BlackRock, Inc. Reports Fourth Quarter and Full Year 2004 Diluted EPS

BlackRock, Inc. Reports Fourth Quarter and Full Year 2004 Diluted EPS of $0.75 and $2.17, Respectively; Assets Under Management at December 31, 2004 Total $341.8 Billion

    Business Editors/Banking Writers

    NEW YORK--(BUSINESS WIRE)--Jan. 19, 2005--BlackRock, Inc. (NYSE:BLK) today reported net income for the quarter ended December 31, 2004 of $49.8 million, or $0.75 per diluted share, compared to net income of $41.4 million, or $0.63 per diluted share, earned in the fourth quarter of 2003. Net income for the year ended December 31, 2004 was $143.1 million, or $2.17 per diluted share, compared to net income of $155.4 million, or $2.36 per diluted share, earned during 2003.
    As previously announced, fourth quarter 2004 earnings included an income tax benefit of $9.5 million, or $0.14 per diluted share, associated with the release of reserves allocated to the Company's New York City tax liability due to the receipt of a favorable preliminary audit finding for the 1998-2000 tax years. In addition, earnings for the fourth quarter included $13.4 million of Long-Term Retention and Incentive Plan (LTIP) expense, $3.2 million of underwriter structuring fees for a new closed-end fund and professional fees of $1.0 million associated with the pending acquisition of SSRM Holdings, Inc. (SSR), which, in total, resulted in after-tax charges of $11.2 million, or $0.17 per diluted share.
    The Company's net income for the year ended December 31, 2004 reflects LTIP expense of $104.0 million, or approximately $0.99 per diluted share, and $4.2 million, or approximately $0.04 per diluted share, in charges reflecting the after-tax impact of underwriter structuring fees for a new closed-end fund and professional fees associated with the acquisition of SSR, which were partially offset by New York City and State income tax benefits of $18.1 million, or $0.27 per diluted share and a $0.02 per diluted share benefit related to the sale of the Company's interest in Trepp LLC during the second quarter of 2004.
    Diluted earnings per share, as adjusted (see Table 2), for the quarter and year ended December 31, 2004 were $0.72 and $2.70, respectively, as compared to $0.63 and $2.36 earned for the fourth quarter and year ended December 31, 2003, respectively. Diluted earnings per share, as adjusted, reflects the exclusion of LTIP expense to be funded by a capital contribution of stock by The PNC Financial Services Group (PNC), New York State and City tax benefits, the sale of the Company's interest in Trepp LLC and professional fees associated with the acquisition of SSR. Growth in diluted earnings per share, as adjusted, during 2004 is primarily due to operating income growth associated with the rise in assets under management (AUM) during the period and an increase in alternative investment product performance fees, partially offset by increased compensation costs and professional fees associated with Sarbanes-Oxley Act compliance activities.
    AUM rose $18.3 billion during the quarter to $341.8 billion at December 31, 2004, up 6% from $323.5 billion at the end of the third quarter. For the full year, AUM increased $32.4 billion, or 10%, from $309.4 billion at year-end 2003. During the quarter, new business flows were positive in all asset classes, contributing $12.7 billion of the total increase in AUM. For the full year, net new business totaled $19.6 billion, driven by strong results across client channels worldwide. BlackRock Solutions business remained robust with the addition of eleven net new assignments and a 37% increase in revenues during 2004, and our Advisory Services effort got off to a strong start, winning two assignments in its first year.
    "We closed 2004 on a strong note, both in terms of new business and investment performance," commented Laurence D. Fink, Chairman and Chief Executive Officer of BlackRock. "While fixed income remains the cornerstone of our firm, we achieved greater diversification both within and across asset classes. For example, global bond AUM increased 57% during the year, domestic equities rose 35% and alternative investments were up 18%. Similarly, we have expanded and diversified our client base both across channels and geographically. Net new business was positive in each of our institutional client channels and, for the first time, inflows from international clients outpaced inflows from domestic investors for the full year. In addition, BlackRock Solutions achieved strong revenue growth with the addition or expansion of numerous client relationships.
    "In many respects, we achieved our results by capitalizing on significant investments made over the past several years - in expanding our global presence, in enhancing our focus on alternatives, in improving coordination of our marketing and client service efforts, in building out our infrastructure, in the continued development of our technology and, most importantly, in continuing to foster the growth of intellectual capital in all areas of the firm. The efforts of every member of our team have been essential not only to continued success in our core activities, but also to the pursuit of our strategic initiatives, including our pending acquisition of SSR. Integration, planning and client consents are proceeding as expected, and we remain on track to close the acquisition at the end of January 2005.
    "Our employees are focused on delivering superior investment results and service to our clients, and we remain committed to sustaining our culture of teamwork and excellence and to continuous improvement in all of our efforts. BlackRock is most significantly differentiated by our unique ability to integrate our capital markets and investing expertise, our BlackRock Solutions tools and intellectual capital, and our advisory services capabilities to help clients frame and solve problems ranging from investment management to risk management, hedging advice and strategic balance sheet advice. The quality and commitment of our team and our focus on delivering value-added services to our clients are the factors that I believe will enable us to further expand BlackRock's franchise in 2005."

    Fourth Quarter and Full Year Business Highlights

--	Fixed income AUM closed the year at $240.7 billion, up $5.2 billion for the quarter and $26.4 billion for the year ended December 31, 2004. While we continued to attract new fundings in core bond products, strong inflows in targeted duration and global bond mandates helped to further diversify our asset base. While rebalancing flows were not a significant factor in 2004, approximately $7.7 billion of outflows resulted from one client's implementation of a macro call on the markets and from merger activity impacting a number of other clients. In total, we recorded net new business of $1.3 billion and $15.6 billion during the quarter and full year, respectively. Investment performance remained competitive, with 88% or more of our institutional taxable fixed income composites outperforming their benchmarks and 89% or more of our taxable bond fund assets ranked in the top two Lipper quartiles for the one-, three- and five-year periods ending December 31, 2004.
--	Liquidity, or cash management, AUM closed the year up sharply to $78.1 billion. Net new business in all products other than securities lending totaled $11.9 billion and $6.7 billion for the quarter and full year, respectively. Securities lending portfolios experienced outflows of $1.7 billion during the quarter and $3.0 billion throughout the year. Fourth quarter inflows were notable given that the Federal Reserve increased the discount rate in November and December of 2004. We believe that we benefited from enhancements in our portfolio management process, improved competitiveness of our institutional funds, and selective expansion of our sales force and our product line. Although 100% of our institutional money market funds ranked in the top two Lipper quartiles for the one-, three- and five-year periods ending December 31, 2004, we expect flows to remain volatile as the Federal Reserve continues to raise interest rates.
--	Equity AUM ended the year at $14.8 billion, up 17% from $12.7 billion at third quarter-end and 8% from $13.7 billion at year-end 2003. Net new business in actively managed domestic equity products (i.e., other than the index fund) totaled $645 million for the quarter and $1.4 billion for the full year. During the year, we successfully launched several new open- and closed-end mutual funds, including the BlackRock Global Energy and Resources Trust, a closed-end fund offered in conjunction with SSR during the fourth quarter. Although outflows in international equities totaled $2.1 billion for the year, the majority occurred during the first half of the year. As performance strengthened, the pace of outflows diminished and selected clients awarded us additional funds and new accounts. We closed the year well-positioned for additional growth, with 77% and 94% of equity mutual fund assets ranked in the top two Lipper quartiles for the year and the fourth quarter, respectively, including BlackRock Select Equity, which was ranked among the ten best performing large cap core equity funds in 2004.
--	Alternative investment AUM closed the year at $8.2 billion, up $784 million (11%) versus September 30, 2004 levels and $1.3 billion (18%) year-over-year. Throughout the year, we benefited from a highly robust new product effort. During the fourth quarter, we offered a new collateralized debt obligation, and had first closings for our new real estate mezzanine debt fund and for a credit-oriented fixed income hedge fund. We also continued to attract assets in an absolute return bond product launched earlier this year, as well as in our existing hedge fund and fund of funds offerings. Performance was competitive and strong across most products. Of particular note, our flagship hedge fund of funds reached its five-year anniversary, outperforming the HFRI Fund of Funds Composite index for each of the one-, three- and five-year periods ended December 31, 2004.
--	BlackRock Solutions recorded a 37% increase in revenues versus 2003. During the quarter, we added two new risk management assignments and completed two advisory assignments. For the year, we added eleven net new assignments, including three Aladdin(R) (investment system outsourcing), seven risk management and one advisory mandate. Among these mandates was our first international assignment, opening a previously untapped source of new business for BlackRock Solutions. In addition to the foregoing, our newly formed Advisory Services Group was retained on two assignments during 2004. Although much progress has been made, staffing remains the most critical constraint to the growth of these businesses, and additional investments will be required to sustain our momentum in these products and services.
--	New business efforts, which continued to flourish across multiple channels, yielded $12.7 billion of net inflows for the quarter and $19.6 billion for the full year. Led by institutional liquidity investors ($10.4 billion) and tax-exempt institutions ($1.7 billion), net new business was positive in every client channel during the quarter. For the full year, net inflows included $7.5 billion from taxable institutions, $7.0 billion from tax-exempt clients, $5.6 billion from institutional liquidity investors and $2.1 billion from mutual fund investors other than PNC-related clients. Geographically, new business flows evidenced continued growth of our global presence, with $10.0 billion of net fundings from international clients during the year.
--	We ended 2004 with positive momentum across much of our product line-up. Our pipeline remains robust, with $8.2 billion of wins funded or to be funded since quarter-end and over 250 searches in process across products. In addition, interest in our BlackRock Solutions and Advisory Services offerings remains very high, and multiple opportunities are in development. The combination of strong, competitive performance and exceptional client service remains vital to maintaining our momentum.

    SSR Acquisition Update

    -- In late August 2004, we announced that BlackRock had entered
    into a definitive agreement to acquire SSR from MetLife, Inc.
    and SSR employees. All areas of both firms have worked closely
    together to plan the integration and to ensure a smooth
    transition for clients of the combined firm. We remain on
    track to close the transaction at the end of January 2005.

    -- Since we announced the transaction, we have worked closely
    with SSR's management team to assess our respective
    capabilities and develop an integration plan that brings
    together the best of both organizations. As a result of this
    process, more than 350 employees associated with SSR were
    given offers to join the combined firm, 94% of which were
    accepted. Their talents will augment our capabilities in fixed
    income, enhance our domestic equity and alternative investment
    platforms, and expand our mutual fund distribution efforts. We
    look forward to welcoming these professionals to the BlackRock
    team.

    -- In addition to organizational planning, BlackRock and SSR
    teams have worked closely with the board of directors of the
    SSR Funds. Following their unanimous decision to recommend
    merger of our funds, we solicited approval from the
    shareholders of SSR's fifteen mutual funds. Ten of these funds
    received approval prior to year-end, and we expect the
    remaining five to be approved at a general meeting of
    shareholders on January 24th. Notably, during the fourth
    quarter, these teams also worked together on the offering of
    the BlackRock Global Energy and Resources Trust, a closed-end
    fund in which we raised $635 million. This early success
    highlights the potential for the combined firm in private
    client channels.

    -- BlackRock, SSR and MetLife, Inc. professionals have also
    coordinated communication with all institutional clients and
    consultants. We recognized at the outset that manager
    concentration and organizational changes might adversely
    impact AUM, but we maintained an open dialogue and shared
    decisions as early as possible with all investors. The client
    consent process, though still ongoing, is proceeding as
    anticipated. We continue to work diligently to ensure a smooth
    transition for all clients. Importantly, we remain
    enthusiastic about the scale, scope and strength of the
    combined firm and the opportunities we will have to better
    serve our clients in the future.

    Total revenue for the quarter ended December 31, 2004 increased $27.5 million, or 17%, to $188.7 million, compared to $161.2 million for the quarter ended December 31, 2003. Separate account revenue and other income increased by $23.4 million, or 28%, and $5.0 million, or 25%, respectively, which were partially offset by a decrease in mutual funds revenue of $1.0 million, or 2%. The increase in separate account revenue represents a $17.6 million, or 19%, increase in separate account base fees driven by a $25.3 billion, or 11%, increase in AUM, and a $5.8 million increase in performance fees primarily driven by positive performance in the Company's fixed income hedge fund and real estate products. Other income increased largely due to strong sales in BlackRock Solutions products and services and fees earned by the Company's Advisory Services Group. Mutual fund revenue decreased primarily due to decreases in average assets in the BlackRock Funds and the BlackRock Liquidity Funds, partially offset by new closed-end funds launched since December 31, 2003, which generated $1.9 billion of additional AUM.

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Three months ended Variance vs. ---------------------------- Dec. Sept. 31, 30, Dec. 31, Sept. 30, 2003 2004 ------------------- ---------------- -------- 2004 2003 2004 Amount % Amount % --------- --------- --------- -------- ------- -------- -- (Dollar amounts in thousands)

Mutual funds revenue BlackRock Funds $16,937 $18,865 $16,289 ($1,928) (10.2%) $648 4.0% Closed-end Funds 19,191 15,804 17,978 3,387 21.4 1,213 6.7 BlackRock Liquidity Funds 18,986 21,486 19,508 (2,500) (11.6) (522) (2.7) Other commingled funds 337 263 298 74 28.1 39 13.1 --------- --------- --------- -------- ------- -------- ---- Total mutual funds revenue 55,451 56,418 54,073 (967) (1.7) 1,378 2.5 --------- --------- --------- -------- ------- -------- ----

Separate accounts revenue Separate accounts base fees 100,643 83,059 92,943 17,584 21.2 7,700 8.3 Separate accounts performance fees 7,649 1,800 539 5,849 NM 7,110 NM --------- --------- --------- -------- ------- -------- ---- Total separate accounts revenue 108,292 84,859 93,482 23,433 27.6 14,810 15.8 --------- --------- --------- -------- ------- -------- ----

Total investment advisory and administration fees 163,743 141,277 147,555 22,466 15.9 16,188 11.0

Other income 24,934 19,934 23,444 5,000 25.1 1,490 6.4 --------- --------- --------- -------- ------- -------- ---- Total revenue $188,677 $161,211 $170,999 $27,466 17.0% $17,678 10.3% ========= ========= ========= ======== ======= ======== =====

---------------------------------------------------------------------- NM = Not meaningful

    During the fourth quarter of 2004, revenue increased approximately $17.7 million, or 10%, as compared to the third quarter of 2004 primarily due to a $7.7 million increase in separate account base fees due to a $5.0 billion increase in AUM, increased alternative product performance fees of $7.4 million and a $1.2 million increase in closed end fund fees. During the fourth quarter of 2004, new closed-end fund launches resulted in a $0.9 billion increase in AUM.
    Total revenue for the year ended December 31, 2004 increased $127.1 million, or 21%, to $725.3 million compared to $598.2 million during the year ended December 31, 2003. Separate account revenue increased by $90.1 million, or 28%, mutual funds revenue increased by $14.8 million, or 7%, and other income increased by $22.2 million, or 32%, compared with the year ended December 31, 2003. The growth in separate account fees primarily consisted of an increase in base fees of $57.4 million, or 18%, reflecting a $25.3 billion, or 11%, increase in AUM and an increase in alternative product performance fees of $32.1 million. The increase in mutual funds revenue was due to an $18.8 million, or 36%, increase in closed-end fund revenue partially offset by a decrease in fees earned from the BlackRock Liquidity Funds of $4.8 million, or 6%. Closed-end fund revenue increased during the period due to several closed-end fund launches during the year, resulting in a $1.5 billion increase in AUM. The reduction in BlackRock Liquidity Funds revenue was the result of a decrease of approximately $2.7 billion in average AUM. Other income increased primarily due to strong sales of BlackRock Solutions products and services and fees earned by the Company's Advisory Services Group.

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Year ended December 31, Variance ------------------- --------------- 2004 2003 Amount % -------- -------- --------- ----- (Dollar amounts in thousands)

Mutual funds revenue BlackRock Funds $ 70,066 $ 69,361 $ 705 1.0% Closed-end Funds 71,443 52,685 18,758 35.6 BlackRock Liquidity Funds 78,265 83,035 (4,770) (5.7) Other commingled funds 1,175 1,055 120 11.4 -------- -------- -------- ----- Total mutual funds revenue 220,949 206,136 14,813 7.2 -------- -------- -------- -----

Separate accounts revenue Separate accounts base fees 371,068 313,681 57,387 18.3 Separate accounts performance fees 41,606 8,875 32,731 NM -------- -------- -------- ----- Total separate accounts revenue 412,674 322,556 90,118 27.9 -------- -------- -------- -----

Total investment advisory and administration fees 633,623 528,692 104,931 19.8

Other income 91,688 69,520 22,168 31.9 -------- -------- -------- ----- Total revenue $725,311 $598,212 $127,099 21.2% ======== ======== ======== =====

---------------------------------------------------------------------- NM = Not meaningful

    Total expense for the quarter ended December 31, 2004 increased $33.4 million, or 34%, to $132.8 million, compared to $99.5 million during the quarter ended December 31, 2003. The increase in expense for the quarter primarily reflects increases of $15.8 million in employee compensation and benefits, $13.4 million in LTIP-related charges and $5.7 million in general and administration expense. Exclusive of LTIP-related charges, total expense for the fourth quarter of 2004 would have increased $20.0 million, or 20%, from 2003. The rise in employee compensation and benefits is primarily attributable to increased salary and benefits expense of $6.6 million, largely due to higher staffing levels, increased incentive compensation due to operating income growth and alternative investment product incentives and $1.7 million in appreciation on Rabbi trust assets associated with the Company's deferred compensation plans. Appreciation or depreciation on Rabbi trust assets are also reflected in the Company's investment income. The rise in general and administration expense primarily reflects increased marketing and promotional costs of $4.6 million, or 62%, including $3.2 million in underwriter structuring fees for a new closed-end fund (The BlackRock Global Energy & Resources Trust), and $1.0 million in professional fees associated with the pending acquisition of SSR.

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Three months ended Variance vs. ----------------------- Dec. 31, Sept. 30, Dec. 31, Sept. 30, 2003 2004 ----------------- ----------------------- 2004 2003 2004 Amount % Amount % -------- -------- -------- ------------- ------------ (Dollar amounts in thousands)

General and administration expense: Marketing and promotional $11,933 $7,372 $7,823 $4,561 61.9% $4,110 52.5%

Occupancy 5,774 5,422 6,066 352 6.5 (292) (4.8) Technology 4,903 5,008 4,771 (105) (2.1) 132 2.8 Other general and administration 14,206 13,287 10,599 919 6.9 3,607 34.0 -------- -------- -------- ------- ----- ------- ----- Total general and administration expense $36,816 $31,089 $29,259 $5,727 18.4% $7,557 25.8% ======== ======== ======== ======= ===== ======= =====

    The $60.5 million decrease in expense from third quarter of 2004 is primarily due to $90.6 million in LTIP-related charges recognized during the third quarter of 2004 versus $13.4 million during the current quarter. Exclusive of LTIP-related charges, total expense for the fourth quarter of 2004 would have increased $16.7 million, or 16%, from the third quarter of 2004 due to a $6.8 million increase in incentive compensation costs, a $4.1 million rise in marketing and promotional costs, primarily consisting of $3.2 million in underwriter structuring fees for a new closed-end fund, $1.8 million in increased appreciation on Rabbi trust assets associated with the Company's deferred compensation plans and a $1.6 million rise in professional fees primarily related to the pending acquisition of SSR and Sarbanes-Oxley Act compliance activities.
    Total expenses for the year ended December 31, 2004 increased $189.6 million to $559.5 million compared to $369.9 million during the year ended December 31, 2003. The increase was primarily attributable to $104.0 million in LTIP-related charges recognized during 2004 as well as an increase of $58.2 million, or 25%, in employee compensation and benefits, an increase of $21.4 million, or 20%, in general and administration expense and the recognition of a $6.1 million impairment of an acquired management contract during 2004. Exclusive of LTIP-related charges and the impairment charge, total expense for 2004 would have increased $79.5 million, or 21%, from 2003. The rise in employee compensation expense reflects increased incentive compensation of $30.8 million and a $26.2 million rise in salaries and benefits largely due to higher staffing levels to support Company growth particularly in BlackRock Solutions. General and administration expense rose during the period due to a $9.6 million, or 34%, increase in marketing and promotional expense largely related to new closed-end issuance, higher professional fees of $5.2 million for legal and accounting services related to mutual fund regulatory inquiries, Sarbanes-Oxley Act compliance activities and the acquisition of SSR and a $3.1 million increase in subadvisory fees primarily related to performance fees earned on a collaterized debt obligation during 2004.

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Year ended December 31, Variance ------------------- -------------- 2004 2003 Amount % --------- --------- -------- ----- (Dollar amounts in thousands)

General and administration expense: Marketing and promotional $37,602 $28,052 $9,550 34.0% Occupancy 23,407 22,033 1,374 6.2 Technology 18,835 18,544 291 1.6 Other general and administration 48,894 38,704 10,190 26.3 --------- --------- -------- ----- Total general and administration expense $128,738 $107,333 $21,405 19.9% ========= ========= ======== =====

    Fourth quarter operating income of $55.8 million, which included $13.4 million of LTIP expense, $3.2 million of underwriter structuring fees on a new closed-end fund, $1.0 million of SSR acquisition costs and a $1.7 million increase in appreciation on Rabbi trust assets, declined $6.0 million from the $61.8 million earned in 2003.
    Operating income for the year ended December 31, 2004 of $165.8 million, which included $104.0 million of LTIP expense, $3.2 million of underwriter structuring fees on a new closed-end fund, $1.0 million of SSR acquisition costs and a $1.3 million increase in appreciation on Rabbi trust assets, declined $62.5 million from the $228.3 million earned in 2003.
    Non-operating income for the quarter ended December 31, 2004 increased $2.4 million as compared to the fourth quarter of 2003 primarily due to increased appreciation on Rabbi trust assets associated with the Company's deferred compensation plans of $1.7 million and increased securities gains of $0.5 million during the period. During the fourth quarter of 2004, non-operating income increased $2.0 million as compared to the third quarter of 2004 largely due to a $1.8 million increase in appreciation on Rabbi trust assets associated with the Company's deferred compensation plans. For the year ended December 31, 2004, non-operating income increased $12.0 million compared to the prior year primarily due to the recognition of a $12.9 million gain on the sale of the Company's interest in Trepp LLC during 2004 partially offset by decreased securities gains and investment income.

    Outlook

    Based on current conditions, which assume no significant changes in economic activity, interest rates or new business momentum, management expects first quarter 2005 GAAP diluted earnings per share to be in a range of $0.58 to $0.62 and diluted earnings per share, as adjusted, to be in a range of $0.79 to $0.83. Full year 2005 GAAP diluted earnings per share are expected to be in a range of $2.83 to $3.13 and diluted earnings per share, as adjusted, are expected to be in a range of $3.40 to $3.70, respectively. 2005 guidance reflects the estimated impact of the Company's acquisition of SSR including expected financing costs and one-time charges of approximately $0.09 per diluted share in the first quarter. The following table reconciles GAAP and adjusted diluted earnings per share.

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Outlook ----------------------------- First Quarter Full Year 2005 2005 -------------- --------------

Diluted earnings per share, GAAP basis $0.58 - $0.62 $2.83 - $3.13 Per diluted share adjustments: PNC LTIP funding obligation $0.12 $0.48 SSR acquisition costs $0.09 $0.09 -------------- -------------- Diluted earnings per share, as adjusted $0.79 - $0.83 $3.40 - $3.70 ============== ==============

    Management believes that earnings per diluted share, as adjusted, is an effective indicator of the Company's profitability and financial performance over time. The LTIP expense associated with awards to be met by PNC's funding requirement has been excluded from adjusted earnings per diluted share because, exclusive of the impact related to LTIP participants' put options, these non-cash charges will not impact BlackRock's book value. SSR acquisition costs, which have been deemed non-recurring by management, has been excluded from earnings per diluted share, as adjusted, to help ensure the comparability of this information to prior reporting periods.

    Performance Notes

    Past performance is no guarantee of future results.

    Mutual fund performance data assumes the reinvestment of dividends and capital gains distributions and reflects the performance of the Institutional Class, with the exception of the BlackRock Funds, Government Income Portfolio, which reflects the performance of the Investor B Shares class. BlackRock waives fees, without which performance would be lower. Investments in BlackRock Funds and BlackRock Liquidity Funds are neither insured nor guaranteed by the U.S. government. Relative peer group performance is based on quartiles from Lipper Inc. Lipper rankings are based on total returns with dividends and distributions reinvested and do not reflect sales charges. Funds with returns among the top 25% of a peer group of funds with comparable objectives are in the first quartile and funds with returns in the next 25% of a peer group are in the second quartile. Some funds have less than five years of performance.
    Fixed Income Portfolios of BlackRock Funds: The Core Bond Total Return and the Managed Income Portfolios are in the Intermediate Investment Grade Debt Lipper peer group. The Intermediate Bond Portfolio is in the Short-Intermediate Investment Grade Debt Lipper peer group. The Low Duration Bond Portfolio is in the Short Investment Grade Debt Lipper peer group. The High Yield Bond Portfolio is in the High Current Yield Lipper peer group and the GNMA Portfolio is in the GNMA Lipper peer group. The Intermediate Government Portfolio is in the Intermediate U.S. Government Lipper peer group and the Government Income Portfolio is in the General U.S. Government Lipper peer group.
    Equity Portfolios of BlackRock Funds: The Select Equity and Large Cap Value Equity Portfolios are in the Large Cap Core and Multi-Cap Value Lipper peer groups, respectively. The Index Equity Portfolio is in the S&P 500 Index Objective Lipper peer group. The Mid-Cap Value Equity Portfolio is in the Mid Cap Value Lipper peer group. The Balanced Portfolio is in the Balanced Lipper peer group. The U.S. Opportunities Portfolio is in the Mid Cap Core Lipper peer group. The International Equity Portfolio is in the International Multi-Cap Core Lipper peer group. The Small Cap Core Portfolio is in the Small Cap Core Lipper peer group. The International Opportunities Portfolio is in the International Small/Mid Cap Growth Lipper peer group.
    BlackRock Liquidity Funds: TempFund and TempCash are in the Institutional Money Market Lipper peer group, and Federal Trust Fund and FedFund are in the Institutional U.S. Government Money Market Lipper peer group. T-Fund and Treasury Trust Fund are in the Institutional U.S. Treasury Lipper peer group. MuniCash and MuniFund are in the Institutional Tax-Exempt Money Market Lipper peer group. California Money Fund and New York Money Fund are in the California Tax-Exempt and New York Tax-Exempt Money Market Lipper peer groups, respectively.
    Composites Performance: Results do not reflect the deduction of management/advisory fees and other expenses, which will reduce a client's return. For example, assuming an annual gross return of 8% and an annual management/advisory fee of 0.25%, the net annualized total return of a composite would be 7.74% over a 5-year period. BlackRock is the source of benchmark data for fixed income composites. Some BlackRock composites have less than five years of performance.

    About BlackRock

    BlackRock is one of the largest publicly traded investment management firms in the United States with approximately $342 billion of assets under management at December 31, 2004. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, liquidity and alternative investment products. In addition, BlackRock provides risk management, investment system outsourcing and financial advisory services to a growing number of institutional investors. Clients are served from the Company's headquarters in New York City, as well as offices in Boston, Edinburgh, Hong Kong, San Francisco, Singapore, Sydney, Tokyo and Wilmington. BlackRock is majority owned by The PNC Financial Services Group, Inc. (NYSE:PNC) and by BlackRock employees. For additional information, please visit the Company's website at www.blackrock.com.

    Forward-Looking Statements

    This press release, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock's future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as "trend," "potential," "opportunity," "pipeline," "believe," "comfortable," "expect," "anticipate," "current," "intention," "estimate," "position," "assume," "outlook," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may" or similar expressions. The information contained on our website is not a part of this press release.
    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 and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
    In addition to factors previously disclosed in BlackRock's Securities and Exchange Commission (SEC) reports and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; (3) the relative and absolute investment performance of BlackRock's advised or sponsored investment products and separately managed accounts; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions or divestitures; (7) the unfavorable resolution of legal proceedings; (8) the extent and timing of any share repurchases; (9) the impact, extent and timing of technological changes and the adequacy of intellectual property protection; (10) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock or PNC; (11) terrorist activities and international hostilities, which may adversely affect the general economy, financial and capital markets, specific industries, and BlackRock; (12) the ability to attract and retain highly talented professionals; (13) fluctuations in foreign currency exchange rates, which may adversely affect the value of advisory fees earned by BlackRock; (14) the impact of changes to tax legislation and, generally, the tax position of the Company; (15) changes in circumstances affecting the expense recognition of BlackRock's 2002 Long-Term Retention and Incentive Plan; and (16) the closing of the Company's acquisition of SSR and, after the closing, the integration of the business of SSR into the business of BlackRock, including, among other things, the levels of SSR assets retained after the closing, the retention of SSR employees and the costs of the acquisition and of the integration of the two businesses.
    BlackRock's Annual Report on Form 10-K for the year ended December 31, 2003 and BlackRock's subsequent reports filed with the SEC, accessible on the SEC's website at http://www.sec.gov and on BlackRock's website at http://www.blackrock.com, discuss these factors in more detail and identify additional factors that can affect forward-looking statements.

TABLE 1 BlackRock, Inc. Financial Highlights (Dollar amounts in thousands, except share data) (unaudited)

Three months ended ---------------------------------- Dec. 31, Sept. 30, ---------------------- ----------- 2004 2003 2004 ---------------------- -----------

Total revenue $188,677 $161,211 $170,999 Total expense $132,851 $99,457 $193,375 Operating income (loss) $55,826 $61,754 ($22,376) Net income (loss) $49,752 $41,355 ($9,814) Diluted earnings (loss) per share $0.75 $0.63 ($0.15) Diluted earnings per share, as adjusted (a) $0.72 $0.63 $0.56 Average diluted shares outstanding 66,229,527 65,634,589 63,676,776 Operating margin (b) 38.1% 40.9% 32.0%

Assets under management ($ in millions) $341,760 $309,356 $323,465

Variance vs. ---------------------------------- Dec. 31, 2003 Sept. 30, 2004 ----------------------------------- Amount % Amount % ----------------------------------

Total revenue $27,466 17% $17,678 10% Total expense $33,394 34% ($60,524) -31% Operating income (loss) ($5,928)-10% $78,202 NM Net income (loss) $8,397 20% $59,566 NM Diluted earnings (loss) per share $0.12 19% $0.90 NM Diluted earnings per share, as adjusted (a) $0.09 14% $0.16 29% Average diluted shares outstanding 594,938 1% 2,552,751 4%

Assets under management ($ in millions) $32,404 10% $18,295 6%

Year ended ---------------------- Dec. 31, Variance ---------------------- ------------------ 2004 2003 Amount % ---------------------- ------------------

Total revenue $725,311 $598,212 $127,099 21% Total expense $559,513 $369,936 $189,577 51% Operating income $165,798 $228,276 ($62,478) -27% Net income $143,141 $155,402 ($12,261) -8% Diluted earnings per share $2.17 $2.36 ($0.19) -8% Diluted earnings per share, as adjusted (a) $2.70 $2.36 $0.34 14% Average diluted shares outstanding 65,960,473 65,860,368 100,105 0% Operating margin (b) 36.9% 40.9%

Assets under management ($ in millions) $341,760 $309,356 $32,404 10%

NM - Not meaningful.

(a) All required disclosures for this non-GAAP measure have been included at Table 2.

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

Three months ended --------------------------------- Dec. 31, Sept. 30, ----------------------- --------- 2004 2003 2004 ----------- ----------- ---------

Operating income (loss), GAAP basis $55,826 $61,754 ($22,376) Add back: LTIP expense 13,393 - 90,606 Less: BlackRock's LTIP funding requirement (2,411) - (16,481) Add back: appreciation on Rabbi trust assets 2,081 362 267 ----------- ----------- --------- Operating income, as adjusted 68,889 62,116 52,016 ----------- ----------- ---------

Revenue, GAAP basis 188,677 161,211 170,999 Less: fund administration and servicing costs (7,939) (9,393) (8,277) ----------- ----------- --------- Revenue used for operating margin measurement 180,737 151,818 162,722 ----------- ----------- ---------

Operating margin, GAAP basis 29.6% 38.3% -13.1% =========== =========== ========= Operating margin, as reported 38.1% 40.9% 32.0% =========== =========== =========

Year ended December 31, ----------------------- 2004 2003 ----------- ---------

Operating income (loss), GAAP basis $165,798 $228,276 Add back: LTIP expense 103,999 - Less: BlackRock's LTIP funding requirement (18,892) - Add back: appreciation on Rabbi trust assets 4,479 3,141 ----------- --------- Operating income, as adjusted 255,384 231,417 ----------- ---------

Revenue, GAAP basis 725,311 598,212 Less: fund administration and servicing costs (32,593) (32,773) ----------- --------- Revenue used for operating margin measurement 692,718 565,439 ----------- ---------

Operating margin, GAAP basis 22.9% 38.2% =========== ========= Operating margin, as reported 36.9% 40.9% =========== =========

- We believe that operating margin, as reported, is an effective indicator of management's ability to effectively employ the Company's resources. Appreciation on Rabbi trust assets associated with the Company's deferred compensation plans has been excluded because investment performance of these assets has a nominal impact on net income. Fund administration and servicing costs have been excluded from operating margin because these costs fluctuate based on the discretion of a third party. TABLE 2

BlackRock, Inc. Adjusted Diluted Earnings Per Share Quarterly Trend (Dollar amounts in thousands, except share data) (unaudited)

Management believes that adjusted earnings per diluted share is an effective indicator of the Company's profitability and financial performance over time. The LTIP expense associated with awards to be met by PNC's funding requirement has been excluded from adjusted earnings per diluted share because, exclusive of the impact related to LTIP participants' put options, these non-cash charges will not impact BlackRock's book value. The remaining items disclosed below, which have been deemed non-recurring by management, have been excluded from adjusted earnings per diluted share to help ensure the comparability of this information to prior reporting periods.

2004 Quarter ------------------------------- -------------------------------------- 1st -------------------------------------- Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 181,823 $ - $ 181,823 ------------ ------------ ------------

Expenses Compensation and benefits 66,069 - 66,069 Long Term Retention and Incentive Plan - - - Other 45,987 - 45,987 ------------ ------------ ------------ Total 112,056 - 112,056 ------------ ------------ ------------

Operating income (loss) 69,767 - 69,767 Nonoperating income (loss) 5,813 - 5,813 Income taxes 20,089 8,659(a) 28,748

Minority interest 284 - 284 ------------ ------------ ------------ Net income (loss) $ 55,207 $ (8,659) $ 46,548 ============ ============ ============

Diluted earnings (loss) per share $ 0.84 $ (0.13) $ 0.71 ============ ============ ============

Diluted shares outstanding 65,807,605 65,807,605 ============ ============

2003 Quarter ------------------------------- -------------------------------------- 1st -------------------------------------- Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 142,751 $ - $ 142,751 ------------ ------------ ------------

Expenses Compensation and benefits 55,386 - 55,386 Other 33,299 - 33,299 ------------ ------------ ------------ Total 88,685 - 88,685 ------------ ------------ ------------

Operating income 54,066 - 54,066 Nonoperating income 3,365 - 3,365 Income taxes 22,111 - 22,111 Minority interest - - - ------------ ------------ ------------ Net income $ 35,320 $ - $ 35,320 ============ ============ ============

Diluted earnings per share $ 0.54 $ - $ 0.54 ============ ============ ============

2004 Quarter ------------------------------- -------------------------------------- 2nd -------------------------------------- Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 183,812 $ - $ 183,812 ------------ ------------ ------------

Expenses Compensation and benefits 81,618 (7,004)(b) 74,614 Long Term Retention and Incentive Plan - - - Other 39,613 - 39,613 ------------ ------------ ------------ Total 121,231 (7,004) 114,227 ------------ ------------ ------------

Operating income (loss) 62,581 7,004 69,585 Nonoperating income (loss) 15,488 (12,947)(b) 2,541 Income taxes 26,521 (1,459)(e) 24,922 (140)(a) Minority interest 3,552 (2,912)(b) 640 ------------ ------------ ------------ Net income (loss) $ 47,996 $ (1,432) $ 46,564 ============ ============ ============

Diluted earnings (loss) per share $ 0.73 $ (0.02) $ 0.71 ============ ============ ============

Diluted shares outstanding 65,766,979 65,766,979 ============ ============

2003 Quarter ------------------------------- -------------------------------------- 2nd -------------------------------------- Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 143,906 $ - $ 143,906 ------------ ------------ ------------

Expenses Compensation and benefits 55,819 - 55,819 Other 33,285 - 33,285 ------------ ------------ ------------ Total 89,104 - 89,104 ------------ ------------ ------------

Operating income 54,802 - 54,802 Nonoperating income 8,082 - 8,082 Income taxes 24,210 - 24,210 Minority interest - - - ------------ ------------ ------------ Net income $ 38,674 $ - $ 38,674 ============ ============ ============

Diluted earnings per share $ 0.58 $ - $ 0.58 ============ ============ ============

2004 Quarter ------------------------------- -------------------------------------- 3rd -------------------------------------- Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 170,999 $ - $ 170,999 ------------ ------------ ------------

Expenses Compensation and benefits 64,950 - 64,950 Long Term Retention and Incentive Plan 90,606 (74,125)(c) 16,481 Other 37,819 - 37,819 ------------ ------------ ------------ Total 193,375 (74,125) 119,250 ------------ ------------ ------------

Operating income (loss) (22,376) 74,125 51,749 Nonoperating income (loss) 5,682 - 5,682 Income taxes (7,265) 27,426(e) 20,161

Minority interest 385 - 385 ------------ ------------ ------------ Net income (loss) $ (9,814) $ 46,699 $ 36,885 ============ ============ ============

Diluted earnings (loss) per share $ (0.15) $ 0.71 $ 0.56 ============ ============ ============

Diluted shares outstanding 63,676,776 2,303,856(f) 65,980,632 ============ ============ ============

2003 Quarter ------------------------------- -------------------------------------- 3rd -------------------------------------- Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 150,344 $ - $ 150,344 ------------ ------------ ------------

Expenses Compensation and benefits 58,956 - 58,956 Other 33,734 - 33,734 ------------ ------------ ------------ Total 92,690 - 92,690 ------------ ------------ ------------

Operating income 57,654 - 57,654 Nonoperating income 5,934 - 5,934 Income taxes 23,579 - 23,579 Minority interest (44) - (44) ------------ ------------ ------------ Net income $ 40,053 $ - $ 40,053 ============ ============ ============

Diluted earnings per share $ 0.61 $ - $ 0.61 ============ ============ ============

2004 Quarter ------------------------------- -------------------------------------- 4th -------------------------------------- Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 188,677 $ - $ 188,677 ------------ ------------ ------------

Expenses Compensation and benefits 74,502 - 74,502 Long Term Retention and Incentive Plan 13,393 (10,982)(c) 2,411 Other 44,956 (1,000)(d) 43,956 ------------ ------------ ------------ Total 132,851 (11,982) 120,869 ------------ ------------ ------------

Operating income (loss) 55,826 11,982 67,808 Nonoperating income (loss) 7,657 - 7,657 Income taxes 12,919 9,545(a) 26,837 4,373(e) Minority interest 812 - 812 ------------ ------------ ------------ Net income (loss) $ 49,752 $ (1,936) $ 47,816 ============ ============ ============

Diluted earnings (loss) per share $ 0.75 $ (0.03) $ 0.72 ============ ============ ============

Diluted shares outstanding 66,229,527 66,229,527 ============ ============

2003 Quarter ---------------------------------------------------------------------- 4th -------------------------------------- Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 161,211 $ - $ 161,211 ------------ ------------ ------------

Expenses Compensation and benefits 58,744 - 58,744 Other 40,713 - 40,713 ------------ ------------ ------------ Total 99,457 - 99,457 ------------ ------------ ------------

Operating income 61,754 - 61,754 Nonoperating income 5,245 - 5,245 Income taxes 25,347 - 25,347 Minority interest 297 - 297 ------------ ------------ ------------ Net income $ 41,355 $ - $ 41,355 ============ ============ ============

Diluted earnings per share $ 0.63 $ - $ 0.63 ============ ============ ============

2004 ------------------------------- Total -------------------------------------- Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 725,311 $ - $ 725,311 ------------ ------------ ------------

Expenses Compensation and benefits 287,139 (7,004) 280,135 Long Term Retention and Incentive Plan 103,999 (85,107) 18,892 Other 168,375 (1,000) 167,375 ------------ ------------ ------------ Total 559,513 (93,111) 466,402 ------------ ------------ ------------

Operating income (loss) 165,798 93,111 258,909 Nonoperating income (loss) 34,640 (12,947) 21,693 Income taxes 52,264 48,404 100,668

Minority interest 5,033 (2,912) 2,121 ------------ ------------ ------------ Net income (loss) $ 143,141 $ 34,672 $ 177,813 ============ ============ ============

Diluted earnings (loss) per share $ 2.17 $ 0.53 $ 2.70 ============ ============ ============

Diluted shares outstanding 65,960,473 65,960,473 ============ ============

2003 ------------------------------- Total ------------------------------------ Non-GAAP As reported Adjustments As adjusted ------------ ------------ ------------

Revenues $ 598,212 $ - $ 598,212 ------------ ------------ ------------

Expenses Compensation and benefits 228,905 - 228,905 Other 141,031 - 141,031 ------------ ------------ ------------ Total 369,936 - 369,936 ------------ ------------ ------------

Operating income 228,276 - 228,276 Nonoperating income 22,626 - 22,626 Income taxes 95,247 - 95,247 Minority interest 253 - 253 ------------ ------------ ------------ Net income $ 155,402 $ - $ 155,402 ============ ============ ============

Diluted earnings per share $ 2.36 $ - $ 2.36 ============ ============ ============

Notes to table: ---------------

(a) Tax benefits related to resolution of New York State and New York City tax audits. (b) Impact related to the Company's sale of its equity interest in Trepp LLC. (c) Incentive compensation related to PNC's LTIP funding requirement. (d) One time charges related to SSR acquisition. (e) Tax impact of all pre tax income adjustments. (f) Antidilutive common stock equivalents by virtue of the Company's net loss during the period.

TABLE 3 BlackRock, Inc. Condensed Consolidated Statements of Income (Dollar amounts in thousands, except share data) (unaudited)

Three months ended --------------------------- December 31, December 31, 2004 2003 % Change ------------------------------------- Revenue Investment advisory and administration fees Mutual funds $55,451 $56,418 (1.7%) Separate accounts 108,292 84,859 27.6 --------------------------- Total investment advisory and administration fees 163,743 141,277 15.9 Other income 24,934 19,934 25.1 --------------------------- Total revenue 188,677 161,211 17.0 ---------------------------

Expense Employee compensation and benefits 74,502 58,744 26.8 Long-Term Retention and Incentive Plan 13,393 - NM Fund administration and servicing costs Affiliates 4,100 6,699 (38.8) Other 3,839 2,694 42.5 General and administration 36,816 31,089 18.4 Amortization of intangible assets 201 231 (13.0) Impairment of intangible assets - - 0.0 --------------------------- Total expense 132,851 99,457 33.6 ---------------------------

Operating income 55,826 61,754 (9.6)

Non-operating income (expense) Investment income 7,824 5,497 42.3 Interest expense (167) (252) (33.7) --------------------------- 7,657 5,245 46.0 ---------------------------

Income before income taxes and minority interest 63,483 66,999 (5.2) Income taxes 12,919 25,347 (49.0) --------------------------- Income before minority interest 50,564 41,652 21.4 Minority interest 812 297 NM --------------------------- Net income $49,752 $41,355 20.3 ===========================

Weighted-average shares outstanding Basic 63,676,069 64,072,611 (0.6%) Diluted 66,229,527 65,634,589 0.9% Earnings per share Basic $0.78 $0.65 20.0% Diluted $0.75 $0.63 19.0%

Dividends paid per share $0.25 $0.20 25.0%

Year ended ------------------------- December 31, December 31, 2004 2003 % Change ------------------------------------ Revenue Investment advisory and administration fees Mutual funds $220,949 $206,136 7.2% Separate accounts 412,674 322,556 27.9 -------------------------- Total investment advisory and administration fees 633,623 528,692 19.8 Other income 91,688 69,520 31.9 -------------------------- Total revenue 725,311 598,212 21.2 --------------------------

Expense Employee compensation and benefits 287,139 228,905 25.4 Long-Term Retention and Incentive Plan 103,999 - NM Fund administration and servicing costs Affiliates 18,342 26,949 (31.9) Other 14,251 5,824 144.7 General and administration 128,738 107,333 19.9 Amortization of intangible assets 947 925 2.4 Impairment of intangible assets 6,097 - NM -------------------------- Total expense 559,513 369,936 51.2 --------------------------

Operating income 165,798 228,276 (27.4)

Non-operating income (expense) Investment income 35,475 23,349 51.9 Interest expense (835) (723) 15.5 -------------------------- 34,640 22,626 53.1 --------------------------

Income before income taxes and minority interest 200,438 250,902 (20.1) Income taxes 52,264 95,247 (45.1) -------------------------- Income before minority interest 148,174 155,655 (4.8) Minority interest 5,033 253 NM -------------------------- Net income $143,141 $155,402 (7.9) ==========================

Weighted-average shares outstanding Basic 63,688,955 64,653,352 (1.5%) Diluted 65,960,473 65,860,368 0.2% Earnings per share Basic $2.25 $2.40 (6.3%) Diluted $2.17 $2.36 (8.1%)

Dividends paid per share $1.00 $0.40 NM

NM - Not meaningful.

TABLE 4 BlackRock, Inc. Condensed Consolidated Statements of Financial Condition (Dollar amounts in thousands) (unaudited)

December December 31, 2004 31, 2003 ----------- ---------

Assets Cash and cash equivalents $457,673 $315,941 Accounts receivable 165,342 127,316 Investments 227,497 234,923 Property and equipment, net 93,701 87,006 Intangible assets, net 184,110 192,079 Other assets 16,912 9,958 ----------- --------- Total assets $1,145,235 $967,223 =========== =========

Liabilities, minority interest and stockholders' equity Accrued compensation $207,352 $172,447 Long-Term Retention and Incentive Plan 103,999 - Accounts payable and accrued liabilities 30,817 60,098 Acquired management contract obligation 4,810 5,736 Other liabilities 12,736 14,395 ----------- --------- Total liabilities 359,714 252,676

Minority interest 17,169 1,239

Stockholders' equity 768,352 713,308 ----------- --------- Total liabilities, minority interest and stockholders' equity $1,145,235 $967,223 =========== =========

TABLE 5 BlackRock, Inc. Consolidated Statements of Cash Flows (Dollar amounts in thousands) (unaudited)

Year ended December 31, ------------------- 2004 2003 --------- ---------

Cash flows from operating activities Net income $143,141 $155,402 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,686 21,366 Impairment of intangible assets 6,097 - Minority interest 5,033 220 Stock-based compensation 11,947 6,351 Deferred income taxes (25,149) (2,311) Tax benefit from stock-based compensation 3,424 6,506 Net gain on investments (13,636) (2,961) Changes in operating assets and liabilities: Increase in accounts receivable (27,040) (13,198) Increase in investments, trading (9,692) (22,057) Decrease in receivable from affiliates 13,040 200 Increase in other assets (4,160) (540) Increase in accrued compensation 34,905 5,493 Increase in Long-Term Retention and Incentive Plan 103,999 - Increase (decrease) in accounts payable and accrued liabilities (30,539) 23,193 Increase (decrease) in other liabilities (698) 1,931 ------------------- Cash provided by operating activities 231,358 179,595 -------------------

Cash flows from investing activities Purchase of property and equipment (25,592) (13,453) Purchase of investments (97,636) (181,671) Sale of investments 192,254 184,405 Deemed cash contribution upon consolidation of VIE 6,412 - Consolidation of sponsored investment funds (68,337) - Acquisitions, net of cash acquired (74) (8,930) ------------------- Cash provided by (used in) investing activities 7,027 (19,649) -------------------

Cash flows from financing activities Issuance of class A common stock - 623 Dividends paid (63,657) (25,614) Distributions paid to minority interest holders (5,797) - Subscriptions to consolidated sponsored investment funds 12,978 - Purchase of treasury stock (57,607) (83,418) Reissuance of treasury stock 15,369 6,915 Acquired management contract obligation payment (926) (842) ------------------- Cash used in financing activities (99,640) (102,336) -------------------

Effect of exchange rate changes on cash and cash equivalents 2,987 3,097

Net increase in cash and cash equivalents 141,732 60,707 Cash and cash equivalents, beginning of year 315,941 255,234 ------------------- Cash and cash equivalents, end of year $457,673 $315,941 ===================

TABLE 6 BlackRock, Inc. Assets Under Management (Dollar amounts in millions) (unaudited)

December 31, 2004 2003 --------- ---------

All Accounts Fixed income $240,709 $214,356 Liquidity 78,057 74,345 Equity 14,792 13,721 Alternative investment products 8,202 6,934 --------- --------- Total $341,760 $309,356 ========= =========

Separate Accounts Fixed income $216,070 $190,432 Liquidity 7,360 5,855 Liquidity-Securities lending 6,898 9,925 Equity 9,397 9,443 Alternative investment products 8,202 6,934 --------- --------- Subtotal 247,927 222,589 --------- --------- Mutual Funds Fixed income 24,639 23,924 Liquidity 63,799 58,565 Equity 5,395 4,278 --------- --------- Subtotal 93,833 86,767 --------- --------- Total $341,760 $309,356 ========= =========

Component Changes in Assets Under Management (Dollar amounts in millions) (unaudited)

Year ended December 31, 2004 2003 --------- ---------

All Accounts Beginning assets under management $309,356 $272,841 Net subscriptions 19,624 22,468 Market appreciation 12,780 14,047 --------- --------- Ending assets under management $341,760 $309,356 ========= =========

% of Change in AUM from net subscriptions 60.6% 61.5%

Separate Accounts Beginning assets under management $222,589 $183,513 Net subscriptions 12,918 26,540 Market appreciation 12,420 12,536 --------- --------- Ending assets under management 247,927 222,589 --------- --------- Mutual Funds Beginning assets under management 86,767 89,328 Net subscriptions (redemptions) 6,706 (4,072) Market appreciation 360 1,511 --------- --------- Ending assets under management 93,833 86,767 --------- ---------

Total $341,760 $309,356 ========= =========

BlackRock, Inc. Assets Under Management Quarterly Trend (Dollar amounts in millions) (unaudited)

---------------------------------------------- Year 2003 2004 ended --------- ------------------------------------ Dec. 31 March 31 June 30 Sept. 30 Dec. 31 Dec. 31 2004 ------------------------------------------------------- Separate Accounts Fixed Income Beginning assets under management $156,574 $190,432 $202,055 $199,762 $211,075 $190,432 Net subscriptions 24,113 7,141 1,365 5,201 1,121 14,828 Market appreciation (depreciation) 9,745 4,482 (3,658) 6,112 3,874 10,810 --------- --------------------------------------------- Ending assets under management $190,432 202,055 199,762 211,075 216,070 216,070 --------- --------------------------------------------- Liquidity Beginning assets under management 5,491 5,855 6,304 6,896 7,703 5,855 Net subscriptions (redemptions) 327 446 591 787 (362) 1,462 Market appreciation 37 3 1 20 19 43 --------- --------------------------------------------- Ending assets under management 5,855 6,304 6,896 7,703 7,360 7,360 --------- --------------------------------------------- Liquidity- Securities lending Beginning assets under management 6,433 9,925 8,479 8,771 8,636 9,925 Net subscriptions (redemptions) 3,492 (1,446) 292 (135) (1,738) (3,027) --------- --------------------------------------------- Ending assets under management 9,925 8,479 8,771 8,636 6,898 6,898 --------- --------------------------------------------- Equity Beginning assets under management 9,736 9,443 9,003 8,790 8,129 9,443 Net subscriptions (redemptions) (2,920) (684) (195) (748) 31 (1,596) Market appreciation (depreciation) 2,627 244 (18) 87 1,237 1,550 --------- --------------------------------------------- Ending assets under management 9,443 9,003 8,790 8,129 9,397 9,397 --------- --------------------------------------------- Alternative investment products Beginning assets under management 5,279 6,934 6,342 6,626 7,418 6,934 Net subscriptions (redemptions) 1,528 (486) 220 851 665 1,251 Market appreciation (depreciation) 127 (106) 64 (59) 118 17 --------- --------------------------------------------- Ending assets under management 6,934 6,342 6,626 7,418 8,202 8,202 --------- --------------------------------------------- Total Separate Accounts Beginning assets under management 183,513 222,589 232,183 230,845 242,961 222,589 Net subscriptions (redemptions) 26,540 4,971 2,273 5,956 (283) 12,918 Market appreciation (depreciation) 12,536 4,623 (3,611) 6,160 5,248 12,420 --------- --------------------------------------------- Ending assets under management $222,589 $232,183 $230,845 $242,961 $247,927 $247,927 ========= =============================================

Mutual Funds Fixed Income Beginning assets under management $19,012 $23,924 $24,742 $23,780 $24,460 $23,924 Net subscriptions (redemptions) 4,295 598 (264) 270 197 801 Market appreciation (depreciation) 617 220 (698) 410 (18) (86) ------------------------------------------------------- Ending assets under management $23,924 24,742 23,780 24,460 24,639 24,639 ------------------------------------------------------- Liquidity Beginning assets under management 66,588 58,565 58,986 50,276 51,498 58,565 Net subscriptions (redemptions) (8,035) 420 (8,710) 1,222 12,309 5,241 Market appreciation (depreciation) 12 1 - - (8) (7) ------------------------------------------------------- Ending assets under management 58,565 58,986 50,276 51,498 63,799 63,799 ------------------------------------------------------- Equity Beginning assets under management 3,728 4,278 4,761 4,753 4,546 4,278 Net subscriptions (redemptions) (332) 351 4 (146) 455 664 Market appreciation (depreciation) 882 132 (12) (61) 394 453 ------------------------------------------------------- Ending assets under management 4,278 4,761 4,753 4,546 5,395 5,395 ------------------------------------------------------- Total Mutual Funds Beginning assets under management 89,328 86,767 88,489 78,809 80,504 86,767 Net subscriptions (redemptions) (4,072) 1,369 (8,970) 1,346 12,961 6,706 Market appreciation (depreciation) 1,511 353 (710) 349 368 360 --------- --------------------------------------------- Ending assets under management $86,767 $88,489 $78,809 $80,504 $93,833 $93,833 ========= =============================================

BlackRock, Inc. Assets Under Management Quarterly Trend (Dollar amounts in millions) (unaudited)

----------------------------------------- Year 2003 2004 ended ------- --------------------------------- Dec. 31 March 31 June 30 Sept. 30 Dec. 31 Dec. 31, 2004 -------------------------------------------------- Mutual Funds BlackRock Funds Beginning assets under management $18,115 $18,354 $18,985 $16,603 $16,305 $18,354 Net subscriptions (redemptions) (523) 427 (2,110) (391) 60 (2,014) Market appreciation (depreciation) 762 204 (272) 93 340 365 -------- ----------------------------------------- Ending assets under management 18,354 18,985 16,603 16,305 16,705 16,705 -------- ----------------------------------------- BlackRock Global Series Beginning assets under management 211 838 1,026 1,293 1,299 838 Net subscriptions (redemptions) 521 181 275 (21) (117) 318 Market appreciation (depreciation) 106 7 (8) 27 41 67 -------- ----------------------------------------- Ending assets under management 838 1,026 1,293 1,299 1,223 1,223 -------- ----------------------------------------- BlackRock Liquidity Funds Beginning assets under management 59,576 52,870 53,159 45,854 47,087 52,870 Net subscriptions (redemptions) (6,706) 289 (7,305) 1,233 11,374 5,591 Market depreciation - - - - (8) (8) -------- ----------------------------------------- Ending assets under management 52,870 53,159 45,854 47,087 58,453 58,453 -------- ----------------------------------------- Closed End Beginning assets under management 10,771 13,961 14,552 14,233 14,895 13,961 Net subscriptions 2,547 449 111 433 520 1,513 Market appreciation (depreciation) 643 142 (430) 229 (5) (64) -------- ----------------------------------------- Ending assets under management 13,961 14,552 14,233 14,895 15,410 15,410 -------- ----------------------------------------- Other Commingled Funds Beginning assets under management 655 744 767 826 918 744 Net subscriptions 89 23 59 92 1,124 1,298 -------- ----------------------------------------- Ending assets under management 744 767 826 918 2,042 2,042 -------- ----------------------------------------- Total Mutual Funds Beginning assets under management 89,328 86,767 88,489 78,809 80,504 86,767 Net subscriptions (redemptions) (4,072) 1,369 (8,970) 1,346 12,961 6,706 Market appreciation (depreciation) 1,511 353 (710) 349 368 360 -------- ----------------------------------------- Ending assets under management $86,767 $88,489 $78,809 $80,504 $93,833 $93,833 ======== =========================================

--30--MEM/ny*

CONTACT: BlackRock Brian Beades, 212-810-5596 invrel@blackrock.com

KEYWORD: NEW YORK INDUSTRY KEYWORD: BANKING EARNINGS SOURCE: BlackRock

Copyright Business Wire 2005