BLK

BlackRock, Inc.

BlackRock, Inc. is one of the largest publicly traded investment management firms in the United States with $1.307 trillion of assets under management at December 31, 2008. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of fixed income, cash management, equity and balanced and alternative investment separate accounts and funds. In addition, through BlackRock Solutions®, the Company offers risk management and advisory services that combine capital markets expertise with proprietarily-developed systems and technology. BlackRock Solutions provides risk management and enterprise investment services for $7 trillion in assets, liabilities and derivatives.

BlackRock is independent in ownership and governance, with no single majority stockholder and a majority of independent directors. At December 31, 2008, Merrill Lynch & Co., Inc. owned approximately 44.2% of BlackRock’s voting common stock outstanding and held approximately 48.2% of the Company’s capital stock on a fully diluted basis. The PNC Financial Services Group, Inc. owned approximately 36.5% of BlackRock’s voting common stock outstanding and held approximately 32.1% of the Company’s capital stock on a fully diluted basis.

On January 1, 2009, Bank of America Corporation acquired Merrill Lynch. In connection with this transaction, BlackRock entered into exchange agreements with each of Merrill Lynch and PNC pursuant to which each agreed to exchange a portion of the BlackRock voting common stock they held for non-voting preferred stock. Following the closing of these exchanges on February 27, 2009, Bank of America/Merrill Lynch and PNC owned approximately 4.9% and 46.5% of BlackRock’s voting common stock, respectively. The capital stock held by Bank of America/Merrill Lynch and PNC in BlackRock remained largely unchanged at approximately 47.4% and 31.5% on a fully diluted basis, respectively.

BlackRock closed 2008 with AUM of $1.307 trillion, a decrease of 4% over year-end 2007 levels. Over the past five years, BlackRock’s AUM has had a compound annual growth rate of 33%.

Growth in AUM over the past five years includes acquired AUM of $660.8 billion. On September 29, 2006, Merrill Lynch contributed the entities and assets that constituted its investment management business (the “MLIM Business,” formerly named Merrill Lynch Investment Managers or “MLIM”) to the Company (the “MLIM Transaction”), adding $589.2 billion in AUM. Acquired AUM also includes approximately $21.9 billion in AUM acquired as a result of BlackRock’s acquisition of the fund of funds business of Quellos Group, LLC (the “Quellos Business” or “Quellos”), which closed on October 1, 2007 (the “Quellos Transaction”) and approximately $49.7 billion in AUM acquired in BlackRock’s acquisition of SSRM Holdings, Inc. from MetLife, Inc. in January 2005 (the “SSR Transaction”).

BlackRock offers a broad range of investment and risk management services to institutional and retail investors worldwide. These diverse capabilities span the global capital markets and permit the Company to serve a wide variety of investor interests. As of year-end 2008, more than 25% of the Company’s separate account clients had awarded BlackRock mandates in more than one asset class. The Company’s $1.307 trillion of AUM at year-end 2008 consisted of approximately 21% equity and balanced, 37% fixed income, 26% cash management, 5% alternative investments and 11% advisory portfolios.

The Company manages assets on behalf of investors in more than 60 countries. Approximately 41% of long-dated AUM, 12% of cash management AUM and 5% of advisory AUM were managed on behalf of international clients, with the balance managed for U.S. investors. In all regions, clients include both institutional and retail investors. At year-end 2008, approximately 76% of long-dated AUM, 91% of cash management AUM and 100% of advisory AUM were managed for institutional clients, with the remainder managed for retail and high net worth investors.

BlackRock has developed and maintains an extensive operating platform, Aladdin®, to support its global investment and risk management operations. The Company offers Aladdin and a variety of related services to institutional investors under the BlackRock Solutions brand name. At year-end 2008, over $7 trillion of assets, liabilities and derivatives were processed on the Aladdin platform in connection with outsourcing, risk management and advisory services provided to 135 clients.

BlackRock operates in a global marketplace characterized by a high degree of market volatility and economic uncertainty, factors that can significantly affect earnings and stockholder returns in any given period. Management seeks to achieve attractive returns for stockholders over time by, among other things, capitalizing on the following factors:

•The Company’s diversified product offerings, which enhance its ability to offer a variety of traditional and alternative investment products across the risk spectrum and to tailor single- and multi- asset class investment solutions to address specific client needs;
•The Company’s longstanding commitment to risk management and the continued development of, and increased interest in, BlackRock Solutions products and services;
•The Company’s global presence, with nearly one-third of employees outside the U.S. supporting local investment capabilities and serving clients throughout the world; and
•The growing recognition of the BlackRock brand, the strength of the Company’s culture and the depth and breadth of its intellectual capital.

The Company’s ability to increase revenue, earnings and stockholder value over time is predicated on its ability to generate new business in investment management and BlackRock Solutions products and services. New business efforts are dependent on BlackRock’s ability to achieve clients’ investment objectives in a manner consistent with their risk preferences and to deliver excellent client service. All of these efforts require the commitment and contributions of BlackRock employees. Accordingly, the ability to retain and attract talented professionals is critical to the Company’s long-term success.