BlackRock, Inc. Reports First Quarter Diluted E.P.S. of $0.70 Per Shar

BlackRock, Inc. Reports First Quarter Diluted E.P.S. of $0.70 Per Share Including $0.08 of Acquisition Costs; Assets Under Management at March 31, 2005 Total $391.3 Billion

    Business Editors

    NEW YORK--(BUSINESS WIRE)--April 19, 2005--BlackRock, Inc. (NYSE:BLK) today reported net income for the quarter ended March 31, 2005 of $46.5 million, or $0.70 per diluted share, compared to net income of $55.2 million, or $0.84 per diluted share, and $49.8 million, or $0.75 per diluted share, in the first and fourth quarters of 2004, respectively.
    First quarter 2005 earnings reflected expenses of $8.9 million, or $0.08 per diluted share, associated with the acquisition of SSRM Holdings, Inc. (SSR), which closed on January 31, 2005. As of that date, substantially all of SSR's operations were integrated into BlackRock, including assets under management (AUM) totaling $49.7 billion.
    For the three months ended March 31, 2005, diluted earnings per share, as adjusted, were $0.89 as compared to $0.71 and $0.72, during the three months ended March 31, 2004 and December 31, 2004, respectively (see Table 1). Diluted earnings per share, as adjusted, primarily reflects the exclusion of expense related to the BlackRock, Inc. 2002 Long Term Retention and Incentive Plan (LTIP) to be funded by a capital contribution of stock by The PNC Financial Services Group, Inc. (PNC), expenses related to the SSR acquisition and New York State and City tax benefits realized during the first and fourth quarters of 2004. First quarter 2005 diluted earnings per share, as adjusted, rose 24% from the prior quarter, and 25% year-over-year.
    "The first quarter was notable in many respects," said Laurence D. Fink, Chairman and Chief Executive Officer. "We closed our largest acquisition to date, adding significantly to the firm's scale and breadth of offerings, integrating operations well ahead of schedule. At the same time, we maintained the growth momentum of our core businesses, despite more challenging market conditions."
    Reported diluted earnings per share for the 2004 first and fourth quarters included New York State and City tax benefits of approximately $0.13 and $0.14 per diluted share, respectively. In addition, reported first quarter 2004 earnings per share did not include any LTIP impact, as expense recognition for that program commenced in the third quarter of 2004. In the first quarter of 2005, LTIP-related expenses totaled $14.1 million, or $0.13 per diluted share.
    AUM increased $49.6 billion, or 15%, during the quarter, and $70.7 billion, or 22%, year-over-year to $391.3 billion. The significant increase in AUM was driven in large measure by the acquisitions of SSR from MetLife, Inc. and a closed-end fund from Cigna Investment Advisors, Inc., which contributed $50.1 billion of AUM, after giving effect to outflows of $1.3 billion and market appreciation subsequent to closing of these acquisitions. Net new business in long-dated assets (other than those acquired) totaled $6.1 billion during the quarter and $15.2 billion during the twelve-month period ended March 31, 2005. Cash management AUM, excluding the impact of acquired assets, declined $4.7 billion during the quarter and $468 million year-over-year, partially reversing the $10.2 billion influx of assets in the fourth quarter of 2004. BlackRock Solutions(R) continued to achieve strong growth, adding several new risk management and advisory relationships during the quarter.
    Mr. Fink added, "Looking ahead, I believe BlackRock is very well positioned for the future. The scale and product depth of our platform has been enhanced, investment performance was strong across asset classes and both U.S. and international clients continue to show considerable interest in traditional and alternative offerings, as well as for our risk management and advisory service products. I am especially proud of the teamwork and solid execution that led to the smooth integration of SSR well ahead of schedule, and welcome our new colleagues to BlackRock with enthusiasm."

    First Quarter Business Highlights

--	Fixed income AUM increased $24.6 billion, or 10%, to $265.3 billion at March 31, 2005. New business efforts in the U.S. resulted in $925 million of net inflows and $21.0 billion of assets transitioned from SSR. Flows from non-U.S. investors remained strong as well, resulting in $3.8 billion of net new business during the quarter. While AUM increased across the board, our product mix did not change appreciably as a result of the acquisition. We continue to have strong interest in our core, global and targeted duration offerings, as well as newer alternative investment strategies in fixed income. Investment performance was very strong, with 100% of composites outperforming their benchmarks and 84% or more of taxable bond fund assets ranked in the top two Lipper quartiles for the 1, 3, 5, 7 and 10-year periods ended March 31, 2005.
--	AUM in our cash management products closed the quarter at $74.1 billion, down $4.0 billion, or 5%, partially reversing the $10.2 billion of net inflows we experienced in the fourth quarter of 2004. Average assets, however, were $75.7 billion during the quarter, which was 9% higher than average assets during the prior quarter and 5% greater than average assets for the full year 2004. The most significant outflows were experienced in our BlackRock Liquidity Funds family, as institutional investors took advantage of temporarily higher rates in direct investments resulting from additional rate increases by the Federal Reserve. We have been carefully managing our portfolio positioning in this challenging environment and have continued to achieve competitive results across our products.
--	Equity AUM increased $17.6 billion, or 119%, to $32.4 billion at March 31, 2005. The SSR acquisition was motivated in part by the opportunity to expand our domestic equity platform, which we achieved by transitioning $17.9 billion of equity AUM through quarter-end. Apart from the SSR assets, we continued to benefit from increased recognition of our equity capabilities, attracting $264 million of net new business during the quarter. Investment performance was strong in most products, including those added through the SSR acquisition, with over two-thirds of equity composites outperforming their benchmarks for the quarter and 1-year period and over half of our equity mutual funds ranked in the top two Lipper quartiles for the 1 and 3-year periods ended March 31, 2005.
--	AUM in alternative investment products totaled $19.6 billion at March 31, 2005, up $11.4 billion, or 139%, during the quarter. The increase included $10.6 billion of new products added to the platform through the SSR acquisition, including real estate equity, collateralized debt obligations and equity hedge funds. New business efforts yielded an additional $462 million of net inflows during the quarter. Performance during the quarter was strong, particularly in our fixed income and equity hedge funds.
--	Net new business in long-dated assets totaled $4.9 billion, although the success of our efforts was somewhat obscured by $1.3 billion of SSR client outflows that occurred, as expected, post-closing. Excluding SSR, BlackRock generated $6.1 billion of net new business in long-dated products during the quarter, approximately two-thirds of which were from non-U.S. clients and one-third from U.S. investors. We also generated strong flows in long-dated assets across client channels globally, including $3.1 billion from tax-exempt investors, $2.8 billion from taxable clients and $307 million from private client/mutual fund investors. The only channel in which we realized net outflows was institutional liquidity, as institutional investors shifted from money market funds to direct investments industry wide.
--	During the quarter, we were retained on three net new risk management, advisory and investment accounting assignments and were engaged on and completed several short-term mandates, continuing BlackRock Solutions' growth trajectory. BlackRock Solutions and our advisory services team collaborated closely on a number of these relationships in order to best deliver our full capabilities to each client. In addition, we have two system implementations in process and continuing robust interest from institutional investors globally in our investment tools, outsourcing and advisory services.
--	We closed the quarter with $5.8 billion of wins to be funded, of which $1.6 billion have since funded. In addition, our pipeline of searches in process remains very active, and includes a significant number of RFPs for equity mandates. Asset flows are expected to remain volatile in cash management in light of the Fed's continued and perhaps more aggressive tightening policy. In addition, we expect to have some volatility in assets over the coming months as investors that transitioned from SSR complete required processes to address manager concentration and other allocation issues. Strong investment performance in the first quarter is expected to continue to support new business efforts, and we expect to be able to capitalize on our expanded product capabilities with both new and existing clients.

    Total revenue for the quarter ended March 31, 2005 increased $68.3 million, or 38%, to $250.1 million, compared to $181.8 million for the quarter ended March 31, 2004. Separate account revenue, other income and mutual funds revenue increased by $38.0 million, or 37%, $16.3 million, or 76%, and $13.9 million, or 25%, respectively. The increase in separate accounts revenue was driven by a $27.2 million, or 31%, increase in separate accounts base fees from $88.1 million for the three months ended March 31, 2004 to $115.2 million for the three months ended March 31, 2005 and a $10.9 million increase in separate accounts performance fees. Separate accounts base fees rose during the first quarter of 2005 primarily due to a $40.2 billion increase in AUM related to the SSR acquisition and an increase in AUM, exclusive of the SSR acquisition, of $19.8 billion, or 9%, primarily in fixed income accounts. Separate accounts performance fees increased $10.9 million during the first quarter of 2005, to $26.7 million compared to $15.8 million for the first quarter of 2004, largely driven by positive performance in the Company's fixed income hedge fund. Other income increased $16.3 million, or 76%, to $37.8 million during the three months ended March 31, 2005 compared to March 31, 2004 primarily due to $5.6 million in property management fees earned on real estate accounts assumed in the SSR acquisition, strong sales in BlackRock Solutions products and services and fees earned by the Company's Advisory Services Group. Mutual funds revenue increased $13.9 million, or 25%, to $70.4 million for the first quarter of 2005 compared to $56.4 million during the first quarter of 2004. The increase in mutual funds revenue was primarily due to the merger of SSR's mutual funds into the BlackRock Funds, representing an increase of $9.5 billion in AUM, and new closed-end funds launched since March 31, 2004, which generated $1.7 billion of additional AUM.

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Three months ended Variance vs. ----------------------- March 31, December March 31, December 31, 31, 2004 2004 ----------------- -------------- ------------ 2005 2004 2004 Amount % Amount % -------- -------- -------- ------ ----- ------ ----- (Dollar amounts in thousands)

Mutual funds revenue BlackRock Funds $29,040 $18,782 $16,937 $10,258 54.6% $12,103 71.5% Closed-end Funds 19,898 16,789 19,191 3,109 18.5 707 3.7 BlackRock Liquidity Funds 21,021 20,612 18,986 409 2.0 2,035 10.7 Other commingled funds 412 263 337 149 56.7 75 22.3 ------- -------- -------- ------- ----- ------- ----- Total mutual funds revenue 70,371 56,446 55,451 13,925 24.7 14,920 26.9 ------- -------- -------- ------- ----- ------- -----

Separate accounts revenue Separate accounts base fees 115,229 88,066 100,643 27,163 30.8 14,586 14.5 Separate accounts performance fees 26,656 15,806 7,649 10,850 NM 19,007 NM ------- -------- -------- ------- ----- ------- ----- Total separate accounts revenue 141,885 103,872 108,292 38,013 36.6 33,593 31.0 ------- -------- -------- ------- ----- ------- -----

Total investment advisory and administration fees 212,256 160,318 163,743 51,938 32.4 48,513 29.6

Other income 37,827 21,505 24,934 16,322 75.9 12,893 51.7 ------- -------- -------- ------- ----- ------- ----- Total revenue $250,083 $181,823 $188,677 $68,260 37.5% $61,406 32.5% ======== ======== ======== ======= ===== ======= =====

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

    During the first quarter of 2005, total revenue increased approximately $61.4 million, or 33%, as compared to the fourth quarter of 2004 primarily due to the $49.7 billion increase in AUM related to the SSR acquisition, increased alternative product performance fees of $17.3 million, a $12.9 million, or 52%, increase in other income due to property management fees earned on real estate accounts assumed in the SSR acquisition, increased sales of BlackRock Solutions products and services and an increase in the annual performance fee on a large BlackRock Solutions service bureau engagement.
    Total expense for the quarter ended March 31, 2005 increased $71.4 million, or 64%, to $183.5 million, compared to $112.1 million for the quarter ended March 31, 2004. The increase in total expense for the quarter primarily reflects increases of $60.9 million in employee compensation and benefits to $126.9 million compared to $66.1 million for the three months ended March 31, 2004 and $14.9 million, or 48%, in general and administration expense to $46.2 million for the three months ended March 31, 2005. The rise in employee compensation and benefits was primarily attributable to higher staffing levels following the SSR acquisition, increased incentive compensation expense, higher performance fee related incentives and $14.1 million of LTIP costs. The rise in general and administration expense primarily reflects $5.0 million related to SSR's operations, increased marketing and promotional costs of $3.6 million, or 44%, including $0.8 million in underwriter offering costs for a new closed-end fund (The BlackRock Health Sciences Trust), $2.4 million in costs associated with the closing and integration of SSR, a $1.2 million increase in professional fees primarily related to Sarbanes-Oxley Act compliance activities and an increase in occupancy expense of $1.1 million primarily related to the Company taking occupancy of office space at 55 East 52nd Street, New York, New York, during the first quarter of 2005.

Three months ended Variance vs. ---------------------- March 31, December March 31, December 31, 31, 2004 2004 ----------------- ---------------------------- 2005 2004 2004 Amount % Amount % -------- -------- -------- -------------- ------------- (Dollar amounts in thousands)

General and administration expense: Marketing and promotional $14,127 $8,206 $11,933 $5,921 72.2% $2,194 18.4% Occupancy 7,587 5,651 5,774 1,936 34.3 1,813 31.4 Technology 5,887 4,559 4,903 1,328 29.1 984 20.1 Other general and administration 18,566 12,883 14,206 5,683 44.1 4,360 30.7 -------- -------- -------- -------- ----- ------- ----- Total general and administration expense $46,167 $31,299 $36,816 $14,868 47.5% $9,351 25.4% ======== ======== ======== ======== ===== ======= =====

    The $50.7 million, or 38%, increase in total expense compared to the fourth quarter of 2004 is primarily due to the impact of operating expenses incurred to support SSR activities, a $14.3 million increase in compensation and benefits, exclusive of SSR, which reflected alternative product incentives and staffing increases during the period, a $1.4 million increase in SSR integration costs compared to the fourth quarter of 2004 and increased occupancy costs of $1.0 million.
    Non-operating income for the quarter ended March 31, 2005 increased $2.0 million as compared to the first quarter of 2004 primarily due to market appreciation on a hedge fund investment obtained in the SSR acquisition, which was partially offset by a $1.3 million decrease in distributions from one of the Company's collateralized debt obligations and $1.1 million in interest expense associated with borrowings used to finance the SSR acquisition. The performance of the hedge fund investment, which the Company intends to reduce during 2005, is partially allocated to one of the Company's deferred compensation plans; as a result, approximately 25% of the appreciation on this investment is also reflected in compensation and benefits. First quarter 2005 non-operating income remained relatively unchanged from $7.7 million earned during the fourth quarter of 2004 as increased net securities gains earned during the current quarter were offset by increased interest costs related to borrowings used to finance the SSR acquisition.

    Outlook

    The Company will cease providing quarterly earnings guidance following this release. Based on current conditions, which assume no significant changes in current circumstances, including economic activity, interest rates or new business momentum, management expects second quarter 2005 GAAP diluted earnings per share to be in a range of $0.76 to $0.80 and diluted earnings per share, as adjusted, to be in a range of $0.88 to $0.92. Full year 2005 GAAP diluted earnings per share are expected to be in a range of $3.00 to $3.18 and diluted earnings per share, as adjusted, are expected to be in a range of $3.56 to $3.74, respectively. Included in the Company's guidance is an estimate of full year 2005 accretion on the SSR acquisition of approximately $0.30 per diluted share. Finally, the midpoint of BlackRock's second quarter 2005 diluted earnings per share outlook assumes estimated general and administration expense and non-operating income of approximately $41.5 million and $2.0 million, respectively. These are point-in-time estimates, made early in the second quarter of 2005. The Company expressly disclaims any current intention to update this guidance. The following table reconciles GAAP and diluted earnings per share, as adjusted.

Outlook ------------------------------------- Second Quarter 2005 Full Year 2005 -------------------------------------

Diluted earnings per share, GAAP $0.76 to $0.80 $3.00 to $3.18 basis Per diluted share adjustments: PNC LTIP funding obligation $0.12 $0.48 SSR acquisition costs -- $0.08 --------------------- --------------- Diluted earnings per share, as $0.88 to $0.92 $3.56 to $3.74 adjusted =====================================

    Management believes that diluted earnings per share, as adjusted, are 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 earnings per diluted share, as adjusted, 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 consist of certain compensation costs and professional fees. Compensation reflected in this amount represents direct incentives related to alternative product performance fees generated in 2004 by SSR employees, assumed by BlackRock in conjunction with the acquisition and settled by BlackRock with no future service requirement. Diluted earnings per share, as adjusted, exclude this amount because it does not relate to current period operations. Professional fees reflected in this amount, which have been considered non-recurring by management, have 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 A Shares class. BlackRock waives fees, without which performance would be lower. Investments in BlackRock 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, Core PLUS 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 Government Income Portfolio is in the General U.S. Government Lipper peer group.
    Equity Portfolios of BlackRock Funds: The Investment Trust Portfolio is in the Large Cap Core Lipper peer group. The Index Equity Portfolio is in the S&P 500 Index Objective Lipper peer group. The Asset Allocation Portfolio is in the Flexible Portfolio Lipper peer group. The Mid-Cap Growth Portfolio is in the Mid Cap Growth Lipper peer group. The Legacy Portfolio is in the Large Cap Growth Lipper Peer Group. The Health Sciences Portfolio is in the Health/Biotechnology Lipper peer group. The Global Resources Portfolio is in the Natural Resources Lipper peer group. The International Opportunities Portfolio is in the International Small/Mid-Cap Growth Lipper peer group.
    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 composites. Some BlackRock composites have less than three years of performance.

    About BlackRock

    BlackRock is one of the largest publicly traded investment management firms in the United States with approximately $391 billion of assets under management at March 31, 2005. 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, Morristown, 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; and (15) the integration of the business of SSR into the business of BlackRock.
    BlackRock's Annual Report on Form 10-K for the year ended December 31, 2004 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 ---------------------------------- March 31, December 31, ---------------------- ------------ 2005 2004 2004 ---------------------- -----------

Total revenue $250,083 $181,823 $188,677 Total expense $183,501 $112,056 $132,851 Operating income $66,582 $69,767 $55,826 Net income $46,536 $55,207 $49,752 Diluted earnings per share $0.70 $0.84 $0.75 Diluted earnings per share, as adjusted (a) $0.89 $0.71 $0.72 Average diluted shares outstanding 66,880,713 65,807,605 66,229,527 Operating margin 26.6% 38.4% 29.6% Operating margin, as adjusted (b) 37.7% 40.8% 38.7%

Assets under management ($ in millions) $391,328 $320,672 $341,760

Variance vs. ------------------------------ March 31, December 31, 2004 2004 ---------- ---- -------------- Amount % Amount % ---------- ---- --------------

Total revenue $68,260 38% $61,406 33% Total expense $71,445 64% $50,650 38% Operating income ($3,185) -5% $10,756 19% Net income ($8,671) -16% ($3,216) -6% Diluted earnings per share ($0.14) -17% ($0.05) -7% Diluted earnings per share, as adjusted (a) $0.18 25% $0.17 24% Average diluted shares outstanding 1,073,108 2% 651,186 1% Operating margin (b)

Assets under management ($ in millions) $70,656 22% $49,568 15%

(a) Diluted earnings per share, as adjusted has been derived from the Company's consolidated financial statements, as follows:

Three months ended -------------------------- March 31, December 31, -------------------------- 2005 2004 2004 ----------------- --------

Net income, GAAP basis $46,536 $55,207 $49,752 Add back: PNC's LTIP funding requirement 7,394 - 6,974 SSR acquisition costs 5,590 - 635 Release of reserves related to New York State and New York City tax audits - (8,659) (9,545) -------- -------- -------- Net income, as adjusted 59,520 46,548 47,816 -------- -------- --------

Diluted earnings per share, GAAP basis $0.70 $0.84 $0.75 ======== ======== ======== Diluted earnings per share, as adjusted $0.89 $0.71 $0.72 ======== ======== ========

Management believes diluted earnings per 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 diluted earnings per share, as adjusted, 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 consist of certain compensation costs and professional fees. Compensation reflected in this amount represents direct incentives related to alternative product performance fees generated in 2004 by SSR employees, assumed by BlackRock in conjunction with the acquisition and settled by BlackRock with no future service requirement. Diluted earnings per share, as adjusted, exclude this amount because it does not relate to current period operations. Professional fees reflected in this amount, which have been considered non-recurring by management, have been excluded from earnings per diluted share, as adjusted, to help ensure the comparability of this information to prior reporting periods.

BlackRock, Inc. Financial Highlights (continued)

(b) Operating income, adjusted for LTIP expense, appreciation on assets related to deferred compensation plans and SSR acquisition costs, divided by total revenue less reimbursable property management compensation and fund administration and servicing costs. Amounts were derived from the Company's consolidated financial statements, as follows:

Three months ended -------------------------- March 31, December 31, -------------------------- 2005 2004 2004 -------- -------- --------

Operating income, GAAP basis $66,582 $69,767 $55,826 Add back: PNC LTIP funding obligation 11,736 - 10,982 Appreciation on assets related to deferred compensation plans 2,063 1,065 2,081 SSR acquisition costs 8,873 - 1,000 -------- -------- -------- Operating income, as adjusted 89,254 70,832 69,889 -------- -------- --------

Revenue, GAAP basis 250,083 181,823 188,677 Less: Reimbursable property management compensation (4,059) - - Fund administration and servicing costs (9,109) (8,360) (7,939) -------- -------- -------- Revenue used for operating margin measurement 236,915 173,463 180,738 -------- -------- --------

Operating margin, GAAP basis 26.6% 38.4% 29.6% ======== ======== ======== Operating margin, as adjusted 37.7% 40.8% 38.7% ======== ======== ========

We believe that operating margin, as adjusted, is an effective indicator of management's ability to effectively employ the Company's resources. Appreciation on assets related to the Company's deferred compensation plans has been excluded because investment performance of these assets has a nominal impact on net income. Reimbursable property management compensation represents compensation and benefits paid to certain BlackRock Realty Advisors, Inc. ("Realty") personnel. These employees are retained on Realty's payroll when properties are acquired by Realty's clients. The related compensation and benefits are fully reimbursed by Realty's clients and have been excluded from operating margin, as adjusted, because they bear no economic cost to the Company. Fund administration and servicing costs have been excluded from operating margin, as adjusted, because these costs fluctuate based on the discretion of a third party.

TABLE 2 BlackRock, Inc. Condensed Consolidated Statements of Income (Dollar amounts in thousands, except share data) (unaudited)

Three months ended ------------------ March 31, December 31, -------- ------------ 2005 2004 2004 ---- ---- ----

Revenue Investment advisory and administration fees Mutual funds $70,371 $56,446 $55,451 Separate accounts 141,885 103,872 108,292 --------------------------------- Total investment advisory and administration fees 212,256 160,318 163,743 Other income 37,827 21,505 24,934 --------------------------------- Total revenue 250,083 181,823 188,677 ---------------------------------

Expense Employee compensation and benefits 126,944 66,069 87,895 Fund administration and servicing costs Affiliates 4,017 5,068 4,100 Other 5,092 3,292 3,839 General and administration 46,167 31,299 36,816 Amortization of intangible assets 1,281 231 201 Impairment of intangible assets - 6,097 - --------------------------------- Total expense 183,501 112,056 132,851 ---------------------------------

Operating income 66,582 69,767 55,826

Non-operating income (expense) Investment income 9,786 6,897 7,824 Interest expense (2,014) (1,084) (167) --------------------------------- Total non-operating income 7,772 5,813 7,657 ---------------------------------

Income before income taxes and minority interest 74,354 75,580 63,483 Income taxes 27,331 20,089 12,919 --------------------------------- Income before minority interest 47,023 55,491 50,564 Minority interest 487 284 812 --------------------------------- Net income $46,536 $55,207 $49,752 =================================

Weighted-average shares outstanding Basic 64,290,510 63,775,783 63,676,069 Diluted 66,880,713 65,807,605 66,229,527 Earnings per share Basic $0.72 $0.87 $0.78 Diluted $0.70 $0.84 $0.75

Dividends paid per share $0.30 $0.25 $0.25

NM - Not meaningful.

Variance vs. ------------ March 31, December 31, 2004 2004 --------- ------------ Amount Percent Amount Percent ------ ------- ------ -------

Revenue Investment advisory and administration fees Mutual funds $13,925 24.7% $14,920 26.9% Separate accounts 38,013 36.6% 33,593 31.0% ----------------- --------------- Total investment advisory and administration fees 51,938 32.4% 48,513 29.6% Other income 16,322 75.9% 12,893 51.7% ----------------- --------------- Total revenue 68,260 37.5% 61,406 32.5% ----------------- ---------------

Expense Employee compensation and benefits 60,875 92.1% 39,049 44.4% Fund administration and servicing costs Affiliates (1,051) -20.7% (83) -2.0% Other 1,800 54.7% 1,253 32.6% General and administration 14,868 47.5% 9,351 25.4% Amortization of intangible assets 1,050 NM 1,080 NM Impairment of intangible assets (6,097) -100.0% - 0.0% ----------------- --------------- Total expense 71,445 63.8% 50,650 38.1% ----------------- ---------------

Operating income (3,185) -4.6% 10,756 19.3%

Non-operating income (expense) Investment income 2,889 41.9% 1,962 25.1% Interest expense (930) 85.8% (1,847) NM ----------------- --------------- 1,959 33.7% 115 1.5% ----------------- ---------------

Income before income taxes and minority interest (1,226) -1.6% 10,871 17.1% Income taxes 7,242 36.0% 14,412 111.6% ----------------- --------------- Income before minority interest (8,468) -15.3% (3,541) -7.0% Minority interest 203 71.5% (325) -40.0% ----------------- --------------- Net income ($8,671) -15.7% ($3,216) -6.4% ================= ===============

Weighted-average shares outstanding Basic 514,727 0.8% 614,441 1.0% Diluted 1,073,108 1.6% 651,186 1.0% Earnings per share Basic ($0.15) -17.2% ($0.06) -7.7% Diluted ($0.14) -16.7% ($0.05) -6.7%

Dividends paid per share $0.05 20.0% $0.05 20.0%

NM - Not meaningful.

TABLE 3 BlackRock, Inc. Condensed Consolidated Statements of Financial Condition (Dollar amounts in thousands) (unaudited)

March 31, December 31, 2005 2004 --------- ------------

Assets Cash and cash equivalents $312,286 $457,673 Accounts receivable 245,100 165,342 Investments 325,392 227,497 Property and equipment, net 107,977 93,701 Intangible assets, net 443,685 184,110 Deferred mutual fund commissions 18,998 - Other assets 40,480 16,912 ----------- ----------- Total assets $1,493,918 $1,145,235 =========== ===========

Liabilities, minority interest and stockholders' equity Long term borrowings $250,000 $0 Accrued compensation 264,009 311,351 Accounts payable and accrued liabilities 89,910 30,817 Acquired management contract obligation 4,810 4,810 Other liabilities 14,764 12,736 ----------- ----------- Total liabilities 623,493 359,714

Minority interest 24,030 17,169

Stockholders' equity 846,395 768,352 ----------- ----------- Total liabilities, minority interest and stockholders' equity $1,493,918 $1,145,235 =========== ===========

TABLE 4 BlackRock, Inc. Consolidated Statements of Cash Flows (Dollar amounts in thousands) (unaudited)

Three months ended March 31, --------- 2005 2004 ---- ----

Cash flows from operating activities Net income $46,536 $55,207 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 7,006 4,949 Impairment of intangible assets - 6,097 Minority interest 487 284 Stock-based compensation 18,147 4,269 Deferred income taxes (4,361) 6,467 Tax impact of stock-based compensation 1,536 (407) Net gain on investments (3,879) (1,281) Amortization of bond issuance costs 125 - Amortization of deferred mutual fund commissions 1,826 - Changes in operating assets and liabilities: Increase in accounts receivable (27,338) (20,926) Increase in investments, trading (30,585) (10,627) Increase in receivable from affiliates (11,355) (37) (Increase) decrease in other assets (7,201) 470 Decrease in accrued compensation (172,294) (83,939) Increase in accounts payable and accrued liabilities 50,432 6,866 Decrease (increase) in other liabilities 226 (1,265) ------------------- Cash used in operating activities (130,692) (33,873) -------------------

Cash flows from investing activities Purchase of property and equipment (16,684) (4,586) Purchase of investments (8,560) (10,059) Sale of investments 17,688 76,180 Sale of real estate held for sale 112,184 - Deemed cash contribution upon consolidation of VIE - 6,412 Acquisitions, net of cash acquired (246,207) (73) ------------------- Cash provided by (used in) investing activities (141,579) 67,874 -------------------

Cash flows from financing activities Borrowings, received, net of issuance costs 395,000 - Prinicipal repayments of borrowings (150,000) - Repayment of short term borrowings (111,840) - Subscriptions to consolidated sponsored investment funds 6,374 - Distributions paid to minority interest holders - (110) Dividends paid (19,274) (15,906) Reissuance of treasury stock 7,133 6,643 Purchase of treasury stock (84) (40,426) Issuance of class A common stock 202 - ------------------- Cash provided by (used in) financing activities 127,511 (49,799) -------------------

Effect of exchange rate changes on cash and cash equivalents (627) 966

Net decrease in cash and cash equivalents (145,387) (14,832) Cash and cash equivalents, beginning of period 457,673 315,941 ------------------- Cash and cash equivalents, end of period $312,286 $301,109 ===================

TABLE 5 BlackRock, Inc. Assets Under Management (Dollar amounts in millions) (unaudited)

March 31, December 31, 2005 2004 2004 ------ --------- ------------

All Accounts Fixed income $265,291 $226,797 $240,709 Cash Management 74,083 73,769 78,057 Equity 32,388 13,764 14,792 Alternative investment products 19,566 6,342 8,202 --------- --------- --------- Total $391,328 $320,672 $341,760 ========= ========= =========

Separate Accounts Fixed income $239,912 $202,055 $216,070 Cash Management 7,307 6,304 7,360 Cash Management-Securities lending 6,791 8,479 6,898 Equity 18,610 9,003 9,397 Alternative investment products 19,566 6,342 8,202 --------- --------- --------- Subtotal 292,186 232,183 247,927 --------- --------- --------- Mutual Funds Fixed income 25,379 24,742 24,639 Liquidity 59,985 58,986 63,799 Equity 13,778 4,761 5,395 --------- --------- --------- Subtotal 99,142 88,489 93,833 --------- --------- --------- Total $391,328 $320,672 $341,760 ========= ========= =========

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

Quarter ended March 31, 2005 2004 --------- ---------

All Accounts Beginning assets under management $341,760 $309,356 Net subscriptions 105 6,340 Acquisitions 49,877 - Market appreciation (depreciation) (414) 4,976 --------- --------- Ending assets under management $391,328 $320,672 ========= =========

% of Change in AUM from net subscriptions and acquisitions 100.8% 56.0%

Separate Accounts Beginning assets under management $247,927 $222,589 Net subscriptions 4,522 4,971 Acquisitions 40,181 - Market appreciation (depreciation) (444) 4,623 --------- --------- Ending assets under management 292,186 232,183 --------- --------- Mutual Funds Beginning assets under management 93,833 86,767 Net subscriptions (redemptions) (4,417) 1,369 Acquisitions 9,696 - Market appreciation 30 353 --------- --------- Ending assets under management 99,142 88,489 --------- ---------

Total $391,328 $320,672 ========= =========

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

Quarter Ended 2004 2005 ------------------------------------- --------- March June September December March 31 30 30 31 31 ------------------------------------- ---------

Separate Accounts Fixed Income Beginning assets under management $190,432 $202,055 $199,762 $211,075 $216,070 Net subscriptions 7,141 1,365 5,201 1,121 4,906 Acquisitions - - - - 20,005 Market appreciation (depreciation) 4,482 (3,658) 6,112 3,874 (1,069) ------------------------------------ ---------- Ending assets under management 202,055 199,762 211,075 216,070 239,912 ------------------------------------ ---------- Cash Management Beginning assets under management 5,855 6,304 6,896 7,703 7,360 Net subscriptions (redemptions) 446 591 787 (362) (632) Acquisitions - - - - 558 Market appreciation 3 1 20 19 21 ------------------------------------ ---------- Ending assets under management 6,304 6,896 7,703 7,360 7,307 ------------------------------------ ---------- Cash Management- Securities lending Beginning assets under management 9,925 8,479 8,771 8,636 6,898 Net subscriptions (redemptions) (1,446) 292 (135) (1,738) (107) ------------------------------------ ---------- Ending assets under management 8,479 8,771 8,636 6,898 6,791 ------------------------------------ ---------- Equity Beginning assets under management 9,443 9,003 8,790 8,129 9,397 Net subscriptions (redemptions) (684) (195) (748) 31 (107) Acquisitions - - - - 9,061 Market appreciation (depreciation) 244 (18) 87 1,237 259 ------------------------------------ ---------- Ending assets under management 9,003 8,790 8,129 9,397 18,610 ------------------------------------ ---------- Alternative investment products Beginning assets under management 6,934 6,342 6,626 7,418 8,202 Net subscriptions (redemptions) (486) 220 851 666 462 Acquisitions - - - - 10,557 Market appreciation (depreciation) (106) 64 (59) 118 345 ------------------------------------ ---------- Ending assets under management 6,342 6,626 7,418 8,202 19,566 ------------------------------------ ---------- Total Separate Accounts Beginning assets under management 222,589 232,183 230,845 242,961 247,927 Net subscriptions (redemptions) 4,971 2,273 5,956 (283) 4,522 Acquisitions - - - - 40,181 Market appreciation (depreciation) 4,623 (3,611) 6,160 5,248 (444) ------------------------------------ ---------- Ending assets under management $232,183 $230,845 $242,961 $247,927 $292,186 ==================================== ==========

Mutual Funds Fixed Income Beginning assets under management $23,924 $24,742 $23,780 $24,460 $24,639 Net subscriptions (redemptions) 598 (264) 270 197 (139) Acquisitions - - - - 989 Market appreciation (depreciation) 220 (698) 410 (18) (110) ------------------------------------ ---------- Ending assets under management 24,742 23,780 24,460 24,639 25,379 ------------------------------------ ---------- Cash Management Beginning assets under management 58,565 58,986 50,276 51,498 63,799 Net subscriptions (redemptions) 420 (8,710) 1,222 12,309 (4,023) Acquisitions - - - - 210 Market appreciation (depreciation) 1 - - (8) (1) ------------------------------------ ---------- Ending assets under management 58,986 50,276 51,498 63,799 59,985 ------------------------------------ ---------- Equity Beginning assets under management 4,278 4,761 4,753 4,546 5,395 Net subscriptions (redemptions) 351 4 (146) 455 (255) Acquisitions - - - - 8,497 Market appreciation (depreciation) 132 (12) (61) 394 141 ------------------------------------ ---------- Ending assets under management 4,761 4,753 4,546 5,395 13,778 ------------------------------------ ---------- Total Mutual Funds Beginning assets under management 86,767 88,489 78,809 80,504 93,833 Net subscriptions (redemptions) 1,369 (8,970) 1,346 12,961 (4,417) Acquisitions - - - - 9,696 Market appreciation (depreciation) 353 (710) 349 368 30 ------------------------------------ ---------- Ending assets under management $88,489 $78,809 $80,504 $93,833 $99,142 ==================================== ==========

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

Quarter Ended 2004 2005 ------------------------------------- --------- March June September December March 31 30 30 31 31 ------------------------------------- --------- Mutual Funds BlackRock Funds Beginning assets under management $18,354 $18,985 $16,603 $16,305 $16,705 Net subscriptions (redemptions) 427 (2,110) (391) 60 (430) Acquisitions - - - - 9,476 Market appreciation (depreciation) 204 (272) 93 340 4 ------------------------------------ ---------- Ending assets under management 18,985 16,603 16,305 16,705 25,755 ------------------------------------ ---------- BlackRock Global Series Beginning assets under management 838 1,026 1,293 1,299 1,223 Net subscriptions (redemptions) 181 275 (21) (117) (104) Market appreciation (depreciation) 7 (8) 27 41 (4) ------------------------------------ ---------- Ending assets under management 1,026 1,293 1,299 1,223 1,115 ------------------------------------ ---------- BlackRock Liquidity Funds Beginning assets under management 52,870 53,159 45,854 47,087 58,453 Net subscriptions (redemptions) 289 (7,305) 1,233 11,374 (4,589) Market depreciation - - - (8) - ------------------------------------ ---------- Ending assets under management 53,159 45,854 47,087 58,453 53,864 ------------------------------------ ---------- Closed End Beginning assets under management 13,961 14,552 14,233 14,895 15,410 Net subscriptions 449 111 433 520 175 Acquisitions - - - - 220 Market appreciation (depreciation) 142 (430) 229 (5) 30 ------------------------------------ ---------- Ending assets under management 14,552 14,233 14,895 15,410 15,835 ------------------------------------ ---------- Other Commingled Funds Beginning assets under management 744 767 826 918 2,042 Net subscriptions 23 59 92 1,124 531 ------------------------------------ ---------- Ending assets under management 767 826 918 2,042 2,573 ------------------------------------ ---------- Total Mutual Funds Beginning assets under management 86,767 88,489 78,809 80,504 93,833 Net subscriptions (redemptions) 1,369 (8,970) 1,346 12,961 (4,417) Acquisitions - - - - 9,696 Market appreciation (depreciation) 353 (710) 349 368 30 ------------------------------------ ---------- Ending assets under management $88,489 $78,809 $80,504 $93,833 $99,142 ==================================== ==========

--30--KL/ny*

CONTACT: BlackRock, Inc. Kathleen Baum, 212-810-5429 Brian Beades, 212-810-5596 invrel@blackrock.com

KEYWORD: NEW YORK INDUSTRY KEYWORD: BANKING EARNINGS SOURCE: BlackRock, Inc.

Copyright Business Wire 2005