      |         |               |   |        
|Mutual funds                         |  |      | 6,795   |               |   | 5,801  
|Other                                |  |      | 36,496  |               |   | 39,427 
|                                     |  |      |         |               |   |        
|Total investments, other             |  |      | 43,291  |               |   | 45,228 
|                                     |  |      |         |               |   |        
|Total investments, trading and other |  | $    | 58,840  |               | $ | 63,897 
|                                     |  |      |         |               |   |        



In April 2004, the Company sold its
interest in Trepp LLC, a leading provider of commercial mortgage backed security information, analytics and technology. This investment was previously recorded in investments, other, in the Companys consolidated statement of financial
condition. The Company received approximately $13,000 in cash consideration and recognized an equivalent gain on the transaction, included in investment income in the Companys consolidated statement of income. Approximately $1,500 of the cash
consideration received is being held in escrow and is reflected in other assets in the Companys consolidated statement of financial condition.



- 10 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



3. Other Income



Other income consists of the following:



|                      |  |                            |        |                           |   |        |  |      |        |  |   |       
|--------------------- |  | -------------------------- | ------ | ------------------------- | - | ------ |  | ---- | ------ |  | - | ------
|                      |  | Three months endedJune 30, |        | Six months ended June 30,
|                      |  | 2004                       |        | 2003                      |   | 2004   |  | 2003
|BlackRock Solutions   |  | $                          | 18,220 |                           | $ | 13,119 |  | $    | 37,260 |  | $ | 27,100
|Investment accounting |  |                            | 1,447  |                           |   | 1,169  |  |      | 2,938  |  |   | 2,312 
|Other                 |  |                            | 2,132  |                           |   | 1,605  |  |      | 3,106  |  |   | 2,867 
|                      |  |                            |        |                           |   |        |  |      |        |  |   |       
|                      |  | $                          | 21,799 |                           | $ | 15,893 |  | $    | 43,304 |  | $ | 32,279
|                      |  |                            |        |                           |   |        |  |      |        |  |   |       



4. Intangible Assets



|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|------------------------------------------------ |  | --------------------------------- |  | -------------------- | ------- | ----------------------- | - | ---------------------- |  | - | -------
|                                                 |  |                                   |  | June 30, 2004       
|                                                 |  | Weighted-avg.estimateduseful life |  | Gross CarryingAmount |         | AccumulatedAmortization |   | Total IntangibleAssets
|Goodwill                                         |  | N/A                               |  | $                    | 243,787 |                         | $ | 65,842                 |  | $ | 177,945
|Management contract acquired                     |  | N/A                               |  |                      | 2,842   |                         |   |                       |  |   | 2,842  
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|Total goodwill and unamortized intangible assets |  |                                   |  |                      | 246,629 |                         |   | 65,842                 |  |   | 180,787
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|Management contract acquired                     |  | 10.0                              |  |                      | 8,040   |                         |   | 3,317                  |  |   | 4,723  
|Other                                            |  | 2.2                               |  |                      | 286     |                         |   | 204                    |  |   | 82     
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|Total amortized intangible assets                |  | 9.7                               |  |                      | 8,326   |                         |   | 3,521                  |  |   | 4,805  
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|Total intangible assets                          |  |                                   |  | $                    | 254,955 |                         | $ | 69,363                 |  | $ | 185,592
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|                                                 |  |                                  
|                                                 |  |                                   |  | December 31, 2003   
|                                                 |  | Weighted-avg.estimateduseful life |  | Gross CarryingAmount |         | AccumulatedAmortization |   | Total IntangibleAssets
|Goodwill                                         |  | N/A                               |  | $                    | 243,787 |                         | $ | 65,842                 |  | $ | 177,945
|Management contracts acquired                    |  | N/A                               |  |                      | 8,866   |                         |   |                       |  |   | 8,866  
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|Total goodwill and unamortized intangible assets |  |                                   |  |                      | 252,653 |                         |   | 65,842                 |  |   | 186,811
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|Management contract acquired                     |  | 10.0                              |  |                      | 8,040   |                         |   | 2,915                  |  |   | 5,125  
|Other                                            |  | 2.2                               |  |                      | 286     |                         |   | 143                    |  |   | 143    
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|Total amortized intangible assets                |  | 9.7                               |  |                      | 8,326   |                         |   | 3,058                  |  |   | 5,268  
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        
|Total intangible assets                          |  |                                   |  | $                    | 260,979 |                         | $ | 68,900                 |  | $ | 192,079
|                                                 |  |                                   |  |                      |         |                         |   |                        |  |   |        



- 11 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



4. Intangible Assets (continued)



The $6,024 decrease in
management contracts acquired, not subject to amortization, during the six months ended June 30, 2004 primarily represents the write-off of the carrying value attributable to management contracts of certain funds acquired during 2002. In February
2004, the respective funds portfolio manager resigned from the Company. As a result, the Company commenced an orderly liquidation of those funds and recognized an impairment charge of $6,097 in impairment of intangible assets on the
Companys consolidated statement of income.



5. BlackRock, Inc. Long
Term Retention and Incentive Plan (LTIP)



The LTIP permits the
grant of up to $240,000 in deferred compensation awards (the LTIP Awards), subject to the achievement of certain performance hurdles by the Company no later than March 2007. As of June 30, 2004, the Company has awarded approximately
$216,100 in LTIP Awards. If the performance hurdles are achieved, up to $200,000 of the LTIP Awards will be funded with up to 4 million shares of BlackRock common stock to be surrendered by The PNC Financial Services Group, Inc. (PNC)
and distributed to LTIP participants, less income tax withholding. In addition, distributed shares to LTIP participants will include an option to put such distributed shares back to BlackRock at fair market value. BlackRock will fund the remainder
of the LTIP Awards with up to $40,000 in cash.



The LTIP Awards will fully vest
at the end of any period of one calendar quarter beginning in 2005 or 2006 or any three-month period commencing prior to and including December 31, 2006 during which the average closing price of the Companys common stock is at least $62 per
share. If that performance hurdle is not achieved, the Companys Compensation Committee of its Board of Directors may, in its sole discretion, vest a portion of the LTIP Awards if the Company realizes compound annual growth in diluted earnings
per share of at least 10% from January 1, 2002 to December 31, 2006 and the Companys publicly-traded stock performs in the top half of its peer group during that time. There will be no expense recognition associated with the LTIP Awards unless
a full or partial vesting is considered probable and estimable.



During the
three months ended June 30, 2004, the Companys common stock has, at times, traded in excess of $62 per share. Assuming the LTIP Awards fully vest by March 31, 2005 by achieving the $62 average price target, the Company will record a one-time
charge of approximately $98,500, net of tax, on March 31, 2005 and quarterly expense of approximately $7,600, net of tax, through December 31, 2006, the end of the LTIPs service period. If the vesting date is later than March 31, 2005, the
one-time charge will increase in an amount equal to the pro rata portion of the service period completed.



With respect to partial vesting, as of June 30, 2004, the Companys compound annual growth in diluted earnings per share exceeds 10%. In addition, as of June 30, 2004, the Companys publicly-traded stock
price performance was 4th out of 14 peer group companies. The Company continues to evaluate the likelihood of achieving the partial vesting criteria each quarter and has concluded that, as of June 30, 2004, such an event is not probable. If it
becomes probable, by September 30, 2004, that the LTIP Awards could partially vest by at least 50%, the Company would record a one-time charge of approximately $42,000, net of tax, on September 30, 2004 and quarterly expense of approximately $3,800,
net of tax, through December 31, 2006, the end of the LTIPs service period. If a partial vesting decision becomes probable subsequent to September 30, 2004, the one-time charge will increase in an amount equal to the pro rata portion of the
service period completed.



- 12 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



6. Common Stock



BlackRocks class A, $0.01 par value,
common stock authorized was 250,000,000 shares as of June 30, 2004 and December 31, 2003, respectively. BlackRocks class B, $0.01 par value, common stock authorized was 100,000,000 shares as of June 30, 2004 and December 31, 2003,
respectively.



The Companys common stock issued and outstanding and
related activity during the six month period ended June 30, 2004 consists of the following:



|                                             |  |                     |  |            |                       |  |          |                          |  |          |   |  |            |   |  |            |  
|-------------------------------------------- |  | ------------------- |  | ---------- | --------------------- |  | -------- | ------------------------ |  | -------- | - |  | ---------- | - |  | ---------- | -
|                                             |  | Shares issued       |  |            |                       |  |          |                          | 
|                                             |  | Common shares Class |  |            | Treasury shares Class |  |          | Shares outstanding Class | 
|                                             |  | A                   |  | B          |                       |  | A        |                          |  | B        |   |  | A          |   |  | B          |  
|December 31, 2003                            |  | 19,243,878          |  | 46,120,737 |                       |  | (954,067 | )                        |  | (313,626 | ) |  | 18,289,811 |   |  | 45,807,111 |  
|Conversion of class B stock to class A stock |  |                    |  | (278,541   | )                     |  | 278,541  |                          |  |         |   |  | 278,541    |   |  | (278,541   | )
|Issuance of class A common stock             |  |                    |  |           |                       |  | 338,428  |                          |  |         |   |  | 338,428    |   |  |           |  
|Treasury stock transactions                  |  |                    |  |           |                       |  | (332,020 | )                        |  | (481,635 | ) |  | (332,020   | ) |  | (481,635   | )
|                                             |  |                     |  |            |                       |  |          |                          |  |          |   |  |            |   |  |            |  
|June 30, 2004                                |  | 19,243,878          |  | 45,842,196 |                       |  | (669,118 | )                        |  | (795,261 | ) |  | 18,574,760 |   |  | 45,046,935 |  
|                                             |  |                     |  |            |                       |  |          |                          |  |          |   |  |            |   |  |            |  



7. Earnings Per Share



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



|                                             |  |                             |            |                           |   |            |  |      |            |  |   |           
|-------------------------------------------- |  | --------------------------- | ---------- | ------------------------- | - | ---------- |  | ---- | ---------- |  | - | ----------
|                                             |  | Three months ended June 30, |            | Six months ended June 30,
|                                             |  | 2004                        |            | 2003                      |   | 2004       |  | 2003
|Net income                                   |  | $                           | 47,996     |                           | $ | 38,674     |  | $    | 103,203    |  | $ | 73,994    
|Basic weighted-average shares outstanding    |  |                             | 63,647,316 |                           |   | 65,028,337 |  |      | 63,701,625 |  |   | 65,042,359
|Dilutive potential shares from stock options |  |                             | 2,119,663  |                           |   | 1,135,988  |  |      | 2,075,350  |  |   | 976,142   
|                                             |  |                             |            |                           |   |            |  |      |            |  |   |           
|Dilutive weighted-average shares outstanding |  |                             | 65,766,979 |                           |   | 66,164,325 |  |      | 65,776,975 |  |   | 66,018,501
|                                             |  |                             |            |                           |   |            |  |      |            |  |   |           
|Basic earnings per share                     |  | $                           | 0.75       |                           | $ | 0.59       |  | $    | 1.62       |  | $ | 1.14      
|                                             |  |                             |            |                           |   |            |  |      |            |  |   |           
|Diluted earnings per share                   |  | $                           | 0.73       |                           | $ | 0.58       |  | $    | 1.57       |  | $ | 1.12      
|                                             |  |                             |            |                           |   |            |  |      |            |  |   |           



- 13 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



8. Supplemental Statements of Cash Flow Information



Supplemental disclosure of cash flow information:



|                           |  |                           |        |      |   |       
|-------------------------- |  | ------------------------- | ------ | ---- | - | ------
|                           |  | Six months ended June 30,
|                           |  | 2004                      |        | 2003
|Cash paid for interest     |  | $                         | 574    |      | $ | 658   
|                           |  |                           |        |      |   |       
|Cash paid for income taxes |  | $                         | 57,479 |      | $ | 14,487
|                           |  |                           |        |      |   |       



Supplemental schedule of noncash
transactions:



|                                                                       |  |                           |        |      |   |       
|---------------------------------------------------------------------- |  | ------------------------- | ------ | ---- | - | ------
|                                                                       |  | Six months ended June 30,
|                                                                       |  | 2004                      |        | 2003
|Stock-based compensation                                               |  | $                         | 0      |      | $ | 5,395 
|                                                                       |  |                           |        |      |   |       
|Reissuance of treasury stock, class A, at a discount to its cost basis |  | $                         | 14,765 |      | $ | 14,487
|                                                                       |  |                           |        |      |   |       



9. Income Taxes



PNC and BlackRock have entered into a tax disaffiliation agreement that sets forth each
partys rights and obligations with respect to income tax payments and refunds and addresses related matters such as the filing of tax returns and the conduct of audits or other proceedings involving claims made by taxing authorities.



For the calendar year which includes the three and six months ended June 30,
2004, BlackRock will file its own consolidated federal income tax return and will file selected state and municipal income tax returns separately and selected state and municipal income tax returns with one or more PNC subsidiaries on a combined or
unitary basis. When BlackRock is included in a groups combined or unitary state or municipal income tax filing with PNC subsidiaries, BlackRocks share of the liability generally will be based upon an allocation to BlackRock of a
percentage of the total tax liability based upon BlackRocks level of activity in such state or municipality.



- 14 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



9. Income Taxes (continued)



The provision (benefit) for
income taxes consists of the following:



|                                          |  |                             |        |                          |   |        |  |   |        |   |  |   |        |  
|----------------------------------------- |  | --------------------------- | ------ | ------------------------ | - | ------ |  | - | ------ | - |  | - | ------ | -
|                                          |  | Three months ended June 30, |        | Six months endedJune 30, |  
|                                          |  | 2004                        |        | 2003                     |   | 2004   |  |   | 2003   |  
|Current:                                  |  |                             |        |                          |   |        |  |   |        |   |  |   |        |  
|Federal                                   |  | $                           | 21,599 |                          | $ | 20,532 |  | $ | 40,033 |   |  | $ | 38,293 |  
|State and local                           |  |                             | 3,210  |                          |   | 2,055  |  |   | 5,888  |   |  |   | 4,884  |  
|Foreign                                   |  |                             | 831    |                          |   | 447    |  |   | 2,000  |   |  |   | 867    |  
|Impact of New York State audit resolution |  |                             | 140    |                          |   |       |  |   | (8,519 | ) |  |   |       |  
|                                          |  |                             |        |                          |   |        |  |   |        |   |  |   |        |  
|Total current                             |  |                             | 25,780 |                          |   | 23,034 |  |   | 39,402 |   |  |   | 44,044 |  
|                                          |  |                             |        |                          |   |        |  |   |        |   |  |   |        |  
|Deferred:                                 |  |                             |        |                          |   |        |  |   |        |   |  |   |        |  
|Federal                                   |  |                             | 632    |                          |   | 993    |  |   | 7,450  |   |  |   | 2,887  |  
|State and local                           |  |                             | 109    |                          |   | 183    |  |   | (242   | ) |  |   | (610   | )
|                                          |  |                             |        |                          |   |        |  |   |        |   |  |   |        |  
|Total deferred                            |  |                             | 741    |                          |   | 1,176  |  |   | 7,208  |   |  |   | 2,277  |  
|                                          |  |                             |        |                          |   |        |  |   |        |   |  |   |        |  
|Total                                     |  | $                           | 26,521 |                          | $ | 24,210 |  | $ | 46,610 |   |  | $ | 46,321 |  
|                                          |  |                             |        |                          |   |        |  |   |        |   |  |   |        |  



The tax effects of temporary
differences that give rise to significant portions of deferred tax assets and liabilities, which are shown net in accounts payable and accrued liabilities-affiliate in the consolidated statements of financial condition, consist of the following:



|                                   |  |              |        |   |                  |   |       
|---------------------------------- |  | ------------ | ------ | - | ---------------- | - | ------
|                                   |  | June 30,2004 |        |   | December 31,2003
|Deferred tax assets:               |  |              |        |   |                  |   |       
|Compensation and benefits          |  | $            | 27,271 |   |                  | $ | 28,942
|Deferred state income taxes        |  |              | 3,947  |   |                  |   | 8,913 
|Deferred revenue                   |  |              | 1,937  |   |                  |   | 3,292 
|Other                              |  |              | 1,802  |   |                  |   | 1,769 
|                                   |  |              |        |   |                  |   |       
|Gross deferred tax asset           |  |              | 34,957 |   |                  |   | 42,916
|                                   |  |              |        |   |                  |   |       
|Deferred tax liabilities:          |  |              |        |   |                  |   |       
|Goodwill                           |  |              | 34,927 |   |                  |   | 34,990
|Depreciation                       |  |              | 2,896  |   |                  |   | 3,213 
|Other                              |  |              | 3,682  |   |                  |   | 3,620 
|                                   |  |              |        |   |                  |   |       
|Gross deferred tax liability       |  |              | 41,505 |   |                  |   | 41,823
|                                   |  |              |        |   |                  |   |       
|Net deferred tax asset (liability) |  | ($           | 6,548  | ) |                  | $ | 1,093 
|                                   |  |              |        |   |                  |   |       



- 15 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



9. Income Taxes (continued)



A reconciliation of income tax
expense with expected federal income tax expense computed at the applicable federal income tax rate of 35% is as follows:



|                                                    |  |                             |        |   |                           |      |   |      |   |        |  |      |      |  |   |        |   |  |      |   |   |   |        |  |      |  
|--------------------------------------------------- |  | --------------------------- | ------ | - | ------------------------- | ---- | - | ---- | - | ------ |  | ---- | ---- |  | - | ------ | - |  | ---- | - | - | - | ------ |  | ---- | -
|                                                    |  | Three months ended June 30, |        |   | Six months ended June 30, |     
|                                                    |  | 2004                        |        |   | %                         |      |   | 2003 |   | %      |  |      | 2004 |  |   | %      |   |  | 2003 |   | % |  
|Expected income tax expense                         |  | $                           | 27,324 |   |                           | 35.0 | % |      | $ | 22,009 |  | 35.0 | %    |  | $ | 53,777 |   |  | 35.0 | % |   | $ | 42,110 |  | 35.0 | %
|                                                    |  |                             |        |   |                           |      |   |     
|Increase (decrease) in income taxes resulting from: |  |                             |        |   |                           |      |   |      |   |        |  |      |      |  |   |        |   |  |      |   |   |   |        |  |      |  
|New York State audit resolution                     |  |                             | 140    |   |                           | 0.2  |   |      |   |       |  |     |      |  |   | (8,519 | ) |  | (5.5 | ) |   |   |       |  |     |  
|Minority interest                                   |  |                             | (1,244 | ) |                           | (1.6 | ) |      |   |       |  |     |      |  |   | (1,343 | ) |  | (0.9 | ) |   |   |       |  |     |  
|Tax-exempt interest income                          |  |                             | (321   | ) |                           | (0.4 | ) |      |   |       |  |     |      |  |   | (713   | ) |  | (0.5 | ) |   |   |       |  |     |  
|State and local taxes                               |  |                             | 2,507  |   |                           | 3.2  |   |      |   | 1,230  |  | 1.9  |      |  |   | 4,159  |   |  | 2.7  |   |   |   | 2,553  |  | 2.1  |  
|Foreign taxes                                       |  |                             | 174    |   |                           | 0.2  |   |      |   | 166    |  | 0.3  |      |  |   | 473    |   |  | 0.3  |   |   |   | 143    |  | 0.1  |  
|Other                                               |  |                             | (2,059 | ) |                           | (2.6 | ) |      |   | 805    |  | 1.3  |      |  |   | (1,224 | ) |  | (0.8 | ) |   |   | 1,515  |  | 1.3  |  
|                                                    |  |                             |        |   |                           |      |   |      |   |        |  |      |      |  |   |        |   |  |      |   |   |   |        |  |      |  
|Income tax expense                                  |  | $                           | 26,521 |   |                           | 34.0 | % |      | $ | 24,210 |  | 38.5 | %    |  | $ | 46,610 |   |  | 30.3 | % |   | $ | 46,321 |  | 38.5 | %
|                                                    |  |                             |        |   |                           |      |   |      |   |        |  |      |      |  |   |        |   |  |      |   |   |   |        |  |      |  



10. Variable Interest Entities Not
Subject to Consolidation



The Company is involved with various entities in
the normal course of business that may be deemed to be VIEs and may hold interests therein, including investment advisory agreements and equity securities, which may be considered variable interests. The Company engages in these transactions
principally to address client needs through the launch of collateralized debt obligations and private investment funds. At June 30, 2004 and December 31, 2003, the aggregate assets, debt and BlackRocks equity ownership, which represents the
extent of the Companys risk of loss, in VIEs in which BlackRock has not been deemed primary beneficiary is as follows:



|                              |  |        |           |      |   |                           |  |   |       
|----------------------------- |  | ------ | --------- | ---- | - | ------------------------- |  | - | ------
|June 30, 2004                 |  | Assets |           | Debt |   | BlackRock EquityOwnership
|Collaterized debt obligations |  | $      | 2,940,000 |      | $ | 2,580,000                 |  | $ | 12,763
|Private investment funds      |  |        | 689,000   |      |   | 288,000                   |  |   | 13,000
|                              |  |        |           |      |   |                           |  |   |       
|Total                         |  | $      | 3,629,000 |      | $ | 2,868,000                 |  | $ | 25,763
|                              |  |        |           |      |   |                           |  |   |       
|                              |  |        |          
|December 31, 2003             |  |        |           |      |   |                          
|Collaterized debt obligations |  | $      | 2,740,000 |      | $ | 2,370,000                 |  | $ | 15,800
|Private investment funds      |  |        | 375,000   |      |   | 227,000                   |  |   | 5,000 
|                              |  |        |           |      |   |                           |  |   |       
|Total                         |  | $      | 3,115,000 |      | $ | 2,597,000                 |  | $ | 20,800
|                              |  |        |           |      |   |                           |  |   |       



- 16 -



---

PART I  FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)



11. Comprehensive Income



|                                                                 |  |                            |        |                           |      |   |        |  |   |         |   |  |   |       
|---------------------------------------------------------------- |  | -------------------------- | ------ | ------------------------- | ---- | - | ------ |  | - | ------- | - |  | - | ------
|                                                                 |  | Three months endedJune 30, |        | Six months ended June 30,
|                                                                 |  | 2004                       |        |                           | 2003 |   | 2004   |  |   | 2003   
|Net income                                                       |  | $                          | 47,996 |                           |      | $ | 38,674 |  | $ | 103,203 |   |  | $ | 73,994
|Other comprehensive income (loss):                               |  |                            |        |                           |      |   |        |  |   |         |   |  |   |       
|Unrealized gain (loss) from investments, available for sale, net |  |                            | (1,149 | )                         |      |   | 3,705  |  |   | (1,852  | ) |  |   | 4,147 
|Foreign currency translation gain                                |  |                            | 62     |                           |      |   | 1,424  |  |   | 1,028   |   |  |   | 1,069 
|                                                                 |  |                            |        |                           |      |   |        |  |   |         |   |  |   |       
|Comprehensive income                                             |  | $                          | 46,909 |                           |      | $ | 43,803 |  | $ | 102,379 |   |  | $ | 79,210
|                                                                 |  |                            |        |                           |      |   |        |  |   |         |   |  |   |       



12. Subsequent Event



In July 2004, BlackRock signed a lease through February
28, 2017 with Park Avenue Plaza Company L.P. for approximately 88,000 square feet of office space located at 55 East 52nd Street, New York, New York. Total rent payments over the lease term will be approximately $52,000, with annual lease payments
for the first four years of the lease term of approximately $4,100. Future minimum commitments under BlackRocks operating leases, following the signing of this lease and net of rental reimbursements of $2,354 through 2005 from a sublease
arrangement, are as follows:



|           |  |   |        
|---------- |  | - | -------
|2004       |  | $ | 5,904  
|2005       |  |   | 13,801 
|2006       |  |   | 15,334 
|2007       |  |   | 15,302 
|2008       |  |   | 15,307 
|Thereafter |  |   | 145,827
|           |  |   |        
|           |  | $ | 211,475
|           |  |   |        



- 17 -



---

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 $309.7 billion of assets under management at June 30, 2004. 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 Liquidity Funds. 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 nations largest diversified
financial services organizations providing regional community banking; wholesale banking, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services. As of June 30, 2004,
PNC indirectly owned approximately 71% of BlackRock.



The following table
summarizes BlackRocks operating performance for the three months ended June 30, 2004, March 31, 2004 and June 30, 2003 and the six months ended June 30, 2004 and 2003:



BlackRock, Inc.

Financial Highlights

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

(unaudited)



|                                        |  |                    |            |   |              |   |            |               |  |   |                |   |  |   |          |   |        |    |   |   |    |         |   |  |     |  
|--------------------------------------- |  | ------------------ | ---------- | - | ------------ | - | ---------- | ------------- |  | - | -------------- | - |  | - | -------- | - | ------ | -- | - | - | -- | ------- | - |  | --- | -
|                                        |  | Three months ended |            |   | Variance vs. |  
|                                        |  | June 30,           |            |   | March 31,    |   |            | June 30, 2003 |  |   | March 31, 2004 |  
|                                        |  | 2004               |            |   | 2003         |   |            | 2004          |  |   | Amount         |   |  | % |          |   | Amount |    |   | % |   
|Total revenue                           |  | $                  | 183,812    |   |              | $ | 143,906    |               |  | $ | 181,823        |   |  | $ | 39,906   |   |        | 28 | % |   | $  | 1,989   |   |  | 1   | %
|Total expense                           |  | $                  | 121,231    |   |              | $ | 89,104     |               |  | $ | 112,056        |   |  | $ | 32,127   |   |        | 36 | % |   | $  | 9,175   |   |  | 8   | %
|Operating income                        |  | $                  | 62,581     |   |              | $ | 54,802     |               |  | $ | 69,767         |   |  | $ | 7,779    |   |        | 14 | % |   | $  | (7,186  | ) |  | -10 | %
|Net income                              |  | $                  | 47,996     |   |              | $ | 38,674     |               |  | $ | 55,207         |   |  | $ | 9,322    |   |        | 24 | % |   | $  | (7,211  | ) |  | -13 | %
|Diluted earnings per share              |  | $                  | 0.73       |   |              | $ | 0.58       |               |  | $ | 0.84           |   |  | $ | 0.15     |   |        | 26 | % |   | $  | (0.11   | ) |  | -13 | %
|Average diluted shares outstanding      |  |                    | 65,766,979 |   |              |   | 66,164,326 |               |  |   | 65,807,605     |   |  |   | (397,347 | ) |        | -1 | % |   |    | (40,626 | ) |  | 0   | %
|Operating margin (a)                    |  |                    | 35.6       | % |              |   | 40.2       | %             |  |   | 40.2           | % |  |   |          |   |        |    |   |   |    |         |   |  |     |  
|                                        |  |                    |            |   |              |   |           
|Assets under management ($ in millions) |  | $                  | 309,654    |   |              | $ | 286,309    |               |  | $ | 320,672        |   |  | $ | 23,345   |   |        | 8  | % |   | ($ | 11,018  | ) |  | -3  | %



|                                        |  |                  |            |   |          |   |            |        |  |   |          |   |  |    |  
|--------------------------------------- |  | ---------------- | ---------- | - | -------- | - | ---------- | ------ |  | - | -------- | - |  | -- | -
|                                        |  | Six months ended |            |   |          |   |            |        | 
|                                        |  | June 30,         |            |   | Variance |  
|                                        |  | 2004             |            |   | 2003     |   |            | Amount |  |   | %        |  
|Total revenue                           |  | $                | 365,635    |   |          | $ | 286,657    |        |  | $ | 78,978   |   |  | 28 | %
|Total expense                           |  | $                | 233,287    |   |          | $ | 177,789    |        |  | $ | 55,498   |   |  | 31 | %
|Operating income                        |  | $                | 132,348    |   |          | $ | 108,868    |        |  | $ | 23,480   |   |  | 22 | %
|Net income                              |  | $                | 103,203    |   |          | $ | 73,994     |        |  | $ | 29,209   |   |  | 39 | %
|Diluted earnings per share              |  | $                | 1.57       |   |          | $ | 1.12       |        |  | $ | 0.45     |   |  | 40 | %
|Average diluted shares outstanding      |  |                  | 65,776,975 |   |          |   | 66,018,501 |        |  |   | (241,526 | ) |  | 0  | %
|Operating margin (a)                    |  |                  | 37.9       | % |          |   | 40.2       | %      |  |   |          |   |  |    |  
|Assets under management ($ in millions) |  | $                | 309,654    |   |          | $ | 286,309    |        |  | $ | 23,345   |   |  | 8  | %



- 18 -



---

PART I  FINANCIAL INFORMATION (continued)

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



BlackRock, Inc.

Financial Highlights (continued)

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

(unaudited)



| | (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 |         |   | Six months ended June 30, |  
|                                              |  | June 30,           |         |   | March 31,2004             |   |        
|                                              |  | 2004               |         |   | 2003                      |   |         |   | 2004 |   |         | 2003 | 
|Operating income, as reported                 |  | $                  | 62,581  |   |                           | $ | 54,802  |   |      | $ | 69,767  |      |  | $ | 132,348 |   |  | $ | 108,868 |  
|                                              |  |                    |         |   |                           |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Revenue, as reported                          |  |                    | 183,812 |   |                           |   | 143,906 |   |      |   | 181,823 |      |  |   | 365,635 |   |  |   | 286,657 |  
|Less: fund administration and servicing costs |  |                    | (8,018  | ) |                           |   | (7,578  | ) |      |   | (8,360  | )    |  |   | (16,378 | ) |  |   | (15,536 | )
|                                              |  |                    |         |   |                           |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Revenue used for operating margin measurement |  |                    | 175,794 |   |                           |   | 136,328 |   |      |   | 173,463 |      |  |   | 349,257 |   |  |   | 271,121 |  
|                                              |  |                    |         |   |                           |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Operating margin                              |  |                    | 34.0    | % |                           |   | 38.1    | % |      |   | 38.4    | %    |  |   | 36.2    | % |  |   | 38.0    | %
|                                              |  |                    |         |   |                           |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Operating margin, as reported                 |  |                    | 35.6    | % |                           |   | 40.2    | % |      |   | 40.2    | %    |  |   | 37.9    | % |  |   | 40.2    | %
|                                              |  |                    |         |   |                           |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  



We believe that
operating margin, as reported, is a more relevant 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
represent fixed, asset-based expenses which can fluctuate based on the discretion of a third party.



- 19 -



---

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. Market appreciation or depreciation includes current income earned on, and changes in, the fair value of securities held in client accounts.



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, investment analytics and investment system
services to insurance companies, finance companies, pension funds, asset managers, 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 fixed monthly or quarterly payments, and may include performance fees. 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 Fundsand BlackRock Closed-end Funds. Intangible assets at June 30, 2004
and December 31, 2003 were approximately $185.6 million and approximately $192.1 million, respectively, with amortization expense of approximately $0.2 million for the three months ended June 30, 2004 and 2003 and approximately $0.5 million for the
six months ended June 30, 2004 and 2003. Impairment of intangible assets represents a write-off of an acquired management contract during the six months ended June 30, 2004 due to the resignation of the respective funds portfolio manager and
the Companys liquidation of the funds. Intangible assets primarily reflect PNCs acquisition of BlackRock Financial Management, L.P. on February 28, 1995 and a management contract acquired in connection with the agreement and plan of
merger of CORE Cap, Inc. with Anthracite Capital, Inc. (Anthracite), a BlackRock managed REIT, on May 15, 2000.



- 20 -



---

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 $23.3 billion, or 8%, to $309.7 billion at June 30, 2004, compared with
$286.3 billion at June 30, 2003. The growth in assets under management was primarily attributable to an increase of $27.2 billion, or 13%, in separate accounts, partially offset by a decrease of $3.8 billion, or 5%, in mutual fund assets.



The increase in separate accounts at June 30, 2004, as compared with June 30,
2003, was the result of net subscriptions of $21.9 billion and market appreciation of $5.3 billion. Net subscriptions were primarily attributable to fixed income sales and increased liquidity assets, which were $22.0 billion and $1.5 billion,
respectively, partially offset by $2.5 billion of net redemptions in equity separate accounts. The rise in fixed income separate account assets was attributable to new client sales and increased fundings from existing clients. The increase in
liquidity assets represents enhanced cross-selling efforts with BlackRocks institutional client base during the period. Net redemptions of equity accounts reflected outflows in the Companys international equity products during the period
due to investment performance which underperformed the benchmark. Market appreciation of $5.3 billion in separate accounts largely reflected appreciation earned on fixed income assets of $3.2 billion due to current income and declining interest
rates and market appreciation in equity assets of $2.1 billion as equity markets improved during the period.



The $3.8 billion decrease in mutual fund assets since June 30, 2003 primarily reflected net redemptions of $4.1 billion. During the period, net redemptions in the BlackRock Liquidity Funds and the BlackRock
Fundsmoney market portfolios totaled $7.9 billion, which was partially offset by net subscriptions in BlackRock Closed-end Funds and BlackRock Fundsfixed income portfolios of $2.5 billion and $1.0 billion, respectively. Liquidity mutual
fund outflows are primarily attributable to the increase in the Federal Funds rate during the second quarter of 2004, which results in a temporary yield advantage for direct investments in the money markets versus mutual funds. Net subscriptions in
BlackRock Closed-end Funds reflected the launch of $2.5 billion in closed-end fund assets since June 30, 2003, including the offering by the Company of the first three equity BlackRock Closed-end Funds, which raised $1.3 billion during the period.
The BlackRock Fundsfixed income portfolios had $1.0 billion in net subscriptions primarily due to strong relative investment performance.



AUM in the second quarter of 2004 decreased $11.0 billion, or 3%, as compared to the first quarter of 2004, representing $6.7 billion in net redemptions and $4.3 billion
in market depreciation. The $6.7 billion in net redemptions during the second quarter of 2004 reflected mutual fund net redemptions of $9.0 billion, of which $8.7 billion was attributable to liquidity assets due to the second quarter 2004 increase
in the Federal Funds rate, partially offset by separate account net subscriptions of $2.3 billion. Average assets in liquidity mutual funds during the second quarter of 2004 were approximately $55.3 billion, as compared to $50.3 billion at
quarter-end. Separate account net subscriptions primarily consisted of fundings in fixed income and liquidity separate accounts of $1.4 billion and $0.6 billion, respectively. Net subscriptions in fixed income accounts were partially offset by $3.2
billion of outflows resulting from two client mergers and a macro-driven decision by a multi-billion dollar AUM client to substantially restructure their exposure to fixed income securities. Market depreciation during the second quarter of 2004 was
primarily attributable to declines in fixed income separate account and mutual fund assets due to rising interest rates.



- 21 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Assets under Management (continued)



BlackRock, Inc.

Assets Under Management

(Dollar amounts in millions)

(unaudited)



|                                |  |          |         |                  |   |         |  |   |        
|------------------------------- |  | -------- | ------- | ---------------- | - | ------- |  | - | -------
|                                |  | June 30, |         | December 31,2003
|                                |  | 2004     |         | 2003             |  
|All Accounts                    |  |          |         |                  |   |         |  |   |        
|Fixed income                    |  | $        | 223,542 |                  | $ | 195,960 |  | $ | 214,356
|Liquidity                       |  |          | 65,943  |                  |   | 71,585  |  |   | 74,345 
|Equity                          |  |          | 13,543  |                  |   | 12,412  |  |   | 13,721 
|Alternative investment products |  |          | 6,626   |                  |   | 6,352   |  |   | 6,934  
|                                |  |          |         |                  |   |         |  |   |        
|Total                           |  | $        | 309,654 |                  | $ | 286,309 |  | $ | 309,356
|                                |  |          |         |                  |   |         |  |   |        
|Separate Accounts               |  |          |         |                  |   |         |  |   |        
|Fixed income                    |  | $        | 199,762 |                  | $ | 174,480 |  | $ | 190,432
|Liquidity                       |  |          | 6,896   |                  |   | 5,366   |  |   | 5,855  
|Liquidity-Securities lending    |  |          | 8,771   |                  |   | 8,374   |  |   | 9,925  
|Equity                          |  |          | 8,790   |                  |   | 9,105   |  |   | 9,443  
|Alternative investment products |  |          | 6,626   |                  |   | 6,352   |  |   | 6,934  
|                                |  |          |         |                  |   |         |  |   |        
|Subtotal                        |  |          | 230,845 |                  |   | 203,677 |  |   | 222,589
|                                |  |          |         |                  |   |         |  |   |        
|Mutual Funds                    |  |          |         |                  |   |         |  |   |        
|Fixed income                    |  |          | 23,780  |                  |   | 21,480  |  |   | 23,924 
|Liquidity                       |  |          | 50,276  |                  |   | 57,845  |  |   | 58,565 
|Equity                          |  |          | 4,753   |                  |   | 3,307   |  |   | 4,278  
|                                |  |          |         |                  |   |         |  |   |        
|Subtotal                        |  |          | 78,809  |                  |   | 82,632  |  |   | 86,767 
|                                |  |          |         |                  |   |         |  |   |        
|Total                           |  | $        | 309,654 |                  | $ | 286,309 |  | $ | 309,356
|                                |  |          |         |                  |   |         |  |   |        



- 22 -



---

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 and six months ended June 30, 2004 and 2003, respectively. The data reflects certain reclassifications to conform with the current periods presentation.



BlackRock, Inc.

Component Changes in Assets Under Management

(Dollar amounts in millions)

(unaudited)



|                                   |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|---------------------------------- |  | -------------------------- | ------- | ------------------------- | ---- | - | ------- |  | - | ------- | - |  | - | ------- | -
|                                   |  | Three months endedJune 30, |         | Six months ended June 30, |     
|                                   |  | 2004                       |         |                           | 2003 |   | 2004    |  |   | 2003    |  
|All Accounts                       |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|Beginning assets under management  |  | $                          | 320,672 |                           |      | $ | 273,599 |  | $ | 309,356 |   |  | $ | 272,841 |  
|Net subscriptions (redemptions)    |  |                            | (6,697  | )                         |      |   | 5,098   |  |   | (357    | ) |  |   | 4,310   |  
|Market appreciation (depreciation) |  |                            | (4,321  | )                         |      |   | 7,612   |  |   | 655     |   |  |   | 9,158   |  
|                                   |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|Ending assets under management     |  | $                          | 309,654 |                           |      | $ | 286,309 |  | $ | 309,654 |   |  | $ | 286,309 |  
|                                   |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|Separate Accounts                  |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|Beginning assets under management  |  | $                          | 232,183 |                           |      | $ | 194,555 |  | $ | 222,589 |   |  | $ | 183,513 |  
|Net subscriptions                  |  |                            | 2,273   |                           |      |   | 2,409   |  |   | 7,244   |   |  |   | 11,930  |  
|Market appreciation (depreciation) |  |                            | (3,611  | )                         |      |   | 6,713   |  |   | 1,012   |   |  |   | 8,234   |  
|                                   |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|Ending assets under management     |  |                            | 230,845 |                           |      |   | 203,677 |  |   | 230,845 |   |  |   | 203,677 |  
|                                   |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|Mutual Funds                       |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |                            | 88,489  |                           |      |   | 79,044  |  |   | 86,767  |   |  |   | 89,328  |  
|Net subscriptions (redemptions)    |  |                            | (8,970  | )                         |      |   | 2,689   |  |   | (7,601  | ) |  |   | (7,620  | )
|Market appreciation (depreciation) |  |                            | (710    | )                         |      |   | 899     |  |   | (357    | ) |  |   | 924     |  
|                                   |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|Ending assets under management     |  |                            | 78,809  |                           |      |   | 82,632  |  |   | 78,809  |   |  |   | 82,632  |  
|                                   |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  
|Total                              |  | $                          | 309,654 |                           |      | $ | 286,309 |  | $ | 309,654 |   |  | $ | 286,309 |  
|                                   |  |                            |         |                           |      |   |         |  |   |         |   |  |   |         |  



- 23 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Assets under Management (continued)



BlackRock, Inc.

Assets Under Management

Quarterly Trend

(Dollar amounts in millions)

(unaudited)



|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|---------------------------------- |  | ------- | ------- | - | ------------ | - | ------- | ------------------------------ |  | - | -------- | - |  | ------- | ------- | - |  | - | ------- | - |  | - | ------- | -
|                                   |  | 2003    |         |   | 2004         |   |         | Six months ended June 30, 2004 | 
|                                   |  | June 30 |         |   | September 30 |   |         | December 31                    |  |   | March 31 |   |  | June 30 |         |  
|Separate Accounts                  |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Fixed Income                       |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  | $       | 167,778 |   |              | $ | 174,480 |                                |  | $ | 178,390  |   |  | $       | 190,432 |   |  | $ | 202,055 |   |  | $ | 190,432 |  
|Net subscriptions                  |  |         | 1,682   |   |              |   | 3,700   |                                |  |   | 9,842    |   |  |         | 7,141   |   |  |   | 1,365   |   |  |   | 8,506   |  
|Market appreciation (depreciation) |  |         | 5,020   |   |              |   | 210     |                                |  |   | 2,200    |   |  |         | 4,482   |   |  |   | (3,658  | ) |  |   | 824     |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |         | 174,480 |   |              |   | 178,390 |                                |  |   | 190,432  |   |  |         | 202,055 |   |  |   | 199,762 |   |  |   | 199,762 |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Liquidity                          |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |         | 6,040   |   |              |   | 5,366   |                                |  |   | 5,707    |   |  |         | 5,855   |   |  |   | 6,304   |   |  |   | 5,855   |  
|Net subscriptions (redemptions)    |  |         | (677    | ) |              |   | 328     |                                |  |   | 135      |   |  |         | 446     |   |  |   | 591     |   |  |   | 1,037   |  
|Market appreciation                |  |         | 3       |   |              |   | 13      |                                |  |   | 13       |   |  |         | 3       |   |  |   | 1       |   |  |   | 4       |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |         | 5,366   |   |              |   | 5,707   |                                |  |   | 5,855    |   |  |         | 6,304   |   |  |   | 6,896   |   |  |   | 6,896   |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Liquidity-Securities lending       |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |         | 6,344   |   |              |   | 8,374   |                                |  |   | 9,996    |   |  |         | 9,925   |   |  |   | 8,479   |   |  |   | 9,925   |  
|Net subscriptions (redemptions)    |  |         | 2,030   |   |              |   | 1,622   |                                |  |   | (71      | ) |  |         | (1,446  | ) |  |   | 292     |   |  |   | (1,154  | )
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |         | 8,374   |   |              |   | 9,996   |                                |  |   | 9,925    |   |  |         | 8,479   |   |  |   | 8,771   |   |  |   | 8,771   |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Equity                             |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |         | 8,995   |   |              |   | 9,105   |                                |  |   | 9,143    |   |  |         | 9,443   |   |  |   | 9,003   |   |  |   | 9,443   |  
|Net redemptions                    |  |         | (1,526  | ) |              |   | (334    | )                              |  |   | (1,234   | ) |  |         | (684    | ) |  |   | (195    | ) |  |   | (879    | )
|Market appreciation (depreciation) |  |         | 1,636   |   |              |   | 372     |                                |  |   | 1,534    |   |  |         | 244     |   |  |   | (18     | ) |  |   | 226     |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |         | 9,105   |   |              |   | 9,143   |                                |  |   | 9,443    |   |  |         | 9,003   |   |  |   | 8,790   |   |  |   | 8,790   |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Alternative investment products    |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |         | 5,398   |   |              |   | 6,352   |                                |  |   | 6,676    |   |  |         | 6,934   |   |  |   | 6,342   |   |  |   | 6,934   |  
|Net subscriptions (redemptions)    |  |         | 900     |   |              |   | 385     |                                |  |   | 237      |   |  |         | (486    | ) |  |   | 220     |   |  |   | (266    | )
|Market appreciation (depreciation) |  |         | 54      |   |              |   | (61     | )                              |  |   | 21       |   |  |         | (106    | ) |  |   | 64      |   |  |   | (42     | )
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |         | 6,352   |   |              |   | 6,676   |                                |  |   | 6,934    |   |  |         | 6,342   |   |  |   | 6,626   |   |  |   | 6,626   |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Total Separate Accounts            |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |         | 194,555 |   |              |   | 203,677 |                                |  |   | 209,912  |   |  |         | 222,589 |   |  |   | 232,183 |   |  |   | 222,589 |  
|Net subscriptions                  |  |         | 2,409   |   |              |   | 5,701   |                                |  |   | 8,909    |   |  |         | 4,971   |   |  |   | 2,273   |   |  |   | 7,244   |  
|Market appreciation (depreciation) |  |         | 6,713   |   |              |   | 534     |                                |  |   | 3,768    |   |  |         | 4,623   |   |  |   | (3,611  | ) |  |   | 1,012   |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  | $       | 203,677 |   |              | $ | 209,912 |                                |  | $ | 222,589  |   |  | $       | 232,183 |   |  | $ | 230,845 |   |  | $ | 230,845 |  
|                                   |  |         |         |   |              |   |         |                                |  |   |          |   |  |         |         |   |  |   |         |   |  |   |         |  



- 24 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Assets under Management (continued)



BlackRock, Inc.

Assets Under Management

Quarterly Trend

(Dollar amounts in millions)

(unaudited)



|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|---------------------------------- |  | ------- | ------ | - | ------------ | - | ------ | ----------------------------- |  | - | -------- | - | ------- | - | ------ |  | - | ------ | - |  | - | ------ | -
|                                   |  | 2003    |        |   | 2004         |   |        | Six months endedJune 30, 2004 | 
|                                   |  | June 30 |        |   | September 30 |   |        | December 31                   |  |   | March 31 |   | June 30 |   |       
|Mutual Funds                       |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Fixed Income                       |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  | $       | 20,280 |   |              | $ | 21,480 |                               |  | $ | 22,974   |   |         | $ | 23,924 |  | $ | 24,742 |   |  | $ | 23,924 |  
|Net subscriptions (redemptions)    |  |         | 788    |   |              |   | 1,426  |                               |  |   | 977      |   |         |   | 598    |  |   | (264   | ) |  |   | 334    |  
|Market appreciation (depreciation) |  |         | 412    |   |              |   | 68     |                               |  |   | (27      | ) |         |   | 220    |  |   | (698   | ) |  |   | (478   | )
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  |         | 21,480 |   |              |   | 22,974 |                               |  |   | 23,924   |   |         |   | 24,742 |  |   | 23,780 |   |  |   | 23,780 |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Liquidity                          |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |         | 55,594 |   |              |   | 57,845 |                               |  |   | 57,334   |   |         |   | 58,565 |  |   | 58,986 |   |  |   | 58,565 |  
|Net subscriptions (redemptions)    |  |         | 2,247  |   |              |   | (512   | )                             |  |   | 1,225    |   |         |   | 420    |  |   | (8,710 | ) |  |   | (8,290 | )
|Market appreciation                |  |         | 4      |   |              |   | 1      |                               |  |   | 6        |   |         |   | 1      |  |   |       |   |  |   | 1      |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  |         | 57,845 |   |              |   | 57,334 |                               |  |   | 58,565   |   |         |   | 58,986 |  |   | 50,276 |   |  |   | 50,276 |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Equity                             |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |         | 3,170  |   |              |   | 3,307  |                               |  |   | 3,281    |   |         |   | 4,278  |  |   | 4,761  |   |  |   | 4,278  |  
|Net subscriptions (redemptions)    |  |         | (346   | ) |              |   | (147   | )                             |  |   | 579      |   |         |   | 351    |  |   | 4      |   |  |   | 355    |  
|Market appreciation (depreciation) |  |         | 483    |   |              |   | 121    |                               |  |   | 418      |   |         |   | 132    |  |   | (12    | ) |  |   | 120    |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  |         | 3,307  |   |              |   | 3,281  |                               |  |   | 4,278    |   |         |   | 4,761  |  |   | 4,753  |   |  |   | 4,753  |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Total Mutual Funds                 |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |         | 79,044 |   |              |   | 82,632 |                               |  |   | 83,589   |   |         |   | 86,767 |  |   | 88,489 |   |  |   | 86,767 |  
|Net subscriptions (redemptions)    |  |         | 2,689  |   |              |   | 767    |                               |  |   | 2,781    |   |         |   | 1,369  |  |   | (8,970 | ) |  |   | (7,601 | )
|Market appreciation (depreciation) |  |         | 899    |   |              |   | 190    |                               |  |   | 397      |   |         |   | 353    |  |   | (710   | ) |  |   | (357   | )
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  | $       | 82,632 |   |              | $ | 83,589 |                               |  | $ | 86,767   |   |         | $ | 88,489 |  | $ | 78,809 |   |  | $ | 78,809 |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  



- 25 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Assets under Management (continued)



BlackRock, Inc.

Assets Under Management

Quarterly Trend

(Dollar amounts in millions)

(unaudited)



|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|---------------------------------- |  | ------- | ------ | - | ------------ | - | ------ | ----------------------------- |  | - | -------- | - | ------- | - | ------ |  | - | ------ | - |  | - | ------ | -
|                                   |  | 2003    |        |   | 2004         |   |        | Six months endedJune 30, 2004 | 
|                                   |  | June 30 |        |   | September 30 |   |        | December 31                   |  |   | March 31 |   | June 30 |   |       
|Mutual Funds                       |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|BlackRock Funds                    |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  | $       | 18,013 |   |              | $ | 18,410 |                               |  | $ | 18,044   |   |         | $ | 18,354 |  | $ | 18,985 |   |  | $ | 18,354 |  
|Net subscriptions (redemptions)    |  |         | (213   | ) |              |   | (385   | )                             |  |   | 57       |   |         |   | 427    |  |   | (2,110 | ) |  |   | (1,683 | )
|Market appreciation (depreciation) |  |         | 610    |   |              |   | 19     |                               |  |   | 253      |   |         |   | 204    |  |   | (272   | ) |  |   | (68    | )
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  |         | 18,410 |   |              |   | 18,044 |                               |  |   | 18,354   |   |         |   | 18,985 |  |   | 16,603 |   |  |   | 16,603 |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|BlackRock Global Series            |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |         | 500    |   |              |   | 589    |                               |  |   | 794      |   |         |   | 838    |  |   | 1,026  |   |  |   | 838    |  
|Net subscriptions (redemptions)    |  |         | 44     |   |              |   | 193    |                               |  |   | (3       | ) |         |   | 181    |  |   | 275    |   |  |   | 456    |  
|Market appreciation (depreciation) |  |         | 45     |   |              |   | 12     |                               |  |   | 47       |   |         |   | 7      |  |   | (8     | ) |  |   | (1     | )
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  |         | 589    |   |              |   | 794    |                               |  |   | 838      |   |         |   | 1,026  |  |   | 1,293  |   |  |   | 1,293  |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|BlackRock Liquidity Funds          |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |         | 48,489 |   |              |   | 51,163 |                               |  |   | 51,078   |   |         |   | 52,870 |  |   | 53,159 |   |  |   | 52,870 |  
|Net subscriptions (redemptions)    |  |         | 2,674  |   |              |   | (85    | )                             |  |   | 1,792    |   |         |   | 289    |  |   | (7,305 | ) |  |   | (7,016 | )
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  |         | 51,163 |   |              |   | 51,078 |                               |  |   | 52,870   |   |         |   | 53,159 |  |   | 45,854 |   |  |   | 45,854 |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Closed End                         |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |         | 11,294 |   |              |   | 11,723 |                               |  |   | 12,920   |   |         |   | 13,961 |  |   | 14,552 |   |  |   | 13,961 |  
|Net subscriptions                  |  |         | 185    |   |              |   | 1,038  |                               |  |   | 944      |   |         |   | 449    |  |   | 111    |   |  |   | 560    |  
|Market appreciation (depreciation) |  |         | 244    |   |              |   | 159    |                               |  |   | 97       |   |         |   | 142    |  |   | (430   | ) |  |   | (288   | )
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  |         | 11,723 |   |              |   | 12,920 |                               |  |   | 13,961   |   |         |   | 14,552 |  |   | 14,233 |   |  |   | 14,233 |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Other Commingled Funds             |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |         | 748    |   |              |   | 747    |                               |  |   | 753      |   |         |   | 744    |  |   | 767    |   |  |   | 744    |  
|Net subscriptions (redemptions)    |  |         | (1     | ) |              |   | 6      |                               |  |   | (9       | ) |         |   | 23     |  |   | 59     |   |  |   | 82     |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  |         | 747    |   |              |   | 753    |                               |  |   | 744      |   |         |   | 767    |  |   | 826    |   |  |   | 826    |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Total Mutual Funds                 |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |         | 79,044 |   |              |   | 82,632 |                               |  |   | 83,589   |   |         |   | 86,767 |  |   | 88,489 |   |  |   | 86,767 |  
|Net subscriptions (redemptions)    |  |         | 2,689  |   |              |   | 767    |                               |  |   | 2,781    |   |         |   | 1,369  |  |   | (8,970 | ) |  |   | (7,601 | )
|Market appreciation (depreciation) |  |         | 899    |   |              |   | 190    |                               |  |   | 397      |   |         |   | 353    |  |   | (710   | ) |  |   | (357   | )
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  
|Ending assets under management     |  | $       | 82,632 |   |              | $ | 83,589 |                               |  | $ | 86,767   |   |         | $ | 88,489 |  | $ | 78,809 |   |  | $ | 78,809 |  
|                                   |  |         |        |   |              |   |        |                               |  |   |          |   |         |   |        |  |   |        |   |  |   |        |  



- 26 -



---

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 June 30, 2004 as compared with the three
months ended June 30, 2003.



Revenue



Total revenue for the three months ended June 30, 2004 increased $39.9 million, or 28%, to
$183.8 million, compared with $143.9 million for the three months ended June 30, 2003. Investment advisory and administration fees increased $34.0 million, or 27%,to $162.0 million for the three months ended June 30, 2004, compared with
$128.0 million for the three months ended June 30, 2003. The increase in investment advisory and administration fees was due to increases in fees earned across all asset classes. Other income of $21.8 million increased $5.9 million, or 37%, for the
three months ended June 30, 2004 compared with $15.9 million for the three months ended June 30, 2003 primarily due to increased sales of BlackRock Solutionsproducts and services.



|                                                  |  |                             |         |          |   |         |  |   |        |  |      |  
|------------------------------------------------- |  | --------------------------- | ------- | -------- | - | ------- |  | - | ------ |  | ---- | -
|                                                  |  | Three months ended June 30, |         | Variance |  
|                                                  |  | 2004                        |         | 2003     |   | Amount  |  | % |       
|Dollar amounts in thousands                       |  | (unaudited)                 |         |          |   |         | 
|Investment advisory and administration fees:      |  |                             |         |          |   |         |  |   |        |  |      |  
|Mutual funds                                      |  | $                           | 54,981  |          | $ | 48,496  |  | $ | 6,485  |  | 13.4 | %
|Separate accounts                                 |  |                             | 107,032 |          |   | 79,517  |  |   | 27,515 |  | 34.6 |  
|                                                  |  |                             |         |          |   |         |  |   |        |  |      |  
|Total investment advisory and administration fees |  |                             | 162,013 |          |   | 128,013 |  |   | 34,000 |  | 26.6 |  
|Other income                                      |  |                             | 21,799  |          |   | 15,893  |  |   | 5,906  |  | 37.2 |  
|                                                  |  |                             |         |          |   |         |  |   |        |  |      |  
|Total revenue                                     |  | $                           | 183,812 |          | $ | 143,906 |  | $ | 39,906 |  | 27.7 | %
|                                                  |  |                             |         |          |   |         |  |   |        |  |      |  



Mutual fund advisory and
administration fees increased $6.5 million, or 13%, to $55.0 million for the three months ended June 30, 2004, compared with $48.5 million for the three months ended June 30, 2003. The increase in mutual fund revenue was primarily the result of
increases in closed-end fund revenue and BlackRock Fundsfees of $5.2 million and $1.0 million, respectively. Since June 30, 2003, the Company has raised approximately $2.5 billion in new closed-end funds that resulted in the increase in
closed-end fund revenue. The increase in BlackRock Fundsfees is primarily attributable to net subscriptions and a shift in asset mix from liquidity portfolios to higher fee earning fixed income portfolios.



Separate account revenue increased $27.5 million, or 35%, to $107.0 million for the three
months ended June 30, 2004, compared with $79.5 million for the three months ended June 30, 2003. Separate account base fees increased $11.5 million, or 15%, to $89.4 million for the three months ended June 30, 2004, compared with $78.0 million for
the three months ended June 30, 2003, as a result of a $27.2 billion, or 13%, increase in separate account assets under management. Performance fees of $17.6 million for the three months ended June 30, 2004 increased $16.0 million compared with $1.6
million for the three months ended June 30, 2003. The increase in performance fees was primarily attributable to alternative investment product performance fees related to investment returns on the Companys fixed income hedge fund, which
exceeded its high water mark during the period.



- 27 -



---

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 June 30, 2004 as compared with the three
months ended June 30, 2003. (continued)



Revenue (continued)



|                                                  |  |                             |         |          |   |         |  |   |        |   |  |      |  
|------------------------------------------------- |  | --------------------------- | ------- | -------- | - | ------- |  | - | ------ | - |  | ---- | -
|                                                  |  | Three months ended June 30, |         | Variance |  
|                                                  |  | 2004                        |         | 2003     |   | Amount  |  |   | %      |  
|Dollar amounts in thousands                       |  | (unaudited)                 |         |          |   |         |  |  
|Mutual funds revenue                              |  |                             |         |          |   |         |  |   |        |   |  |      |  
|BlackRock Funds                                   |  | $                           | 18,058  |          | $ | 17,056  |  | $ | 1,002  |   |  | 5.9  | %
|Closed End Funds                                  |  |                             | 17,484  |          |   | 12,301  |  |   | 5,183  |   |  | 42.1 |  
|BlackRock Liquidity Funds                         |  |                             | 19,160  |          |   | 18,854  |  |   | 306    |   |  | 1.6  |  
|Other commingled funds                            |  |                             | 279     |          |   | 285     |  |   | (6     | ) |  | (2.1 | )
|                                                  |  |                             |         |          |   |         |  |   |        |   |  |      |  
|Total mutual funds revenue                        |  |                             | 54,981  |          |   | 48,496  |  |   | 6,485  |   |  | 13.4 |  
|                                                  |  |                             |         |          |   |         |  |   |        |   |  |      |  
|Separate accounts revenue                         |  |                             |         |          |   |         |  |   |        |   |  |      |  
|Separate account base fees                        |  |                             | 89,436  |          |   | 77,957  |  |   | 11,479 |   |  | 14.7 |  
|Separate account performance fees                 |  |                             | 17,596  |          |   | 1,560   |  |   | 16,036 |   |  | NM   |  
|                                                  |  |                             |         |          |   |         |  |   |        |   |  |      |  
|Total separate accounts revenue                   |  |                             | 107,032 |          |   | 79,517  |  |   | 27,515 |   |  | 34.6 |  
|                                                  |  |                             |         |          |   |         |  |   |        |   |  |      |  
|Total investment advisory and administration fees |  |                             | 162,013 |          |   | 128,013 |  |   | 34,000 |   |  | 26.6 |  
|                                                  |  |                             |         |          |   |         |  |   |        |   |  |      |  
|Other income                                      |  |                             | 21,799  |          |   | 15,893  |  |   | 5,906  |   |  | 37.2 |  
|                                                  |  |                             |         |          |   |         |  |   |        |   |  |      |  
|Total revenue                                     |  | $                           | 183,812 |          | $ | 143,906 |  | $ | 39,906 |   |  | 27.7 | %
|                                                  |  |                             |         |          |   |         |  |   |        |   |  |      |  

---

NM = Not meaningful



- 28 -



---

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 June 30, 2004 as compared with the three
months ended June 30, 2003. (continued)



Expense



Total expense rose $32.1 million, or 36%, to $121.2 million in the second quarter of 2004
compared with $89.1 million during the second quarter of 2003. The increase was attributable to increases in employee compensation and benefits, general and administration expense and fund administration and servicing expense paid to third parties,
partially offset by a decrease in affiliated fund administration and servicing costs.



|                                        |  |                            |         |          |   |        |  |   |        |   |  |       |  
|--------------------------------------- |  | -------------------------- | ------- | -------- | - | ------ |  | - | ------ | - |  | ----- | -
|                                        |  | Three months endedJune 30, |         | Variance |  
|                                        |  | 2004                       |         | 2003     |   | Amount |  |   | %      |  
|Dollar amounts in thousands             |  | (unaudited)                |         |          |   |        |  |  
|Employee compensation and benefits      |  | $                          | 81,618  |          | $ | 55,819 |  | $ | 25,799 |   |  | 46.2  | %
|Fund administration and servicing costs |  |                            |         |          |   |        |  |   |        |   |  |       |  
|Affiliates                              |  |                            | 4,948   |          |   | 6,686  |  |   | (1,738 | ) |  | (26.0 | )
|Other                                   |  |                            | 3,070   |          |   | 892    |  |   | 2,178  |   |  | 244.2 |  
|General and administration              |  |                            | 31,363  |          |   | 25,476 |  |   | 5,887  |   |  | 23.1  |  
|Amortization of intangible assets       |  |                            | 232     |          |   | 231    |  |   | 1      |   |  | 0.4   |  
|                                        |  |                            |         |          |   |        |  |   |        |   |  |       |  
|Total expense                           |  | $                          | 121,231 |          | $ | 89,104 |  | $ | 32,127 |   |  | 36.1  | %
|                                        |  |                            |         |          |   |        |  |   |        |   |  |       |  



The rise in employee compensation and
benefits of $25.8 million, or 46%, primarily reflects increased salary and incentive compensation expense, including increased direct incentives related to alternative investment product performance fees and the gain on the Companys sale of
Trepp LLC totaling $10.0 million and $7.0 million, respectively, $5.0 million in salaries and benefits to support staffing needs, a $3.0 million increase in incentive compensation reflecting operating income growth and $1.3 million in stock-based
compensation related to restricted stock granted to employees during the fourth quarter of 2003. General and administration expense increased $5.9 million, or 23%, to $31.4 million during the three months ended June 30, 2004 compared to $25.5
million during the three months ended June 30, 2003 primarily due to increases in marketing and promotional and other expenses of $2.8 million and $2.5 million, respectively. During the three months ended June 30, 2004, marketing and promotional
expense of $9.6 million increased $2.8 million, or 42%, compared to $6.8 million during the three months ended June 30, 2003 primarily due to closed-end fund launches and increased institutional marketing activities. Other expense of $11.2 million
increased $2.5 million, or 28%, during the three months ended June 30, 2004 compared to $8.8 million during the three months ended June 30, 2003 primarily due to increased professional fees of $2.1 million for legal and accounting services related
to mutual fund regulatory inquiries and costs incurred for complying with the Sarbanes-Oxley Act of 2002 as well as a $0.4 million rise in insurance costs. During the second quarter of 2004, fund administration and servicing expense paid to third
parties of $3.1 million increased by $2.2 million compared to the second quarter of 2003 primarily due to increases in shareholder servicing fees related to new closed-end funds and transfer agency related expenses associated with the BlackRock
Funds totaling $1.3 million and $0.9 million, respectively. The $1.7 million, or 26%, decrease in affiliated fund administration and servicing costs from $6.7 million during the three months ended June 30, 2003 to $4.9 million primarily relates
to a restructuring of BlackRocks co-administration agreements with PFPC Inc., an indirect, wholly-owned subsidiary of PNC.



- 29 -



---

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 June 30, 2004 as compared with the three
months ended June 30, 2003. (continued)



Expense (continued)



|                                         |  |                            |        |          |   |        |  |   |       |  |      |  
|---------------------------------------- |  | -------------------------- | ------ | -------- | - | ------ |  | - | ----- |  | ---- | -
|                                         |  | Three months endedJune 30, |        | Variance |  
|                                         |  | 2004                       |        | 2003     |   | Amount |  | % |      
|Dollar amounts in thousands              |  | (unaudited)                |        |          |   |        | 
|General and administration expense:      |  |                            |        |          |   |        |  |   |       |  |      |  
|Marketing and promotional                |  | $                          | 9,637  |          | $ | 6,797  |  | $ | 2,840 |  | 41.8 | %
|Occupancy expense                        |  |                            | 5,914  |          |   | 5,400  |  |   | 514   |  | 9.5  |  
|Technology                               |  |                            | 4,603  |          |   | 4,523  |  |   | 80    |  | 1.8  |  
|Other general and administration         |  |                            | 11,209 |          |   | 8,756  |  |   | 2,453 |  | 28.0 |  
|                                         |  |                            |        |          |   |        |  |   |       |  |      |  
|Total general and administration expense |  | $                          | 31,363 |          | $ | 25,476 |  | $ | 5,887 |  | 23.1 | %
|                                         |  |                            |        |          |   |        |  |   |       |  |      |  



- 30 -



---

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 June 30, 2004 as compared with the three
months ended June 30, 2003. (continued)



Operating Income and Net
Income



Operating income was $62.6 million for the three months ended June
30, 2004, representing a $7.8 million, or 14%, increase compared with the three months ended June 30, 2003. Non-operating income increased $7.4 million, or 92%, to $15.5 million for the three months ended June 30, 2004 as compared with the three
months ended June 30, 2003. The rise was primarily due to the recognition of a $12.9 million gain on the Companys sale of its interest in Trepp LLC, partially offset by $0.5 million in securities losses as compared to realizing $2.8 million of
gains in the second quarter of 2003 and reduced investment income of $1.8 million. Income tax expense was $26.5 million and $24.2 million, representing effective tax rates of 34.0% and 38.6% for the three months ended June 30, 2004 and June 30,
2003, respectively, reflecting Company managements decision to decrease the full year effective tax rate for 2004 to 36.5%. Net income totaled $48.0 million for the three months ended June 30, 2004 compared with $38.7 million for the three
months ended June 30, 2003, representing an increase of $9.3 million, or 24%.



- 31 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Operating results for the six months ended June 30, 2004 as compared with the six months
ended June 30, 2003.



Revenue



Total revenue for the six months ended June 30, 2004 increased $78.9 million or 28% to
$365.6 million, compared with $286.7 million for the six months ended June 30, 2003. Investment advisory and administration fees increased $68.0 million, or 27%,to $322.3 million for the six months ended June 30, 2004, compared with $254.4
million for the six months ended June 30, 2003. The increase in investment advisory and administration fees was due to increases in fees earned from separate accounts of $53.8 million, or 34%, and mutual funds of $14.2 million, or 15%. Other income
of $43.3 million increased $11.0 million, or 34%, for the six months ended June 30, 2004 compared with $32.3 million for the six months ended June 30, 2003 primarily due to increased sales of BlackRock Solutionsproducts and services.



|                                                  |  |                           |         |          |   |         |  |   |        |  |      |  
|------------------------------------------------- |  | ------------------------- | ------- | -------- | - | ------- |  | - | ------ |  | ---- | -
|                                                  |  | Six months ended June 30, |         | Variance |  
|                                                  |  | 2004                      |         | 2003     |   | Amount  |  | % |       
|Dollar amounts in thousands                       |  | (unaudited)               |         |          |   |         | 
|Investment advisory and administration fees:      |  |                           |         |          |   |         |  |   |        |  |      |  
|Mutual funds                                      |  | $                         | 111,427 |          | $ | 97,236  |  | $ | 14,191 |  | 14.6 | %
|Separate accounts                                 |  |                           | 210,904 |          |   | 157,142 |  |   | 53,762 |  | 34.2 |  
|                                                  |  |                           |         |          |   |         |  |   |        |  |      |  
|Total investment advisory and administration fees |  |                           | 322,331 |          |   | 254,378 |  |   | 67,953 |  | 26.7 |  
|Other income                                      |  |                           | 43,304  |          |   | 32,279  |  |   | 11,025 |  | 34.2 |  
|                                                  |  |                           |         |          |   |         |  |   |        |  |      |  
|Total revenue                                     |  | $                         | 365,635 |          | $ | 286,657 |  | $ | 78,978 |  | 27.6 | %
|                                                  |  |                           |         |          |   |         |  |   |        |  |      |  



Mutual fund advisory and
administration fees increased $14.2 million, or 15%, to $111.4 million for the six months ended June 30, 2004, compared with $97.2 million for the six months ended June 30, 2003. The increase in mutual fund revenue was primarily the result of
increases in closed-end fund revenue and BlackRock Fundsfees of $10.7 million and $3.6 million, respectively. Since June 30, 2003, the Company has raised approximately $2.5 billion in new closed-end funds which resulted in the increase in
closed-end fund revenue. The increase in BlackRock Fundsfees is primarily attributable to an increase in average assets under management of approximately $1.1 billion.



Separate account revenue increased $53.8 million, or 34%, to $210.9 million for the six months ended June 30, 2004, compared with $157.1
million for the six months ended June 30, 2003. Separate account base fees increased $25.0 million, or 16%, to $177.5 million for the six months ended June 30, 2004, compared with $152.5 million for the six months ended June 30, 2003, as a result of
a $27.2 billion, or 13%, increase in separate account assets under management. Performance fees of $33.4 million for the six months ended June 30, 2004 increased $28.7 million compared with $4.7 million for the six months ended June 30, 2003. The
increase in performance fees was primarily related to fees earned on the Companys fixed income hedge fund, which exceeded its high water mark during the second quarter of 2004, fees earned from a collateralized debt obligation
(CDO) and several separate accounts. The CDO performance fee, which totaled $7.9 million, represents a portion of returns realized by its investors since the CDOs inception in January 2001 and, therefore, is not indicative of
future CDO performance fees.



- 32 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Operating results for the six months ended June 30, 2004 as compared with the six months
ended June 30, 2003. (continued)



Revenue (continued)



|                                                  |  |                           |         |          |   |         |  |   |        |   |  |      |  
|------------------------------------------------- |  | ------------------------- | ------- | -------- | - | ------- |  | - | ------ | - |  | ---- | -
|                                                  |  | Six months ended June 30, |         | Variance |  
|                                                  |  | 2004                      |         | 2003     |   | Amount  |  |   | %      |  
|Dollar amounts in thousands                       |  | (unaudited)               |         |          |   |         |  |  
|Mutual funds revenue                              |  |                           |         |          |   |         |  |   |        |   |  |      |  
|BlackRock Funds                                   |  | $                         | 36,840  |          | $ | 33,242  |  | $ | 3,598  |   |  | 10.8 | %
|Closed End Funds                                  |  |                           | 34,274  |          |   | 23,614  |  |   | 10,660 |   |  | 45.1 |  
|BlackRock Liquidity Funds                         |  |                           | 39,773  |          |   | 39,853  |  |   | (80    | ) |  | (0.2 | )
|Other commingled funds                            |  |                           | 540     |          |   | 527     |  |   | 13     |   |  | 2.5  |  
|                                                  |  |                           |         |          |   |         |  |   |        |   |  |      |  
|Total mutual funds revenue                        |  |                           | 111,427 |          |   | 97,236  |  |   | 14,191 |   |  | 14.6 |  
|                                                  |  |                           |         |          |   |         |  |   |        |   |  |      |  
|Separate accounts revenue                         |  |                           |         |          |   |         |  |   |        |   |  |      |  
|Separate account base fees                        |  |                           | 177,502 |          |   | 152,470 |  |   | 25,032 |   |  | 16.4 |  
|Separate account performance fees                 |  |                           | 33,402  |          |   | 4,672   |  |   | 28,730 |   |  | NM   |  
|                                                  |  |                           |         |          |   |         |  |   |        |   |  |      |  
|Total separate accounts revenue                   |  |                           | 210,904 |          |   | 157,142 |  |   | 53,762 |   |  | 34.2 |  
|                                                  |  |                           |         |          |   |         |  |   |        |   |  |      |  
|Total investment advisory and administration fees |  |                           | 322,331 |          |   | 254,378 |  |   | 67,953 |   |  | 26.7 |  
|                                                  |  |                           |         |          |   |         |  |   |        |   |  |      |  
|Other income                                      |  |                           | 43,304  |          |   | 32,279  |  |   | 11,025 |   |  | 34.2 |  
|                                                  |  |                           |         |          |   |         |  |   |        |   |  |      |  
|Total revenue                                     |  | $                         | 365,635 |          | $ | 286,657 |  | $ | 78,978 |   |  | 27.6 | %
|                                                  |  |                           |         |          |   |         |  |   |        |   |  |      |  

---

NM = Not meaningful



- 33 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Operating results for the six months ended June 30, 2004 as compared with the six months
ended June 30, 2003. (continued)



Expense



Total expense rose $55.5 million, or 31%, to $233.3 million in the six months ended June 30,
2004 compared with $177.8 million in the six months ended June 30, 2003. The increase was attributable to increases in employee compensation and benefits of $36.5 million, or 33%, general and administration expense of $12.1 million, or 24%, fund
administration and servicing expense paid to third parties of $4.5 million and the recognition of an impairment on the Companys intangible assets during the first quarter of 2004, partially offset by a decrease in affiliated fund
administration and servicing costs of $3.6 million.



|                                        |  |                           |         |          |   |         |  |    |        |   |  |       |  
|--------------------------------------- |  | ------------------------- | ------- | -------- | - | ------- |  | -- | ------ | - |  | ----- | -
|                                        |  | Six months ended June 30, |         | Variance |  
|                                        |  | 2004                      |         | 2003     |   | Amount  |  |    | %      |  
|Dollar amounts in thousands             |  | (unaudited)               |         |          |   |         |  |   
|Employee compensation and benefits      |  | $                         | 147,687 |          | $ | 111,205 |  | $  | 36,482 |   |  | 32.8  | %
|Fund administration and servicing costs |  |                           |         |          |   |         |  |    |        |   |  |       |  
|Affiliates                              |  |                           | 10,016  |          |   | 13,629  |  | ($ | 3,613  | ) |  | (26.5 | )
|Other                                   |  |                           | 6,362   |          |   | 1,907   |  |    | 4,455  |   |  | 233.6 |  
|General and administration              |  |                           | 62,662  |          |   | 50,585  |  |    | 12,077 |   |  | 23.9  |  
|Amortization of intangible assets       |  |                           | 463     |          |   | 463     |  |    |       |   |  | 0.0   |  
|Impairment of intangible assets         |  |                           | 6,097   |          |   |        |  |    | 6,097  |   |  | NM    |  
|                                        |  |                           |         |          |   |         |  |    |        |   |  |       |  
|Total expense                           |  | $                         | 233,287 |          | $ | 177,789 |  | $  | 55,498 |   |  | 31.2  | %
|                                        |  |                           |         |          |   |         |  |    |        |   |  |       |  



NM =
Not meaningful



Operating margin for the six months ended June 30, 2004
decreased 2.3% to 37.9% from 40.2% during the comparable period in 2003, primarily due to increased incentive compensation. During the period, the Company sold its interest in Trepp LLC, a leading provider of commercial mortgage backed security
information, analytics and technology, resulting in a $12.9 million gain, which was included in non-operating income. The decrease in operating margin was primarily due to the recognition of $7.0 million of incentive compensation expense related to
the gain on the sale of the Companys interest in Trepp LLC.



- 34 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Operating results for the six months ended June 30, 2004 as compared with the six months
ended June 30, 2003. (continued)



Expense (continued)



Higher employee compensation and benefits expense primarily reflects increased salary and
incentive compensation expense, including an increase in direct incentives related to alternative investment product performance fees and the gain on the Companys sale of Trepp LLC totaling $13.5 million and $7.0 million, respectively, $8.3
million in salaries and benefits to support staffing needs, a $7.0 million increase in incentive compensation reflecting operating income growth and $2.5 million in stock-based compensation related to restricted stock granted to employees during the
fourth quarter of 2003. General and administration expense increased $12.1 million, or 24%, to $62.7 million during the six months ended June 30, 2004 compared to $50.6 million during the six months ended June 30, 2003 primarily due to increases in
marketing and promotional and other expenses of $4.4 million and $7.1 million, respectively. During the six months ended June 30, 2004, marketing and promotional expense of $17.8 million increased $4.4 million, or 33%, compared to $13.5 million
during the six months ended June 30, 2003 primarily due to closed-end fund launches and increased institutional marketing activities. Other expense of $24.1 million increased $7.1 million, or 42%, during the six months ended June 30, 2004 compared
to $17.0 million during the six months ended June 30, 2003 primarily due to increased professional fees of $4.6 million for legal and accounting services related to mutual fund regulatory inquiries and costs incurred for complying with the
Sarbanes-Oxley Act of 2002 as well as a $1.1 million rise in insurance costs. In February 2004, the portfolio manager of BlackRocks long-short equity hedge funds resigned from the firm. As a result, BlackRock commenced an orderly liquidation
of these hedge funds and recognized a $6.1 million impairment charge representing the carrying value of the funds acquired management contract. After adjusting for the benefit of a $2.7 million performance fee, the funds liquidation
resulted in an after-tax loss of approximately $2.0 million. During the period, fund administration and servicing expense paid to third parties of $6.4 million increased by $4.5 million compared to the six months ended June 30, 2003 due to increases
in shareholder servicing fees related to new closed-end funds and transfer agency related expenses associated with the BlackRock Funds totaling $2.4 million and $2.1 million, respectively. The $3.6 million, or 27%, decrease in affiliated fund
administration and servicing costs from $13.6 million during the six months ended June 30, 2003 to $10.0 million primarily relates to a restructuring of BlackRocks co-administration agreements with PFPC Inc.



|                                         |  |                          |        |          |   |        |  |   |        |  |      |  
|---------------------------------------- |  | ------------------------ | ------ | -------- | - | ------ |  | - | ------ |  | ---- | -
|                                         |  | Six months ended June30, |        | Variance |  
|                                         |  | 2004                     |        | 2003     |   | Amount |  | % |       
|Dollar amounts in thousands              |  | (unaudited)              |        |          |   |        | 
|General and administration expense:      |  |                          |        |          |   |        |  |   |        |  |      |  
|Marketing and promotional                |  | $                        | 17,840 |          | $ | 13,464 |  | $ | 4,376  |  | 32.5 | %
|Occupancy expense                        |  |                          | 11,564 |          |   | 11,012 |  |   | 552    |  | 5.0  |  
|Technology                               |  |                          | 9,161  |          |   | 9,102  |  |   | 59     |  | 0.6  |  
|Other general and administration         |  |                          | 24,097 |          |   | 17,007 |  |   | 7,090  |  | 41.7 |  
|                                         |  |                          |        |          |   |        |  |   |        |  |      |  
|Total general and administration expense |  | $                        | 62,662 |          | $ | 50,585 |  | $ | 12,077 |  | 23.9 | %
|                                         |  |                          |        |          |   |        |  |   |        |  |      |  



- 35 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Operating results for the six months ended June 30, 2004 as compared with the six months
ended June 30, 2003. (continued)



Operating Income and Net Income



Operating income was $132.3 million for the six months ended June 30,
2004, representing a $23.5 million, or 22%, increase compared with the six months ended June 30, 2003. Non-operating income increased $9.9 million, or 86%, to $21.3 million for the six months ended June 30, 2004 as compared with the six months ended
June 30, 2003. The rise was primarily due to the recognition of a $12.9 million gain on the Companys sale of its interest in Trepp LLC and an $0.7 million increase in investment income related to municipal bonds acquired in mid 2003, partially
offset by reduced securities gains of $1.8 million, $1.2 million in interest expense related to the Companys obligation to purchase a subsidiarys minority interest in 2008 and $1.1 million representing impairments of the Companys
collateralized bond obligation investments. Income tax expense was $46.6 million and $46.3 million, representing effective tax rates of 30.3% and 38.5% for the six months ended June 30, 2004 and June 30, 2003, respectively. The decrease in the
Companys effective tax rate relates to a previously disclosed net income benefit of approximately $8.7 million, associated with the resolution of an audit performed by New York State on the Companys state income tax returns filed from
1998 through 2001. In addition, during the second quarter of 2004, the Company adjusted its full year effective tax rate for 2004 to 36.5%. Including the income tax benefit, net income totaled $103.2 million for the six months ended June 30, 2004
compared with $74.0 million for the six months ended June 30, 2003, representing an increase of $29.2 million, or 39%.



Liquidity and Capital Resources



BlackRock meets its working capital requirements through cash generated by its operating activities. Cash provided by the Companys operating activities totaled
$39.8 million for the period ended June 30, 2004, including a $121.0 million net payment of the Companys 2003 incentive compensation programs. BlackRock expects that cash flows provided by operating activities will continue to serve as the
principal source of working capital for the near future.



Net cash flow
provided by investing activities was $9.0 million for the six months ended June 30, 2004, primarily consisting of $12.5 million in net investment sales, a $6.4 million increase in the Companys cash and cash equivalents due to its consolidation
of a joint venture under Financial Accounting Standards Board Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, partially offset by $9.9 million in capital expenditures largely related to
investments in technology. During the six months ended June 30, 2004, the Company sold several municipal bonds, its investment in the BlackRock FundsGNMA Portfolio and seed investments in several closed-end funds for approximately $56.3
million and sold its equity interest in Trepp LLC for approximately $11.5 million, which was partially offset by $55.1 million in seed investments of new product offerings, two of which represent consolidated investments to the Company.



- 36 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Operating results for the six months ended June 30, 2004 as compared with the six months
ended June 30, 2003. (continued)



Liquidity and Capital Resources
(continued)



Net cash flow used in financing activities was $69.0 million
for the six months ended June 30, 2004 and primarily represented treasury stock activity and the payment of $35.7 million in dividends. During January 2004, BlackRocks Board of Directors approved a two million share repurchase program.
Pursuant to the repurchase program, the Company may make repurchases from time to time as market conditions warrant in open market or privately negotiated transactions at the discretion of the Companys management. The authority to purchase
310,000 shares available under pre-existing programs terminated with the approval of this program. In addition to authorizing the new share repurchase program, the Board of Directors also approved a management stock buy-back (the Management
Buy-Back) that authorized BlackRock to purchase shares owned by senior management through the repurchase program. Shares repurchased by the Company under the Management Buy-Back reduced the current two million share repurchase authorization.
Eligible participants elected to sell an aggregate of 690,575 shares which, based on BlackRocks average closing price for the five days ended January 28, 2004, approximated $40.4 million. In addition, the Company repurchased approximately
115,000 shares under the program in open market transactions for approximately $6.7 million. As a result, the Company is currently authorized to repurchase approximately 1.2 million shares under its repurchase program. Cash paid in the repurchase
program was partially offset by the receipt of $10.0 million by the Company due to the exercise of employee stock options during the six months ended June 30, 2004.



Total capital at June 30, 2004 was $764.2 million and was primarily comprised of stockholders equity.



Contractual Obligations and Commercial Commitments



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



In the ordinary course of business, BlackRock enters into contracts (purchase obligations) with third parties pursuant to which the third parties provide services to or on behalf of BlackRock. Purchase obligations
represent executory contracts which are either noncancelable or cancelable with penalty. At June 30, 2004, the Companys obligations primarily reflected shareholder servicing arrangements related to client investments in the BlackRock
Closed-end Funds, subadvisory agreements and standard service contracts with third parties for portfolio, market data and office services.



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.



In connection with the management contract acquired on May 15, 2000 associated with the agreement and plan of merger of CORE Cap, Inc. with Anthracite, a BlackRock managed REIT, the Company recorded an $8.0 million liability using an
imputed interest rate of 10%, the prevailing interest rate on the date of acquisition. For the three and six months ended June 30, 2004, the related expense was $0.1 million and $0.3 million, respectively. At June 30, 2004, the future commitment
under the agreement is $6.5 million. If Anthracites management contract with BlackRock is terminated, not renewed or not extended for any reason other than cause, Anthracite would remit to the Company all future payments due under this
obligation.



- 37 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Operating results for the six months ended June 30, 2004 as compared with the six months
ended June 30, 2003. (continued)



Contractual Obligations and
Commercial Commitments (continued)



On April 30, 2003, the Company
purchased 80% of the outstanding equity interests of an investment manager of a hedge fund of funds for approximately $4.1 million in cash. Additionally, the Company has committed to purchase the remaining equity of the investment manager on March
31, 2008, subject to certain acceleration provisions. The purchase price of this remaining interest is performance-based and is not subject to a maximum or the continued employment of former employees of the investment manager with the Company.
Based on the current performance of the investment manager, the Companys obligation, if settled at June 30, 2004, would be approximately $2.3 million.



Summary of Commitments (unaudited):



|                               |  |       |         |      |   |        |  |      |        |      |   |        |  |            |        |  |   |        |  |   |        
|------------------------------ |  | ----- | ------- | ---- | - | ------ |  | ---- | ------ | ---- | - | ------ |  | ---------- | ------ |  | - | ------ |  | - | -------
|                               |  | Total |         | 2004 |   | 2005   |  | 2006 |        | 2007 |   | 2008   |  | Thereafter
|(Dollar amounts in thousands)  |  |       |         |      |   |        |  |      |        |      |   |        |  |           
|Lease Commitments              |  | $     | 211,475 |      | $ | 5,904  |  | $    | 13,801 |      | $ | 15,334 |  | $          | 15,302 |  | $ | 15,307 |  | $ | 145,827
|Purchase Obligations           |  |       | 21,833  |      |   | 7,307  |  |      | 5,867  |      |   | 5,054  |  |            | 3,054  |  |   | 552    |  |   |       
|Acquired Management Contract   |  |       | 6,500   |      |   |       |  |      | 1,500  |      |   | 1,000  |  |            | 1,000  |  |   | 1,000  |  |   | 2,000  
|Acquisition Forward Commitment |  |       | 2,261   |      |   | 2,261  |  |      |       |      |   |       |  |            |       |  |   |       |  |   |       
|                               |  |       |         |      |   |        |  |      |        |      |   |        |  |            |        |  |   |        |  |   |        
|Total Commitments              |  | $     | 242,069 |      | $ | 15,472 |  | $    | 21,168 |      | $ | 21,388 |  | $          | 19,356 |  | $ | 16,859 |  | $ | 147,827
|                               |  |       |         |      |   |        |  |      |        |      |   |        |  |            |        |  |   |        |  |   |        



In July 2004, BlackRock signed a lease
through February 28, 2017 with Park Avenue Plaza Company L.P. for approximately 88,000 square feet of office space located at 55 East 52nd Street, New York, New York. Total rent payments over the lease term will be approximately $52 million, with
annual lease payments for the first four years of the lease term of approximately $4.1 million. Future minimum commitments under this lease have been reflected above.



- 38 -



---

PART I  FINANCIAL INFORMATION (continued)

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



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 Annual Report on Form 10-K for the year ended December 31, 2003.



Investments



Readily Marketable Securities



The accounting method used for the Companys readily marketable securities is dependent upon the Companys ownership level. If the Company does not possess
significant influence over the issuers operations, the securities are classified as trading or available for sale, depending on the Companys ability and intent to hold the security. If BlackRock holds significant influence over the
issuer of a readily marketable equity security, the investment is accounted for under the equity method of accounting and included in investments, other. Managements conclusion that the Company holds significant influence over an issuer whose
security was previously classified as an available for sale security has a significant impact on the Companys net income due to the related accounting treatment. Under the equity method, the Companys share of the investees net
income is recorded in investment income (expense), net, while unrealized gains and losses on available for sale securities are recorded in the accumulated other comprehensive income or loss component of stockholders equity until the securities
are sold. Accumulated gross unrealized losses on June 30, 2004 on readily marketable available for sale securities were approximately $1.9 million.



Nonmarketable Equity Securities



Items classified as investments, other, are accounted for using the cost or equity methods of accounting. If the Company has significant influence over the
investees operations, the equity method of accounting is used and the Companys share of the investees net income is recorded as investment income (expense), net, for alternative investment products and other income for operating
joint ventures. If the Company does not maintain significant influence over the investees operations, the cost method of accounting is used. Under the cost method of accounting, investment income is recognized as received or upon the sale of
the security. Therefore, managements conclusion that BlackRock holds significant influence over an issuer has a significant impact on the Companys net income. Unrealized gains related to investments accounted for under the cost method
during the three and six months ended June 30, 2004 totaled approximately $1.0 million and $0.5 million, respectively.



Impairment of Securities



Management periodically assesses impairment on investments to determine if it is other than temporary.



- 39 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Critical Accounting Policies (continued)



Impairment of Securities (continued)



Several of the Companys available for sale investments represent interests in
collateralized debt obligations for 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 amount) is less than the last revised estimate, 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 and other securities, the Company considers the length of time and the extent to which the securitys market value, if determinable, 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.



BlackRock, Inc. Long Term Retention and Incentive Plan (LTIP)



The LTIP permits the grant of up to $240 million in deferred compensation awards (the LTIP Awards), subject to the achievement of certain performance hurdles by the Company no later than March 2007. The Compensation Committee of
the Companys Board of Directors may vest a portion of the LTIP Awards, in its sole discretion, if the Company achieves certain alternative performance hurdles during the vesting period. For a more detailed discussion of the LTIP, refer to Note
10 in the Notes to the Consolidated Financial Statements in BlackRocks 2003 Annual Report on Form 10-K.



There will be no expense recognition associated with the LTIP Awards unless a full or partial vesting determination is considered probable and estimable. The Compensation and Audit Committees of the Companys
Board of Directors have determined, based on current conditions, that the probability of any partial vesting prior to the opportunity for commencement of full vesting of the program at the conclusion of the first quarter of 2005 is unlikely. The
LTIP was constructed such that the expected increase in value to stockholders necessary to fully vest the program had to result from continued growth in the Companys earnings rather than from changes in the financial markets. As such, the
Compensation Committee established a minimum performance period (through December 31, 2004) under which no vesting of the program would occur. At such time, the Compensation and Audit Committees will evaluate the likelihood that the Company will
complete the program term with alternative vesting criteria performance in excess of LTIP requirements. In addition, the Companys management supports the Compensation and Audit Committees determination through periodic assessments of
this contingency based on the Companys stock price and related volatility, market indicators for the Companys future earnings relative to its peers and the Companys current state of completion of the program term. The Company will
accrue expense for this contingency accordingly. Assuming the LTIP Awards fully vest by March 31, 2005 by achieving the $62 average price target, the Company will record a one-time charge of approximately $98 million, net of tax, or $1.50 per
diluted share in the first quarter of 2005, and quarterly expense of approximately $8 million, net of tax, or $0.12 per diluted share, through December 31, 2006, the end of the LTIPs service period. If the vesting date is later than March 31,
2005, the one-time charge will increase in an amount equal to the pro rata portion of the service period completed.



With respect to partial vesting, as of June 30, 2004, the Companys compound annual growth in diluted earnings per share exceeds 10%. In addition, as of June 30,
2004, the Companys publicly-traded stock price performance was 4th out of 14 peer group companies. The Company continues to evaluate the likelihood of achieving the partial vesting criteria each quarter and has concluded that, as of June 30,
2004, such an event is not probable. If it becomes probable, by September 30, 2004, that the LTIP Awards could partially vest by at least 50%, the Company would record a one-time charge of approximately $42 million, net of tax, or $0.64 per diluted
share, on September 30, 2004 and quarterly expense of approximately $7.5 million, net of tax, or $0.06 per diluted share, through December 31, 2006, the end of the LTIPs service period. If a partial vesting decision becomes probable subsequent
to September 30, 2004, the one-time charge will increase in an amount equal to the pro rata portion of the service period completed.



- 40 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Critical Accounting Policies (continued)



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.



Property and Equipment



Property and equipment are 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. A change in an asset classs estimated useful life by management would have a significant impact on the Companys depreciation expense (approximately $4.9
million and $9.6 million for the three and six months ended June 30, 2004, respectively) due to the concentration of the Companys property and equipment in relatively short-lived assets (useful lives of three to five years). A summary
of the estimated useful lives used, by asset class, is included in Note 3 in the Notes to the Consolidated Financial Statements included in the Companys 2003 Annual Report on Form 10-K.



Related Party Transactions



The Company provides investment advisory and administration services to the BlackRock
Funds, BlackRock Liquidity Funds, the BlackRock Closed-end Funds and other commingled funds.



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



|                                             |  |                            |        |                           |   |        |  |      |         |  |   |       
|-------------------------------------------- |  | -------------------------- | ------ | ------------------------- | - | ------ |  | ---- | ------- |  | - | ------
|                                             |  | Three months endedJune 30, |        | Six months ended June 30,
|                                             |  | 2004                       |        | 2003                      |   | 2004   |  | 2003
|(Dollar amounts in thousands)                |  | (unaudited)               
|Investment advisory and administration fees: |  |                            |        |                           |   |        |  |      |         |  |   |       
|BlackRock Open-end Funds:                    |  |                            |        |                           |   |        |  |      |         |  |   |       
|PNC                                          |  | $                          | 8,866  |                           | $ | 9,999  |  | $    | 18,162  |  | $ | 20,116
|Other                                        |  |                            | 9,192  |                           |   | 7,057  |  |      | 18,678  |  |   | 13,126
|BlackRock Closed-end Funds - Other           |  |                            | 17,484 |                           |   | 12,301 |  |      | 34,274  |  |   | 23,614
|BlackRock Liquidity Funds                    |  |                            |        |                           |   |        |  |      |         |  |   |       
|PNC                                          |  |                            | 3,107  |                           |   | 3,131  |  |      | 6,208   |  |   | 6,420 
|Other*                                       |  |                            | 16,053 |                           |   | 15,723 |  |      | 33,565  |  |   | 33,433
|STIF - PNC                                   |  |                            | 270    |                           |   | 285    |  |      | 531     |  |   | 527   
|                                             |  |                            |        |                           |   |        |  |      |         |  |   |       
|                                             |  | $                          | 54,972 |                           | $ | 48,496 |  | $    | 111,418 |  | $ | 97,236
|                                             |  |                            |        |                           |   |        |  |      |         |  |   |       

---

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



- 41 -



---

PART I  FINANCIAL INFORMATION (continued)

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



Related Party Transactions (continued)



The Company provides investment advisory and administration services to certain PNC
subsidiaries, Nomura Asset Management Co., Ltd. (Nomura), a strategic joint venture partner, and affiliates 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 endedJune 30, |       | Six months endedJune 30,
|                                             |  | 2004                       |       | 2003                     |   | 2004  |  | 2003
|(Dollar amounts in thousands)                |  | (unaudited)               
|Investment advisory and administration fees: |  |                            |       |                          |   |       |  |      |        |  |   |       
|Separate accounts - Nomura                   |  | $                          | 2,021 |                          | $ | 3,162 |  | $    | 4,293  |  | $ | 6,421 
|Separate accounts - PNC                      |  |                            | 1,564 |                          |   | 1,904 |  |      | 3,437  |  |   | 3,568 
|Private client services - PNC                |  |                            | 1,383 |                          |   | 1,382 |  |      | 2,769  |  |   | 2,764 
|Other income-risk management - PNC           |  |                            | 1,250 |                          |   | 1,250 |  |      | 2,500  |  |   | 2,500 
|                                             |  |                            |       |                          |   |       |  |      |        |  |   |       
|                                             |  | $                          | 6,218 |                          | $ | 7,698 |  | $    | 12,999 |  | $ | 15,253
|                                             |  |                            |       |                          |   |       |  |      |        |  |   |       



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 June 30, 2004 and 2003 totaled approximately $16.4 million and $18.0 million, respectively, and, for the six months ended
June 30, 2004 and 2003 totaled approximately $33.6 million and $35.9 million, respectively.



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



|                             |  |             |        |      |   |       
|---------------------------- |  | ----------- | ------ | ---- | - | ------
|                             |  | June 30,   
|                             |  | 2004        |        | 2003
|(Dollar amounts in millions) |  | (unaudited)
|BlackRock Open-end Funds     |  | $           | 7,818  |      | $ | 10,595
|BlackRock Liquidity Funds    |  |             | 9,361  |      |   | 8,442 
|STIF                         |  |             | 751    |      |   | 747   
|Separate accounts            |  |             | 9,534  |      |   | 11,592
|                             |  |             |        |      |   |       
|                             |  | $           | 27,464 |      | $ | 31,376
|                             |  |             |        |      |   |       



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



- 42 -



---

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 also provides general and administration services to the Company. Charges for such
services were based on actual usage or on defined formulas that, 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 ended June 30, |       | Six months endedJune 30,
|                                        |  | 2004                        |       | 2003                     |   | 2004  |  | 2003
|(Dollar amounts in thousands)           |  | (unaudited)                
|Fund administration and servicing costs |  | $                           | 4,948 |                          | $ | 6,686 |  | $    | 10,016 |  | $ | 13,629
|General and administration              |  |                             | 1,011 |                          |   | 1,534 |  |      | 2,250  |  |   | 3,144 
|General and administration-consulting   |  |                             | 400   |                          |   | 450   |  |      | 3,086  |  |   | 901   
|                                        |  |                             |       |                          |   |       |  |      |        |  |   |       
|                                        |  | $                           | 6,359 |                          | $ | 8,670 |  | $    | 15,352 |  | $ | 17,674
|                                        |  |                             |       |                          |   |       |  |      |        |  |   |       



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 was approximately $3.2 million and $9.8 million at June 30,
2004 and December 31, 2003, respectively, which primarily represent investment and administration services provided to Nomura, PNC subsidiaries and affiliates.



Receivable from affiliates was approximately $0.3 million and $0.1 million at June 30, 2004 and December 31, 2003, respectively. These amounts primarily represent
reimbursed expenses due from the BlackRock Funds and affiliates.



Payable to affiliates was approximately $28.3 million and $40.7 million at June 30, 2004 and December 31, 2003, respectively. These amounts primarily represent income taxes payable.



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 rising interest rates, BlackRocks assets under management
would likely be negatively affected by reduced asset values and increased redemptions.



- 43 -



---

PART I  FINANCIAL INFORMATION (continued)

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



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.



Forward Looking Statements



This report and other documents filed by BlackRock include forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to
BlackRocks future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as believe, expect, anticipate,
intend, estimate, position, target, mission, assume, achievable, potential, strategy, goal, objective,
plan, aspiration, outlook, outcome, continue, remain, maintain, strive, trend and variations of such words and similar expressions, or future
or conditional verbs such as will, would, should, could, may or 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 and does not undertake 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 SEC reports and those identified elsewhere in this report, forward-looking statements are subject, among others, to the following risks and uncertainties that could cause actual results or future events 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 reduced demand for products or services or reduced value of assets under management or of investments; (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 or divestitures; (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; (11) terrorist
activities and international hostilities, which may adversely affect the general economy, financial and capital markets, specific industries and BlackRock; (12) the ability to attract and retain highly talented professionals; (13) fluctuations in
foreign currency exchange rates, which may adversely affect the value of advisory fees earned by BlackRock; and (14) the impact of changes to tax legislation and, generally, the tax position of the Company.



BlackRocks Annual Report on Form 10-K for the year ended December 31, 2003 and
BlackRocks subsequent reports filed with the SEC, accessible on the SECs website at http://www.sec.gov and on BlackRocks website at http://www.blackrock.com, discuss these factors in more detail and identify
additional factors that can affect forward-looking statements.



- 44 -



---

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 consist primarily of BlackRock funds, private investment funds
and municipal bonds. 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 June 30, 2004, the carrying value of seed investments was $82.1 million. The carrying value of BlackRocks other investments, available for sale, included in the mutual funds total, as stated below, was $49.5 million as of June
30, 2004 and represents an investment in the Low Duration Bond Portfolio 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 values of the investments and provides a sensitivity analysis of the estimated carrying values of all financial instruments subject to equity price risk, assuming a 10% increase or decrease in equity prices:



|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|---------------------------------------------- |  | ------------- | ------- | ------------------------------------------------- | - | ------------------------------------------------- |  | - | -------
|June 30, 2004                                  |  | CarryingValue |         | Carrying valueassuming 10%increase inmarket price |   | Carrying valueassuming 10%decrease inmarket price
|Mutual funds                                   |  | $             | 14,900  |                                                   | $ | 16,390                                            |  | $ | 13,410 
|Equity securities                              |  |               | 8,492   |                                                   |   | 9,341                                             |  |   | 7,643  
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, trading                     |  |               | 23,392  |                                                   |   | 25,731                                            |  |   | 21,053 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Mutual funds                                   |  |               | 50,269  |                                                   |   | 55,296                                            |  |   | 45,242 
|Collateralized debt obligations                |  |               | 12,764  |                                                   |   | 14,040                                            |  |   | 11,488 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, available for sale          |  |               | 63,033  |                                                   |   | 69,336                                            |  |   | 56,730 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Mutual funds                                   |  |               | 6,011   |                                                   |   | 6,612                                             |  |   | 5,410  
|Other                                          |  |               | 77,397  |                                                   |   | 85,137                                            |  |   | 69,657 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, other                       |  |               | 83,408  |                                                   |   | 91,749                                            |  |   | 75,067 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments subject to equity price risk |  | $             | 169,833 |                                                   | $ | 186,816                                           |  | $ | 152,850
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|                                               |  |               |        
|December 31, 2003                              |  |               |         |                                                   |   |                                                  
|Mutual funds                                   |  | $             | 10,648  |                                                   | $ | 11,713                                            |  | $ | 9,583  
|Equity securities                              |  |               | 8,021   |                                                   |   | 8,823                                             |  |   | 7,219  
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, trading                     |  |               | 18,669  |                                                   |   | 20,536                                            |  |   | 16,802 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Mutual funds                                   |  |               | 78,226  |                                                   |   | 86,049                                            |  |   | 70,403 
|Collateralized debt obligations                |  |               | 15,822  |                                                   |   | 17,404                                            |  |   | 14,240 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, available for sale          |  |               | 94,048  |                                                   |   | 103,453                                           |  |   | 84,643 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Mutual funds                                   |  |               | 5,801   |                                                   |   | 6,381                                             |  |   | 5,221  
|Other                                          |  |               | 39,427  |                                                   |   | 43,370                                            |  |   | 35,484 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, other                       |  |               | 45,228  |                                                   |   | 49,751                                            |  |   | 40,705 
|                                               |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments subject to equity price risk |  | $             | 157,945 |                                                   | $ | 173,740                                           |  | $ | 142,151
|                                               |  |               |         |                                                   |   |                                                   |  |   |        



- 45 -



---

PART I  FINANCIAL INFORMATION (continued)

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



At June 30, 2004, investments, trading, and investments, other, with carrying values of approximately $14.9 million and $23.4 million, respectively, reflects
investments by BlackRock with respect to senior employee elections under the Companys deferred compensation plans. 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 carrying value of
the Companys investments in municipal debt and U.S. Treasury securities, which expose BlackRock to interest rate risk, at June 30, 2004 and December 31, 2003. The table also provides a sensitivity analysis of the estimated carrying value of
these financial instruments, assuming 100 basis point upward and downward parallel shifts in the yield curve:



|                          |  |               |        |                                              |   |                                              |  |   |       
|------------------------- |  | ------------- | ------ | -------------------------------------------- | - | -------------------------------------------- |  | - | ------
|June 30, 2004             |  | CarryingValue |        | Carrying valueassuming +100basis point shift |   | Carrying valueassuming -100basis point shift
|Municipal debt securities |  | $             | 47,545 |                                              | $ | 44,616                                       |  | $ | 50,642
|U.S. Treasury securities  |  |               | 18,991 |                                              |   | 17,387                                       |  |   | 20,846
|                          |  |               |        |                                              |   |                                              |  |   |       
|                          |  | $             | 66,536 |                                              | $ | 62,003                                       |  | $ | 71,488
|                          |  |               |        |                                              |   |                                              |  |   |       
|                          |  |               |       
|December 31, 2003         |  |               |        |                                              |   |                                             
|Municipal debt securities |  | $             | 76,978 |                                              | $ | 70,099                                       |  | $ | 84,414
|                          |  |               |        |                                              |   |                                              |  |   |       



- 46 -



---

PART I  FINANCIAL INFORMATION (continued)

|Item 4. | Controls and Procedures
|------- | -----------------------



Under the direction of BlackRocks Chief Executive Officer and Chief Financial Officer, BlackRock evaluated its disclosure controls and procedures and internal
control over financial reporting and concluded that its disclosure controls and procedures were effective as of June 30, 2004. The Companys management implemented a new general ledger system and related core financial modules during the second
quarter of 2004. This system enhanced internal controls related to the financial close and reporting processes. There were no other significant changes in internal controls during the first six months of 2004.



Subsequent to June 30, 2004, the Companys Management Committee established several
product and infrastructure based operating committees to assist the Committee in conducting firm wide operations.



- 47 -



---

PART II  OTHER INFORMATION

|Item 1. | Legal Proceedings
|------- | -----------------



As previously disclosed, BlackRock has received subpoenas from various federal and state governmental and regulatory authorities and various information requests from the Securities and Exchange Commission in
connection with industry-wide investigations of mutual fund matters. BlackRock is continuing to cooperate fully in these matters.



BlackRock and persons to whom BlackRock may have indemnification obligations, in the normal course of business, are subject to various pending and threatened lawsuits, in
which claims for monetary damages are asserted. Management, after consultation with legal counsel, does not currently anticipate that the aggregate liability, if any, arising out of such lawsuits will have a material adverse effect on
BlackRocks financial position, although at the present time, management is not in a position to determine whether any such pending or threatened litigation will have a material adverse effect on BlackRocks results of operations in any
future reporting period.



- 48 -



---

PART II  OTHER INFORMATION (continued)

|Item 2. | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
|------- | --------------------------------------------------------------------------------



During the three months ended June 30, 2004, the Company made the following purchases of its equity securities that are registered pursuant
to Section 12(b) of the Securities Exchange Act of 1934.



|                                     |  |                                |   |  |                             |       |                                                                              |         |                                                                          |          
|------------------------------------ |  | ------------------------------ | - |  | --------------------------- | ----- | ---------------------------------------------------------------------------- | ------- | ------------------------------------------------------------------------ | ---------
|                                     |  | Total Number ofSharesPurchased |   |  | Average PricePaid per Share |       | Total Number ofSharesPurchased asPart of PubliclyAnnounced Plansor Programs1 |         | MaximumNumber ofShares that MayYet BePurchasedUnder the Plansor Programs
|April 1, 2004 through April 30, 2004 |  | 490                            | 2 |  | $                           | 62.57 |                                                                              |        |                                                                          | 1,309,425
|                                     |  |                                |   | 
|May 1, 2004 through May 31, 2004     |  | 114,200                        |   |  | $                           | 58.94 |                                                                              | 114,200 |                                                                          | 1,195,225
|                                     |  |                                |   | 
|June 1, 2004 through June 30, 2004   |  | 2,310                          | 2 |  | $                           | 63.57 |                                                                              |        |                                                                          | 1,195,225
|                                     |  |                                |   |  |                             |       |                                                                              |         |                                                                          |          
|Total                                |  | 117,000                        |   |  | $                           | 59.04 |                                                                              | 114,200 |                                                                          |          
|                                     |  |                                |   |  |                             |       |                                                                              |         |                                                                          |          

---

|1 | On January 21, 2004, the Company announced a two million share repurchase program. The
Company is currently authorized to repurchase approximately 1.2 million shares under this repurchase program.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | Represents purchases made by the Company to satisfy income tax withholding obligations of
certain employees.
|- | ------------------------------------------------------------------------------------------------------------



- 49 -



---

PART II  OTHER INFORMATION (continued)

Item 4. Submission of Matters to a Vote of Security Holders



The annual meeting of stockholders of BlackRock was held on May 11, 2004, for the purpose of considering and acting upon the following:



(1) Election of Directors. Four Class II directors were elected and the votes cast for or against/withheld were as follows:



|                     |  |                 |  |          
|-------------------- |  | --------------- |  | ---------
|                     |  | Aggregate Votes
|                     |  | For             |  | Withheld 
|Nominees             |  |                 |  |          
|David H. Komansky    |  | 241,804,568     |  | 744,080  
|James E. Rohr        |  | 240,002,377     |  | 2,546,271
|Ralph L. Schlosstein |  | 240,490,698     |  | 2,057,950
|Lawrence M. Wagner   |  | 241,925,102     |  | 623,546  



(2) Compensation Plans. One
matter was approved and the votes cast for or against and the abstentions were as follows:



|                                                                                             |  |                 |  |         |  |          
|-------------------------------------------------------------------------------------------- |  | --------------- |  | ------- |  | ---------
|                                                                                             |  | Aggregate Votes
|                                                                                             |  | For             |  | Against |  | Abstained
|Approval of the Amendment of the BlackRock, Inc. 2002 Long Term Retention and Incentive Plan |  | 239,852,663     |  | 567,822 |  | 39,751   



There were no broker non-votes. The
continuing directors of BlackRock are William O. Albertini, William S. Demchak, Laurence D. Fink, Murry S. Gerber, James Grosfeld, William C. Mutterperl, Frank T. Nickell and Thomas H. OBrien. Effective July 29, 2004, Linda Gosden Robinson was
appointed to the Companys Board of Directors and shall be a nominee for election at the 2005 Annual Meeting of Stockholders.



With respect to the preceding matters, holders of BlackRocks class A common stock and class B common stock voted together as a single class. Holders of
BlackRocks class A common stock are entitled to one vote per share. Holders of BlackRocks class B common stock are entitled to five votes per share.



- 50 -



---

PART II  OTHER INFORMATION (continued)

|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 the Registrant, 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 52nd Street 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 52nd Street 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.                                                                



- 51 -



---

PART II  OTHER INFORMATION (continued)

|Item 6. | Exhibits and Reports on Form 8-K (continued)
|------- | --------------------------------------------



| | (a) | Exhibits (continued)
| | --- | --------------------



|            |  |                                                                                                                                                                                              
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                  
|10.21(9)    |  | Employment Agreement, between the Registrant and Laurence D. 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. +                                                                                                       
|            | 
|10.28(12)   |  | Third, Fourth and Fifth Amendments to The PNC Financial Services Group, Inc.s Incentive Savings Plan. +                                                                                     
|            | 
|10.29(14)   |  | First Amendment to the BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan. +                                                                                                        
|            | 
|10.30       |  | Agreement of Lease, dated July 29, 2004, between Park Avenue Plaza Company L.P. and the Registrant.                                                                                          
|            | 
|10.31       |  | Letter Agreement dated July 29, 2004, amending the Agreement of Lease between Park Avenue Plaza Company L.P. and the Registrant.                                                             
|            | 
|21.1(13)    |  | Subsidiaries of the Registrant.                                                                                                                                                              
|            | 
|31.1        |  | Section 302 Certification of Chief Executive Officer.                                                                                                                                        
|            | 
|31.2        |  | Section 302 Certification of Chief Financial Officer.                                                                                                                                        
|            | 
|32.1        |  | Section 906 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) | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended June 30, 2003.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

|(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.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------



- 52 -



---

PART II  OTHER INFORMATION (continued)

|Item 6. | Exhibits and Reports on Form 8-K (continued)
|------- | --------------------------------------------



| | (a) | Exhibits (continued)
| | --- | --------------------



|(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.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(12) | Incorporated by reference to the PNC Financial Services Group, Inc.s Annual Report on Form 10K (Commission File No. 001-9718) for the year ended December 31, 2003.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Incorporated by reference to the Registrants Annual Report on Form 10-K (Commission File No. 001-15305) for the year ended December 31, 2003.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(14) | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended March 31, 2004.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------



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



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



Since March 31, 2004, the Company has filed the following Current Report on Form 8-K:



Form 8-K dated as of April 20, 2004, to report the results of operations and
financial condition for the three months ended March 31, 2004, filed pursuant to Item 12 of Form 8-K.



- 53 -



---

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.
|                     |  | (Registrant)   
|                     |  |                
|Date: August 6, 2004 |  | By:             |  | /s/ Paul L. Audet                          
|                     |  |                 |  | Paul L. Audet                              
|                     |  |                 |  | Managing Director & Chief Financial Officer



- 54 -



---

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 the Registrant, 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 52nd Street 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 52nd Street 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 D. 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. +                                                                                                                                                 



---

EXHIBIT INDEX (continued)



|            |  |                                                                                                                                 
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                     
|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. +                                          
|            | 
|10.28 (12)  |  | Third, Fourth and Fifth Amendments to The PNC Financial Services Group, Inc.s Incentive Savings Plan. +                        
|            | 
|10.29 (14)  |  | First Amendment to the BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan. +                                           
|            | 
|10.30       |  | Agreement of Lease, dated July 29, 2004, between Park Avenue Plaza Company L.P. and the Registrant.                             
|            | 
|10.31       |  | Letter Agreement dated July 29, 2004, amending the Agreement of Lease between Park Avenue Plaza Company L.P. and the Registrant.
|            | 
|21.1 (13)   |  | Subsidiaries of the Registrant.                                                                                                 
|            | 
|31.1        |  | Section 302 Certification of Chief Executive Officer.                                                                           
|            | 
|31.2        |  | Section 302 Certification of Chief Financial Officer.                                                                           
|            | 
|32.1        |  | Section 906 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) | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended June 30, 2003.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------

|(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.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(12) | Incorporated by reference to the PNC Financial Services Group, Inc.s Annual Report on Form 10K (Commission File No. 001-9718) for the year ended December 31, 2003.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) | Incorporated by reference to the Registrants Annual Report on Form 10-K (Commission File No. 001-15305) for the year ended December 31, 2003.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(14) | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended March 31, 2004.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------



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