##### Table of Contents

SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549





---




FORM 10-Q


(Mark One)


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




For the quarterly period ended June 30, 2002





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





---




BlackRock, Inc.


---

(Exact name of registrant as specified in its
charter)





Delaware



51-0380803(State or other jurisdiction ofincorporation or organization)



(I.R.S. Employer Identification No.)





40 East 52 nd Street, 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 for new fiscal year, if changed since last report)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the proceeding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.





Yes  x

No ̈





As of July 31, 2002, there were 17,422,921 shares of the
registrants class A common stock outstanding and 47,351,138 shares of the registrants class B common stock outstanding.




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##### Table of Contents

BlackRock Inc.





Index to Form 10-Q





PART I





FINANCIAL INFORMATION





PageItem 1.

Financial StatementsConsolidated Statements of Financial Condition

1Consolidated Statements of Income

2Consolidated Statements of Cash Flows

3Notes to Consolidated Financial Statements

4Item 2.

Managements Discussion and Analysis of Financial Condition and Results of Operations

12Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35PART IIOTHER INFORMATIONItem 4.

Submission of Matters to a Vote of Security Holders

36Item 6.

Exhibits and Reports on Form 8-K

37




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##### Table of Contents

PART I  FINANCIAL INFORMATION


Item
1.    Financial Statements





BlackRock, Inc.





Consolidated Statements of Financial Condition


(Dollar amounts in thousands)





---




June 30, 2002


December 31, 2001(unaudited)AssetsCash and cash equivalents

$
169,533


$
186,451Accounts receivable


109,902



94,090Investments (cost: $166,918 and $143,600, respectively)


163,003



139,126Property and equipment, net


92,772



70,510Intangible assets, net


181,286



181,688Receivable from affiliates


8,809



2,569Other assets


8,989



10,044Total assets

$
734,294


$
684,478Liabilities and stockholders equityAccrued compensation

$
120,035


$
146,019Accounts payable and accrued liabilitiesAffiliate


21,473



15,972Other


16,279



19,075Acquired management contract obligation


6,578



7,344Other liabilities


8,711



9,951Total liabilities


173,076



198,361Stockholders equityCommon stock, class A, 17,337,643 and 15,916,944 shares issued, respectively


173



159Common stock, class B, 47,670,696 and 48,674,607 shares issued, respectively


477



487Additional paid-in capital


194,390



184,041Retained earnings


373,733



307,498Unearned compensation


(1,376
)


(1,927
)Accumulated other comprehensive loss


(2,907
)


(3,537
)Treasury stock, class A, at cost 249 and 0 shares issued, respectively


(11
)


Treasury stock, class B, at cost 265,558 and 125,633 shares issued, respectively


(3,261
)


(604
)Total stockholders equity


561,218



486,117Total liabilities and stockholders equity

$
734,294


$
684,478





See accompanying notes to consolidated financial statements.





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1




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##### Table of Contents

BlackRock, Inc.





Consolidated Statements of Income


(Dollar amounts in thousands, except share data)


(unaudited)





---




Three months ended June
30,


Six months ended June
30,2002


2001


2002


2001RevenueInvestment advisory and administration feesMutual funds

$
54,736


$
54,791


$
109,995


$
109,707Separate accounts


88,755



71,624



165,271



142,009Other incomeAffiliate


1,250



1,250



2,500



2,500Other


11,954



7,597



25,042



14,755Total revenue


156,695



135,262



302,808



268,971ExpenseEmployee compensation and benefits


67,830



55,534



128,217



110,964Fund administration and servicing costsaffiliates


11,916



15,722



25,094



32,412General and administrationAffiliate


1,887



1,757



3,787



3,704Other


20,156



16,927



40,668



32,035Amortization of intangible assets


201



2,614



402



5,228Total expense


101,990



92,554



198,168



184,343Operating income


54,705



42,708



104,640



84,628Non-operating income (expense)Investment income


4,014



2,632



7,034



4,494Interest expense


(171
)


(201
)


(354
)


(402
)Total non-operating income


3,843



2,431



6,680



4,092Income before income taxes


58,548



45,139



111,320



88,720Income taxes


23,712



18,909



45,085



36,994Net income

$
34,836


$
26,230


$
66,235


$
51,726Earnings per shareBasic

$
0.54


$
0.41


$
1.02


$
0.81Diluted

$
0.53


$
0.40


$
1.01


$
0.80Weighted-average shares outstandingBasic


64,726,856



64,248,630



64,687,900



64,204,186Diluted


65,333,228



64,877,389



65,261,868



64,867,348





See accompanying notes to consolidated financial statements.





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2




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##### Table of Contents

BlackRock, Inc.





Consolidated Statements of Cash Flow


(Dollar amounts in thousands)


(unaudited)





---




Six months ended June
30,2002


2001Cash flows from operating activitiesNet income

$
66,235


$
51,726Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization


9,966



12,131Stock-based compensation


3,105



2,911Deferred income taxes


8,066



653Tax benefit from stock-based compensation


6,304



5,140Purchase of investments, trading, net


(17,350
)


Net gain on investments


(1,423
)


Changes in operating assets and liabilities:(Increase) decrease in accounts receivable


(15,812
)


5,138Increase in receivable from affiliates


(14,306
)


(70
)Decrease in other assets


1,055



2,372Decrease in accrued compensation


(20,434
)


(36,987
)Increase in accounts payable and accrued liabilities


2,705



15,759Increase (decrease) in other liabilities


(1,240
)


1,699Cash provided by operating activities


26,871



60,472Cash flows from investing activitiesPurchase of property and equipment


(31,826
)


(18,033
)Purchase of investments


(5,118
)


(127,731
)Cash used in investing activities


(36,944
)


(145,764
)Cash flows from financing activitiesIssuance of class A common stock


760



203Purchase of treasury stock


(9,174
)


(6,472
)Reissuance of treasury stock


1,691



212Acquired management contract obligation payment


(766
)


(1,500
)Cash used in financing activities


(7,489
)


(7,557
)Effect of exchange rate changes on cash and cash equivalents


644



(510
)Net decrease in cash and cash equivalents


(16,918
)


(93,359
)Cash and cash equivalents, beginning of period


186,451



192,590Cash and cash equivalents, end of period

$
169,533


$
99,231





See accompanying notes to consolidated financial statements.





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3




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##### Table of Contents




BlackRock, Inc.





Notes to Consolidated Financial Statements


Six Months Ended June 30, 2002 and 2001


(Dollar amounts in thousands, except share data)


(unaudited)





|1. |  | Significant Accounting Policies
|-- |  | -------------------------------




Basis of Presentation





The consolidated interim financial statements of BlackRock, Inc. and
its subsidiaries (BlackRock or the Company) included herein have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. These consolidated financial statements are unaudited and should be read in
conjunction with the audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2001. The Company follows the same accounting policies in the preparation of
interim reports as set forth in the annual report. In the opinion of management, the consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the financial position,
results of operations and cash flows of BlackRock for the interim periods presented and are not necessarily indicative of a full years results.





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





Investments





The Companys investments are classified as trading and available for sale. Investments, trading represent matching investments made by, and held in a Rabbi Trust for, the Company with respect to
the BlackRock Voluntary and Involuntary Deferred Compensation Plans and are recorded at fair market value with unrealized gains and losses included in the accompanying consolidated statements of income as non-operating investment income or loss.
Investments, available for sale consist primarily of investments in BlackRock funds and certain institutional and private placement portfolios (alternative investment products), and are stated at market values. Securities, which are not
readily marketable (alternative investment products), are stated at their estimated fair market value as determined by the Companys management. The resulting unrealized gains and losses on investments, available for sale are included in the
accumulated other comprehensive loss component of stockholders equity, net of tax. Realized gains and losses on trading and available for sale investments and interest and dividend income are included in investment income (expense) in the
accompanying consolidated statements of income.The Companys management periodically assesses impairment on investments to determine if they are other than temporary. Any impairment on investments, other than temporary impairments, is
recorded in the consolidated statements of income.




4




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##### Table of Contents




Business Combinations





On July 20, 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 141,
Business Combinations. SFAS No. 141 requires the purchase method of accounting be used for all business combinations initiated or completed after June 30, 2001 and eliminates the pooling-of-interests method of accounting. The
statement also addresses disclosure requirements for business combinations and initial recognition and measurement criteria for goodwill and other intangible assets as a result of purchase business combinations.





Intangible Assets





Intangible assets are comprised of goodwill and management contract acquired. For the three months and six months ended June 30, 2001, goodwill was amortized on a straight-line basis over 25 years. On July 20, 2001,
the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets, which changed the accounting for goodwill from an amortization method to an impairment-only approach. The amortization of goodwill, including goodwill recognized
relating to past business combinations, ceases upon adoption of the new standard. Impairment testing for goodwill at a reporting unit level is required on at least an annual basis. The new standard also addresses other accounting matters, disclosure
requirements and financial statement presentation issues relating to goodwill and other intangible assets. The Company adopted SFAS No. 142, effective on January 1, 2002, as required. Assuming no impairment adjustments are necessary, no
future business combinations, and no other changes to goodwill, the Company expects diluted earnings per share to increase by approximately $.08 per share in 2002 as a result of the cessation of goodwill amortization. Management contract
acquired is amortized in proportion to and over the period of contract revenue, which is ten years. The Company regularly evaluates the carrying value of intangible assets. Any impairment would be recognized when the future operating cash flows
expected to be derived from such intangible assets are less than their carrying value. In such instances, impairment, if any, is measured on a discounted future cash flow basis.





Accounting for Obligations Associated with the Retirement of Long-Lived Assets





In August 2001, the FASB issued SFAS No. 143, Accounting for Obligations Associated with the Retirement of Long-Lived Assets, which requires that the fair value of a liability be recognized when incurred for
the retirement of a long-lived asset and the value of the asset be increased by that amount. The statement also requires that the liability be maintained at its present value in subsequent periods and outlines certain disclosures for such
obligations. The adoption of this statement, which is effective January 1, 2003, is not expected to have a material impact on the Companys financial statements.





Accounting for the Impairment or Disposal of Long-Lived Assets





In October 2001, the FASB also issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which replaces SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and For Assets
to be Disposed Of. This statement primarily defines one accounting model for long-lived assets to be disposed of by sale, including discontinued operations and addresses implementation issues. The adoption of this statement, which is effective
January 1, 2002, is not expected to have a material impact on the Companys financial statements.




5




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##### Table of Contents




Derivative Instruments and Hedging Activities





In 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS
No. 137 and No. 138. SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivatives embedded in other contracts and for hedging activities. SFAS No. 133 generally requires an
entity to recognize all derivatives as either assets or liabilities in the statement of financial position and measure those investments at fair value. The Company adopted the new statement as of January 1, 2001.





The Company enters into forward foreign currency exchange contracts with financial institutions to hedge certain assets denominated in
foreign currencies. The purpose of the Companys foreign currency hedging activities is to protect the Company from foreign currency exposures related to non-dollar denominated investments on its statement of financial condition.





During the term of the forward foreign currency exchange contracts, changes in fair value will be recognized in the
consolidated statements of financial condition and included among assets (if there is an unrealized gain) or among liabilities (if there is an unrealized loss). A corresponding amount will be included as a component of general and administrative
expenses in the consolidated statements of income.





By using derivative financial instruments to hedge exposure to
changes in exchange rates, the Company exposes itself to market risk. Market risk is the effect on the value of a financial instrument that results from a change in currency exchange rates. The Company manages exposure to market risk associated with
foreign currency exchange contracts by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.





Reclassification of Prior Periods Statements





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




6




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##### Table of Contents




Investments, Trading and Available for Sale





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





---




Gross Unrealized

Fair Market ValueJune 30, 2002

Cost

Gains

LossesTrading

$
17,350


450




$
17,800Total investments, trading


17,350


450





17,800Mutual funds


134,421





1,475


132,946Collateralized bond obligations


13,951





2,890


11,061Other


1,196








1,196Total investments, available for sale


149,568





4,365


145,203Total investments, trading and available for sale

$
166,918

$
450

$
4,365

$
163,003December 31, 2001Mutual funds

$
129,304




$
1,882

$
127,422Collateralized bond obligation


12,689





2,607


10,082Other


1,607


15





1,622Total investments, available for sale

$
143,600

$
15

$
4,489

$
139,126





---




BlackRock acts as investment advisor for all investments.





Net realized gains on the sale of
investments totaled $856 and $0 for the three months ended June 30, 2002 and June 30, 2001, respectively, and $973 and $6 for the six months ended June 30, 2002 and 2001, respectively.





3.    Intangible Assets





a)    Goodwill





The consolidated financial statements reflect the
results of operations of the former BlackRock Financial Management, L.P. and BFM Advisory L.P., which were acquired by PNC on February 28, 1995. Goodwill recognized at acquisition approximated $240,000 and was amortized on a straight-line basis over
25 years. On July 20, 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets, which changed the accounting for goodwill from an amortization method to an impairment-only approach. The amortization of goodwill, including
goodwill recognized relating to past business combinations, ceased upon adoption of the new standard. Impairment testing for goodwill at a reporting unit level is required on at least an annual basis.




7




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##### Table of Contents




b)    Management Contract Acquired





On May 15, 2000, BlackRock entered into a contract in connection with the agreement and plan of merger of CORE Cap, Inc. with
Anthracite Capital, Inc., a BlackRock managed REIT. This agreement assigns the managerial rights and duties of CORE Cap, Inc.s former manager to BlackRock for consideration in the amount of $12,500 to be paid by BlackRock over a ten-year
period. The present value of the acquired contract using an imputed interest rate of 10% was $8,040 on the date of acquisition. This amount is recorded as an intangible asset and is being amortized on a straight-line basis over ten years. If
BlackRock were terminated as manager of the REIT with cause, the then remaining present value of future payments would be written off. If BlackRock were terminated without cause then the REIT would be required to pay BlackRock for the remaining
payments.





---




Goodwill

Management Contract Acquired

Total Intangible AssetsBalance at December 31, 2001

$
240,797

$
8,040

$
248,837Accumulated amortization at June 30, 2002


65,842


1,709


67,551Balance at June 30, 2002

$
174,955

$
6,331

$
181,286





---




The following table reflects the adoption of SFAS No. 142:





---




Three months ended June 30,

Six months endedJune 30,2002

2001

2002

2001Reported net income

$
34,836

$
26,230

$
66,235

$
51,726Goodwill amortization, net of tax





1,284





2,568Adjusted net income

$
34,836

$
27,514

$
66,235

$
54,294Basic earnings per share:Reported

$
0.54

$
0.41

$
1.02

$
0.81Goodwill amortization, net of tax





0.02





0.04Adjusted

$
0.54

$
0.43

$
1.02

$
0.85Diluted earnings per share:Reported

$
0.53

$
0.40

$
1.01

$
0.80Goodwill amortization, net of tax





0.02





0.04Adjusted

$
0.53

$
0.42

$
1.01

$
0.84





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8




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##### Table of Contents




b)    Management Contract Acquired (continued)





The Company expects amortization expense to be $402 for the remainder of 2002 and $804 annually for 2003
through 2006.





4.    Common Stock





BlackRocks class A, $0.01 par value, common shares authorized was 250,000,000 shares as of June 30, 2002 and December 31, 2001, respectively.
BlackRocks class B, $0.01 par value, common shares authorized was 100,000,000 shares as of June 30, 2002 and December 31, 2001, respectively.





The Companys common shares issued and outstanding and related activity consists of the following:





---




Shares issued


Shares outstandingCommon sharesClass


Treasury sharesClass


ClassA

B


A


B


A


BDecember 31, 2001

15,916,944

48,674,607





(125,633
)

15,916,944


48,548,974Conversion of class B stock to class A stock

940,462

(1,003,911
)

63,449


(16,607
)

1,003,911


(1,020,518
)Issuance of shares to Nonemployee Directors

1,910










1,910


Issuance of class A common stock

472,365










472,365


Issuance of class B common stock















Treasury stock transactions

5,962




(63,698
)

(123,318
)

(57,736
)

(123,318
)June 30, 2002

17,337,643

47,670,696


(249
)

(265,558
)

17,337,394


47,405,138





---




5.    Comprehensive Income





---




Three months ended June 30,


Six months ended June 30,2002

2001


2002


2001Net income

$
34,836

$
26,230


$
66,235


$
51,726Other comprehensive income gain (loss):Unrealized gain (loss) from investments, available for sale, net


943


(29
)


(14
)


1,397Foreign currency translation gain (loss)


1,056


13



644



(510
)Comprehensive income

$
36,835

$
26,214


$
66,865


$
52,613





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9




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##### Table of Contents




6.    Earnings Per Share





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





---




Three months endedJune 30,

Six months endedJune 30,2002

2001

2002

2001Net income

$
34,836

$
26,230

$
66,235

$
51,726Basic weighted-average shares outstanding


64,726,856


64,248,630


64,687,900


64,204,186Dilutive potential shares from forward sales


53,639


107,277


53,639


107,277Dilutive potential shares from stock options


552,733


521,482


520,329


555,885Dilutive weighted-average shares outstanding


65,333,228


64,877,389


65,261,868


64,867,348Basic earnings per share

$
0.54

$
0.41

$
1.02

$
0.81Diluted earnings per share

$
0.53

$
0.40

$
1.01

$
0.80





---




7.    Supplemental Statements of Cash Flow Information





Supplemental
disclosure of cash flow information:





Six months ended June 30,2002

2001Cash paid for interest

$
734

$
804Cash paid for income taxes

$
40,111

$
18,207





Supplemental schedule of noncash transactions:





Six months ended June 30,2002

2001Stock-based compensation

$
5,550

$
6,831




10




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##### Table of Contents




8.    Subsequent Event





On July 22, 2002, BlackRock entered into two forward foreign currency exchange contracts of 10 million and £7 million as fair value hedges, which
mature in December 2002. The purpose of these hedges is to protect the Company from foreign currency exposure related to specific non-dollar seed investments in certain offshore money market funds. During the term of these forward contracts, changes
in fair value will be recognized in the consolidated statements of financial condition. A corresponding amount will be included in general and administrative expenses of the consolidated statements of income.





In July 2002, BlackRock and PNC entered into a revised agreement with respect to investment management services. The agreement
incorporates a reduction in the rate of fees paid to PNC based on current market conditions with PNC related assets invested in the BlackRock Funds declining approximately $4.1 billion since inception of the previous agreement in May 1998 and
which now comprise approximately 70% of BlackRock Funds as compared to 85% in 1998. Based on the current levels and mix of investments in the BlackRock Funds by PNC accounts, the agreement is expected to reduce fund administration and
servicing costs-affiliates by approximately 25% annually as compared to the level of fund administration and servicing costs affiliates that would have been paid under the previous investment services agreement.




11




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##### Table of Contents




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
$249.8 billion of assets under management at June 30, 2002. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, liquidity and alternative investment separate accounts and
mutual funds, including BlackRock Funds and BlackRock Provident Institutional Funds(BPIF). In addition, BlackRock provides risk management and investment system services and products to institutional investors under the
BlackRock Solutions name. BlackRock is a majority-owned indirect subsidiary of The PNC Financial Services Group, Inc. (PNC), one of the largest diversified financial services companies in the United States, operating businesses
engaged in regional community banking, corporate banking, real estate finance, asset-based lending, wealth management, asset management and global fund services. As of June 30, 2002, PNC indirectly owns approximately 69%, the public owns
approximately 16% and BlackRock employees own approximately 15% of BlackRock.





The following table summarizes
BlackRocks operating performance for the three months ended June 30, 2002, June 30, 2001 and March 31, 2002 and six months ended June 30, 2002 and June 30, 2001:





BlackRock, Inc.





Financial Highlights


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


(unaudited)





Three months ended

Variance vs.June 30,

March 31,

June 30, 2001

March 31, 20022002

2001

2002

Amount

%

Amount

%Total revenue

$
156,695

$
135,262

$
146,113

$
21,433

16%

$
10,582

7%Total expense

$
101,990

$
92,554

$
96,178

$
9,436

10%

$
5,812

6%Operating income

$
54,705

$
42,708

$
49,935

$
11,997

28%

$
4,770

10%Net income

$
34,836

$
26,230

$
31,399

$
8,606

33%

$
3,437

11%Diluted earnings per share

$
0.53

$
0.40

$
0.48

$
0.13

33%

$
0.05

10%Average diluted shares outstanding


65,333,228


64,877,389


65,219,988


455,839

1%


113,240

0%EBITDA (a)

$
63,684

$
51,722

$
57,956

$
11,962

23%

$
5,728

10%Operating margin (b)


37.8%


35.7%


37.6%Assets under management ($ in millions)

$
249,778

$
212,694

$
238,116

$
37,084

17%

$
11,662

5%





Six months endedJune 30,

Variance vs.2002

2001

Amount

%Total revenue

$
302,808

$
268,971

$
33,837

13%Total expense

$
198,168

$
184,343

$
13,825

8%Operating income

$
104,640

$
84,628

$
20,012

24%Net income

$
66,235

$
51,726

$
14,509

28%Diluted earnings per share

$
1.01

$
0.80

$
0.21

26%Average diluted shares outstanding


65,261,868


64,867,348


394,520

1%EBITDA (a)

$
121,640

$
101,253

$
20,387

20%Operating margin (b)


37.7%


35.8%Assets under management ($ in millions)

$
249,778

$
212,694

$
37,084

17%





(a)    Earnings before interest expense, taxes, depreciation and
amortization.


(b)    Operating income divided by total revenue less fund administration and servicing costsaffiliates.





---



12




---

##### Table of Contents




General





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





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





BlackRock provides a variety of risk management
and technology services to insurance companies, finance companies, pension funds, foundations, 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. The fees earned on risk management advisory assignments are recorded as other income.





Operating expense primarily consists of employee compensation and benefits, fund administration and servicing costs-affiliates, and
general and administration expense. Employee compensation and benefits expense reflects salaries, deferred and incentive compensation and related benefit costs. Fund administration and servicing costs-affiliates expense reflects payments made to PNC
affiliated entities, primarily associated with the administration and servicing of PNC client investments in the BlackRock Funds. Intangible assets at June 30, 2002 and December 31, 2001 were $181.3 million and
$181.7 million, respectively, with amortization expense of approximately $0.2 million and $2.6 million for the three months ended June 30, 2002 and 2001, respectively, and $0.4 million and $5.2 million for the six
months ended June 30, 2002 and June 30, 2001, respectively. Intangible assets reflect PNCs acquisition of BlackRock Financial Management, L.P. (BFM) 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., a BlackRock managed REIT, on May 15, 2000. On July 20, 2001, the FASB issued Statement of Financial Accounting Standards (SFAS)
No. 142, Goodwill and Other Intangible Assets, which changed the accounting for goodwill from an amortization method to an impairment-only approach. The amortization of goodwill, including goodwill recognized relating to past
business combinations, ceased upon adoption of the new standard. Impairment testing for goodwill at a reporting unit level is required on at least an annual basis. The new standard also addresses other accounting matters, disclosure requirements and
financial statement presentation issues relating to goodwill and other intangible assets. The Company adopted SFAS No. 142, effective on January 1, 2002, as required. Assuming no impairment adjustments are necessary, no future business
combinations and no other changes to goodwill, the Company expects diluted earnings per share to increase by approximately $.08 per share in 2002 resulting from the cessation of goodwill amortization.





Assets Under Management





Assets under management increased $37.1 billion, or 17%, to $249.8 billion at June 30, 2002, compared with $212.7 billion at June 30, 2001. The growth in assets under management was attributable to increases
of $28.2 billion or 20% in separate accounts and $8.9 billion or 12% in mutual fund assets.




13




---

##### Table of Contents




The increase in separate accounts at June 30, 2002, as compared with
June 30, 2001, was the result of net subscriptions of $20.2 billion and market appreciation of $8.0 billion. Net subscriptions in fixed income, equity, and alternative investment products accounts were $21.4 billion,
$2.6 billion, and $1.1 billion, respectively, while liquidity- securities lending and liquidity separate account assets experienced net redemptions of $3.6 billion and $1.3 billion, respectively. The rise in fixed income and
alternative investment products separate account assets was attributable to new client sales and increased fundings from existing clients associated with solid investment performance and client service and included approximately $6.6 billion of
merger related terminations. The growth in equity separate account assets primarily reflected new business from international equity mandates of $3.0 billion and was partially offset by $0.4 billion from domestic equity redemptions due to
weak relative investment performance and the continued decline in the U.S. stock markets. Liquidity-securities lending and liquidity separate account assets experienced net redemptions of $4.9 billion, with security lending mandates accounting
for $3.6 billion or 72% of the outflows since June 2001 as a result of a substantial decline in equity values. Market appreciation of $8.0 billion in separate accounts largely reflected appreciation in fixed income assets of
$8.9 billion due to declining interest rates, partially offset by market depreciation in equity assets of $0.8 billion.





The $8.9 billion increase in mutual fund assets since June 30, 2001 reflected net subscriptions of $10.9 billion, which was partially offset by $2.0 billion of market depreciation primarily in the BlackRock
Funds associated with the decline in the equity markets and poor relative performance in a number of key products. Net subscriptions in BPIF and closed-end funds since June 30, 2001 were $9.2 billion and $3.8 billion,
respectively, and was partially offset by $2.1 billion in net redemptions in the BlackRock Funds. The increase in BPIF assets was the result of strong sales driven in part by the decline in short-term interest rates and investors
flight to quality. Management does not assume that the current level of BPIF assets will be sustained as the economy improves and short-term interest rates stabilize or begin to rise. The increase in closed-end funds was the result of the
Companys offering of new closed-end funds. Net redemptions in the BlackRock Fundssince June 30, 2001 primarily reflected withdrawals by PNCs private banking clients.





BlackRock experienced $7.9 billion in net subscriptions for the first six months of 2002 reflecting separate account net subscriptions of $12.1 billion offset by
$4.2 billion of mutual fund redemptions. Fixed income, equity and alternative product separate accounts exhibited continued strong growth with net subscriptions of $17.7 billion which was partially offset by $5.7 billion of
redemptions in lower fee security lending and liquidity separate account assets. Liquidity asset balances experienced significant volatility in the first six months of 2002, which could continue through the balance of 2002. Mutual fund net
redemptions for the first six months of 2002 was attributable to $3.0 billion in net redemptions in the BlackRock Fundsand $2.0 billion in net redemptions in the BPIF funds which was partially offset by $0.8 billion in net
subscriptions in the BlackRock closed-end and short term investment funds.




14




---

##### Table of Contents




BlackRock, Inc.





Assets Under Management


(Dollar amounts in millions)


(unaudited)





---




June 30,

Variance2002

2001

Amount


%All AccountsFixed income

$
157,913

$
122,809

$
35,104


28.6
%Liquidity


70,599


65,615


4,984


7.6Equity


15,898


19,791


(3,893
)

(19.7
)Alternative investment products


5,368


4,479


889


19.8Total

$
249,778

$
212,694

$
37,084


17.4
%Separate AccountsFixed income

$
140,738

$
110,483

$
30,255


27.4
%Liquidity


5,516


6,782


(1,266
)

(18.7
)Liquidity-Securities lending


6,435


10,004


(3,569
)

(35.7
)Equity


10,119


8,257


1,862


22.6Alternative investment products


5,368


4,479


889


19.8Subtotal


168,176


140,005


28,171


20.1Mutual FundsFixed income


17,175


12,326


4,849


39.3Liquidity


58,648


48,829


9,819


20.1Equity


5,779


11,534


(5,755
)

(49.9
)Subtotal


81,602


72,689


8,913


12.3Total

$
249,778

$
212,694

$
37,084


17.4
%





---



15




---

##### Table of Contents




The following tables present the component changes in BlackRocks assets
under management for the three months and six months ended June 30, 2002 and 2001, respectively. The data reflects certain reclassifications to conform with the current years presentation.





BlackRock, Inc.





Component Changes in
Assets Under Management


(Dollar amounts in millions)


(unaudited)





---




Three months endedJune 30,

Six months endedJune 30,2002


2001

2002


2001All AccountsBeginning assets under management

$
238,116


$
201,636

$
238,584


$
203,769Net subscriptions


8,209



10,172


7,898



8,074Market appreciation


3,453



886


3,296



851Ending assets under management

$
249,778


$
212,694

$
249,778


$
212,694Separate AccountsBeginning assets under management

$
153,954


$
132,711

$
151,986


$
133,743Net subscriptions


10,189



6,871


12,078



3,897Market appreciation


4,033



423


4,112



2,365Ending assets under management


168,176



140,005


168,176



140,005Mutual FundsBeginning assets under management


84,162



68,925


86,598



70,026Net subscriptions (redemptions)


(1,980
)


3,301


(4,180
)


4,177Market appreciation (depreciation)


(580
)


463


(816
)


(1,514
)Ending assets under management


81,602



72,689


81,602



72,689Total

$
249,778


$
212,694

$
249,778


$
212,694





---



16




---

##### Table of Contents




BlackRock, Inc.





Assets Under Management


Quarterly Trend


(Dollar amounts in millions)


(unaudited)





---




Quarter ended


Six months endedJune 30, 20022001


2002June 30


September 30


December 31


March 31


June 30Separate AccountsFixed IncomeBeginning assets under management

$
107,371


$
110,483


$
118,336


$
119,488


$
123,983


$
119,488Net subscriptions


2,682



2,959



1,731



4,437



12,270



16,707Market appreciation (depreciation)


430



4,894



(579
)


58



4,485



4,543Ending assets under management


110,483



118,336



119,488



123,983



140,738



140,738LiquidityBeginning assets under management


5,713



6,782



6,987



6,831



5,441



6,831Net subscriptions (redemptions)


1,042



181



(171
)


(1,395
)


80



(1,315
)Market appreciation (depreciation)


27



24



15



5



(5
)


Ending assets under management


6,782



6,987



6,831



5,441



5,516



5,516Liquidity-Securities lendingBeginning assets under management


7,514



10,004



8,069



10,781



9,544



10,781Net subscriptions (redemptions)


2,490



(1,935
)


2,712



(1,237
)


(3,109
)


(4,346
)Market appreciation






















Ending assets under management


10,004



8,069



10,781



9,544



6,435



6,435EquityBeginning assets under management


7,796



8,257



8,185



9,577



9,445



9,577Net subscriptions (redemptions)


488



1,144



675



(80
)


884



804Market appreciation (depreciation)


(27
)


(1,216
)


717



(52
)


(210
)


(262
)Ending assets under management


8,257



8,185



9,577



9,445



10,119



10,119Alternative investment productsBeginning assets under management


4,317



4,479



4,879



5,309



5,541



5,309Net subscriptions


169



426



411



164



64



228Market appreciation (depreciation)


(7
)


(26
)


19



68



(237
)


(169
)Ending assets under management


4,479



4,879



5,309



5,541



5,368



5,368Total Separate AccountsBeginning assets under management


132,711



140,005



146,456



151,986



153,954



151,986Net subscriptions


6,871



2,775



5,358



1,889



10,189



12,078Market appreciation


423



3,676



172



79



4,033



4,112Ending assets under management

$
140,005


$
146,456


$
151,986


$
153,954


$
168,176


$
168,176Mutual FundsFixed IncomeBeginning assets under management

$
13,600


$
12,326


$
13,985


$
15,754


$
16,270


$
15,754Net subscriptions (redemptions)


(1,207
)


1,397



2,000



644



565



1,209Market appreciation (depreciation)


(67
)


262



(231
)


(128
)


340



212Ending assets under management


12,326



13,985



15,754



16,270



17,175



17,175LiquidityBeginning assets under management


44,252



48,829



56,221



62,141



59,994



62,141Net subscriptions (redemptions)


4,577



7,392



5,920



(2,147
)


(1,347
)


(3,494
)Market appreciation


















1



1Ending assets under management


48,829



56,221



62,141



59,994



58,648



58,648EquityBeginning assets under management


11,073



11,534



8,934



8,703



7,898



8,703Net redemptions


(69
)


(558
)


(1,040
)


(697
)


(1,198
)


(1,895
)Market appreciation (depreciation)


530



(2,042
)


809



(108
)


(921
)


(1,029
)Ending assets under management


11,534



8,934



8,703



7,898



5,779



5,779Total Mutual FundsBeginning assets under management


68,925



72,689



79,140



86,598



84,162



86,598Net subscriptions (redemptions)


3,301



8,231



6,880



(2,200
)


(1,980
)


(4,180
)Market appreciation (depreciation)


463



(1,780
)


578



(236
)


(580
)


(816
)Ending assets under management

$
72,689


$
79,140


$
86,598


$
84,162


$
81,602


$
81,602





---



17




---

##### Table of Contents




BlackRock, Inc.





Assets Under Management


Quarterly Trend


(Dollar amounts in millions)


(unaudited)





---




Quarter ended


Six months endedJune 30, 20022001


2002June 30


September 30


December 31


March 31


June 30Mutual FundsBlackRock FundsBeginning assets under management

$
24,383


$
24,589


$
22,790


$
24,195


$
22,176


$
24,195Net subscriptions (redemptions)


(253
)


49



755



(1,830
)


(1,123
)


(2,953
)Market appreciation (depreciation)


459



(1,848
)


650



(189
)


(789
)


(978
)Ending assets under management


24,589



22,790



24,195



22,176



20,264



20,264BlackRock Global SeriesBeginning assets under management


105



134



127



149



247



149Net subscriptions (redemptions)


33



1



13



95



(52
)


43Market appreciation (depreciation)


(4
)


(8
)


9



3



13



16Ending assets under management


134



127



149



247



208



208BPIFBeginning assets under management


37,047



41,954



48,889



53,167



52,534



53,167Net subscriptions (redemptions)


4,907



6,935



4,278



(633
)


(1,407
)


(2,040
)Ending assets under management


41,954



48,889



53,167



52,534



51,127



51,127Closed EndBeginning assets under management


6,841



5,440



6,728



8,512



8,611



8,512Net subscriptions (redemptions)


(1,409
)


1,212



1,865



149



586



735Market appreciation (depreciation)


8



76



(81
)


(50
)


196



146Ending assets under management


5,440



6,728



8,512



8,611



9,393



9,393Short Term Investment Funds (STIF)Beginning assets under management


549



572



606



575



594



575Net subscriptions (redemptions)


23



34



(31
)


19



16



35Ending assets under management


572



606



575



594



610



610Total Mutual FundsBeginning assets under management


68,925



72,689



79,140



86,598



84,162



86,598Net subscriptions (redemptions)


3,301



8,231



6,880



(2,200
)


(1,980
)


(4,180
)Market appreciation (depreciation)


463



(1,780
)


578



(236
)


(580
)


(816
)Ending assets under management

$
72,689


$
79,140


$
86,598


$
84,162


$
81,602


$
81,602





---



18




---

##### Table of Contents




Operating results for the three months ended June 30, 2002 as compared with the three months ended
June 30, 2001.





Revenue





Total revenue for the three months ended June 30, 2002 increased $21.4 million or 16% to $156.7 million compared with $135.3 million for the three months ended June 30, 2001. Investment advisory
and administration fees increased $17.1 million or 14% to $143.5 million for the three months ended June 30, 2002, compared with $126.4 million for the three months ended June 30, 2001. The growth in investment advisory and administration fees was
primarily due to a 17% increase in assets under management to $249.8 billion at June 30, 2002. Other income of $13.2 million increased $4.4 million or 49% for the three months ended June 30, 2002 compared with $8.8 million for the three months ended
June 30, 2001 primarily due to increased sales of BlackRock Solutions products and portfolio accounting services.





---




Three months ended June
30,

Variance2002

2001

Amount


%Dollar amounts in thousands

(unaudited)Investment advisory and administration fees:Mutual funds

$
54,736

$
54,791

($
55
)

-0.1
%Separate accounts


88,755


71,624


17,131


23.9Total investment advisory and administration fees


143,491


126,415


17,076


13.5Other income


13,204


8,847


4,357


49.2Total revenue

$
156,695

$
135,262

$
21,433


15.8
%





---




Mutual fund advisory and administration fees for the second quarter were essentially flat compared with the three months ended June 30, 2001, with strong growth in BPIF, closed-end and STIF revenue of approximately $6.5 million, $2.2
million and $0.1 million, respectively, which was entirely offset by an $8.8 million or 28% decline in revenue from the BlackRock Funds. The increase in BPIF revenue was primarily due to increases in assets under management of $9.2
billion or 22% as compared with the second quarter of 2001 resulting from expanded sales efforts, solid investment performance and investors flight to quality. The rise in closed-end fund revenue was a result of an increase in assets of $4.0
billion or 73% due to the Companys new fund offerings. The decrease in BlackRock Funds revenue was attributable to a decrease in assets of $4.3 billion or 18% primarily due to the continued weakness in the equity markets and poor
relative investment performance in a number of key products.




19




---

##### Table of Contents




Separate account revenue increased $17.1 million or 24% to $88.8 million for the
three months ended June 30, 2002, compared with $71.6 million for the three months ended June 30, 2001. Excluding performance fees, advisory fees on separate accounts increased $11.7 million or 22% to $65.5 million for the three months ended June
30, 2002 compared with $53.7 million for the three months ended June 30, 2001. The increase was driven by a $28.2 billion or 20% increase in separate account assets under management particularly in fixed income and international equity separate
accounts, which increased $30.3 billion and $2.6 billion, respectively and was partially offset by a decrease in liquidity and liquidity-securities lending separate accounts of $4.8 billion. Performance fees of $23.3 million for the three months
ended June 30, 2002 increased $5.4 million or 30% compared with $17.9 million for the three months ended June 30, 2001. Performance fees earned on the Companys fixed income hedge fund totaled $18.4 million for the second quarter of
2002 as compared with $16.8 million for the second quarter of 2001. Investment losses occurring late in the second quarter have resulted in a high water mark for the fund, which will substantially reduce the likelihood of earning additional
performance fees for the remainder of 2002.





---




Three months ended June
30,

Variance2002

2001

Amount


%Dollar amounts in thousands

(unaudited)Mutual funds revenueBlackRock Funds

$
22,892

$
31,740

($
8,848
)

(27.9
%)Closed End Funds


9,873


7,617


2,256


29.6BPIF


21,763


15,285


6,478


42.4STIF


208


149


59


39.6Total mutual funds revenue


54,736


54,791


(55
)

(0.1
)Separate accounts revenueSeparate account base fees


65,451


53,705


11,746


21.9Separate account performance fees


23,304


17,919


5,385


30.1Total separate accounts revenue


88,755


71,624


17,131


23.9Total investment advisory and administration fees


143,491


126,415


17,076


13.5Other income


13,204


8,847


4,357


49.2Total revenue

$
156,695

$
135,262

$
21,433


15.8
%





---



20




---

##### Table of Contents




Expense





Total expense increased $9.4 million or 10% to $102.0 million for the three months ended June 30, 2002, compared with $92.6 million for the three months ended June 30, 2001. The change primarily
reflects increases in employee compensation and benefits and general and administration expenses, partially offset by a decrease in fund administration and servicing costs-affiliates and amortization of intangible assets.





---




Three months ended June
30,

Variance2002

2001

Amount


%Dollar amounts in thousands

(unaudited)Employee compensation and benefits

$
67,830

$
55,534

$
12,296


22.1
%Fund administration and servicing costs-affiliates


11,916


15,722


(3,806
)

(24.2
)General and administration


22,043


18,684


3,359


18.0Amortization of intangible assets


201


2,614


(2,413
)

(92.3
)Total expense

$
101,990

$
92,554

$
9,436


10.2
%





---




Employee compensation and benefits increased $12.3 million primarily due to increased incentive compensation of $7.2 million reflecting accruals based on the growth of operating income, $2.7 million related to direct incentives on
alternative product performance fees and $2.4 million in salary and benefits. Salary and benefit cost increases were the result of an 11% increase in full-time employees and $0.2 million attributable to investment returns associated with the
recently established Voluntary and Involuntary Deferred Compensation programs. For the three months ended June 30, 2002, fund administration and servicing costs-affiliates declined $3.8 million or 24% due to lower levels of PNC client assets
invested in the BlackRock Funds. General and administration expenses increased $3.4 million or 18% to $22.0 million for the three months ended June 30, 2002 compared with $18.7 million for the three months ended June 30, 2001 largely due to
higher marketing and promotional expenses and increased depreciation and leasehold amortization costs. Amortization of intangible assets decreased due to the adoption of SFAS No. 142, Goodwill and Other Intangible Assets effective on
January 1, 2002, which changed the accounting for goodwill from an amortization method to an impairment-only approach.




21




---

##### Table of Contents




---




Three months ended June
30,

Variance2002

2001

Amount


%Dollar amounts in thousands

(unaudited)General and administration expense:Marketing and promotional

$
6,581

$
5,399

$
1,182


21.9
%Occupancy expense


5,020


2,871


2,149


74.9Technology


4,535


3,499


1,036


29.6Other general and administration


5,907


6,915


(1,008
)

(14.6
)Total general and administration expense

$
22,043

$
18,684

$
3,359


18.0
%





---




Marketing and promotional expenses of $6.6 million for the three months ended June 30, 2002 increased $1.2 million or 22% primarily due to increased institutional marketing costs and expenses attributable to launching the new
closed-end funds. Occupancy expense of $5.0 million for the three months ended June 30, 2002 increased $2.1 million due to higher depreciation and leasehold costs associated with corporate facility expansion, particularly at 40 East 52 nd Street, New York, Wilmington, Delaware, San Francisco, California, Boston, Massachusetts and Hong Kong. Technology
expenses increased approximately $1.0 million or 30% to $4.5 million for the three months ended June 30, 2002 as a result of higher depreciation charges associated with the completion of new data processing facilities in New York and Delaware, and
capitalized investments to support the growth of BlackRock Solutions. The decrease in other general and administration expense was primarily due to foreign currency translation gains associated with the weakening of the U.S. dollar versus the
Euro and U.K. pound.





Operating Income and Net Income





Operating income was $54.7 million for the three months ended June 30, 2002, representing a $12.0 million or 28% increase compared with the three months ended June 30,
2001. Non-operating income increased $1.4 million to $3.8 million for the three months ended June 30,2002 as compared with the three months ended June 30, 2001. The rise was primarily due to an increase of $0.9 million in gains on the sale of
securities and a $0.2 million increase associated with investment returns on the recently established Voluntary and Involuntary Deferred Compensation programs. Income tax expense was $23.7 million and $18.9 million, representing effective tax rates
of 40.5% and 41.9% for the three months ended June 30, 2002 and June 30, 2001, respectively. Net income totaled $34.8 million for the three months ended June 30, 2002 compared with $26.2 million for the three months ended June 30, 2001, representing
an increase of $8.6 million or 33%.




22




---

##### Table of Contents




Operating results for the six months ended June 30, 2002 as compared with the six months ended June
30, 2001.





Revenue





Total revenue for the six months ended June 30, 2002 increased $33.8 million or 13% to $302.8 million compared with $269.0 million for the six months ended June 30, 2001. Investment advisory and
administration fees increased $23.6 million or 9% to $275.3 million for the six months ended June 30, 2002, compared with $251.7 million for the six months ended June 30, 2001. The growth in investment advisory and administration fees was primarily
due to a 17% increase in assets under management to $249.8 billion at June 30, 2002. Other income of $27.5 million increased $10.3 million or 60% for the six months ended June 30, 2002 compared with $17.2 million for the six months ended June 30,
2001 primarily due to increased sales of BlackRock Solutionsproducts.





---




Six months ended June
30,

Variance2002

2001

Amount

%Dollar amounts in thousands

(unaudited)Investment advisory and administration fees:Mutual funds

$
109,995

$
109,707

$
288

0.3
%Separate accounts


165,271


142,009


23,262

16.4Total investment advisory and administration fees


275,266


251,716


23,550

9.4Other income


27,542


17,255


10,287

59.6Total revenue

$
302,808

$
268,971

$
33,837

12.6
%





---




Mutual fund advisory and administration fees increased $0.3 million to $110.0 million for the six months ended June 30, 2002, compared with $109.7 million for the six months ended June 30, 2001. The increase in mutual fund revenue
was the result of increases in BPIF, closed end fund and STIF revenue of $11.9 million, $4.3 million and $0.1 million, respectively and was partially offset by a decrease of $16.0 million or 25% in BlackRock Funds revenue. The increase in
BPIF revenue was primarily due to increases in assets under management of $9.2 billion or 22% at June 30, 2002 resulting from expanded sales efforts, solid investment performance and investors flight to quality. The rise in closed-end fund
revenue was a result of an increase in assets of $4.0 billion or 73% due to the Companys new fund offerings. The decrease in BlackRock Funds revenue was attributable to a decrease in assets of $4.3 billion or 18% primarily due to the
continued weakness in the equity markets and poor relative investment performance in a number of key products.




23




---

##### Table of Contents




Separate account revenue increased $23.3 million or 16% to $165.3 million for the
six months ended June 30, 2002, compared with $142.0 million for the six months ended June 30, 2001. Excluding performance fees, advisory fees on separate accounts increased $22.5 million or 21% to $127.9 million for the six months ended June 30,
2002 compared with $105.4 million for the six months ended June 30, 2001. The increase reflected a $28.2 billion or 20% increase in separate account assets under management particularly in fixed income and international equity separate accounts of
$30.3 billion and $2.6 billion, respectively and was partially offset by a decrease in liquidity and liquidity-securities lending separate accounts of $4.8 billion. Performance fees of $37.3 million for the six months ended June 30, 2002 increased
$0.7 million or 2% compared with $36.6 million for the six months ended June 30, 2001. Performance fees earned on the Companys fixed income hedge fund totaled $30.4 million for the first half of 2002 as compared to $32.8 million for the first
half of 2001. Investment losses occurring late in the second quarter have resulted in a high water mark for the fund, which will substantially reduce the likelihood of earning additional performance fees for the remainder of 2002.





---




Six months ended June
30,

Variance2002

2001

Amount


%Dollar amounts in thousands

(unaudited)Mutual funds revenueBlackRock Funds

$
48,587

$
64,603

($
16,016
)

(24.8
%)Closed End Funds


19,361


15,075


4,286


28.4BPIF


41,637


29,744


11,893


40.0STIF


410


285


125


43.9Total mutual funds revenue


109,995


109,707


288


0.3Separate accounts revenueSeparate account base fees


127,950


105,421


22,529


21.4Separate account performance fees


37,321


36,588


733


2.0Total separate accounts revenue


165,271


142,009


23,262


16.4Total investment advisory and administration fees


275,266


251,716


23,550


9.4Other income


27,542


17,255


10,287


59.6Total revenue

$
302,808

$
268,971

$
33,837


12.6
%





---



24




---

##### Table of Contents




Expense





Total expense increased $13.8 million or 8% to $198.1 million for the six months ended June 30, 2002, compared with $184.3 million for the six months ended June 30, 2001. The change primarily reflects
increases in employee compensation and benefits and general and administration expenses, partially offset by a decrease in fund administration and servicing costs-affiliates and amortization of intangible assets.





---




Six months ended June
30,

Variance2002

2001

Amount


%Dollar amounts in thousands

(unaudited)Employee compensation and benefits

$
128,217

$
110,964

$
17,253


15.5
%Fund administration and servicing costs-affiliates


25,094


32,412


(7,318
)

(22.6
)General and administration


44,455


35,739


8,716


24.4Amortization of intangible assets


402


5,228


(4,826
)

(92.3
)Total expense

$
198,168

$
184,343

$
13,825


7.5
%





---




Employee compensation and benefits increased $17.3 million primarily due to increased incentive compensation of $10.9 million reflecting accruals based on the growth of operating income, $5.8 million in salary and benefits and $0.6
million related to direct incentives on alternative product performance fees. Salary and benefit cost increases were the result of a 11% increase in full-time employees and $0.5 million attributable to investment returns associated with the recently
established Voluntary and Involuntary Deferred Compensation programs. For the six months ended June 30, 2002, fund administration and servicing costs-affiliates declined $7.3 million or 23% due to lower levels of PNC client assets invested in the
BlackRock Funds. General and administration expenses increased $8.7 million or 24% to $44.4 million for the six months ended June 30, 2002 compared with $35.7 million for the six months ended June 30, 2001 largely due to higher marketing
and promotional expenses and increased depreciation and leasehold amortization costs. Amortization of intangible assets decreased due to the adoption of SFAS No. 142, Goodwill and Other Intangible Assets effective on January 1, 2002,
which changed the accounting for goodwill from an amortization method to an impairment-only approach.





---




Six months ended June
30,

Variance2002

2001

Amount


%Dollar amounts in thousands

(unaudited)General and administration expense:Marketing and promotional

$
12,497

$
10,246

$
2,251


22.0
%Occupancy expense


9,742


5,407


4,335


80.2Technology


8,932


6,654


2,278


34.2Other general and administration


13,284


13,432


(148
)

(1.1
)Total general and administration expense

$
44,455

$
35,739

$
8,716


24.4
%





---



25




---

##### Table of Contents




Marketing and promotional expenses of $12.5 million for the six months ended June
30, 2002 increased $2.3 million or 22% primarily due to increased institutional marketing costs and expenses associated with launching the new closed-end funds. Occupancy expense of $9.7 million for the six months ended June 30, 2002 increased $4.3
million due to higher depreciation and leasehold amortization costs associated with corporate facility expansion, particularly at 40 East 52 nd Street, New York, Wilmington, Delaware, San Francisco, California, Boston, Massachusetts and Hong Kong. Technology expenses increased approximately $2.3 million or 34% to $8.9 million for the six months ended
June 30, 2002 as a result of higher depreciation charges associated with the completion of new data processing facilities in New York and Delaware, and capitalized investments to support the growth of BlackRock Solutions.





Operating Income and Net Income





Operating income was $104.6 million for the six months ended June 30, 2002, representing a $20.0 million or 24% increase compared with the six months ended June 30, 2001. Non-operating income increased $2.6 million to $6.7
million for the six months ended June 30,2002 as compared with the six months ended June 30, 2001. The rise was primarily due to a increase of $1.0 million in gains on the sale of securities and a $0.5 million increase associated with investment
returns on the recently established Voluntary and Involuntary Deferred Compensation programs. Income tax expense was $45.1 million and $37.0 million, representing effective tax rates of 40.5% and 41.7% for the six months ended June 30, 2002 and June
30, 2001, respectively. Net income totaled $66.2 million for the six months ended June 30, 2002 compared with $51.7 million for the six months ended June 30, 2001, representing an increase of $14.5 million or 28%.





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 $26.9 million for the six months ended June 30, 2002. Operating
activities for the six months ended June 30, 2002, included net purchases of investments, trading of approximately $17.4 million, which represented initial investments related to the Companys Voluntary and Involuntary Deferred Compensation
Plans and $1.4 million in net gains on investments. The increase in receivables from affiliates since December 31, 2001 was primarily due to the recognition of a deferred tax asset on the amounts transferred under the Companys new Voluntary
and Involuntary Deferred Compensation Plans.





Net cash flow used in investing activities was $36.9 million for the
six months ended June 30, 2002. Capital expenditures for the six months ended June 30, 2002 for property and equipment was $31.8 million and primarily reflected construction costs for 40 East 52 nd Street and the purchase of equipment to support corporate expansion and the growth of BlackRock Solutions. Net purchases of investments,
available for sale were $5.1 million for the six months ended June 30, 2002, reflected purchases of $123.3 million in the BlackRock Funds Low Duration Bond Portfolio and $3.5 million in seed investments partially offset by redemptions of
$85.1 million and $35.0 million in the BlackRock Funds Intermediate Bond Portfolio and BlackRock Funds Core Plus Total Return Portfolio, respectively.




26




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##### Table of Contents




Net cash flow used in financing activities was $7.5 million for the six months
ended June 30, 2002. Financing activities primarily represented treasury stock activity for the six months ended June 30, 2002. On January 31, 2002, in connection with the Long-term Deferred Compensation Plan, BlackRock repurchased approximately
150,000 shares of class A common stock at a fair market value of $42.33 per share from certain employees to facilitate required employee income tax payments. On May 2, 2001, BlackRocks Board of Directors authorized BlackRock to repurchase up
to 500,000 of its outstanding shares of class A common stock from time to time as market and business conditions warrant in open market or privately negotiated transactions. To date, BlackRock has not purchased any shares of its outstanding class A
common stock under this repurchase program. In connection with the BlackRock Inc. 2001 Employee Stock Purchase Plan (ESPP), the Company reissued approximately 44,000 shares of class A treasury stock to its participants on January 31,
2002. During February 2002, the Company also purchased class B common stock from a former BlackRock employee in the amount of $2.1 million.





Total capital at June 30, 2002 was $561.2 million and was comprised entirely of stockholders equity.





Contractual Obligations and Commercial Commitments





The
Company leases office space in New York, New York, Edinburgh, Scotland, Hong Kong, San Francisco, California, and Boston, Massachusetts under agreements which expire through 2017. Future minimum commitments under all operating leases are $174.3
million.





In connection with the management contract acquired associated with the agreement and plan of merger of
CORE Cap, Inc. with Anthracite Capital, Inc., a BlackRock managed REIT, the Company recorded an $8.0 million liability using an imputed interest rate of 10%. At June 30, 2002, the future commitment under the agreement is $9.5 million.





As of June 30, 2002 and 2001, the Company had an unused revolving line of credit, which will expire in December
2002, with PNC Bank whereby the Company may borrow principal amounts up to $175 million at prime rate (4.75% at June 30, 2002).





The Company enters into various contractual commitments with BlackRock sponsored funds in order to provide seed investments in new products. Approximately $7.9 million of these commitments remained unfunded at June 30, 2002.





Summary of Commitments:


---




Total

2002

2003

2004

2005

2006

Thereafter(Dollar amounts in thousands)Lease Commitments

$
174,276

$
5,529

$
10,907

$
10,822

$
10,713

$
10,867

$
125,438Acquired Management Contract


9,500





1,500


1,500


1,500


1,000


4,000Investment Commitments


7,900


7,900














Line of Credit with PNC




















Total Commitments

$
191,676

$
13,429

$
12,407

$
12,322

$
12,213

$
11,867

$
129,438





---



27




---

##### Table of Contents




Long-term Incentive and Retention Plan-Status





BlackRock and PNC are continuing to develop a new long-term incentive and retention program for key employees in anticipation of the lapse
of all employment agreements and final vesting of substantially all restricted stock on December 31, 2002. Management expects to announce the terms of the new program shortly.





Critical Accounting Policies





Significant intercompany
accounts and transactions between the consolidated entities have been eliminated. 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. The Company follows the same accounting policies in the preparation of interim reports as set forth in the Annual Report on Form 10-K for the year ended December 31, 2001.
Management considers the following accounting policies critical to an informed review of BlackRocks consolidated financial statements.





Investments





The Companys
investments are classified as trading and available for sale. Investments, trading represent matching investments made by, and held in a Rabbi Trust for, the Company with respect to the BlackRock Voluntary and Involuntary Deferred Compensation Plans
and are recorded at fair market value with unrealized gains and losses included in the accompanying consolidated statements of income as non-operating income or loss. Investments, available for sale consist primarily of investments in BlackRock
funds and certain institutional and private placement portfolios (alternative investment products) and are stated at quoted market values. Securities, which are not readily marketable, (alternative investment products) are stated at
their estimated fair market value as determined by the Companys management. The resulting unrealized gains and losses on investments, available for sale are included in the accumulated other comprehensive loss component of stockholders
equity, net of tax. Realized gains and losses on investments and interest and dividend income are included in investment income (expense) in the accompanying consolidated statements of income. The Companys management periodically assesses
impairment on investments to determine if they are other than temporary. Any impairment on investments, other than temporary impairments, is recorded in earnings.




28




---

##### Table of Contents




Intangible Assets





Intangible assets are comprised of goodwill and management contract acquired. For the three months and six months ended
June 30, 2001, goodwill was amortized on a straight-line basis over 25 years. On July 20, 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets, which changed the accounting for goodwill from an amortization method to
an impairment-only approach. The amortization of goodwill, including goodwill recognized relating to past business combinations, ceased upon adoption of the new standard. Impairment testing for goodwill at a reporting unit level is required on at
least an annual basis. The new standard also addresses other accounting matters, disclosure requirements and financial statement presentation issues relating to goodwill and other intangible assets. The Company adopted SFAS No. 142 effective January
1, 2002, as required. Assuming no impairment adjustments are necessary, no future business combinations, and no other changes to goodwill, the Company expects diluted earnings per share to increase by approximately $.08 per share in 2002 as a result
of the cessation of goodwill amortization. Management contract acquired is amortized in proportion to and over the period of contract revenue, which is ten years. The Company continually evaluates the carrying value of intangible assets. Any
impairment would be recognized when the future operating cash flows expected to be derived from such intangible assets are less than their carrying value. In such instances, impairment, if any, is measured on a discounted future cash flow basis.





Software Costs





The Company has adopted Statement of Position (SOP) 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal
Use. SOP 98-1 requires the capitalization of certain costs incurred in connection with developing or obtaining software for internal use. Qualifying software costs are being amortized over an estimated useful life of three years.





Stock-based Compensation





The Company follows SFAS No. 123, Accounting for Stock-based Compensation, and has adopted the intrinsic value method for all arrangements under
which employees receive shares of stock or other equity instruments of the employer or the employer incurs liabilities to employees in amounts based on the price of its stock. Fair value disclosures are included in the notes to the consolidated
financial statements as stated in the Companys Annual Report on Form 10-K for the year ended December 31, 2001.





Pursuant to SFAS No. 123, the Company has elected to account for its 1999 Stock Award and Incentive Plan and shares issued under the BlackRock 2001 Employee Stock Purchase Plan under Accounting Principles Board Opinion No.
(APB) 25, Accounting for Stock Issued to Employees, and adopt the disclosure only provisions of SFAS No. 123.




29




---

##### Table of Contents




Revenue Recognition





Investment advisory and administration fees are recognized as the services are performed. Such fees are primarily based on
predetermined percentages of the market values of the assets under management. Investment advisory and administration fees for mutual funds are shown net of fees waived pursuant to expense limitations.





The Company also receives performance fees or an incentive allocation from alternative investment products and certain
separate accounts. These performance fees are earned upon attaining contractual investment return thresholds or as a fixed percentage of actual returns over stipulated performance periods. Such fees are recorded as earned. Should the alternative
investment products and separate accounts subject to performance fees not continue to meet specified investment return thresholds, performance fees and related employee compensation expense previously recorded may be subject to reversal. At June 30,
2002, no performance fees recorded by the Company are subject to reversal.





BlackRock provides a
variety of risk management and technology services to insurance companies, finance companies, pension funds, 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. The fees earned on risk management advisory assignments are recorded as other income.





In December 1999, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin
(SAB) No. 101, Revenue Recognition in Financial Statements. SAB No. 101 provides guidance on applying generally accepted accounting principles to revenue recognition issues in financial statements. The Company adopted SAB No.
101 as required in the first quarter of 2000. The adoption of SAB No. 101 did not have a material effect on the Companys consolidated results of operations and financial position.





Accounting for Off-Balance Sheet Activities





BlackRock has equity interests in collateralized bond obligations (CBO), which are reflected in investments in the accompanying consolidated statements of financial condition. These
investments are periodically assessed to determine whether the underlying assets and liabilities should be consolidated. See Off-Balance Sheet Activities.




30




---

##### Table of Contents




Related Party Transactions





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





Revenues for services provided to these mutual funds including amounts associated
with clients of PNC affiliated entities are as follows:





---




Three months ended June
30,

Six months ended June
30,2002

2001

2002

2001(Dollar amounts in thousands)

(unaudited)Investment advisory and administration fees:BlackRock Open-end Funds:PNC

$
16,114

$
23,338

$
34,396

$
47,257Other


6,778


8,400


14,190


17,344BlackRock Closed-end FundsOther


9,873


7,617


19,361


15,075BlackRock Provident Institutional FundsPNC


3,458


2,948


6,881


5,819Other*


18,305


12,338


34,757


23,926Commingled FundsPNC


208


150


410


286$
54,736

$
54,791

$
109,995

$
109,707





---




|* |  | 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 and affiliates for a fee, based on assets
under management. In addition, the Company provides risk management and model portfolio services to PNC.





Revenues
for such services are as follows:





---




Three months ended June 30,

Six months ended June
30,2002

2001

2002

2001(Dollar amounts in thousands)

(unaudited)Investment advisory and administration fees:Separate accounts

$
3,941

$
3,156

$
7,401

$
6,764Model Portfolio Services


1,101


1,098


2,201


2,196Other income-risk management


1,250


1,250


2,500


2,500Fixed income trading services


282


282


564


564$
6,574

$
5,786

$
12,666

$
12,024





---



31




---

##### Table of Contents




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





PNC also provides general and administration services to the Company. Charges for
such services were based on actual usage or on defined formulas, which in managements view, resulted in reasonable allocations. Aggregate expenses included in the consolidated financial statements for transactions with related parties are as
follows:





---




Three months ended June
30,

Six months ended June
30,2002

2001

2002

2001(Dollar amounts in thousands)

(unaudited)Fund administration and servicing costs-affiliates

$
11,916

$
15,722

$
25,094

$
32,412General and administration


1,587


1,757


3,187


3,704General and administration-consulting


300





600


$
13,803

$
17,479

$
28,881

$
36,116





---




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.





Payable to affiliates was $21,473 and $15,972 at June 30, 2002 and December 31, 2001,
respectively. These amounts primarily represent income taxes payable and fund administration and servicing costs-affiliates payable. These amounts do not bear interest.





Included in accounts receivable is approximately $4,770 and $5,387 at June 30, 2002 and December 31, 2001, respectively, which primarily represents investment and
administration services provided to PNC subsidiaries and affiliates.





Receivable from affiliates was approximately
$8,809 and $2,569 at June 30, 2002 and December 31, 2001, respectively. The amount primarily represents reimbursed expenses due from the BlackRock Funds and affiliates as well as a deferred tax asset on the amounts associated with the Companys
Voluntary and Involuntary Deferred Compensation Plans.




32




---

##### Table of Contents




Off-Balance Sheet Activities





As an investment manager of alternative and traditional investment products, the Company has investments in and/or may provide investment management, advisory or
administrative services to funds and other investment companies organized as limited liability companies (LLC), corporations or business trusts.





Specifically, BlackRock acts as the collateral manager for four CBO funds organized as corporations or limited liability companies. At June 30, 2002, aggregate assets and debt in the CBOs
approximated $1.9 billion and $1.8 billion, respectively. BlackRocks equity ownership was approximately $14.7 million at June 30, 2002.





BlackRock serves as the investment manager for two fixed income hedge funds (Obsidian Funds), with one fund structured as an LLC and the other as a corporate entity, that engage in the
trading of fixed income securities. BlackRock serves as the managing member for the LLC, which had total assets and liabilities of approximately $23.8 billion and $23.3 billion, respectively. BlackRocks equity ownership was approximately $0.1
million at June 30, 2002.





Under current accounting principles generally accepted in the United States, the
Company has not consolidated the CBOs or the Obsidian Funds because non-affiliated parties have sufficient equity ownership and BlackRock has not guaranteed any of their obligations nor is it contractually liable for any of their obligations.
Accordingly, the statements of financial condition and results of operations of the CBOs and the LLC are not included in BlackRocks financial statements with the exception of BlackRocks equity ownership. The accounting for special
purpose entities is currently under review by the Financial Accounting Standards Board and the conditions for consolidation or non-consolidation of such entities could change.





Interest Rates





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





Inflation





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




33




---

##### Table of Contents




Forward Looking Statements





This report and other statements made by BlackRock may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to
the outlook for earnings and revenues and other future financial or business performance, strategies and expectations. Forward-looking statements are typically identified by words or phrases such as believe, prospects,
opportunity, expectations, optimistic, pessimistic, 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 to update forward-looking statements. Actual results could differ materially
from those anticipated in forward-looking statements and future results could differ materially from historical performance.





In addition to factors previously disclosed in BlackRocks SEC reports and those identified elsewhere in this report, 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 reduced demand for products or services or reduced value of assets under management; (3) the investment performance of BlackRocks advised or sponsored investment products and separately managed accounts; (4) the
impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions; (7) the unfavorable resolution of legal proceedings; (8) the extent and timing of any share repurchases; (9) the impact, extent
and timing of technological changes; (10) the impact of legislative and regulatory actions and reforms; and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock or PNC and (11) terrorist activities, including
the September 11 terrorist attacks, which may adversely affect the general economy, financial and capital markets, specific industries, and BlackRock. BlackRock cannot predict the severity or duration of effects stemming from such activities or any
actions taken in connection with them.




34




---

##### Table of Contents




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, trading represent matching investments made by, and held in a Rabbi Trust for, the Company with respect to the BlackRock Voluntary and Involuntary Deferred Compensation Plans. As of June 30, 2002, the
fair market value of these investments was $17.8 million. BlackRocks investments, available for sale, consist primarily of investments in BlackRock funds and certain institutional and private placement portfolios. Occasionally, the Company
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 account to establish a performance history. As of June 30, 2002, the fair market value of seed
investments was $21.3 million. The fair market value of BlackRocks other investments included in the mutual funds total, as stated below, was $123.9 million as of June 30, 2002 and is comprised of $123.9 million in the BlackRock Funds
Low Duration Bond Portfolio. These investments expose BlackRock to equity price risk. BlackRock did not hold any derivative securities to hedge its investments through the period ended June 30, 2002. The following table summarizes the fair values of
the investments and provides a sensitivity analysis of the estimated fair values of these financial instruments assuming a 10% increase or decrease in equity prices:





---




Fair Market Value

Fair market value assuming 10% increase in market
price

Fair market value assuming 10% decrease in market
priceJune 30, 2001Trading

$
17,800

$
19,580

$
16,020Total investments, trading


17,800


19,580


16,020Mutual funds


132,946


146,241


119,651Collateralized bond obligation


11,061


12,167


9,955Other


1,196


1,316


1,076145,203


159,723


130,683Total investments, trading and available for sale

$
163,003

$
179,303

$
146,703





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35




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##### Table of Contents




PART II  OTHER INFORMATION





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





The annual meeting of stockholders
of BlackRock was held on May 14, 2002, for the purpose of considering and acting upon the following:





Four Class
III directors were elected and the votes cast for or against/withheld were as follows:





Aggregate VotesNominee

For

Against/WithheldMurry S. Gerber

243,007,295

220,798Walter E. Gregg, Jr.

242,952,545

275,548James Grosfeld

243,007,295

220,298Helen P. Pudlin

233,761,740

275,661





There were no broker non-votes. The continuing directors of
BlackRock are Laurence D. Fink, Ralph L. Schlosstein, Frank T. Nickell, Laurence M. Wagner, James E. Rohr and Thomas H. OBrien.





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




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##### Table of Contents




Item 6.    
Exhibits and Reports on Form 8-K





(a)    Exhibits





Exhibit No.

Description3.1(1)

Amended and Restated Certificate of Incorporation of the Registrant.3.2

Amended and Restated Bylaws of the Registrant.3.3

Amendment No. 1 to the Amended and Restated Bylaws of the Registrant.3.4

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.10.1(1)

Tax Disaffiliation Agreement, dated October 6, 1999, among BlackRock Inc., PNC Asset Management, Inc. and The PNC
Financial Services Group, Inc., formerly PNC Bank Corp.10.2 (1)

1999 Stock Award and Incentive Plan. +10.3(1)

1999 Annual Incentive Performance Plan. +10.4(1)

Nonemployee Directors Stock Compensation Plan. +10.5(1)

Form of Employment Agreement. +10.6(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.10.7(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.10.8(1)

Services Agreement, dated October 6, 1999, between the Registrant and The PNC Financial Services Group, Inc.,
formerly PNC Bank Corp.10.9(2)

BlackRock, Inc. Amended and Restated Long-Term Deferred Compensation Plan. +10.10 (2)

BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation Plan. +10.11(3)

Agreement of Lease, dated May 3, 2000, between 40 East 52ndStreet L.P. and the Registrant.10.12(4)

Amendment No. 1 to the 1999 Stock Award and Incentive Plan. +10.13(4)

Amendment No. 1 to the 1999 Amended and Restated Long-Term Deferred Compensation Plan. +10.14(4)

Amendment No. 1 to the BlackRock International, Ltd. Amended and Restated Long-Term Deferred Compensation Plan.
+10.15(4)

Amendment No. 2 to the 1999 Stock Award and Incentive Plan. +10.16(5)

Agreement of Lease, dated September 4, 2001, between 40 East 52ndStreet L.P. and the Registrant.10.17(6)

BlackRock, Inc. 2001 Employee Stock Purchase Plan. +10.18(7)

BlackRock, Inc. Voluntary Deferred Compensation Plan. +10.19

BlackRock, Inc. Involuntary Deferred Compensation Plan. +10.20(8)

Amendment No. 2 to the BlackRock, Inc. 1999 Stock Award and Incentive Plan. +99.1

Certification of Chief Executive Officer and Chief Financial Officer.


---

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

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

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

|(4) |  | Incorporated by Reference to the Registrants Quarterly Report on Form 10-Q (Commission File No. 001-15305), for the quarter ended June 30, 2001.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------

|(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. 333-68668), originally filed with the Securities and
Exchange Commission on August 30, 2001.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) |  | 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.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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




(b)    Reports on Form 8-K




37




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##### Table of Contents

SIGNATURES





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





BLACKROCK, INC. (Registrant)By:

/s/    PAUL L.
AUDETDate:

August 13, 2002





Paul L. Audet Managing
Director & Chief Financial Officer




38