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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 September 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 October 31, 2004, there were 18,926,693 shares of the registrants class A common stock outstanding and
44,699,209 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 |  | 21  
|        |  |                                                                                      
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 49  
|        |  |                                                                                      
|Item 4. |  | Controls and Procedures                                                               |  | 51  
|        |  | PART II  OTHER INFORMATION                                                            |  |     
|        |  |                                                                                      
|Item 1. |  | Legal Proceedings                                                                     |  | 52  
|        |  |                                                                                      
|Item 2. |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 53  
|        |  |                                                                                      
|Item 6. |  | Exhibits                                                                              |  | 54  



- ii -



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PART I  FINANCIAL INFORMATION

|Item 1. | Financial Statements
|------- | --------------------



BlackRock, Inc.

Consolidated Statements of Financial Condition

(Dollar amounts in thousands)



|                                                                                |  |                   |           |   |                  |   |         |  
|------------------------------------------------------------------------------- |  | ----------------- | --------- | - | ---------------- | - | ------- | -
|                                                                                |  | September 30,2004 |           |   | December 31,2003 |  
|                                                                                |  | (unaudited)       |           |   |                  |  
|Assets                                                                          |  |                   |           |   |                  |   |         |  
|Cash and cash equivalents                                                       |  | $                 | 379,431   |   |                  | $ | 315,941 |  
|Accounts receivable                                                             |  |                   | 149,110   |   |                  |   | 127,235 |  
|Investments                                                                     |  |                   | 240,513   |   |                  |   | 234,923 |  
|Property and equipment, net                                                     |  |                   | 88,377    |   |                  |   | 87,006  |  
|Intangible assets, net                                                          |  |                   | 184,288   |   |                  |   | 192,079 |  
|Receivable from affiliates                                                      |  |                   | 21,597    |   |                  |   | 81      |  
|Other assets                                                                    |  |                   | 13,685    |   |                  |   | 9,958   |  
|                                                                                |  |                   |           |   |                  |   |         |  
|Total assets                                                                    |  | $                 | 1,077,001 |   |                  | $ | 967,223 |  
|                                                                                |  |                   |           |   |                  |   |         |  
|Liabilities                                                                     |  |                   |           |   |                  |   |         |  
|Accrued compensation                                                            |  | $                 | 167,461   |   |                  | $ | 172,447 |  
|Long-Term Retention and Incentive Plan                                          |  |                   | 90,606    |   |                  |   |        |  
|Accounts payable and accrued liabilities                                        |  |                   |           |   |                  |   |         |  
|Affiliate                                                                       |  |                   | 33,580    |   |                  |   | 40,668  |  
|Other                                                                           |  |                   | 22,379    |   |                  |   | 19,430  |  
|Acquired management contract obligation                                         |  |                   | 4,810     |   |                  |   | 5,736   |  
|Other liabilities                                                               |  |                   | 14,492    |   |                  |   | 14,395  |  
|                                                                                |  |                   |           |   |                  |   |         |  
|Total liabilities                                                               |  |                   | 333,328   |   |                  |   | 252,676 |  
|                                                                                |  |                   |           |   |                  |   |         |  
|Minority interest                                                               |  |                   | 8,724     |   |                  |   | 1,239   |  
|                                                                                |  |                  
|Stockholders equity                                                            |  |                   |           |   |                  |   |         |  
|Common stock, class A, 19,243,878 shares issued                                 |  |                   | 192       |   |                  |   | 192     |  
|Common stock, class B, 45,820,129 and 46,120,737 shares issued, respectively    |  |                   | 458       |   |                  |   | 461     |  
|Additional paid - in capital                                                    |  |                   | 182,375   |   |                  |   | 196,446 |  
|Retained earnings                                                               |  |                   | 616,185   |   |                  |   | 570,535 |  
|Unearned compensation                                                           |  |                   | (5,911    | ) |                  |   | (10,270 | )
|Accumulated other comprehensive income                                          |  |                   | 5,970     |   |                  |   | 6,027   |  
|Treasury stock, class A, at cost, 550,775 and 954,067 shares held, respectively |  |                   | (30,511   | ) |                  |   | (45,054 | )
|Treasury stock, class B, at cost, 806,667 and 313,626 shares held, respectively |  |                   | (33,809   | ) |                  |   | (5,029  | )
|                                                                                |  |                   |           |   |                  |   |         |  
|Total stockholders equity                                                      |  |                   | 734,949   |   |                  |   | 713,308 |  
|                                                                                |  |                   |           |   |                  |   |         |  
|Total liabilities and stockholders equity                                      |  | $                 | 1,077,001 |   |                  | $ | 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 September 30, |            |   | Nine months ended September 30, |  
|                                                        |  | 2004                             |            |   | 2003                            |   |            | 2004 |  |   | 2003       |  
|Revenue                                                 |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Investment advisory and administration fees             |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Mutual funds                                            |  | $                                | 54,073     |   |                                 | $ | 52,482     |      |  | $ | 165,500    |   |  | $ | 149,718    |  
|Separate accounts                                       |  |                                  | 93,482     |   |                                 |   | 80,555     |      |  |   | 304,386    |   |  |   | 237,697    |  
|Other income                                            |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Affiliate                                               |  |                                  | 1,338      |   |                                 |   | 1,256      |      |  |   | 3,975      |   |  |   | 3,776      |  
|Other                                                   |  |                                  | 22,106     |   |                                 |   | 16,051     |      |  |   | 62,773     |   |  |   | 45,810     |  
|                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Total revenue                                           |  |                                  | 170,999    |   |                                 |   | 150,344    |      |  |   | 536,634    |   |  |   | 437,001    |  
|                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Expense                                                 |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Employee compensation and benefits                      |  |                                  | 64,950     |   |                                 |   | 58,956     |      |  |   | 212,637    |   |  |   | 170,161    |  
|Long-Term Retention and Incentive Plan                  |  |                                  | 90,606     |   |                                 |   |           |      |  |   | 90,606     |   |  |   |           |  
|Fund administration and servicing costs                 |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Affiliate                                               |  |                                  | 4,227      |   |                                 |   | 6,621      |      |  |   | 14,243     |   |  |   | 20,250     |  
|Other                                                   |  |                                  | 4,050      |   |                                 |   | 1,223      |      |  |   | 10,412     |   |  |   | 3,130      |  
|General and administration                              |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Affiliate                                               |  |                                  | 1,481      |   |                                 |   | 1,786      |      |  |   | 6,817      |   |  |   | 5,831      |  
|Other                                                   |  |                                  | 27,778     |   |                                 |   | 23,883     |      |  |   | 85,104     |   |  |   | 70,413     |  
|Amortization of intangible assets                       |  |                                  | 283        |   |                                 |   | 231        |      |  |   | 746        |   |  |   | 694        |  
|Impairment of intangible assets                         |  |                                  |           |   |                                 |   |           |      |  |   | 6,097      |   |  |   |           |  
|                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Total expense                                           |  |                                  | 193,375    |   |                                 |   | 92,700     |      |  |   | 426,662    |   |  |   | 270,479    |  
|                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Operating income (loss)                                 |  |                                  | (22,376    | ) |                                 |   | 57,644     |      |  |   | 109,972    |   |  |   | 166,522    |  
|                                                        |  |                                  |            |  
|Non-operating income (expense)                          |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Investment income                                       |  |                                  | 4,717      |   |                                 |   | 6,086      |      |  |   | 27,652     |   |  |   | 17,848     |  
|Interest expense                                        |  |                                  | 965        |   |                                 |   | (152       | )    |  |   | (669       | ) |  |   | (467       | )
|                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Total non-operating income                              |  |                                  | 5,682      |   |                                 |   | 5,934      |      |  |   | 26,983     |   |  |   | 17,381     |  
|                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Income (loss) before income taxes and minority interest |  |                                  | (16,694    | ) |                                 |   | 63,578     |      |  |   | 136,955    |   |  |   | 183,903    |  
|Income taxes                                            |  |                                  | (7,265     | ) |                                 |   | 23,579     |      |  |   | 39,345     |   |  |   | 69,900     |  
|                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Income (loss) before minority interest                  |  |                                  | (9,429     | ) |                                 |   | 39,999     |      |  |   | 97,610     |   |  |   | 114,003    |  
|Minority interest                                       |  |                                  | 385        |   |                                 |   | (54        | )    |  |   | 4,221      |   |  |   | (44        | )
|                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss)                                       |  | $                                | (9,814     | ) |                                 | $ | 40,053     |      |  | $ | 93,389     |   |  | $ | 114,047    |  
|                                                        |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Earnings (loss) per share                               |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Basic                                                   |  | $                                | (0.15      | ) |                                 | $ | 0.62       |      |  | $ | 1.47       |   |  | $ | 1.76       |  
|Diluted                                                 |  | $                                | (0.15      | ) |                                 | $ | 0.61       |      |  | $ | 1.42       |   |  | $ | 1.73       |  
|                                                        |  |                                  |            |  
|Dividends paid per share                                |  | $                                | 0.25       |   |                                 | $ | 0.20       |      |  | $ | 0.75       |   |  | $ | 0.20       |  
|                                                        |  |                                  |            |  
|Weighted-average shares outstanding                     |  |                                  |            |   |                                 |   |            |      |  |   |            |   |  |   |            |  
|Basic                                                   |  |                                  | 63,676,776 |   |                                 |   | 64,497,117 |      |  |   | 63,693,281 |   |  |   | 64,858,615 |  
|Diluted                                                 |  |                                  | 63,676,776 |   |                                 |   | 65,692,272 |      |  |   | 65,858,552 |   |  |   | 65,918,485 |  



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)



|                                                                                  |  |                                 |         |   |      |   |          |  
|--------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ---- | - | -------- | -
|                                                                                  |  | Nine months ended September 30, |        
|                                                                                  |  | 2004                            |         |   | 2003 |  
|Cash flows from operating activities                                              |  |                                 |         |   |      |   |          |  
|Net income                                                                        |  | $                               | 93,389  |   |      | $ | 114,047  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                 |         |   |      |   |          |  
|Depreciation and amortization                                                     |  |                                 | 15,462  |   |      |   | 15,886   |  
|Impairment of intangible assets                                                   |  |                                 | 6,097   |   |      |   |         |  
|Minority interest                                                                 |  |                                 | 4,221   |   |      |   | (97      | )
|Stock-based compensation                                                          |  |                                 | 9,518   |   |      |   | 5,051    |  
|Deferred income taxes                                                             |  |                                 | (20,908 | ) |      |   | (467     | )
|Tax benefit from stock-based compensation                                         |  |                                 | 1,690   |   |      |   | 5,146    |  
|Net gain on investments                                                           |  |                                 | (13,142 | ) |      |   | (1,970   | )
|Changes in operating assets and liabilities:                                      |  |                                 |         |   |      |   |          |  
|Increase in accounts receivable                                                   |  |                                 | (22,998 | ) |      |   | (12,619  | )
|Increase in investments, trading                                                  |  |                                 | (10,600 | ) |      |   | (21,414  | )
|Increase in receivable from affiliates                                            |  |                                 | (608    | ) |      |   | (2,051   | )
|Increase in other assets                                                          |  |                                 | (952    | ) |      |   | (3,992   | )
|Decrease in accrued compensation                                                  |  |                                 | (4,986  | ) |      |   | (19,374  | )
|Increase in Long-Term Retention and Incentive Plan                                |  |                                 | 90,606  |   |      |   |         |  
|(Decrease) increase in accounts payable and accrued liabilities                   |  |                                 | (4,387  | ) |      |   | 15,702   |  
|Increase in other liabilities                                                     |  |                                 | 1,060   |   |      |   | 719      |  
|                                                                                  |  |                                 |         |   |      |   |          |  
|Cash provided by operating activities                                             |  |                                 | 143,462 |   |      |   | 94,567   |  
|                                                                                  |  |                                 |         |   |      |   |          |  
|Cash flows from investing activities                                              |  |                                 |         |   |      |   |          |  
|Purchase of property and equipment                                                |  |                                 | (15,245 | ) |      |   | (9,653   | )
|Purchase of investments                                                           |  |                                 | (90,121 | ) |      |   | (155,295 | )
|Sale of investments                                                               |  |                                 | 145,737 |   |      |   | 135,806  |  
|Deemed cash contribution upon consolidation of VIE                                |  |                                 | 6,412   |   |      |   |         |  
|Consolidation of sponsored investment funds                                       |  |                                 | (43,169 | ) |      |   |         |  
|Acquisitions, net of cash acquired                                                |  |                                 | (74     | ) |      |   | (8,918   | )
|                                                                                  |  |                                 |         |   |      |   |          |  
|Cash provided by (used in) investing activities                                   |  |                                 | 3,540   |   |      |   | (38,060  | )
|                                                                                  |  |                                 |         |   |      |   |          |  
|Cash flows from financing activities                                              |  |                                 |         |   |      |   |          |  
|Issuance of class A common stock                                                  |  |                                 |        |   |      |   | 623      |  
|Dividends paid                                                                    |  |                                 | (47,685 | ) |      |   | (12,834  | )
|Distributions paid to minority interest holders                                   |  |                                 | (5,794  | ) |      |   |         |  
|Subscriptions to consolidated sponsored investment funds                          |  |                                 | 5,152   |   |      |   |         |  
|Purchase of treasury stock                                                        |  |                                 | (48,539 | ) |      |   | (62,773  | )
|Reissuance of treasury stock                                                      |  |                                 | 13,325  |   |      |   | 4,421    |  
|Acquired management contract obligation payment                                   |  |                                 | (926    | ) |      |   | (842     | )
|                                                                                  |  |                                 |         |   |      |   |          |  
|Cash used in financing activities                                                 |  |                                 | (84,467 | ) |      |   | (71,405  | )
|                                                                                  |  |                                 |         |   |      |   |          |  
|Effect of exchange rate changes on cash and cash equivalents                      |  |                                 | 955     |   |      |   | 1,231    |  
|                                                                                  |  |                                
|Net increase (decrease) in cash and cash equivalents                              |  |                                 | 63,490  |   |      |   | (13,667  | )
|Cash and cash equivalents, beginning of period                                    |  |                                 | 315,941 |   |      |   | 255,234  |  
|                                                                                  |  |                                 |         |   |      |   |          |  
|Cash and cash equivalents, end of period                                          |  | $                               | 379,431 |   |      | $ | 241,567  |  
|                                                                                  |  |                                 |         |   |      |   |          |  



- 3 -



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PART I  FINANCIAL INFORMATION (continued)

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



BlackRock, Inc.

Notes to Consolidated Financial Statements

Three and Nine Months Ended September 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, municipal bonds and
BlackRock-sponsored collateralized debt obligations. 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 September 30, 2004, these investments represent 21%, or approximately $50,000, 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 nine month periods ended
September 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 September 30, |         |   | Nine months ended September 30, |  
|                                                                                                                                      |  | 2004                             |         |   | 2003                            |   |        | 2004 |  |   | 2003    |  
|Net income (loss), as reported                                                                                                        |  | $                                | (9,814  | ) |                                 | $ | 40,053 |      |  | $ | 93,389  |   |  | $ | 114,047 |  
|Add: Stock-based employee compensation expense included in reported net income, net of related tax effects                            |  |                                  | 1,041   |   |                                 |   | 252    |      |  |   | 3,372   |   |  |   | 794     |  
|Deduct: Total stock-based employee compensation expense determined under fair value method for all awards, net of related tax
effects |  |                                  | (3,497  | ) |                                 |   | (3,641 | )    |  |   | (11,162 | ) |  |   | (11,019 | )
|                                                                                                                                      |  |                                  |         |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Pro forma net income (loss)                                                                                                           |  | $                                | (12,270 | ) |                                 | $ | 36,664 |      |  | $ | 85,599  |   |  | $ | 103,822 |  
|                                                                                                                                      |  |                                  |         |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Earnings (loss) per share:                                                                                                            |  |                                  |         |   |                                 |   |        |      |  |   |         |   |  |   |         |  
|Basic - as reported                                                                                                                   |  | $                                | (0.15   | ) |                                 | $ | 0.62   |      |  | $ | 1.47    |   |  | $ | 1.76    |  
|Basic - pro forma                                                                                                                     |  | $                                | (0.19   | ) |                                 | $ | 0.57   |      |  | $ | 1.34    |   |  | $ | 1.59    |  
|                                                                                                                                      |  |                                  |         |  
|Diluted - as reported                                                                                                                 |  | $                                | (0.15   | ) |                                 | $ | 0.61   |      |  | $ | 1.42    |   |  | $ | 1.73    |  
|Diluted - pro forma                                                                                                                   |  | $                                | (0.19   | ) |                                 | $ | 0.56   |      |  | $ | 1.30    |   |  | $ | 1.58    |  



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 financial results specific to the BlackRock Solutions business.



- 6 -



---

PART I  FINANCIAL INFORMATION (continued)

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



1. Significant Accounting Policies (continued)



Segment Reporting (continued)



Third party revenue for BlackRock Solutionsproducts and services is disclosed in Note 4 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, but has not consolidated, in Note 11 to these consolidated financial statements.



- 7 -



---

PART I  FINANCIAL INFORMATION (continued)

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



1. Significant Accounting Policies (continued)



Recent Accounting Development (continued)



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 
|                                         |  |                 |       



- 8 -



---

PART I  FINANCIAL INFORMATION (continued)

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



1. Significant Accounting Policies (continued)



Recent Accounting Development (continued)



Under previous guidance, the Companys management determined that the Company was the primary beneficiary of six collateralized debt obligations (CDO)
and consolidated the results of operations, financial position and cash flow for these entities during the three months ended September 30, 2003. The CDOs were subsequently deconsolidated under FIN 46R. A reconciliation of BlackRocks adjusted
condensed consolidated statements of financial condition and operations as of and for the three months ended September 30, 2003 to the Companys Quarterly Report on Form 10-Q for the three months ended September 30, 2003 is as follows:



Condensed Consolidating Statement of Financial Condition

September 30, 2003

(unaudited)



|                                                              |  |                 |           |             |   |            |             |  |   |        
|------------------------------------------------------------- |  | --------------- | --------- | ----------- | - | ---------- | ----------- |  | - | -------
|                                                              |  | Deconsolidation
|                                                              |  | As Reported     |           | Adjustments |   |            | As Adjusted
|Assets                                                        |  |                 |           |             |   |            |             |  |   |        
|Cash and cash equivalents                                     |  | $               | 241,567   |             | $ | 0          |             |  | $ | 241,567
|Restricted cash                                               |  |                 | 148,383   |             |   | (148,383   | )           |  |   |       
|Investments                                                   |  |                 | 2,550,443 |             |   | (2,295,715 | )           |  |   | 254,728
|Other assets                                                  |  |                 | 544,409   |             |   | (121,010   | )           |  |   | 423,399
|                                                              |  |                 |           |             |   |            |             |  |   |        
|Total assets                                                  |  | $               | 3,484,802 |             | $ | (2,565,108 | )           |  | $ | 919,694
|                                                              |  |                 |           |             |   |            |             |  |   |        
|Liabilities                                                   |  |                 |           |             |   |            |             |  |   |        
|Borrowings                                                    |  | $               | 2,035,637 |             | $ | (2,035,637 | )           |  | $ | 0      
|Unrealized depreciation on derivative contracts               |  |                 | 76,305    |             |   | (76,305    | )           |  |   |       
|Other liabilities                                             |  |                 | 301,872   |             |   | (80,462    | )           |  |   | 221,410
|                                                              |  |                 |           |             |   |            |             |  |   |        
|Total liabilities                                             |  |                 | 2,413,814 |             |   | (2,192,404 | )           |  |   | 221,410
|                                                              |  |                 |           |             |   |            |             |  |   |        
|Mandatorily redeemable preferred stock of subsidiaries        |  |                 | 105,547   |             |   | (105,547   | )           |  |   |       
|                                                              |  |                 |          
|Minority interest                                             |  |                 | 269,181   |             |   | (268,259   | )           |  |   | 922    
|Stockholders equity                                          |  |                 | 696,260   |             |   | 1,102      |             |  |   | 697,362
|                                                              |  |                 |           |             |   |            |             |  |   |        
|Total liabilities, minority interest and stockholders equity |  | $               | 3,484,802 |             | $ | (2,565,108 | )           |  | $ | 919,694
|                                                              |  |                 |           |             |   |            |             |  |   |        



- 9 -



---

PART I  FINANCIAL INFORMATION (continued)

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



1. Significant Accounting Policies (continued)



Recent Accounting Developments (continued)



Condensed Consolidating Statement of Operations

Three months ended September 30, 2003

(unaudited)



|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|---------------------------------------------------------------------------------------- |  | --------------- | ------- | - | ----------- | - | ------- | ----------- |  | - | ------- | -
|                                                                                         |  | Deconsolidation |        
|                                                                                         |  | As Reported     |         |   | Adjustments |   |         | As Adjusted | 
|Revenue                                                                                  |  |                 |         |   |             |   |         |             |  |   |         |  
|Investment advisory and administration fees                                              |  | $               | 129,601 |   |             | $ | 3,436   |             |  | $ | 133,037 |  
|Other income                                                                             |  |                 | 17,307  |   |             |   |        |             |  |   | 17,307  |  
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|Total revenue                                                                            |  |                 | 146,908 |   |             |   | 3,436   |             |  |   | 150,344 |  
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|Expense                                                                                  |  |                 |         |   |             |   |         |             |  |   |         |  
|Employee compensation and benefits                                                       |  |                 | 58,956  |   |             |   |        |             |  |   | 58,956  |  
|Other operating expenses                                                                 |  |                 | 36,242  |   |             |   | (2,498  | )           |  |   | 33,744  |  
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|Total expense                                                                            |  |                 | 95,198  |   |             |   | (2,498  | )           |  |   | 92,700  |  
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|Operating income                                                                         |  |                 | 51,710  |   |             |   | 5,934   |             |  |   | 57,644  |  
|                                                                                         |  |                 |        
|Non operating income (expense)                                                           |  |                 |         |   |             |   |         |             |  |   |         |  
|Investment income                                                                        |  |                 | 66,923  |   |             |   | (60,837 | )           |  |   | 6,086   |  
|Interest expense                                                                         |  |                 | (24,165 | ) |             |   | 24,013  |             |  |   | (152    | )
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|                                                                                         |  |                 | 42,758  |   |             |   | (36,824 | )           |  |   | 5,934   |  
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|Income before income taxes, minority interest and cumulative effect of accounting change |  |                 | 94,468  |   |             |   | (30,890 | )           |  |   | 63,578  |  
|Income taxes                                                                             |  |                 | 23,579  |   |             |   |        |             |  |   | 23,579  |  
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|Income before minority interest and cumulative effect of accounting change               |  |                 | 70,889  |   |             |   | (30,890 | )           |  |   | 39,999  |  
|Minority interest                                                                        |  |                 | 30,930  |   |             |   | (30,984 | )           |  |   | (54     | )
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|Income before cumulative effect of accounting change                                     |  |                 | 39,959  |   |             |   | 94      |             |  |   | 40,053  |  
|Cumulative effect of accounting change                                                   |  |                 | 139     |   |             |   | (139    | )           |  |   |        |  
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|Net income                                                                               |  | $               | 40,098  |   |             | $ | (45     | )           |  | $ | 40,053  |  
|                                                                                         |  |                 |         |   |             |   |         |             |  |   |         |  
|Earnings per share                                                                       |  |                 |         |   |             |   |         |             |  |   |         |  
|Basic                                                                                    |  | $               | 0.62    |   |             | $ | 0.00    |             |  | $ | 0.62    |  
|Diluted                                                                                  |  | $               | 0.61    |   |             | $ | 0.00    |             |  | $ | 0.61    |  



Reclassification of Prior
Periods Statements



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



- 10 -



---

PART I  FINANCIAL INFORMATION (continued)

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



2. Acquisition



In August 2004, the Company entered into a definitive agreement with MetLife, Inc. (MetLife) to acquire SSRM Holdings Inc. (SSRM), the holding company of State Street Research & Management
Company and SSR Realty Advisors, Inc., from MetLife for $375,000 in cash and stock. SSRM, through its subsidiaries, actively manages stock, bond, balanced and real estate portfolios for both institutional and individual investors with approximately
$52,000,000 in assets under management at September 30, 2004.



Under the terms
of the transaction, which has been approved by the Boards of Directors of BlackRock and MetLife, MetLife will receive at closing $325,000 in cash and $50,000 of BlackRock class A common stock. Additional cash consideration, which could increase the
purchase price by up to 25%, may be paid over five years contingent on certain measures.



Closing is expected in early 2005 pending required regulatory and SSRM mutual fund shareholder approvals and satisfaction of other customary closing conditions.



3. Investments



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



|                                      |  |      |         |                  |   |        |                |   |        |   |  |   |        
|------------------------------------- |  | ---- | ------- | ---------------- | - | ------ | -------------- | - | ------ | - |  | - | -------
|                                      |  |      |         | Gross Unrealized |   |        | Carrying Value
|September 30, 2004                    |  | Cost |         | Gains            |   | Losses |                |  
|Mutual funds                          |  | $    | 53,984  |                  | $ | 34     |                | $ | (349   | ) |  | $ | 53,669 
|Collateralized debt obligations       |  |      | 10,688  |                  |   | 1,895  |                |   |       |   |  |   | 12,583 
|                                      |  |      |         |                  |   |        |                |   |        |   |  |   |        
|Total investments, available for sale |  | $    | 64,672  |                  | $ | 1,929  |                | $ | (349   | ) |  | $ | 66,252 
|                                      |  |      |         |                  |   |        |                |   |        |   |  |   |        
|                                      |  |      |         |                 
|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
|                                      |  |      |         |                  |   |        |                |   |        |   |  |   |        



- 11 -



---

PART I  FINANCIAL INFORMATION (continued)

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



3. Investments (continued)



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



|                                     |  |      |         |                |   |        
|------------------------------------ |  | ---- | ------- | -------------- | - | -------
|September 30, 2004                   |  | Cost |         | Carrying Value
|U.S government securities            |  | $    | 19,640  |                | $ | 20,249 
|Mutual funds                         |  |      | 14,072  |                |   | 14,718 
|Equity securities                    |  |      | 7,927   |                |   | 10,333 
|                                     |  |      |         |                |   |        
|Total investments, trading           |  |      | 41,639  |                |   | 45,300 
|                                     |  |      |         |                |   |        
|Other                                |  |      |         |                |   |        
|Equity method                        |  |      | 70,873  |                |   | 72,937 
|Cost method                          |  |      | 27,319  |                |   | 28,038 
|Fair value                           |  |      | 28,367  |                |   | 27,986 
|                                     |  |      |         |                |   |        
|Total investments, other             |  |      | 126,559 |                |   | 128,961
|                                     |  |      |         |                |   |        
|Total investments, trading and other |  | $    | 168,198 |                | $ | 174,261
|                                     |  |      |         |                |   |        
|                                     |  |     
|December 31, 2003                    |  |      |         |               
|Mutual funds                         |  | $    | 9,573   |                | $ | 10,648 
|Equity securities                    |  |      | 5,976   |                |   | 8,021  
|                                     |  |      |         |                |   |        
|Total investments, trading           |  |      | 15,549  |                |   | 18,669 
|                                     |  |      |         |                |   |        
|                                     |  |     
|Mutual funds                         |  |      | 7,000   |                |   | 5,801  
|Other                                |  |      |         |                |   |        
|Equity method                        |  |      | 28,793  |                |   | 30,288 
|Cost method                          |  |      | 9,139   |                |   | 9,139  
|                                     |  |      |         |                |   |        
|Total investments, other             |  |      | 44,932  |                |   | 45,228 
|                                     |  |      |         |                |   |        
|Total investments, trading and other |  | $    | 60,481  |                | $ | 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.



- 12 -



---

PART I  FINANCIAL INFORMATION (continued)

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



4. Other Income



Other income consists of the following:



|                      |  |                                  |        |                                |   |        |  |      |        |  |   |       
|--------------------- |  | -------------------------------- | ------ | ------------------------------ | - | ------ |  | ---- | ------ |  | - | ------
|                      |  | Three months ended September 30, |        | Nine months endedSeptember 30,
|                      |  | 2004                             |        | 2003                           |   | 2004   |  | 2003
|BlackRock Solutions   |  | $                                | 21,488 |                                | $ | 14,568 |  | $    | 59,165 |  | $ | 41,667
|Investment accounting |  |                                  | 1,510  |                                |   | 1,139  |  |      | 4,448  |  |   | 3,449 
|Other                 |  |                                  | 446    |                                |   | 1,600  |  |      | 3,135  |  |   | 4,470 
|                      |  |                                  |        |                                |   |        |  |      |        |  |   |       
|                      |  | $                                | 23,444 |                                | $ | 17,307 |  | $    | 66,748 |  | $ | 49,586
|                      |  |                                  |        |                                |   |        |  |      |        |  |   |       



5. Intangible Assets



|                                                 |  |                                   |                      |                    |                          |  |                         |        |  |   |        
|------------------------------------------------ |  | --------------------------------- | -------------------- | ------------------ | ------------------------ |  | ----------------------- | ------ |  | - | -------
|                                                 |  | Weighted-avg.estimateduseful life |                      | September 30, 2004
|                                                 |  |                                   | Gross CarryingAmount |                    | Accumulated Amortization |  | Total Intangible Assets
|Goodwill                                         |  | N/A                               |                      | $                  | 242,766                  |  | $                       | 65,842 |  | $ | 176,924
|Management contract acquired                     |  | N/A                               |                      |                    | 2,842                    |  |                         |       |  |   | 2,842  
|                                                 |  |                                   |                      |                    |                          |  |                         |        |  |   |        
|Total goodwill and unamortized intangible assets |  |                                   |                      |                    | 245,608                  |  |                         | 65,842 |  |   | 179,766
|Management contract acquired                     |  | 10.0                              |                      |                    | 8,040                    |  |                         | 3,518  |  |   | 4,522  
|                                                 |  |                                   |                      |                    |                          |  |                         |        |  |   |        
|Total intangible assets                          |  |                                   |                      | $                  | 253,648                  |  | $                       | 69,360 |  | $ | 184,288
|                                                 |  |                                   |                      |                    |                          |  |                         |        |  |   |        
|                                                 |  |                                  
|                                                 |  | Weighted-avg.estimateduseful life |                      | December 31, 2003 
|                                                 |  |                                   | 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
|                                                 |  |                                   |                      |                    |                          |  |                         |        |  |   |        



- 13 -



---

PART I  FINANCIAL INFORMATION (continued)

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



5. Intangible Assets (continued)



The $1,021 decrease in goodwill is related to the reversal of an obligation to purchase the minority interest of a subsidiary and the associated decline in the
subsidiarys implied enterprise value.



The $6,024 decrease in management
contracts acquired, not subject to amortization, during the nine months ended September 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.



6. 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 September 30, 2004, the Company has awarded approximately $207,000 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. Shares attributable to value in excess of PNCs $200,000 LTIP funding requirement will be available to support the Companys future long-term retention and incentive programs
but are not subject to surrender by PNC until the programs are approved by the Compensation Committee of the Companys Board of Directors. In addition, shares distributed 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.



Under the terms of the LTIP, awards fully vest if BlackRocks average closing common stock price is at least $62 for any 3-month period beginning on or after January
1, 2005 and ending on or prior to March 30, 2007. An alternative performance hurdle provides for partial vesting of the LTIP based on specific targets for the Companys earnings growth and relative stock price performance to peers over the term
of the LTIP, subject to the authority of the Companys Compensation Committee to reduce the amount of awards vested under the LTIP.



Due to the strength in the Companys stock price, which has recently traded in excess of $70 per share, the Companys management has determined that full
vesting of LTIP awards is probable and recorded a charge of $90,606 during the period reflecting LTIP awards earned through September 30, 2004 and related payroll taxes. Based on the current level of LTIP awards outstanding and assuming full vesting
remains probable, quarterly expense, during the period from October 1, 2004 through December 31, 2006, should be approximately $13,100.



- 14 -



---

PART I  FINANCIAL INFORMATION (continued)

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



7. Common Stock



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



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



|                                             |  |                     |  |            |                          |  |          |   |  |          |   |  |            |   |  |            |  
|-------------------------------------------- |  | ------------------- |  | ---------- | ------------------------ |  | -------- | - |  | -------- | - |  | ---------- | - |  | ---------- | -
|                                             |  | Shares issued       |  |            | Shares outstanding Class | 
|                                             |  | Common shares Class |  |            | Treasury shares 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 |  |                    |  | (300,608   | )                        |  | 300,608  |   |  |         |   |  | 300,608    |   |  | (300,608   | )
|Issuance of class A common stock             |  |                    |  |           |                          |  | 438,867  |   |  |         |   |  | 438,867    |   |  |           |  
|Treasury stock transactions                  |  |                    |  |           |                          |  | (336,183 | ) |  | (493,041 | ) |  | (336,183   | ) |  | (493,041   | )
|                                             |  |                     |  |            |                          |  |          |   |  |          |   |  |            |   |  |            |  
|September 30, 2004                           |  | 19,243,878          |  | 45,820,129 |                          |  | (550,775 | ) |  | (806,667 | ) |  | 18,693,103 |   |  | 45,013,462 |  
|                                             |  |                     |  |            |                          |  |          |   |  |          |   |  |            |   |  |            |  



8. Earnings Per Share



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



|                                             |  |                                  |            |                                 |      |   |            |  |      |            |  |   |           
|-------------------------------------------- |  | -------------------------------- | ---------- | ------------------------------- | ---- | - | ---------- |  | ---- | ---------- |  | - | ----------
|                                             |  | Three months ended September 30, |            | Nine months ended September 30,
|                                             |  | 2004                             |            |                                 | 2003 |   | 2004       |  | 2003
|Net income (loss)                            |  | $                                | (9,814     | )                               |      | $ | 40,053     |  | $    | 93,389     |  | $ | 114,047   
|                                             |  |                                  |            |                                 |      |   |            |  |      |            |  |   |           
|Basic weighted-average shares outstanding    |  |                                  | 63,676,776 |                                 |      |   | 64,497,117 |  |      | 63,693,281 |  |   | 64,858,615
|Dilutive potential shares from stock options |  |                                  |           |                                 |      |   | 1,195,155  |  |      | 2,165,271  |  |   | 1,059,870 
|                                             |  |                                  |            |                                 |      |   |            |  |      |            |  |   |           
|Dilutive weighted-average shares outstanding |  |                                  | 63,676,776 |                                 |      |   | 65,692,272 |  |      | 65,858,552 |  |   | 65,918,485
|                                             |  |                                  |            |                                 |      |   |            |  |      |            |  |   |           
|Basic earnings (loss) per share              |  | $                                | (0.15      | )                               |      | $ | 0.62       |  | $    | 1.47       |  | $ | 1.76      
|                                             |  |                                  |            |                                 |      |   |            |  |      |            |  |   |           
|Diluted earnings (loss) per share            |  | $                                | (0.15      | )                               |      | $ | 0.61       |  | $    | 1.42       |  | $ | 1.73      
|                                             |  |                                  |            |                                 |      |   |            |  |      |            |  |   |           



- 15 -



---

PART I  FINANCIAL INFORMATION (continued)

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



8. Earnings Per Share (continued)



During the three months ended September 30, 2004, 2,303,856 common stock equivalents were excluded from the Companys diluted earnings per share due to their
antidilutive impact.



9. Supplemental Statements of Cash Flow Information



Supplemental disclosure of cash flow information:



|                           |  |                                |        |      |   |       
|-------------------------- |  | ------------------------------ | ------ | ---- | - | ------
|                           |  | Nine months endedSeptember 30,
|                           |  | 2004                           |        | 2003
|Cash paid for interest     |  | $                              | 926    |      | $ | 842   
|                           |  |                                |        |      |   |       
|Cash paid for income taxes |  | $                              | 65,856 |      | $ | 52,184
|                           |  |                                |        |      |   |       



Supplemental schedule of noncash
transactions:



|                                                                       |  |                                |        |      |   |       
|---------------------------------------------------------------------- |  | ------------------------------ | ------ | ---- | - | ------
|                                                                       |  | Nine months endedSeptember 30,
|                                                                       |  | 2004                           |        | 2003
|Stock-based compensation                                               |  | $                              | 0      |      | $ | 5,395 
|                                                                       |  |                                |        |      |   |       
|Reissuance of treasury stock, class A, at a discount to its cost basis |  | $                              | 16,596 |      | $ | 15,140
|                                                                       |  |                                |        |      |   |       



10. 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.



- 16 -



---

PART I  FINANCIAL INFORMATION (continued)

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



10. Income Taxes (continued)



For the calendar year which includes the three and nine months ended September 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.



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



|                                          |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |        |  
|----------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | - | ------ | ---- |  | - | ------- | - |  | - | ------ | -
|                                          |  | Three months endedSeptember 30, |         |   | Nine months endedSeptember 30, |  
|                                          |  | 2004                            |         |   | 2003                           |   |        | 2004 |  |   | 2003    |  
|Current:                                  |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Federal                                   |  | $                               | 20,105  |   |                                | $ | 21,884 |      |  | $ | 60,138  |   |  | $ | 60,177 |  
|State and local                           |  |                                 | (292    | ) |                                |   | 4,346  |      |  |   | 5,596   |   |  |   | 9,230  |  
|Foreign                                   |  |                                 | 1,038   |   |                                |   | 93     |      |  |   | 3,038   |   |  |   | 960    |  
|Impact of New York State audit resolution |  |                                 |        |   |                                |   |       |      |  |   | (8,519  | ) |  |   |       |  
|                                          |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Total current                             |  |                                 | 20,851  |   |                                |   | 26,323 |      |  |   | 60,253  |   |  |   | 70,367 |  
|                                          |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Deferred:                                 |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Federal                                   |  |                                 | (23,724 | ) |                                |   | (2,657 | )    |  |   | (16,274 | ) |  |   | 230    |  
|State and local                           |  |                                 | (4,392  | ) |                                |   | (87    | )    |  |   | (4,634  | ) |  |   | (697   | )
|                                          |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Total deferred                            |  |                                 | (28,116 | ) |                                |   | (2,744 | )    |  |   | (20,908 | ) |  |   | (467   | )
|                                          |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |        |  
|Total                                     |  | $                               | (7,265  | ) |                                | $ | 23,579 |      |  | $ | 39,345  |   |  | $ | 69,900 |  
|                                          |  |                                 |         |   |                                |   |        |      |  |   |         |   |  |   |        |  



- 17 -



---

PART I  FINANCIAL INFORMATION (continued)

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



10. Income Taxes (continued)



The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities, which are shown net in receivable from affiliates
in the consolidated statements of financial condition, consist of the following:



|                             |  |                   |        |                  |   |       
|---------------------------- |  | ----------------- | ------ | ---------------- | - | ------
|                             |  | September 30,2004 |        | December 31,2003
|Deferred tax assets:         |  |                   |        |                  |   |       
|Compensation and benefits    |  | $                 | 58,133 |                  | $ | 28,942
|Deferred state income taxes  |  |                   | 5,321  |                  |   | 8,913 
|Deferred revenue             |  |                   | 1,482  |                  |   | 3,292 
|Other                        |  |                   | 4,095  |                  |   | 1,769 
|                             |  |                   |        |                  |   |       
|Gross deferred tax asset     |  |                   | 69,031 |                  |   | 42,916
|                             |  |                   |        |                  |   |       
|Deferred tax liabilities:    |  |                   |        |                  |   |       
|Goodwill                     |  |                   | 36,466 |                  |   | 34,990
|Depreciation                 |  |                   | 7,574  |                  |   | 3,213 
|Other                        |  |                   | 3,819  |                  |   | 3,620 
|                             |  |                   |        |                  |   |       
|Gross deferred tax liability |  |                   | 47,859 |                  |   | 41,823
|                             |  |                   |        |                  |   |       
|Net deferred tax asset       |  | $                 | 21,172 |                  | $ | 1,093 
|                             |  |                   |        |                  |   |       



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 September 30, |        |   | Nine months ended September 30, |      
|                                                    |  | 2004                             |        |   | %                               |       |    | 2003 |   |        | % |  |      | 2004 |  |   | %      |   |  | 2003 |   |  | % |       
|Expected income tax expense (benefit)               |  | $                                | (5,843 | ) |                                 | (35.0 | )% |      | $ | 22,272 |   |  | 35.0 | %    |  | $ | 47,934 |   |  | 35.0 | % |  | $ | 64,382 |   |  | 35.0 | %
|                                                    |  |                                  |        |   |                                 |       |    |     
|Increase (decrease) in income taxes resulting from: |  |                                  |        |   |                                 |       |    |      |   |        |   |  |      |      |  |   |        |   |  |      |   |  |   |        |   |  |      |  
|State and local taxes                               |  |                                  | (2,892 | ) |                                 | (17.3 | )  |      |   | 2,993  |   |  | 4.7  |      |  |   | 1,267  |   |  | 0.9  |   |  |   | 5,546  |   |  | 3.0  |  
|Tax-exempt interest income                          |  |                                  | (380   | ) |                                 | (2.3  | )  |      |   | (612   | ) |  | (0.9 | )    |  |   | (1,093 | ) |  | (0.8 | ) |  |   | (612   | ) |  | (0.3 | )
|Minority interest                                   |  |                                  | (134   | ) |                                 | (0.8  | )  |      |   |       |   |  |     |      |  |   | (1,477 | ) |  | (1.1 | ) |  |   |       |   |  |     |  
|New York State audit resolution                     |  |                                  |       |   |                                 |      |    |      |   |       |   |  |     |      |  |   | (8,519 | ) |  | (6.2 | ) |  |   |       |   |  |     |  
|Foreign taxes                                       |  |                                  | 1,780  |   |                                 | 10.7  |    |      |   | (309   | ) |  | (0.5 | )    |  |   | 2,253  |   |  | 1.6  |   |  |   | (166   | ) |  | (0.1 | )
|Other                                               |  |                                  | 204    |   |                                 | 1.2   |    |      |   | (765   | ) |  | (1.2 | )    |  |   | (1,020 | ) |  | (0.7 | ) |  |   | 750    |   |  | 0.4  |  
|                                                    |  |                                  |        |   |                                 |       |    |      |   |        |   |  |      |      |  |   |        |   |  |      |   |  |   |        |   |  |      |  
|Income tax expense (benefit)                        |  | $                                | (7,265 | ) |                                 | (43.5 | )% |      | $ | 23,579 |   |  | 37.1 | %    |  | $ | 39,345 |   |  | 28.7 | % |  | $ | 69,900 |   |  | 38.0 | %
|                                                    |  |                                  |        |   |                                 |       |    |      |   |        |   |  |      |      |  |   |        |   |  |      |   |  |   |        |   |  |      |  



- 18 -



---

PART I  FINANCIAL INFORMATION (continued)

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



11. 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
September 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 are as
follows:



|                              |  |        |           |      |   |                           |  |   |       
|----------------------------- |  | ------ | --------- | ---- | - | ------------------------- |  | - | ------
|                              |  | Assets |           | Debt |   | BlackRock EquityOwnership
|September 30, 2004            |  |        |           |      |   |                          
|Collaterized debt obligations |  | $      | 3,020,000 |      | $ | 2,627,000                 |  | $ | 12,583
|Private investment funds      |  |        | 1,175,000 |      |   | 672,000                   |  |   | 33,000
|                              |  |        |           |      |   |                           |  |   |       
|Total                         |  | $      | 4,195,000 |      | $ | 3,299,000                 |  | $ | 45,583
|                              |  |        |           |      |   |                           |  |   |       
|                              |  |        |          
|December 31, 2003             |  |        |           |      |   |                          
|Collaterized debt obligations |  | $      | 2,740,000 |      | $ | 2,370,000                 |  | $ | 15,822
|Private investment funds      |  |        | 375,000   |      |   | 227,000                   |  |   | 5,000 
|                              |  |        |           |      |   |                           |  |   |       
|Total                         |  | $      | 3,115,000 |      | $ | 2,597,000                 |  | $ | 20,822
|                              |  |        |           |      |   |                           |  |   |       



12. Comprehensive Income (Loss)



|                                                                 |  |                                  |        |   |                                |   |        |      |  |   |        |   |  |   |        
|---------------------------------------------------------------- |  | -------------------------------- | ------ | - | ------------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | -------
|                                                                 |  | Three months ended September 30, |        |   | Nine months endedSeptember 30,
|                                                                 |  | 2004                             |        |   | 2003                           |   |        | 2004 |  |   | 2003  
|Net income (loss)                                                |  | $                                | (9,814 | ) |                                | $ | 40,053 |      |  | $ | 93,389 |   |  | $ | 114,047
|Other comprehensive income (loss):                               |  |                                  |        |   |                                |   |        |      |  |   |        |   |  |   |        
|Unrealized gain (loss) from investments, available for sale, net |  |                                  | 840    |   |                                |   | (1,746 | )    |  |   | (1,013 | ) |  |   | 2,401  
|Foreign currency translation gain (loss)                         |  |                                  | (76    | ) |                                |   | 162    |      |  |   | 953    |   |  |   | 1,231  
|                                                                 |  |                                  |        |   |                                |   |        |      |  |   |        |   |  |   |        
|Comprehensive income (loss)                                      |  | $                                | (9,050 | ) |                                | $ | 38,469 |      |  | $ | 93,329 |   |  | $ | 117,679
|                                                                 |  |                                  |        |   |                                |   |        |      |  |   |        |   |  |   |        



- 19 -



---

PART I  FINANCIAL INFORMATION (continued)

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



13. Lease Commitments



In August 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 $1,961 through 2005 from a sublease arrangement, are as follows:



|           |  |   |        
|---------- |  | - | -------
|2004       |  | $ | 2,849  
|2005       |  |   | 13,434 
|2006       |  |   | 15,376 
|2007       |  |   | 15,337 
|2008       |  |   | 15,304 
|Thereafter |  |   | 145,806
|           |  |   |        
|           |  | $ | 208,106
|           |  |   |        



- 20 -



---

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 $323.5 billion of assets under management at September 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, wealth management, asset management and global fund services. As of September 30, 2004, PNC indirectly owned approximately 71% of BlackRock.



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



|                                            |  |                    |            |   |              |   |            |                    |  |   |               |   |  |   |            |   |        |      |   |   |   |            |   |  |      |  
|------------------------------------------- |  | ------------------ | ---------- | - | ------------ | - | ---------- | ------------------ |  | - | ------------- | - |  | - | ---------- | - | ------ | ---- | - | - | - | ---------- | - |  | ---- | -
|                                            |  | Three months ended |            |   | Variance vs. |  
|                                            |  | September 30,      |            |   | June 30,     |   |            | September 30, 2003 |  |   | June 30, 2004 |  
|                                            |  | 2004               |            |   | 2003         |   |            | 2004               |  |   | Amount        |   |  | % |            |   | Amount |      |   | % |  
|Total revenue                               |  | $                  | 170,999    |   |              | $ | 150,344    |                    |  | $ | 183,812       |   |  | $ | 20,655     |   |        | 14   | % |   | $ | (12,813    | ) |  | -7   | %
|Total expense                               |  | $                  | 193,375    |   |              | $ | 92,700     |                    |  | $ | 121,231       |   |  | $ | 100,675    |   |        | 109  | % |   | $ | 72,144     |   |  | 60   | %
|Operating income (loss)                     |  | $                  | (22,376    | ) |              | $ | 57,644     |                    |  | $ | 62,581        |   |  | $ | (80,020    | ) |        | -139 | % |   | $ | (84,957    | ) |  | -136 | %
|Net income (loss)                           |  | $                  | (9,814     | ) |              | $ | 40,053     |                    |  | $ | 47,996        |   |  | $ | (49,867    | ) |        | -125 | % |   | $ | (57,810    | ) |  | -120 | %
|Diluted earnings (loss) per share           |  | $                  | (0.15      | ) |              | $ | 0.61       |                    |  | $ | 0.73          |   |  | $ | (0.76      | ) |        | -125 | % |   | $ | (0.88      | ) |  | -121 | %
|Diluted earnings per share, as adjusted (a) |  | $                  | 0.56       |   |              | $ | 0.61       |                    |  | $ | 0.73          |   |  | $ | (0.05      | ) |        | -8   | % |   | $ | (0.17      | ) |  | -23  | %
|Average diluted shares outstanding          |  |                    | 63,676,776 |   |              |   | 65,692,272 |                    |  |   | 65,766,979    |   |  |   | (2,015,496 | ) |        | -3   | % |   |   | (2,090,203 | ) |  | -3   | %
|Operating margin (b)                        |  |                    | 31.8       | % |              |   | 40.5       | %                  |  |   | 35.6          | % |  |   |            |   |        |      |   |   |   |            |   |  |      |  
|                                            |  |                    |            |   |              |   |           
|Assets under management ($ in millions)     |  | $                  | 323,465    |   |              | $ | 293,501    |                    |  | $ | 309,654       |   |  | $ | 29,964     |   |        | 10   | % |   | $ | 13,811     |   |  | 4    | %



|                                            |  |                   |            |   |          |   |            |        |  |   |         |   |  |     |  
|------------------------------------------- |  | ----------------- | ---------- | - | -------- | - | ---------- | ------ |  | - | ------- | - |  | --- | -
|                                            |  | Nine months ended |            |   |          |   |            |        | 
|                                            |  | September 30,     |            |   | Variance |  
|                                            |  | 2004              |            |   | 2003     |   |            | Amount |  |   | %       |  
|Total revenue                               |  | $                 | 536,634    |   |          | $ | 437,001    |        |  | $ | 99,633  |   |  | 23  | %
|Total expense                               |  | $                 | 426,662    |   |          | $ | 270,479    |        |  | $ | 156,183 |   |  | 58  | %
|Operating income                            |  | $                 | 109,972    |   |          | $ | 166,522    |        |  | $ | (56,550 | ) |  | -34 | %
|Net income                                  |  | $                 | 93,389     |   |          | $ | 114,047    |        |  | $ | (20,658 | ) |  | -18 | %
|Diluted earnings per share                  |  | $                 | 1.42       |   |          | $ | 1.73       |        |  | $ | (0.31   | ) |  | -18 | %
|Diluted earnings per share, as adjusted (a) |  | $                 | 2.13       |   |          | $ | 1.73       |        |  | $ | 0.40    |   |  | 23  | %
|Average diluted shares outstanding          |  |                   | 65,858,552 |   |          |   | 65,918,485 |        |  |   | (59,933 | ) |  | 0   | %
|Operating margin (b)                        |  |                   | 36.0       | % |          |   | 40.3       | %      |  |   |         |   |  |     |  
|                                            |  |                   |            |  
|Assets under management ($ in millions)     |  | $                 | 323,465    |   |          | $ | 293,501    |        |  | $ | 29,964  |   |  | 10  | %



- 21 -



---

PART I  FINANCIAL INFORMATION (continued)

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



|(a) | Diluted earnings per share adjusted to exclude the portion of expenses related to the BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan (LTIP) to be funded by
The PNC Financial Services Group, Inc. (PNC) with a capital contribution of up to 4 million shares of BlackRock common stock. This measure is derived from the Companys consolidated financial statements, as follows:
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                          |  |                                               |            |   |  |   |            |  
|------------------------------------------------------------------------- |  | --------------------------------------------- | ---------- | - |  | - | ---------- | -
|                                                                          |  | Three and nine months endedSeptember 30, 2004 |           
|Net income (loss), GAAP basis                                             |  | $                                             | (9,814     | ) |  | $ | 93,389     |  
|LTIP expense, net of tax                                                  |  |                                               | 57,082     |   |  |   | 57,082     |  
|                                                                          |  |                                               |            |   |  |   |            |  
|Net income, excluding LTIP                                                |  |                                               | 47,268     |   |  |   | 150,471    |  
|BlackRocks LTIP funding requirement                                      |  |                                               | (10,383    | ) |  |   | (10,383    | )
|                                                                          |  |                                               |            |   |  |   |            |  
|Net income, as adjusted for PNC LTIP funding requirement                  |  |                                               | 36,885     |   |  |   | 140,088    |  
|                                                                          |  |                                               |            |   |  |   |            |  
|Diluted weighted average shares outstanding, GAAP basis                   |  |                                               | 63,676,776 |   |  |   | 65,858,552 |  
|Antidilutive common stock equivalents by virtue of the Companys net loss |  |                                               | 2,303,856  |   |  |   |           |  
|                                                                          |  |                                               |            |   |  |   |            |  
|Diluted weighted average shares outstanding, as adjusted                  |  |                                               | 65,980,632 |   |  |   | 65,858,552 |  
|                                                                          |  |                                               |            |   |  |   |            |  
|Diluted earnings (loss) per share, GAAP basis                             |  | $                                             | (0.15      | ) |  | $ | 1.42       |  
|                                                                          |  |                                               |            |   |  |   |            |  
|Diluted earnings per share, as adjusted for PNC LTIP funding requirement  |  | $                                             | 0.56       |   |  | $ | 2.13       |  
|                                                                          |  |                                               |            |   |  |   |            |  



We believe that diluted earnings per
share, as adjusted for PNC LTIP funding requirement, is an effective indicator of the Companys profitability. The LTIP expense associated with awards to be met by PNCs funding requirement has been excluded from diluted earnings per
share, as adjusted, because, exclusive of the impact related to Plan participants put options, these non-cash charges will not impact BlackRocks book value.



|(b) | Operating income, adjusted for LTIP expense, 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 |         |   | Nine months ended September 30, |  
|                                              |  | September 30,      |         |   | June 30, 2004                   |   |        
|                                              |  | 2004               |         |   | 2003                            |   |         |   | 2004 |   |         | 2003 | 
|Operating income (loss), GAAP basis           |  | $                  | (22,376 | ) |                                 | $ | 57,644  |   |      | $ | 62,581  |      |  | $ | 109,972 |   |  | $ | 166,522 |  
|Add back: LTIP expense                        |  |                    | 90,606  |   |                                 |   |        |   |      |   |        |      |  |   | 90,606  |   |  |   |        |  
|Less: BlackRocks LTIP funding requirement    |  |                    | (16,481 | ) |                                 |   |        |   |      |   |        |      |  |   | (16,481 | ) |  |   |        |  
|                                              |  |                    |         |   |                                 |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Operating income, as adjusted                 |  |                    | 51,749  |   |                                 |   | 57,644  |   |      |   | 62,581  |      |  |   | 184,097 |   |  |   | 166,522 |  
|                                              |  |                    |         |   |                                 |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Revenue, GAAP basis                           |  |                    | 170,999 |   |                                 |   | 150,344 |   |      |   | 183,812 |      |  |   | 536,634 |   |  |   | 437,001 |  
|Less: fund administration and servicing costs |  |                    | (8,277  | ) |                                 |   | (7,844  | ) |      |   | (8,018  | )    |  |   | (24,655 | ) |  |   | (23,380 | )
|                                              |  |                    |         |   |                                 |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Revenue used for operating margin measurement |  |                    | 162,722 |   |                                 |   | 142,500 |   |      |   | 175,794 |      |  |   | 511,979 |   |  |   | 413,621 |  
|                                              |  |                    |         |   |                                 |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Operating margin, GAAP basis                  |  |                    | -13.1   | % |                                 |   | 38.3    | % |      |   | 34.0    | %    |  |   | 20.5    | % |  |   | 38.1    | %
|                                              |  |                    |         |   |                                 |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  
|Operating margin, as reported                 |  |                    | 31.8    | % |                                 |   | 40.5    | % |      |   | 35.6    | %    |  |   | 36.0    | % |  |   | 40.3    | %
|                                              |  |                    |         |   |                                 |   |         |   |      |   |         |      |  |   |         |   |  |   |         |  



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



- 22 -



---

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 in the
consolidated statements of income.



Operating expense primarily consists of
employee compensation and benefits, Long-Term Retention and Incentive Plan, fund administration and servicing costs, general and administration expense and impairment of intangible assets. Employee compensation and benefits expense reflects
salaries, deferred and incentive compensation and related benefit costs. Long-Term Retention and Incentive Plan reflects expenses recognized for awards granted to employees under the BlackRock, Inc. 2002 Long Term Retention and Incentive Plan
(LTIP), for which the Companys management has determined that full vesting is probable, and related payroll taxes. 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 September 30, 2004 and December 31, 2003 were approximately $184.3 million and
approximately $192.1 million, respectively, with amortization expense of approximately $0.3 million and $0.2 million for the three months ended September 30, 2004 and 2003, respectively, and approximately $0.7 million for the nine months ended
September 30, 2004 and 2003. Impairment of intangible assets represents a write-off of an acquired management contract during the nine months ended September 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.



- 23 -



---

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 $30.0 billion, or 10%, to $323.5 billion at September 30, 2004, compared
with $293.5 billion at September 30, 2003. The growth in assets under management was primarily attributable to an increase of $33.0 billion, or 16%, in separate accounts, partially offset by a decrease of $3.1 billion, or 4%, in mutual fund assets.



The increase in separate accounts at September 30, 2004, as compared with
September 30, 2003, was the result of net subscriptions of $22.1 billion and market appreciation of $10.9 billion. Net subscriptions were primarily attributable to fixed income sales, increased liquidity assets and subscriptions in alternative
investment products, which were $23.5 billion, $2.0 billion and $0.8 billion, respectively, partially offset by net redemptions in equity and liquidity-securities lending separate accounts of $2.9 billion and $1.4 billion, respectively. 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 and net subscriptions in alternative investment products relate primarily to the launch of a fixed income absolute return product during June 2004. Net redemptions of equity accounts largely reflected outflows in the Companys
international equity products. Market appreciation of $10.9 billion in separate accounts largely reflected appreciation earned on fixed income assets of $9.1 billion due to current income and declining interest rates and market appreciation in
equity assets of $1.8 billion as equity markets improved during the period.



The $3.1 billion decrease in mutual fund assets since September 30, 2003 primarily reflected net redemptions of $3.5 billion. During the period, net redemptions in the BlackRock Liquidity Funds and the BlackRock Fundsmoney
market portfolios totaled $6.3 billion, which was partially offset by net subscriptions in BlackRock Closed-end Funds and BlackRock Fundsand BlackRock Global Seriesfixed income portfolios of $1.9 billion and $0.9 billion,
respectively. Liquidity mutual fund outflows are primarily attributable to the increase in the Federal Funds rate during the second quarter of 2004, which resulted 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 $1.9 billion in closed-end fund assets since September 30, 2003, including the offering by the Company of the first three equity BlackRock Closed-end Funds, which
raised $1.2 billion during the period. The BlackRock Funds and BlackRock Global Seriesfixed income portfolios had $0.9 billion in net subscriptions primarily due to strong relative investment performance.



AUM in the third quarter of 2004 increased $13.8 billion, or 4%, as compared to the second
quarter of 2004, representing $7.3 billion in net subscriptions and $6.5 billion in market appreciation. The $7.3 billion in net subscriptions during the period primarily reflected $5.2 billion in fixed income separate account net subscriptions, net
new business of $2.0 billion in liquidity separate accounts and liquidity institutional mutual funds (BlackRock Liquidity Funds) due to enhanced cross-selling efforts and a $0.9 million increase in alternative investment product AUM primarily
associated with the Companys new fixed income absolute return product. Asset inflows during the period were partially offset by $0.7 billion of net redemptions in equity separate accounts. Market appreciation during the third quarter of 2004
was primarily attributable to rises in fixed income separate account and mutual fund assets due to declining interest rates.



- 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

(Dollar amounts in millions)

(unaudited)



|                                |  |               |         |                   |   |         |  |   |        
|------------------------------- |  | ------------- | ------- | ----------------- | - | ------- |  | - | -------
|                                |  | September 30, |         | December 31, 2003
|                                |  | 2004          |         | 2003              |  
|All Accounts                    |  |               |         |                   |   |         |  |   |        
|Fixed income                    |  | $             | 235,535 |                   | $ | 201,364 |  | $ | 214,356
|Liquidity                       |  |               | 67,837  |                   |   | 73,037  |  |   | 74,345 
|Equity                          |  |               | 12,675  |                   |   | 12,424  |  |   | 13,721 
|Alternative investment products |  |               | 7,418   |                   |   | 6,676   |  |   | 6,934  
|                                |  |               |         |                   |   |         |  |   |        
|Total                           |  | $             | 323,465 |                   | $ | 293,501 |  | $ | 309,356
|                                |  |               |         |                   |   |         |  |   |        
|Separate Accounts               |  |               |         |                   |   |         |  |   |        
|Fixed income                    |  | $             | 211,075 |                   | $ | 178,390 |  | $ | 190,432
|Liquidity                       |  |               | 7,703   |                   |   | 5,707   |  |   | 5,855  
|Liquidity-Securities lending    |  |               | 8,636   |                   |   | 9,996   |  |   | 9,925  
|Equity                          |  |               | 8,129   |                   |   | 9,143   |  |   | 9,443  
|Alternative investment products |  |               | 7,418   |                   |   | 6,676   |  |   | 6,934  
|                                |  |               |         |                   |   |         |  |   |        
|Subtotal                        |  |               | 242,961 |                   |   | 209,912 |  |   | 222,589
|                                |  |               |         |                   |   |         |  |   |        
|Mutual Funds                    |  |               |         |                   |   |         |  |   |        
|Fixed income                    |  |               | 24,460  |                   |   | 22,974  |  |   | 23,924 
|Liquidity                       |  |               | 51,498  |                   |   | 57,334  |  |   | 58,565 
|Equity                          |  |               | 4,546   |                   |   | 3,281   |  |   | 4,278  
|                                |  |               |         |                   |   |         |  |   |        
|Subtotal                        |  |               | 80,504  |                   |   | 83,589  |  |   | 86,767 
|                                |  |               |         |                   |   |         |  |   |        
|Total                           |  | $             | 323,465 |                   | $ | 293,501 |  | $ | 309,356
|                                |  |               |         |                   |   |         |  |   |        



- 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)



The following tables present the component changes in BlackRocks assets under
management for the three and nine months ended September 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 endedSeptember 30, |         | Nine months endedSeptember 30, |  
|                                   |  | 2004                            |         | 2003                           |   | 2004    |  |   | 2003    |  
|All Accounts                       |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  
|Beginning assets under management  |  | $                               | 309,654 |                                | $ | 286,309 |  | $ | 309,356 |   |  | $ | 272,841 |  
|Net subscriptions                  |  |                                 | 7,302   |                                |   | 6,468   |  |   | 6,945   |   |  |   | 10,778  |  
|Market appreciation                |  |                                 | 6,509   |                                |   | 724     |  |   | 7,164   |   |  |   | 9,882   |  
|                                   |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  
|Ending assets under management     |  | $                               | 323,465 |                                | $ | 293,501 |  | $ | 323,465 |   |  | $ | 293,501 |  
|                                   |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  
|Separate Accounts                  |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  
|Beginning assets under management  |  | $                               | 230,845 |                                | $ | 203,677 |  | $ | 222,589 |   |  | $ | 183,513 |  
|Net subscriptions                  |  |                                 | 5,956   |                                |   | 5,701   |  |   | 13,200  |   |  |   | 17,631  |  
|Market appreciation                |  |                                 | 6,160   |                                |   | 534     |  |   | 7,172   |   |  |   | 8,768   |  
|                                   |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  
|Ending assets under management     |  |                                 | 242,961 |                                |   | 209,912 |  |   | 242,961 |   |  |   | 209,912 |  
|                                   |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  
|Mutual Funds                       |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |                                 | 78,809  |                                |   | 82,632  |  |   | 86,767  |   |  |   | 89,328  |  
|Net subscriptions (redemptions)    |  |                                 | 1,346   |                                |   | 767     |  |   | (6,255  | ) |  |   | (6,853  | )
|Market appreciation (depreciation) |  |                                 | 349     |                                |   | 190     |  |   | (8      | ) |  |   | 1,114   |  
|                                   |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  
|Ending assets under management     |  |                                 | 80,504  |                                |   | 83,589  |  |   | 80,504  |   |  |   | 83,589  |  
|                                   |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  
|Total                              |  | $                               | 323,465 |                                | $ | 293,501 |  | $ | 323,465 |   |  | $ | 293,501 |  
|                                   |  |                                 |         |                                |   |         |  |   |         |   |  |   |         |  



- 26 -



---

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        |   |         | Nine months ended September 30, 2004 | 
|                                   |  | September 30 |         |   | December 31 |   |         | March 31                             |  |   | June 30 |   |  | September 30 |         |  
|Separate Accounts                  |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Fixed Income                       |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  | $            | 174,480 |   |             | $ | 178,390 |                                      |  | $ | 190,432 |   |  | $            | 202,055 |   |  | $ | 199,762 |   |  | $ | 190,432 |  
|Net subscriptions                  |  |              | 3,700   |   |             |   | 9,842   |                                      |  |   | 7,141   |   |  |              | 1,365   |   |  |   | 5,201   |   |  |   | 13,707  |  
|Market appreciation (depreciation) |  |              | 210     |   |             |   | 2,200   |                                      |  |   | 4,482   |   |  |              | (3,658  | ) |  |   | 6,112   |   |  |   | 6,936   |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |              | 178,390 |   |             |   | 190,432 |                                      |  |   | 202,055 |   |  |              | 199,762 |   |  |   | 211,075 |   |  |   | 211,075 |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Liquidity                          |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |              | 5,366   |   |             |   | 5,707   |                                      |  |   | 5,855   |   |  |              | 6,304   |   |  |   | 6,896   |   |  |   | 5,855   |  
|Net subscriptions                  |  |              | 328     |   |             |   | 135     |                                      |  |   | 446     |   |  |              | 591     |   |  |   | 787     |   |  |   | 1,824   |  
|Market appreciation                |  |              | 13      |   |             |   | 13      |                                      |  |   | 3       |   |  |              | 1       |   |  |   | 20      |   |  |   | 24      |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |              | 5,707   |   |             |   | 5,855   |                                      |  |   | 6,304   |   |  |              | 6,896   |   |  |   | 7,703   |   |  |   | 7,703   |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Liquidity-Securities lending       |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |              | 8,374   |   |             |   | 9,996   |                                      |  |   | 9,925   |   |  |              | 8,479   |   |  |   | 8,771   |   |  |   | 9,925   |  
|Net subscriptions (redemptions)    |  |              | 1,622   |   |             |   | (71     | )                                    |  |   | (1,446  | ) |  |              | 292     |   |  |   | (135    | ) |  |   | (1,289  | )
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |              | 9,996   |   |             |   | 9,925   |                                      |  |   | 8,479   |   |  |              | 8,771   |   |  |   | 8,636   |   |  |   | 8,636   |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Equity                             |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |              | 9,105   |   |             |   | 9,143   |                                      |  |   | 9,443   |   |  |              | 9,003   |   |  |   | 8,790   |   |  |   | 9,443   |  
|Net redemptions                    |  |              | (334    | ) |             |   | (1,234  | )                                    |  |   | (684    | ) |  |              | (195    | ) |  |   | (748    | ) |  |   | (1,627  | )
|Market appreciation (depreciation) |  |              | 372     |   |             |   | 1,534   |                                      |  |   | 244     |   |  |              | (18     | ) |  |   | 87      |   |  |   | 313     |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |              | 9,143   |   |             |   | 9,443   |                                      |  |   | 9,003   |   |  |              | 8,790   |   |  |   | 8,129   |   |  |   | 8,129   |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Alternative investment products    |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |              | 6,352   |   |             |   | 6,676   |                                      |  |   | 6,934   |   |  |              | 6,342   |   |  |   | 6,626   |   |  |   | 6,934   |  
|Net subscriptions (redemptions)    |  |              | 385     |   |             |   | 237     |                                      |  |   | (486    | ) |  |              | 220     |   |  |   | 851     |   |  |   | 585     |  
|Market appreciation (depreciation) |  |              | (61     | ) |             |   | 21      |                                      |  |   | (106    | ) |  |              | 64      |   |  |   | (59     | ) |  |   | (101    | )
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  |              | 6,676   |   |             |   | 6,934   |                                      |  |   | 6,342   |   |  |              | 6,626   |   |  |   | 7,418   |   |  |   | 7,418   |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Total Separate Accounts            |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Beginning assets under management  |  |              | 203,677 |   |             |   | 209,912 |                                      |  |   | 222,589 |   |  |              | 232,183 |   |  |   | 230,845 |   |  |   | 222,589 |  
|Net subscriptions                  |  |              | 5,701   |   |             |   | 8,909   |                                      |  |   | 4,971   |   |  |              | 2,273   |   |  |   | 5,956   |   |  |   | 13,200  |  
|Market appreciation (depreciation) |  |              | 534     |   |             |   | 3,768   |                                      |  |   | 4,623   |   |  |              | (3,611  | ) |  |   | 6,160   |   |  |   | 7,172   |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  
|Ending assets under management     |  | $            | 209,912 |   |             | $ | 222,589 |                                      |  | $ | 232,183 |   |  | $            | 230,845 |   |  | $ | 242,961 |   |  | $ | 242,961 |  
|                                   |  |              |         |   |             |   |         |                                      |  |   |         |   |  |              |         |   |  |   |         |   |  |   |         |  



- 27 -



---

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        |   |        | Nine months ended September 30, 2004 | 
|                                   |  | September 30 |        |   | December 31 |   |        | March 31                             |  | June 30 |        |  | September 30 |        |  
|Mutual Funds                       |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Fixed Income                       |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  | $            | 21,480 |   |             | $ | 22,974 |                                      |  | $       | 23,924 |  | $            | 24,742 |   |  | $ | 23,780 |   |  | $ | 23,924 |  
|Net subscriptions (redemptions)    |  |              | 1,426  |   |             |   | 977    |                                      |  |         | 598    |  |              | (264   | ) |  |   | 270    |   |  |   | 604    |  
|Market appreciation (depreciation) |  |              | 68     |   |             |   | (27    | )                                    |  |         | 220    |  |              | (698   | ) |  |   | 410    |   |  |   | (68    | )
|                                   |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  |              | 22,974 |   |             |   | 23,924 |                                      |  |         | 24,742 |  |              | 23,780 |   |  |   | 24,460 |   |  |   | 24,460 |  
|                                   |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Liquidity                          |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |              | 57,845 |   |             |   | 57,334 |                                      |  |         | 58,565 |  |              | 58,986 |   |  |   | 50,276 |   |  |   | 58,565 |  
|Net subscriptions (redemptions)    |  |              | (512   | ) |             |   | 1,225  |                                      |  |         | 420    |  |              | (8,710 | ) |  |   | 1,222  |   |  |   | (7,068 | )
|Market appreciation                |  |              | 1      |   |             |   | 6      |                                      |  |         | 1      |  |              |       |   |  |   |       |   |  |   | 1      |  
|                                   |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  |              | 57,334 |   |             |   | 58,565 |                                      |  |         | 58,986 |  |              | 50,276 |   |  |   | 51,498 |   |  |   | 51,498 |  
|                                   |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Equity                             |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |              | 3,307  |   |             |   | 3,281  |                                      |  |         | 4,278  |  |              | 4,761  |   |  |   | 4,753  |   |  |   | 4,278  |  
|Net subscriptions (redemptions)    |  |              | (147   | ) |             |   | 579    |                                      |  |         | 351    |  |              | 4      |   |  |   | (146   | ) |  |   | 209    |  
|Market appreciation (depreciation) |  |              | 121    |   |             |   | 418    |                                      |  |         | 132    |  |              | (12    | ) |  |   | (61    | ) |  |   | 59     |  
|                                   |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  |              | 3,281  |   |             |   | 4,278  |                                      |  |         | 4,761  |  |              | 4,753  |   |  |   | 4,546  |   |  |   | 4,546  |  
|                                   |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Total Mutual Funds                 |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |              | 82,632 |   |             |   | 83,589 |                                      |  |         | 86,767 |  |              | 88,489 |   |  |   | 78,809 |   |  |   | 86,767 |  
|Net subscriptions (redemptions)    |  |              | 767    |   |             |   | 2,781  |                                      |  |         | 1,369  |  |              | (8,970 | ) |  |   | 1,346  |   |  |   | (6,255 | )
|Market appreciation (depreciation) |  |              | 190    |   |             |   | 397    |                                      |  |         | 353    |  |              | (710   | ) |  |   | 349    |   |  |   | (8     | )
|                                   |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  | $            | 83,589 |   |             | $ | 86,767 |                                      |  | $       | 88,489 |  | $            | 78,809 |   |  | $ | 80,504 |   |  | $ | 80,504 |  
|                                   |  |              |        |   |             |   |        |                                      |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  



- 28 -



---

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        |   |        | Nine months ended September 30,2004 | 
|                                   |  | September 30 |        |   | December 31 |   |        | March 31                            |  | June 30 |        |  | September 30 |        |  
|Mutual Funds                       |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|BlackRock Funds                    |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  | $            | 18,410 |   |             | $ | 18,044 |                                     |  | $       | 18,354 |  | $            | 18,985 |   |  | $ | 16,603 |   |  | $ | 18,354 |  
|Net subscriptions (redemptions)    |  |              | (385   | ) |             |   | 57     |                                     |  |         | 427    |  |              | (2,110 | ) |  |   | (391   | ) |  |   | (2,074 | )
|Market appreciation (depreciation) |  |              | 19     |   |             |   | 253    |                                     |  |         | 204    |  |              | (272   | ) |  |   | 93     |   |  |   | 25     |  
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  |              | 18,044 |   |             |   | 18,354 |                                     |  |         | 18,985 |  |              | 16,603 |   |  |   | 16,305 |   |  |   | 16,305 |  
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|BlackRock Global Series            |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |              | 589    |   |             |   | 794    |                                     |  |         | 838    |  |              | 1,026  |   |  |   | 1,293  |   |  |   | 838    |  
|Net subscriptions (redemptions)    |  |              | 193    |   |             |   | (3     | )                                   |  |         | 181    |  |              | 275    |   |  |   | (21    | ) |  |   | 435    |  
|Market appreciation (depreciation) |  |              | 12     |   |             |   | 47     |                                     |  |         | 7      |  |              | (8     | ) |  |   | 27     |   |  |   | 26     |  
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  |              | 794    |   |             |   | 838    |                                     |  |         | 1,026  |  |              | 1,293  |   |  |   | 1,299  |   |  |   | 1,299  |  
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|BlackRock Liquidity Funds          |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |              | 51,163 |   |             |   | 51,078 |                                     |  |         | 52,870 |  |              | 53,159 |   |  |   | 45,854 |   |  |   | 52,870 |  
|Net subscriptions (redemptions)    |  |              | (85    | ) |             |   | 1,792  |                                     |  |         | 289    |  |              | (7,305 | ) |  |   | 1,233  |   |  |   | (5,783 | )
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  |              | 51,078 |   |             |   | 52,870 |                                     |  |         | 53,159 |  |              | 45,854 |   |  |   | 47,087 |   |  |   | 47,087 |  
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Closed End                         |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |              | 11,723 |   |             |   | 12,920 |                                     |  |         | 13,961 |  |              | 14,552 |   |  |   | 14,233 |   |  |   | 13,961 |  
|Net subscriptions                  |  |              | 1,038  |   |             |   | 944    |                                     |  |         | 449    |  |              | 111    |   |  |   | 433    |   |  |   | 993    |  
|Market appreciation (depreciation) |  |              | 159    |   |             |   | 97     |                                     |  |         | 142    |  |              | (430   | ) |  |   | 229    |   |  |   | (59    | )
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  |              | 12,920 |   |             |   | 13,961 |                                     |  |         | 14,552 |  |              | 14,233 |   |  |   | 14,895 |   |  |   | 14,895 |  
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Other Commingled Funds             |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |              | 747    |   |             |   | 753    |                                     |  |         | 744    |  |              | 767    |   |  |   | 826    |   |  |   | 744    |  
|Net subscriptions (redemptions)    |  |              | 6      |   |             |   | (9     | )                                   |  |         | 23     |  |              | 59     |   |  |   | 92     |   |  |   | 174    |  
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  |              | 753    |   |             |   | 744    |                                     |  |         | 767    |  |              | 826    |   |  |   | 918    |   |  |   | 918    |  
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Total Mutual Funds                 |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Beginning assets under management  |  |              | 82,632 |   |             |   | 83,589 |                                     |  |         | 86,767 |  |              | 88,489 |   |  |   | 78,809 |   |  |   | 86,767 |  
|Net subscriptions (redemptions)    |  |              | 767    |   |             |   | 2,781  |                                     |  |         | 1,369  |  |              | (8,970 | ) |  |   | 1,346  |   |  |   | (6,255 | )
|Market appreciation (depreciation) |  |              | 190    |   |             |   | 397    |                                     |  |         | 353    |  |              | (710   | ) |  |   | 349    |   |  |   | (8     | )
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  
|Ending assets under management     |  | $            | 83,589 |   |             | $ | 86,767 |                                     |  | $       | 88,489 |  | $            | 78,809 |   |  | $ | 80,504 |   |  | $ | 80,504 |  
|                                   |  |              |        |   |             |   |        |                                     |  |         |        |  |              |        |   |  |   |        |   |  |   |        |  



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



Revenue



Total revenue for the three months ended September 30, 2004 increased $20.7 million, or 14%,
to $171.0 million, compared with $150.3 million for the three months ended September 30, 2003. Investment advisory and administration fees increased $14.5 million, or 11%,to $147.6 million for the three months ended September 30, 2004,
compared with $133.0 million for the three months ended September 30, 2003. The increase in investment advisory and administration fees was due to increases in fees earned from separate accounts of $12.9 million, or 16%, and mutual funds of $1.6
million, or 3%. Other income of $23.4 million increased $6.1 million, or 36%, for the three months ended September 30, 2004, compared with $17.3 million for the three months ended September 30, 2003, primarily due to increased sales of BlackRock
Solutionsproducts and services.



|                                                  |  |                                 |         |          |   |         |  |   |        |  |      |  
|------------------------------------------------- |  | ------------------------------- | ------- | -------- | - | ------- |  | - | ------ |  | ---- | -
|                                                  |  | Three months endedSeptember 30, |         | Variance |  
|                                                  |  | 2004                            |         | 2003     |   | Amount  |  | % |       
|Dollar amounts in thousands                       |  | (unaudited)                     |         |          |   |         | 
|Investment advisory and administration fees:      |  |                                 |         |          |   |         |  |   |        |  |      |  
|Mutual funds                                      |  | $                               | 54,073  |          | $ | 52,482  |  | $ | 1,591  |  | 3.0  | %
|Separate accounts                                 |  |                                 | 93,482  |          |   | 80,555  |  |   | 12,927 |  | 16.0 |  
|                                                  |  |                                 |         |          |   |         |  |   |        |  |      |  
|Total investment advisory and administration fees |  |                                 | 147,555 |          |   | 133,037 |  |   | 14,518 |  | 10.9 |  
|Other income                                      |  |                                 | 23,444  |          |   | 17,307  |  |   | 6,137  |  | 35.5 |  
|                                                  |  |                                 |         |          |   |         |  |   |        |  |      |  
|Total revenue                                     |  | $                               | 170,999 |          | $ | 150,344 |  | $ | 20,655 |  | 13.7 | %
|                                                  |  |                                 |         |          |   |         |  |   |        |  |      |  



Mutual fund advisory and
administration fees increased $1.6 million, or 3%, to $54.1 million for the three months ended September 30, 2004, compared with $52.5 million for the three months ended September 30, 2003. The increase in mutual fund revenue was primarily the
result of an increase in closed-end fund revenue of $4.7 million, partially offset by decreases in BlackRock Liquidity Fundfees and BlackRock Fundsfees of $2.2 million and $1.0 million, respectively. Since September 30, 2003, the
Company has raised approximately $1.9 billion in new closed-end funds that resulted in the increase in closed-end fund revenue. The decrease in fees earned from the BlackRock Liquidity Fundsduring the third quarter of 2004 is primarily
attributable to a decrease in average assets under management of approximately $4.9 billion, or 9%, as compared to the third quarter of 2003. The decrease in BlackRock Fundsfees is primarily attributable to a decrease in average assets under
management of approximately $1.2 billion, partially offset by a shift in asset mix from liquidity portfolios to higher fee earning fixed income portfolios.



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



Revenue (continued)



Separate account revenue increased $12.9 million, or 16%, to $93.5 million for the three
months ended September 30, 2004, compared with $80.6 million for the three months ended September 30, 2003. Separate account base fees increased $14.8 million, or 19%, to $92.9 million for the three months ended September 30, 2004, compared with
$78.2 million for the three months ended September 30, 2003, as a result of a $33.0 billion, or 16%, increase in separate account assets under management. Performance fees of $0.6 million for the three months ended September 30, 2004 decreased $1.9
million, compared with $2.4 million for the three months ended September 30, 2003. The decrease in performance fees was primarily attributable to alternative investment product performance fees related to investment returns on the Companys
fixed income hedge fund earned during the third quarter of 2003. The performance fees in 2003 were earned on assets raised during the latter half of 2003, not subject to the fixed income hedge funds high water mark.



|                                                  |  |                                  |         |          |   |         |  |   |        |   |  |       |   
|------------------------------------------------- |  | -------------------------------- | ------- | -------- | - | ------- |  | - | ------ | - |  | ----- | --
|                                                  |  | Three months ended September 30, |         | Variance |  
|                                                  |  | 2004                             |         | 2003     |   | Amount  |  |   | %      |  
|Dollar amounts in thousands                       |  | (unaudited)                      |         |          |   |         |  |  
|Mutual funds revenue                              |  |                                  |         |          |   |         |  |   |        |   |  |       |   
|BlackRock Funds                                   |  | $                                | 16,289  |          | $ | 17,255  |  | $ | (966   | ) |  | (5.6  | )%
|Closed End Funds                                  |  |                                  | 17,978  |          |   | 13,267  |  |   | 4,711  |   |  | 35.5  |   
|BlackRock Liquidity Funds                         |  |                                  | 19,508  |          |   | 21,694  |  |   | (2,186 | ) |  | (10.1 | ) 
|Other commingled funds                            |  |                                  | 298     |          |   | 266     |  |   | 32     |   |  | 12.0  |   
|                                                  |  |                                  |         |          |   |         |  |   |        |   |  |       |   
|Total mutual funds revenue                        |  |                                  | 54,073  |          |   | 52,482  |  |   | 1,591  |   |  | 3.0   |   
|                                                  |  |                                  |         |          |   |         |  |   |        |   |  |       |   
|Separate accounts revenue                         |  |                                  |         |          |   |         |  |   |        |   |  |       |   
|Separate account base fees                        |  |                                  | 92,943  |          |   | 78,152  |  |   | 14,791 |   |  | 18.9  |   
|Separate account performance fees                 |  |                                  | 539     |          |   | 2,403   |  |   | (1,864 | ) |  | NM    |   
|                                                  |  |                                  |         |          |   |         |  |   |        |   |  |       |   
|Total separate accounts revenue                   |  |                                  | 93,482  |          |   | 80,555  |  |   | 12,927 |   |  | 16.0  |   
|                                                  |  |                                  |         |          |   |         |  |   |        |   |  |       |   
|Total investment advisory and administration fees |  |                                  | 147,555 |          |   | 133,037 |  |   | 14,518 |   |  | 10.9  |   
|                                                  |  |                                  |         |          |   |         |  |   |        |   |  |       |   
|Other income                                      |  |                                  | 23,444  |          |   | 17,307  |  |   | 6,137  |   |  | 35.5  |   
|                                                  |  |                                  |         |          |   |         |  |   |        |   |  |       |   
|Total revenue                                     |  | $                                | 170,999 |          | $ | 150,344 |  | $ | 20,655 |   |  | 13.7  | % 
|                                                  |  |                                  |         |          |   |         |  |   |        |   |  |       |   

---

NM = Not meaningful.



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



Expense



Total expense rose $100.7 million to $193.4 million in the third quarter of 2004,
compared with $92.7 million during the third quarter of 2003. The increase in expense for the quarter primarily reflects a $90.6 million charge associated with LTIP awards. Under the terms of the LTIP, awards fully vest if BlackRocks average
closing common stock price is at least $62 for any 3-month period beginning on or after January 1, 2005 and ending on or prior to March 30, 2007. Due to the strength of the Companys stock price, which has recently traded in excess of $70 per
share, the Companys management has determined that full vesting of LTIP awards is probable and recorded a charge of $90.6 million during the quarter reflecting LTIP awards earned from the beginning of the LTIPs service period, January 1,
2002, through September 30, 2004 and related payroll taxes. Based on the current level of LTIP awards outstanding and assuming full vesting remains probable, quarterly expense, during the period from October 1, 2004 through December 31, 2006, should
approximate $13.1 million.



Exclusive of LTIP-related charges, total expense
increased $10.1 million, or 11%, compared to $92.7 million during the three months ended September 30, 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 endedSeptember 30, |         | Variance |  
|                                        |  | 2004                            |         | 2003     |   | Amount |  |   | %       |  
|Dollar amounts in thousands             |  | (unaudited)                     |         |          |   |        |  |  
|Employee compensation and benefits      |  | $                               | 64,950  |          | $ | 58,956 |  | $ | 5,994   |   |  | 10.2  | %
|Long-Term Retention and Incentive Plan  |  |                                 | 90,606  |          |   |       |  |   | 90,606  |   |  | NM    |  
|Fund administration and servicing costs |  |                                 |         |          |   |        |  |   |         |   |  |       |  
|Affiliates                              |  |                                 | 4,227   |          |   | 6,621  |  |   | (2,394  | ) |  | (36.2 | )
|Other                                   |  |                                 | 4,050   |          |   | 1,223  |  |   | 2,827   |   |  | 231.2 |  
|General and administration              |  |                                 | 29,259  |          |   | 25,669 |  |   | 3,590   |   |  | 14.0  |  
|Amortization of intangible assets       |  |                                 | 283     |          |   | 231    |  |   | 52      |   |  | 22.5  |  
|                                        |  |                                 |         |          |   |        |  |   |         |   |  |       |  
|Total expense                           |  | $                               | 193,375 |          | $ | 92,700 |  | $ | 100,675 |   |  | 108.6 | %
|                                        |  |                                 |         |          |   |        |  |   |         |   |  |       |  

---

NM = Not meaningful.



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



Expense (continued)



The rise in employee compensation and benefits of $6.0 million, or 10%,
primarily reflects a $5.1 million increase in salaries and benefits to support staffing needs and business growth and $1.2 million in stock-based compensation associated with restricted shares granted to employees during the fourth quarter of 2003.
General and administration expense increased $3.6 million, or 14%, to $29.3 million during the three months ended September 30, 2004 compared to $25.7 million during the three months ended September 30, 2003 primarily due to increased professional
fees of $1.9 million for legal and accounting services primarily related to mutual fund regulatory inquiries and Sarbanes-Oxley Act compliance activities, increased marketing and promotional costs of $0.5 million, increased occupancy of $0.5 million
primarily due to lease escalations and increased foreign currency charges of $0.3 million related to the decline of the U.S. dollar. During the third quarter of 2004, fund administration and servicing expense paid to third parties of $4.1 million
increased by $2.8 million compared to the third quarter of 2003 primarily due to increases in transfer agency related expenses associated with the BlackRock Funds and shareholder servicing fees related to new closed-end funds totaling $1.1
million and $1.0 million, respectively. The $2.4 million, or 36%, decrease in affiliated fund administration and servicing costs from $6.6 million during the three months ended September 30, 2003 to $4.2 million primarily relates to a restructuring
of BlackRocks co-administration agreements with PFPC Inc., an indirect, wholly-owned subsidiary of PNC.



|                                         |  |                                 |        |          |   |        |  |   |       |  |      |  
|---------------------------------------- |  | ------------------------------- | ------ | -------- | - | ------ |  | - | ----- |  | ---- | -
|                                         |  | Three months endedSeptember 30, |        | Variance |  
|                                         |  | 2004                            |        | 2003     |   | Amount |  | % |      
|Dollar amounts in thousands              |  | (unaudited)                     |        |          |   |        | 
|General and administration expense:      |  |                                 |        |          |   |        |  |   |       |  |      |  
|Marketing and promotional                |  | $                               | 7,823  |          | $ | 7,303  |  | $ | 520   |  | 7.1  | %
|Occupancy expense                        |  |                                 | 6,066  |          |   | 5,598  |  |   | 468   |  | 8.4  |  
|Technology                               |  |                                 | 4,771  |          |   | 4,436  |  |   | 335   |  | 7.6  |  
|Other general and administration         |  |                                 | 10,599 |          |   | 8,332  |  |   | 2,267 |  | 27.2 |  
|                                         |  |                                 |        |          |   |        |  |   |       |  |      |  
|Total general and administration expense |  | $                               | 29,259 |          | $ | 25,669 |  | $ | 3,590 |  | 14.0 | %
|                                         |  |                                 |        |          |   |        |  |   |       |  |      |  



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



Operating Income and Net
Income



Operating loss was $22.4 million for the three months ended
September 30, 2004 and includes a $90.6 million charge associated with awards granted under the LTIP. Exclusive of the LTIP charge, operating income for the three months ended September 30, 2004 increased $10.6 million, or 18%, compared with $57.6
million for the three months ended September 30, 2003. Non-operating income decreased $0.3 million, or 4%, to $5.7 million for the three months ended September 30, 2004 as compared with the three months ended September 30, 2003. The decline was
primarily due to reduced investment income of $1.4 million associated with lower investment balances, partially offset by a reversal of interest expense associated with the Companys obligation to acquire a subsidiarys minority interest.
The income tax benefit for the three months ended September 30, 2004 was $7.3 million, representing a 43.5% effective tax rate, compared to income tax expense of $23.6 million, representing an effective tax rate of 37.1%. The decrease in the
Companys effective tax rate is attributable to the net loss realized during the quarter. Net loss totaled $9.8 million for the three months ended September 30, 2004 and includes the LTIP charges, which resulted in an after tax impact of $57.1
million on third quarter 2004 earnings. Exclusive of the LTIP charge, net income increased $7.2 million, or 18%, compared with $40.1 million for the three months ended September 30, 2003.



- 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 nine months ended September 30, 2004 as compared with the nine
months ended September 30, 2003.



Revenue



Total revenue for the nine months ended September 30, 2004 increased $99.6 million, or 23%,
to $536.6 million, compared with $437.0 million for the nine months ended September 30, 2003. Investment advisory and administration fees increased $82.5 million, or 21%, to $469.9 million for the nine months ended September 30, 2004, compared with
$387.4 million for the nine months ended September 30, 2003. The increase in investment advisory and administration fees was due to increases in fees earned from separate accounts of $66.7 million, or 28%, and mutual funds of $15.8 million, or 11%.
Other income of $66.7 million increased $17.2 million, or 35%, for the nine months ended September 30, 2004 compared with $49.6 million for the nine months ended September 30, 2003 primarily due to increased sales of BlackRock Solutionsproducts and services.



|                                                  |  |                                |         |          |   |         |  |   |        |  |      |  
|------------------------------------------------- |  | ------------------------------ | ------- | -------- | - | ------- |  | - | ------ |  | ---- | -
|                                                  |  | Nine months endedSeptember 30, |         | Variance |  
|                                                  |  | 2004                           |         | 2003     |   | Amount  |  | % |       
|Dollar amounts in thousands                       |  | (unaudited)                    |         |          |   |         | 
|Investment advisory and administration fees:      |  |                                |         |          |   |         |  |   |        |  |      |  
|Mutual funds                                      |  | $                              | 165,500 |          | $ | 149,718 |  | $ | 15,782 |  | 10.5 | %
|Separate accounts                                 |  |                                | 304,386 |          |   | 237,697 |  |   | 66,689 |  | 28.1 |  
|                                                  |  |                                |         |          |   |         |  |   |        |  |      |  
|Total investment advisory and administration fees |  |                                | 469,886 |          |   | 387,415 |  |   | 82,471 |  | 21.3 |  
|Other income                                      |  |                                | 66,748  |          |   | 49,586  |  |   | 17,162 |  | 34.6 |  
|                                                  |  |                                |         |          |   |         |  |   |        |  |      |  
|Total revenue                                     |  | $                              | 536,634 |          | $ | 437,001 |  | $ | 99,633 |  | 22.8 | %
|                                                  |  |                                |         |          |   |         |  |   |        |  |      |  



Mutual fund advisory and
administration fees increased $15.8 million, or 11%, to $165.5 million for the nine months ended September 30, 2004, compared with $149.7 million for the nine months ended September 30, 2003. The increase in mutual fund revenue was primarily the
result of increases in closed-end fund revenue and BlackRock Fundsfees of $15.4 million and $2.6 million, respectively, partially offset by a $2.3 million decrease in fees earned from the BlackRock Liquidity Funds. Since September 30,
2003, the Company has raised approximately $1.9 billion in new closed-end funds which resulted in the rise in closed-end fund revenue. The increase in BlackRock Fundsfees is primarily attributable to a shift in asset mix from liquidity
portfolios to higher fee earning fixed income portfolios. The decline in BlackRock Liquidity Fundsfees is primarily attributable to a decrease in average assets under management of approximately $2.1 billion due to increases in the Federal
Funds rate during the period.



- 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 nine months ended September 30, 2004 as compared with the nine
months ended September 30, 2003. (continued)



Revenue (continued)



Separate account revenue increased $66.7 million, or 28%, to $304.4
million for the nine months ended September 30, 2004, compared with $237.7 million for the nine months ended September 30, 2003. Separate account base fees increased $39.8 million, or 17%, to $270.4 million for the nine months ended September 30,
2004, compared with $230.6 million for the nine months ended September 30, 2003, as a result of a $33.0 billion, or 16%, increase in separate account assets under management. Performance fees of $34.0 million for the nine months ended September 30,
2004 increased $26.9 million compared with $7.1 million for the nine months ended September 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 fund (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.



|                                                  |  |                                |         |          |   |         |  |   |        |   |  |      |  
|------------------------------------------------- |  | ------------------------------ | ------- | -------- | - | ------- |  | - | ------ | - |  | ---- | -
|                                                  |  | Nine months endedSeptember 30, |         | Variance |  
|                                                  |  | 2004                           |         | 2003     |   | Amount  |  |   | %      |  
|Dollar amounts in thousands                       |  | (unaudited)                    |         |          |   |         |  |  
|Mutual funds revenue                              |  |                                |         |          |   |         |  |   |        |   |  |      |  
|BlackRock Funds                                   |  | $                              | 53,128  |          | $ | 50,497  |  | $ | 2,631  |   |  | 5.2  | %
|Closed End Funds                                  |  |                                | 52,252  |          |   | 36,881  |  |   | 15,371 |   |  | 41.7 |  
|BlackRock Liquidity Funds                         |  |                                | 59,281  |          |   | 61,547  |  |   | (2,266 | ) |  | (3.7 | )
|Other commingled funds                            |  |                                | 839     |          |   | 793     |  |   | 46     |   |  | 5.8  |  
|                                                  |  |                                |         |          |   |         |  |   |        |   |  |      |  
|Total mutual funds revenue                        |  |                                | 165,500 |          |   | 149,718 |  |   | 15,782 |   |  | 10.5 |  
|                                                  |  |                                |         |          |   |         |  |   |        |   |  |      |  
|Separate accounts revenue                         |  |                                |         |          |   |         |  |   |        |   |  |      |  
|Separate account base fees                        |  |                                | 270,427 |          |   | 230,622 |  |   | 39,805 |   |  | 17.3 |  
|Separate account performance fees                 |  |                                | 33,959  |          |   | 7,075   |  |   | 26,884 |   |  | NM   |  
|                                                  |  |                                |         |          |   |         |  |   |        |   |  |      |  
|Total separate accounts revenue                   |  |                                | 304,386 |          |   | 237,697 |  |   | 66,689 |   |  | 28.1 |  
|                                                  |  |                                |         |          |   |         |  |   |        |   |  |      |  
|Total investment advisory and administration fees |  |                                | 469,886 |          |   | 387,415 |  |   | 82,471 |   |  | 21.3 |  
|                                                  |  |                                |         |          |   |         |  |   |        |   |  |      |  
|Other income                                      |  |                                | 66,748  |          |   | 49,586  |  |   | 17,162 |   |  | 34.6 |  
|                                                  |  |                                |         |          |   |         |  |   |        |   |  |      |  
|Total revenue                                     |  | $                              | 536,634 |          | $ | 437,001 |  | $ | 99,633 |   |  | 22.8 | %
|                                                  |  |                                |         |          |   |         |  |   |        |   |  |      |  

---

NM = Not meaningful.



- 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 nine months ended September 30, 2004 as compared with the nine
months ended September 30, 2003. (continued)



Expense



Total expense rose $156.2 million to $426.7 million in the nine months ended September
30, 2004 compared with $270.5 million in the nine months ended September 30, 2003. The increase in expense for the period primarily reflects a $90.6 million charge associated with LTIP awards. Exclusive of LTIP-related charges, total expense
increased $65.6 million, or 24%, compared to $270.5 million during the nine months ended September 30, 2003. The increase was attributable to increases in employee compensation and benefits, general and administration expense, fund administration
and servicing expense paid to third parties and the recognition of a $6.1 million impairment charge on the Companys intangible assets, partially offset by a decrease in affiliated fund administration and servicing costs.



|                                        |  |                                 |         |          |   |         |  |   |         |   |  |       |  
|--------------------------------------- |  | ------------------------------- | ------- | -------- | - | ------- |  | - | ------- | - |  | ----- | -
|                                        |  | Nine months ended September 30, |         | Variance |  
|                                        |  | 2004                            |         | 2003     |   | Amount  |  |   | %       |  
|Dollar amounts in thousands             |  | (unaudited)                     |         |          |   |         |  |  
|Employee compensation and benefits      |  | $                               | 212,637 |          | $ | 170,161 |  | $ | 42,476  |   |  | 25.0  | %
|Long-Term Retention and Incentive Plan  |  |                                 | 90,606  |          |   |        |  |   | 90,606  |   |  | NM    |  
|Fund administration and servicing costs |  |                                 |         |          |   |         |  |   |         |   |  |       |  
|Affiliates                              |  |                                 | 14,243  |          |   | 20,250  |  |   | (6,007  | ) |  | (29.7 | )
|Other                                   |  |                                 | 10,412  |          |   | 3,130   |  |   | 7,282   |   |  | 232.7 |  
|General and administration              |  |                                 | 91,921  |          |   | 76,244  |  |   | 15,677  |   |  | 20.6  |  
|Amortization of intangible assets       |  |                                 | 746     |          |   | 694     |  |   | 52      |   |  | 7.5   |  
|Impairment of intangible assets         |  |                                 | 6,097   |          |   |        |  |   | 6,097   |   |  | NM    |  
|                                        |  |                                 |         |          |   |         |  |   |         |   |  |       |  
|Total expense                           |  | $                               | 426,662 |          | $ | 270,479 |  | $ | 156,183 |   |  | 57.7  | %
|                                        |  |                                 |         |          |   |         |  |   |         |   |  |       |  

---

NM = Not meaningful.



- 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 nine months ended September 30, 2004 as compared with the nine
months ended September 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 associated with alternative investment product performance fees and the gain on the Companys sale of its interest in Trepp LLC totaling $13.0
million and $7.0 million, respectively, $13.1 million in salaries and benefits to support staffing needs, a $5.4 million increase in incentive compensation reflecting operating income growth and $3.7 million in stock-based compensation related to
restricted stock granted to employees during the fourth quarter of 2003. General and administration expense increased $15.7 million, or 21%, to $91.9 million during the nine months ended September 30, 2004, compared to $76.2 million during the nine
months ended September 30, 2003 primarily due to increases in marketing and promotional, occupancy and other expenses of $5.0 million, $1.0 million and $9.3 million, respectively. During the nine months ended September 30, 2004, marketing and
promotional expense of $25.7 million increased $5.0 million, or 24%, compared to $20.7 million during the nine months ended September 30, 2003 primarily due to closed-end fund launches and increased institutional marketing activities. Occupancy
expense increased $1.0 million, or 6%, from $16.6 million during the nine months ended September 30, 2003 to $17.6 million during the current period primarily due to lease escalations. Other expense of $34.7 million increased $9.3 million, or 37%,
during the nine months ended September 30, 2004 compared to $25.4 million during the nine months ended September 30, 2003 primarily due to increased professional fees of $5.8 million for legal and accounting services primarily related to mutual fund
regulatory inquiries and Sarbanes-Oxley compliance activities, a $2.1 million increase in subadvisory fees related to performance fees earned on a CDO during 2004 and a $0.8 million rise in foreign currency charges related to the decline of the U.S.
dollar. In February 2004, the portfolio manager of BlackRocks long-short equity hedge funds resigned from the Company. 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 $10.4 million increased by $7.3 million compared to the nine months ended September 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 $3.3 million and $3.2 million, respectively. The $6.0 million, or 30%, decrease in affiliated fund administration and servicing costs from $20.3 million during
the nine months ended September 30, 2003 to $14.2 million primarily relates to a restructuring of BlackRocks co-administration agreements with PFPC Inc.



|                                         |  |                                |        |          |   |        |  |   |        |  |      |  
|---------------------------------------- |  | ------------------------------ | ------ | -------- | - | ------ |  | - | ------ |  | ---- | -
|                                         |  | Nine months endedSeptember 30, |        | Variance |  
|                                         |  | 2004                           |        | 2003     |   | Amount |  | % |       
|Dollar amounts in thousands              |  | (unaudited)                    |        |          |   |        | 
|General and administration expense:      |  |                                |        |          |   |        |  |   |        |  |      |  
|Marketing and promotional                |  | $                              | 25,663 |          | $ | 20,679 |  | $ | 4,984  |  | 24.1 | %
|Occupancy expense                        |  |                                | 17,633 |          |   | 16,611 |  |   | 1,022  |  | 6.2  |  
|Technology                               |  |                                | 13,933 |          |   | 13,540 |  |   | 393    |  | 2.9  |  
|Other general and administration         |  |                                | 34,692 |          |   | 25,414 |  |   | 9,278  |  | 36.5 |  
|                                         |  |                                |        |          |   |        |  |   |        |  |      |  
|Total general and administration expense |  | $                              | 91,921 |          | $ | 76,244 |  | $ | 15,677 |  | 20.6 | %
|                                         |  |                                |        |          |   |        |  |   |        |  |      |  



- 38 -



---

PART I  FINANCIAL INFORMATION (continued)

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



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



Operating Income and Net
Income



Operating income was $110.0 million for the nine months ended
September 30, 2004 and includes a $90.6 million charge associated with awards granted under the LTIP. Exclusive of the LTIP charge, operating income for the nine months ended September 30, 2004 increased $34.1 million, or 20%, compared with $166.5
million for the nine months ended September 30, 2003. Operating margin for the nine months ended September 30, 2004, which reflects the Companys LTIP funding obligation, decreased 4.3% to 36.0% from 40.3% during the comparable period in 2003.
The Companys LTIP funding obligation reduced the Companys operating margin by approximately 3% during the nine months ended September 30, 2004 and is expected to reduce operating margins by approximately 1.5% through the end of the
LTIPs service period, December 31, 2006, based on recent historical results. Non-operating income increased $9.6 million, or 55%, to $27.0 million for the nine months ended September 30, 2004 as compared with the nine months ended September
30, 2003. The increase 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 decreased securities gains of $2.5 million and reduced investment income of $0.6 million
associated with lower investment balances. Income tax expense was $39.3 million and $69.9 million, representing effective tax rates of 28.7% and 38.0% for the nine months ended September 30, 2004 and September 30, 2003, respectively. The decline in
the Companys effective tax rate is primarily attributable 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. Net income totaled $93.4 million for the nine months ended September 30, 2004 and includes the LTIPs after tax impact of $57.1 million on year-to-date earnings. Exclusive of the LTIP charge, net income
increased $36.4 million, or 32%, compared with $114.0 million for the nine months ended September 30, 2003.



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 $143.5 million for the period ended September 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 $3.5 million for the nine months ended
September 30, 2004, primarily consisting of $12.4 million in net investment sales and 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 $15.2 million in capital expenditures largely related to investments in technology. During the nine months ended September
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 $111.8 million and sold its equity interest in Trepp LLC for
approximately $11.5 million, which was partially offset by $109.5 million in seed investments of new product offerings, three of which represent consolidated investments to the Company.



- 39 -



---

PART I  FINANCIAL INFORMATION (continued)

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



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



Liquidity and Capital
Resources (continued)



In August 2004, the Company entered into a
definitive agreement with MetLife, Inc. (MetLife) to acquire SSRM Holdings Inc. (SSRM), the holding company of State Street Research & Management Company and SSR Realty Advisors, Inc., from MetLife for $375 million in cash and stock.



Under the terms of the transaction, which has been approved by the Boards of Directors of
BlackRock and MetLife, MetLife will receive at closing $325 million in cash and $50 million of BlackRock class A common stock. The Company has estimated it will finance approximately $200 million of the purchase price and is reviewing financing
alternatives. The remaining purchase price is expected to be funded with cash ($379.4 million at September 30, 2004) at closing.



Closing is expected in early 2005 pending required regulatory and SSRM mutual fund shareholder approvals and satisfaction of other customary closing conditions.



Net cash flow used in financing activities was $84.5 million for the nine
months ended September 30, 2004 and primarily represented treasury stock activity and the payment of $47.7 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 through September 30, 2004. During October 2004, the Company repurchased approximately 110,000 shares in open market transactions for approximately $7.8 million and, as a result, the
Company is currently authorized to repurchase approximately 1.1 million shares under its repurchase program. Cash paid in the repurchase program was partially offset by the receipt of $13.3 million by the Company due to the exercise of employee
stock options during the nine months ended September 30, 2004.



Total capital
at September 30, 2004 was $743.7 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 September 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.



- 40 -



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PART I  FINANCIAL INFORMATION (continued)

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



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



Contractual Obligations
and Commercial Commitments (continued)



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 nine months ended September 30, 2004, the related expense was $0.1 million and $0.4 million, respectively. At September 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.



The Company has entered into a commitment to invest $5.3 million in Carbon Capital II, Inc., an alternative investment fund sponsored by BlackRock, which remained
unfounded at September 30, 2004.



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, minimum 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 September 30, 2004, would be approximately $2.8 million.



Summary of Commitments (unaudited):



|                               |  |       |         |      |   |        |  |      |        |      |   |        |  |            |        |  |   |        |  |   |        
|------------------------------ |  | ----- | ------- | ---- | - | ------ |  | ---- | ------ | ---- | - | ------ |  | ---------- | ------ |  | - | ------ |  | - | -------
|                               |  | Total |         | 2004 |   | 2005   |  | 2006 |        | 2007 |   | 2008   |  | Thereafter
|(Dollar amounts in thousands)  |  |       |         |      |   |        |  |      |        |      |   |        |  |           
|Lease Commitments              |  | $     | 208,106 |      | $ | 2,849  |  | $    | 13,434 |      | $ | 15,376 |  | $          | 15,337 |  | $ | 15,304 |  | $ | 145,806
|Purchase Obligations           |  |       | 20,221  |      |   | 3,093  |  |      | 6,751  |      |   | 5,881  |  |            | 3,647  |  |   | 849    |  |   | 0      
|Acquired Management Contract   |  |       | 6,500   |      |   |       |  |      | 1,500  |      |   | 1,000  |  |            | 1,000  |  |   | 1,000  |  |   | 2,000  
|Investment Commitments         |  |       | 5,255   |      |   | 5,255  |  |      |       |      |   |       |  |            |       |  |   |       |  |   |       
|Acquisition Forward Commitment |  |       | 2,800   |      |   | 2,800  |  |      |       |      |   |       |  |            |       |  |   |       |  |   |       
|                               |  |       |         |      |   |        |  |      |        |      |   |        |  |            |        |  |   |        |  |   |        
|Total Commitments              |  | $     | 242,882 |      | $ | 13,997 |  | $    | 21,685 |      | $ | 22,257 |  | $          | 19,984 |  | $ | 17,153 |  | $ | 147,806
|                               |  |       |         |      |   |        |  |      |        |      |   |        |  |            |        |  |   |        |  |   |        



- 41 -



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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 September 30, 2004 on readily marketable available for sale securities were approximately $0.3 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 (losses) related to investments accounted for under the cost
method during the three and nine months ended September 30, 2004 totaled approximately ($0.3) million and $0.2 million, respectively.



Impairment of Securities



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



- 42 -



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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. As of September 30, 2004, the
Company has awarded approximately $207 million in LTIP Awards. If the performance hurdles are achieved, up to $200 million 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. Shares attributable to value in excess of PNCs $200 million LTIP funding requirement will be available to support the Companys
future long-term retention and incentive programs but are not subject to surrender by PNC until the programs are approved by the Compensation Committee of the Companys Board of Directors. In addition, shares distributed 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 million in cash.



Under the terms of the LTIP, awards fully vest if BlackRocks average closing common stock price is at least $62 for any 3-month period
beginning on or after January 1, 2005 and ending on or prior to March 30, 2007. An alternative performance hurdle provides for partial vesting of the LTIP based on specific targets for the Companys earnings growth and relative stock price
performance to peers over the term of the LTIP, subject to the authority of the Companys Compensation Committee to reduce the amount of awards vested under the LTIP.



Due to the strength in the Companys stock price, which has traded in excess of $70 per share, the Companys management has
determined that full vesting of Plan awards is probable and recorded a charge of $90.6 million during the period reflecting Plan awards earned through September 30, 2004 and related payroll taxes. Based on the current level of Plan awards
outstanding and assuming full vesting remains probable, quarterly expense, during the period from October 1, 2004 through December 31, 2006 should be approximately $13.1 million.



- 43 -



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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 $5.1
million and $14.7 million for the three and nine months ended September 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.



- 44 -



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PART I  FINANCIAL INFORMATION (continued)

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



Related Party Transactions



The Company 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 endedSeptember 30, |        | Nine months endedSeptember 30,
|                                             |  | 2004                            |        | 2003                           |   | 2004   |  | 2003
|(Dollar amounts in thousands)                |  | (unaudited)                    
|Investment advisory and administration fees: |  |                                 |        |                                |   |        |  |      |         |  |   |        
|BlackRock Open-end Funds:                    |  |                                 |        |                                |   |        |  |      |         |  |   |        
|PNC                                          |  | $                               | 7,185  |                                | $ | 9,642  |  | $    | 25,347  |  | $ | 29,758 
|Other                                        |  |                                 | 9,104  |                                |   | 7,613  |  |      | 27,781  |  |   | 20,739 
|BlackRock Closed-end Funds - Other           |  |                                 | 17,978 |                                |   | 13,267 |  |      | 52,252  |  |   | 36,881 
|BlackRock Liquidity Funds                    |  |                                 |        |                                |   |        |  |      |         |  |   |        
|PNC                                          |  |                                 | 3,817  |                                |   | 3,279  |  |      | 10,025  |  |   | 9,699  
|Other*                                       |  |                                 | 15,691 |                                |   | 18,415 |  |      | 49,256  |  |   | 51,848 
|STIF - PNC                                   |  |                                 | 264    |                                |   | 266    |  |      | 796     |  |   | 793    
|                                             |  |                                 |        |                                |   |        |  |      |         |  |   |        
|                                             |  | $                               | 54,039 |                                | $ | 52,482 |  | $    | 165,457 |  | $ | 149,718
|                                             |  |                                 |        |                                |   |        |  |      |         |  |   |        

---

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



The Company provides investment advisory and administration services to certain PNC
subsidiaries, Nomura Asset Management Co., Ltd. (Nomura), a strategic joint venture partner, and 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 ended September 30, |       | Nine months endedSeptember 30,
|                                             |  | 2004                             |       | 2003                           |   | 2004  |  | 2003
|(Dollar amounts in thousands)                |  | (unaudited)                     
|Investment advisory and administration fees: |  |                                  |       |                                |   |       |  |      |        |  |   |       
|Separate accounts  Nomura                   |  | $                                | 2,237 |                                | $ | 3,210 |  | $    | 6,542  |  | $ | 9,505 
|Separate accounts  PNC                      |  |                                  | 1,588 |                                |   | 2,092 |  |      | 5,026  |  |   | 5,660 
|Private client services  PNC                |  |                                  | 1,387 |                                |   | 1,381 |  |      | 4,271  |  |   | 4,144 
|Other income-risk management  PNC           |  |                                  | 1,250 |                                |   | 1,250 |  |      | 3,750  |  |   | 3,750 
|                                             |  |                                  |       |                                |   |       |  |      |        |  |   |       
|                                             |  | $                                | 6,462 |                                | $ | 7,933 |  | $    | 19,589 |  | $ | 23,059
|                                             |  |                                  |       |                                |   |       |  |      |        |  |   |       



- 45 -



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PART I  FINANCIAL INFORMATION (continued)

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



Related Party Transactions (continued)



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 September 30, 2004 and 2003 totaled approximately $15.5 million and $17.9 million, respectively, and, for the nine months ended September 30, 2004 and 2003 totaled approximately
$49.2 million and $53.8 million, respectively.



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



|                             |  |               |        |      |   |       
|---------------------------- |  | ------------- | ------ | ---- | - | ------
|                             |  | September 30,
|                             |  | 2004          |        | 2003
|(Dollar amounts in millions) |  | (unaudited)  
|BlackRock Open-end Funds     |  | $             | 7,396  |      | $ | 10,119
|BlackRock Liquidity Funds    |  |               | 10,234 |      |   | 8,316 
|STIF                         |  |               | 748    |      |   | 753   
|Separate accounts            |  |               | 11,541 |      |   | 12,425
|                             |  |               |        |      |   |       
|                             |  | $             | 29,919 |      | $ | 31,613
|                             |  |               |        |      |   |       



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.



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. Additionally, the Company has entered into subadvisory and
consulting agreements with Nomura and an entity whose President and Chief Executive Officer serves on the Companys Board of Directors.



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



|                                        |  |                                  |       |                                |   |       |  |      |        |  |   |       
|--------------------------------------- |  | -------------------------------- | ----- | ------------------------------ | - | ----- |  | ---- | ------ |  | - | ------
|                                        |  | Three months ended September 30, |       | Nine months endedSeptember 30,
|                                        |  | 2004                             |       | 2003                           |   | 2004  |  | 2003
|(Dollar amounts in thousands)           |  | (unaudited)                     
|Fund administration and servicing costs |  | $                                | 4,227 |                                | $ | 6,621 |  | $    | 14,243 |  | $ | 20,250
|General and administration              |  |                                  | 1,082 |                                |   | 1,343 |  |      | 3,332  |  |   | 4,487 
|General and administration-consulting   |  |                                  | 399   |                                |   | 443   |  |      | 3,485  |  |   | 1,344 
|                                        |  |                                  |       |                                |   |       |  |      |        |  |   |       
|                                        |  | $                                | 5,708 |                                | $ | 8,407 |  | $    | 21,060 |  | $ | 26,081
|                                        |  |                                  |       |                                |   |       |  |      |        |  |   |       



- 46 -



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PART I  FINANCIAL INFORMATION (continued)

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



Related Party Transactions (continued)



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 $2.9 million and $9.8 million at September 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 $21.6 million and $0.1 million at September 30, 2004 and December 31, 2003, respectively. These amounts primarily represent
deferred income taxes receivable.



Payable to affiliates was approximately
$33.6 million and $40.7 million at September 30, 2004 and December 31, 2003, respectively. These amounts primarily represent income taxes payable and accrued fund administration and servicing costs.



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.



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.



- 47 -



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PART I  FINANCIAL INFORMATION (continued)

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



Forward Looking Statements (continued)



In addition to factors previously disclosed in BlackRocks Securities and Exchange
Commission (the SEC) reports and those identified elsewhere in this quarterly report, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the
introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in demand
for products or services or in the value of assets under management; (3) the relative and absolute 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 and 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 and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock
or PNC; (11) terrorist activities and international hostilities, which may adversely affect the general economy, financial and capital markets, specific industries, and BlackRock; (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; (14) the impact of changes to tax legislation and, generally, the tax position of the Company; (15) changes in
circumstances affecting the expense recognition of BlackRocks LTIP; and (16) the closing of the Companys acquisition of SSRM Holdings, Inc.



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.



- 48 -



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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 debt securities. 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 September 30, 2004, the carrying value of seed investments was $132.0 million. The carrying value of BlackRocks other investments, available for sale, included in the mutual funds total, as stated below, was $49.7 million as of
September 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:



|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|------------------------------------- |  | ------------- | ------- | ------------------------------------------------- | - | ------------------------------------------------- |  | - | -------
|                                      |  | CarryingValue |         | Carrying valueassuming 10%increase inmarket price |   | Carrying valueassuming 10%decrease inmarket price
|September 30, 2004                    |  |               |         |                                                   |   |                                                  
|Mutual funds                          |  | $             | 14,718  |                                                   | $ | 16,190                                            |  | $ | 13,246 
|Equity securities                     |  |               | 10,333  |                                                   |   | 11,366                                            |  |   | 9,300  
|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, trading            |  |               | 25,051  |                                                   |   | 27,556                                            |  |   | 22,546 
|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|Mutual funds                          |  |               | 53,669  |                                                   |   | 59,036                                            |  |   | 48,302 
|Collateralized debt obligations       |  |               | 12,583  |                                                   |   | 13,841                                            |  |   | 11,325 
|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, available for sale |  |               | 66,252  |                                                   |   | 72,877                                            |  |   | 59,627 
|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|Other                                 |  |               |         |                                                   |   |                                                   |  |   |        
|Equity method                         |  |               | 72,937  |                                                   |   | 80,231                                            |  |   | 65,643 
|Cost method                           |  |               | 28,038  |                                                   |   | 30,842                                            |  |   | 25,234 
|Fair value                            |  |               | 27,986  |                                                   |   | 30,785                                            |  |   | 25,187 
|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, other              |  |               | 128,961 |                                                   |   | 141,858                                           |  |   | 116,064
|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments                     |  | $             | 220,264 |                                                   | $ | 242,291                                           |  | $ | 198,237
|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|                                      |  |               |        
|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                                 |  |               |         |                                                   |   |                                                   |  |   |        
|Equity method                         |  |               | 30,288  |                                                   |   | 33,317                                            |  |   | 27,259 
|Cost method                           |  |               | 9,139   |                                                   |   | 10,053                                            |  |   | 8,225  
|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments, other              |  |               | 45,228  |                                                   |   | 49,751                                            |  |   | 40,705 
|                                      |  |               |         |                                                   |   |                                                   |  |   |        
|Total investments                     |  | $             | 157,945 |                                                   | $ | 173,740                                           |  | $ | 142,151
|                                      |  |               |         |                                                   |   |                                                   |  |   |        



- 49 -



---

PART I  FINANCIAL INFORMATION (continued)

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



At September 30, 2004, investments, trading, and investments, other, with carrying values of approximately $14.7 million and $23.8 million, respectively, reflects
investments by BlackRock with respect to senior employee elections under the Companys deferred compensation plans. Therefore, any change in the carrying 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 September 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:



|                          |  |               |        |                                              |   |                                               |  |   |       
|------------------------- |  | ------------- | ------ | -------------------------------------------- | - | --------------------------------------------- |  | - | ------
|                          |  | CarryingValue |        | Carrying valueassuming +100basis point shift |   | Carrying valueassuming - 100basis point shift
|September 30, 2004        |  |               |        |                                              |   |                                              
|U.S. Treasury securities  |  | $             | 20,249 |                                              | $ | 18,441                                        |  | $ | 22,302
|                          |  |               |        |                                              |   |                                               |  |   |       
|December 31, 2003         |  |               |        |                                              |   |                                              
|Municipal debt securities |  | $             | 76,978 |                                              | $ | 70,099                                        |  | $ | 84,414
|                          |  |               |        |                                              |   |                                               |  |   |       



- 50 -



---

PART I  FINANCIAL INFORMATION (continued)

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



BlackRocks management, with the participation of BlackRocks Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of
BlackRocks disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, BlackRocks Chief Executive Officer and Chief Financial Officer have concluded that BlackRocks disclosure
controls and procedures were effective as of September 30, 2004.



During the
third quarter of 2004, the Companys Management Committee established several product and infrastructure-based operating committees to assist the Management Committee in conducting firmwide operations. There were no other changes in
BlackRocks internal controls over financial reporting during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, BlackRocks internal controls over financial
reporting.



- 51 -



---

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.



- 52 -



---

PART II  OTHER INFORMATION (continued)

|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------



|(c) | During the three months ended September 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 Programs |   | MaximumNumber ofShares that MayYet BePurchasedUnder the Plansor Programs 1
|July 1, 2004 through July 31, 2004           |  | 2,6302                         |  | $                           | 64.15 |                                                                             |  |                                                                            | 1,195,225
|                                             |  |                                |  |                            
|August 1, 2004 through August 31, 2004       |  | 1,5332                         |  | $                           | 62.75 |                                                                             |  |                                                                            | 1,195,225
|                                             |  |                                |  |                            
|September 1, 2004 through September 30, 2004 |  |                               |  |                             |      |                                                                             |  |                                                                            | 1,195,225
|                                             |  |                                |  |                             |       |                                                                             |   |                                                                            |          
|Total                                        |  | 4,163                          |  | $                           | 63.63 |                                                                             |  |                                                                            |          
|                                             |  |                                |  |                             |       |                                                                             |   |                                                                            |          

---

|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.
|- | ------------------------------------------------------------------------------------------------------------



- 53 -



---

PART II  OTHER INFORMATION (continued)

|Item 6. | 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.                                                                



- 54 -



---

PART II  OTHER INFORMATION (continued)

|Item 6. | Exhibits
|------- | --------



|            |  |                                                                                                                                                                                              
|----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 (15)  |  | Agreement of Lease, dated July 29, 2004, between Park Avenue Plaza Company L.P. and the Registrant.                                                                                          
|            | 
|10.31 (15)  |  | Letter Agreement, dated July 29, 2004, amending the Agreement of Lease between Park Avenue Plaza Company L.P. and the Registrant.                                                            
|            | 
|10.32 (16)  |  | Stock Purchase Agreement among MetLife, Inc., Metropolitan Life Insurance Company, SSRM Holdings, Inc. BlackRock, Inc. and BlackRock Financial Management, Inc., dated August 25,
2004       
|            | 
|10.33       |  | Form of Restricted Stock Agreement under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.                                                                                            
|            | 
|10.34       |  | Form of BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan Award Agreement. +                                                                                                       
|            | 
|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 September 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.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------



- 55 -



---

PART II  OTHER INFORMATION (continued)

|Item 6. | Exhibits
|------- | --------



|    |   |  |                                                                                                                                                                      
|--- | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 10-K (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.                   
|(15 | ) |  | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended June 30, 2004.                    
|(16 | ) |  | Incorporated by Reference to Exhibit 99.3 to the Registrants Current Report on Form 8-K (Commission File No. 001-15305) filed on August 30, 2004.                   
|+   |   |  | Denotes compensatory plan.                                                                                                                                           



- 56 -



---

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: November 5, 2004 |  | By:             |  | /s/ Paul L. Audet                                       
|                       |  |                 |  | Paul L. Audet Managing Director &Chief
Financial Officer



- 57 -



---

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 (15)  |  | Agreement of Lease, dated July 29, 2004, between Park Avenue Plaza Company L.P. and the Registrant.                                                                                   
|            | 
|10.31 (15)  |  | Letter Agreement, dated July 29, 2004, amending the Agreement of Lease between Park Avenue Plaza Company L.P. and the Registrant.                                                     
|            | 
|10.32 (16)  |  | Stock Purchase Agreement among MetLife, Inc., Metropolitan Life Insurance Company, SSRM Holdings, Inc. BlackRock, Inc. and BlackRock Financial Management, Inc., dated August 25,
2004
|            | 
|10.33       |  | Form of Restricted Stock Agreement under the BlackRock, Inc. 1999 Stock Award and Incentive Plan.                                                                                     
|            | 
|10.34       |  | Form of BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan Award Agreement. +                                                                                                
|            | 
|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 September 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 10-K (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.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------

|(15) | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended June 30, 2004.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------

|(16) | Incorporated by Reference to Exhibit 99.3 to the Registrants Current Report on Form 8-K (Commission File No. 001-15305) filed on August 30, 2004.
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------



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