UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 20072009

Or

For the transition period fromto.

Commission File No. 001-33099

BlackRock, Inc.

(Exact name of registrant as specified in its charter)

4055 East 52nd Street, New York, NY 1002210055

(Address of principal executive offices)

(212) 810-5300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known, seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated”accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer  x    Accelerated filer  ¨    Non-accelerated filer  ¨

(Do not check if a smaller reporting company)    Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 20072009 was approximately $2.2$3.6 billion. There is no non-voting common stock of the registrant outstanding.

As of January 31, 2008,February 28, 2010, there were 117,282,55863,076,131 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference herein:

Portions of the definitive Proxy Statement of BlackRock, Inc. to be filed pursuant to Regulation 14A of the general rules and regulations under the Securities Exchange Act of 1934, as amended, for the 20082010 annual meeting of stockholders to be held on May 27, 200813, 2010 (“Proxy Statement”) are incorporated by reference into Part III of this Form 10-K.

BlackRock, Inc.

Index to Form 10-K

TABLE OF CONTENTS

Part I

Overview

BlackRock, Inc. (“BlackRock” or the “Company”) is one of the largest publicly traded investment management firms in the United Statesfirm with $1.357$3.346 trillion of assets under management (“AUM”) at December 31, 2007.2009. BlackRock manages assetsfocuses exclusively on behalfinvestment management and risk management; we do not engage in proprietary trading or other activities that could conflict with the interests of our clients. Our business is global — we invest in capital markets throughout the world, we have employees in 24 countries and we serve institutional and individualretail investors worldwidein more than 100 countries. We offer a broad array of equity, fixed income, multi-asset class, alternative investment and cash management products, as well as ourBlackRock Solutions^® investment systems, risk management and advisory services. We offer our investment products directly and through intermediaries in a variety of fixed income, cash management, equityvehicles, including open-end and balancedclosed-end mutual funds, iShares^® exchange-traded funds¹ (“ETFs”), collective investment trusts and alternativeseparate accounts. Our clients include taxable, tax-exempt and official institutions, high net worth individuals and retail investors.

On December 1, 2009, BlackRock acquired Barclays Global Investors (“BGI”) from Barclays Bank PLC (“Barclays”), referred to as the “BGI Transaction”, adding substantial investment separate accounts and funds. In addition, BlackRock provides risk management capabilities and more than 3,500 new colleagues to the combined organization. BGI has long been recognized for product innovation in indexed and scientific investing, including pioneeringiShares, the industry’s leading ETF platform, sophisticated retirement solutions and liability-driven investment system outsourcingstrategies. These strengths complement BlackRock’s active fundamental portfolio management capabilities, global mutual fund platform, customized solutions, risk management and advisory services. Together, the combined firm is strongly distinguished by its scale, breadth of capabilities and depth of intellectual capital focused on helping clients address their investment challenges and achieve their financial advisory services globallyobjectives. Upon closing of the BGI Transaction, we commenced operations as a unified firm with the integration of corporate systems largely completed and implementation of our operating platform well underway. Substantial operating and cultural integration work is expected to institutional investors.continue over the course of the next two years.

BlackRock is an independent, in ownership and governance,publicly traded company, with no single majority stockholder and a majority of directors are independent.independent directors. At December 31, 2007,2009, Merrill Lynch & Co., Inc. (“Merrill Lynch”), a wholly-owned subsidiary of Bank of America Corporation, owned approximately 45.1%3.7% of the Company’sBlackRock’s voting common stock outstanding and held approximately 49.0%34.2% of the Company’s capital stock on a fully diluted basis.stock. The PNC Financial Services Group, Inc. (“PNC”), owned approximately 33.5%35.2% of BlackRock’s voting common stock outstanding and held approximately 24.5% of the Company’s capital stock. Headquartered in New York City,Barclays owned approximately 4.8% of BlackRock’s voting common stock outstanding and held approximately 19.8% of the Company has 70 offices in 19 countries throughoutCompany’s capital stock.

At December 31, 2009, BlackRock managed $3.346 trillion of AUM, a 156%, or $2.039 trillion, increase relative to BlackRock’s reported AUM at December 31, 2008. The majority of the United States, Europe, Asiaincrease, $1.850 trillion, was due to the BGI Transaction, including substantial net new business and Australia.

BlackRock closed 2007 with AUMmarket appreciation recorded by BGI during the first eleven months of $1.357 trillion, up $232.02009. The remaining $189 billion or 21% over year-end 2006 levels. Over the past five years, BlackRock’s AUM has had a compound annualof growth rate of 37.8%.represented net new business, investment performance, market appreciation and favorable foreign exchange movements.

Item 1.

BUSINESS

Overview

Reported AUM ⁽¹⁾⁽²⁾

Year ended December 31,

CAGR = Compound Annual Growth RateNM - Not Meaningful

Growth in reported AUM over the past five years includes acquired AUM of $660.8 billion. On September 29, 2006, Merrill Lynch contributedapproximately $2.5 trillion from 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 billionacquisitions of BGI in AUM. Acquired AUM also includes approximately $21.9 billion in AUM acquired as a result of BlackRock’s acquisition of2009, the fund of funds business of Quellos Group, LLC (the “Quellos Business” or “Quellos”(“Quellos”) which closed on October 1,in 2007, (the “Quellos Transaction”Merrill Lynch Investment Managers (“MLIM”) and approximately $49.7 billion in AUM acquired as a result of BlackRock’s acquisition of2006, and SSRM Holdings, Inc. in 2005.

Item 1.

BUSINESS

Overview (continued)

On a pro forma combined basis (as though the BGI Transaction had closed on December 31, 2008), AUM increased 23% or $634.5 billion from MetLife, Inc.$2.712 trillion at year-end 2008. Net new business during the year totaled $159.8 billion, including $219.2 billion of net inflows in January 2005 (the “SSR Transaction”).long-dated and advisory AUM and $59.4 billion of outflows in cash management products. In addition, a strong recovery in global credit and equity markets and favorable foreign exchange rate movements contributed $472.3 billion to AUM growth in 2009. At year-end, 85% of AUM was in long-dated strategies (46% in equities, 32% in fixed income, 4% in multi-asset class and 3% in alternative investments), 10% was in cash management products and 5% was in advisory or long-term liquidation portfolios. BlackRock has realized a 58% compound annual growth rate in AUM over the past five years through a combination of acquisitions, new business, investment performance, market appreciation and foreign exchange movements.

Component Changes in AUM

Non-GAAP Operating Income, Adjustments:as Adjusted:

GAAP reported operating income includes all compensation relatedcertain significant items, the after-tax impact of which management considers non-recurring or transactions that ultimately will not impact BlackRock’s book value and, therefore, are excluded in calculating operating income, as adjusted.

Operating income, as adjusted (a non-GAAP measure), excludes certain expenses associated with certain of BlackRock’s long-term incentive plans (“LTIP”) which are partially funded by BlackRock common stock currently held by PNC, certain costsincurred related to the integration of the SSR, MLIM, Transaction, certainQuellos and BGI Transactions in 2005, 2006, 2007 and 2009, respectively, transaction costs, which include advisory fees, legal fees and consulting expenses related to the integration of the assets acquired from Quellos inBGI Transaction, a 2007 certain costs associated with the SSR Transaction in 2005, a termination fee for closed-end fund administration and servicing arrangements with Merrill Lynch, closed-end fund launch costs2008 and commissions,2009 restructuring charges and compensation expense associated with appreciation / (depreciation) on assets related to BlackRock’scertain BlackRock deferred compensation plans and compensation charges, which the Company anticipates will be reimbursed by Merrill Lynch in the future.

Operatingplans. These expenses have been excluded from operating income, as adjusted, (a non-GAAP measure), excludesbecause they have been deemed non-recurring by management and to help enhance the comparability of this information to prior periods.

The portion of the LTIPcompensation expense associated with certain of BlackRock’s long-term incentive plan (“LTIP”) awards met by the distributionthat will be funded through distributions to participants of shares of BlackRock common stock previously held by PNC and a Merrill Lynch cash compensation contribution, a portion of which has been received, have been excluded because, exclusive of the impact related to the exercise of LTIP participants’ put options, primarily in the three months ended March 31, 2007, these charges do not impact BlackRock’s book value. A detailed discussion of the LTIP is included in Note 1215 to the consolidated financial statements beginning on page F-1 of this Form 10-K. MLIM, Quellos and SSR integration costs consist principally of certain professional fees and compensation costs

Compensation expense associated with appreciation (depreciation) on assets related to those transactions. Also included in MLIM Transaction costs are marketing costs associated with rebranding. MLIM, Quellos and SSR integration costs have been deemed non-recurring by management and havecertain BlackRock deferred compensation plans has been excluded fromas returns on investments set aside for these plans, which substantially offset this expense, are reported in non-operating income (expense).

Management believes that operating income exclusive of these costs is more representative of the operating performance for the respective periods.

Operating Margin, as Adjusted:

Operating income used for measuring operating margin, as adjusted, is equal to operating income, as adjusted, to help ensureexcluding the comparabilityimpact of this information to prior periods. The expense related to the termination of the closed-end fund administration and servicing arrangements with Merrill Lynch has been excluded from operating income, as adjusted, as the termination of the arrangements is deemed non-recurring by management Closed-end fund launch costs and commissions have been excluded from operating income, as adjusted, becausecommissions. Management believes that excluding such costs and commissions is useful because these costs can fluctuate considerably and revenues associated with the expenditure of suchthese costs will not fully impact the Company’s results until future periods. Compensation

Operating margin, as adjusted, allows the Company to compare performance from period-to-period by adjusting for items that may not recur, recur infrequently or may fluctuate based on market movements, such as restructuring charges, transaction/integration costs, closed-end fund launch costs and fluctuations in deferred compensation expense based on mark-to-market movements in investments held to fund certain compensation plans. The Company also uses operating margin, as adjusted, to monitor corporate performance and efficiency and as a benchmark to compare its performance to other companies. Management reviews both the GAAP and non-GAAP financial measures.

Item 1.

BUSINESS (continued)

Overview (continued)

Operating Margin, as Adjusted (continued):

Revenue used for operating margin, as adjusted, excludes distribution and servicing costs paid to related parties and to other third parties. Management believes that excluding such costs is useful to BlackRock because it creates consistency in the treatment for certain contracts for similar services, which due to the terms of the contracts, are accounted under GAAP on a net basis within investment advisory, administration fees and securities lending revenue. Amortization of deferred mutual fund sales commissions is excluded from revenue used for operating margin measurement, as adjusted, because such costs, over time, offset distribution fee revenue earned by the Company. Reimbursable property management compensation represented compensation and benefits paid to personnel of Metric Property Management, Inc. (“Metric”), a subsidiary of BlackRock Realty Advisors, Inc. (“Realty”). Prior to the transfer in 2008 to a third party, these employees were retained on Metric’s payroll when certain properties were acquired by Realty’s clients. The related compensation and benefits were fully reimbursed by Realty’s clients and have been excluded from revenue used for operating margin, as adjusted, because they did not bear an economic cost to BlackRock. For each of these items, BlackRock excludes from revenue used for operating margin, as adjusted, the costs related to each of these items as a proxy for such offsetting revenues.

Non-Operating Income (Expense), Less Net Income (Loss) Attributable to Non-controlling Interests, as Adjusted:

Non-operating income (expense), less net income (loss) attributable to non-controlling interests, as adjusted, equals non-operating income (expense), GAAP basis, less net income (loss) attributable to non-controlling interests, GAAP basis, adjusted for compensation expense associated with thedepreciation or appreciation / (depreciation) ofon assets related to certain of BlackRock’s deferred compensation plansplans. The compensation expense offset is recorded in operating income. This compensation expense has been excluded from operatingincluded in non-operating income (expense), less net income (loss) attributable to non-controlling interests, as adjusted, as investmentto offset returns on investments set aside for these assetsplans, which are reported in non-operating income (expense), GAAP basis.

Management believes that non-operating income (expense), less net income (loss) attributable to non-controlling interests, as adjusted, provides for comparability of the related impact onthis information to prior periods and is an effective measure for reviewing BlackRock’s non-operating contribution to its consolidated results. As compensation expense and resultsassociated with depreciation or appreciation on assets related to certain BlackRock deferred compensation plans, which is included in a nominal impact on net income. Compensation charges to be reimbursed by Merrill Lynch have been excluded from operating income, offsets the gain/(loss) on the investments set aside for these plans, management believes that non-operating income (expense), less net income (loss) attributable to non-controlling interests, as adjusted, because these charges are not expected toprovides a useful measure, for both management and investors, of BlackRock’s non-operating results that impact BlackRock’s book value.

Non-GAAP Net Income Adjustments:Attributable to BlackRock, Inc., as Adjusted:

GAAP reported net income attributable to BlackRock, Inc. and GAAP diluted earnings per common share include certain charges and gains,significant items, the after-tax impact of which management considers non-recurring or transactions that ultimately will not impact BlackRock’s book value and, therefore, are excluded in calculating net income attributable to BlackRock, Inc., as adjusted.

Net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted (a non-GAAP measure)(non-GAAP measures), exclude the after-tax impact of the 2008 and 2009 restructuring charges, the 2007 termination of closed-end fund administration and servicing arrangements with Merrill Lynch, LTIP expense to be funded by PNC and by an expecteda Merrill Lynch cash compensation contribution, a portion of which has been received, the SSR, MLIM, Quellos and SSRBGI integration costs, BGI transaction costs and the effect on deferred income tax expense attributable to changes in corporate income tax rate reductions.rates as a result of enacted legislation.

Item 1.

BUSINESS (continued)

Overview (continued)

See Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for a detailed reconciliation of GAAP reported operating income, non-operating income (expense) less net income (loss) attributable to non-controlling interests, net income attributable to BlackRock, Inc. and diluted earnings per common share to adjusted non-GAAP operating income, non-operating income (expense), net income attributable to BlackRock, Inc. and diluted earnings per common share.

4

Products*Products *

BlackRock offers a wide varietybroad spectrum of fixed income, equity and balanced, cashinvestment management and alternativerisk management products and services. Investment management offerings include single- and multi-asset class portfolios, which may be structured to focus on a particular investment products.style, capitalization range, region or market sector; credit or maturity profile; or liability structure. Revenue from these products primarily consists of advisory fees, typically structured as a percentage of AUM and, inAUM. In some instances, we earn securities lending fees or performance fees, which may be expressed as a share of earnings or a percentage of returns in excess of agreedagreed-upon targets. In addition, BlackRock also offers itsAladdin^® investment system, as well as risk management, investment system outsourcing financialand advisory and transition management services, to institutional investors under theBlackRock Solutionsname. Revenue on these services may be based on several criteria including asset volume, number of users, accomplishment of specific deliverables or other performance objectives.

Equity

BlackRock’s bondequity AUM closed the year at $1.536 trillion, up 656%, or $1.333 trillion, from reported AUM of $203.3 billion at December 31, 2008. The increase was due primarily to the BGI Transaction, which contributed $1.188 trillion in acquired assets. On a pro forma combined basis, equity AUM increased 47% or $488.2 billion from $1.048 trillion at year-end 2008. The pro forma increase included $124.2 billion in net new business and $360.2 billion from investment performance (alpha) and positive market movement (beta).

Component Changes in Equity AUM

BlackRock manages equity portfolios utilizing three distinct investment approaches: index or passive, active fundamental and active scientific. Index strategies employ a structured balance of risk, return and cost to offer an efficient way to obtain exposure to equity markets. Fundamental investments seek to add value relative to a specified index or on an absolute basis primarily through security selection based on BlackRock’s proprietary research and portfolio manager judgment. Scientific equity strategies seek superior investment outcomes through a stock selection process that aims to systematically find and exploit pricing opportunities while rigorously managing risk and cost. A wide variety of products are denominatedoffered in many currencieseach of these styles, including U.S. dollars, pounds sterling, euros, yenglobal and Australian dollars. The Company’s equity platform spans global markets, stylesregional portfolios; value, growth and capitalization ranges. BlackRock’s alternative investment capabilities include private equity, private equity funds of funds, real estate equitycore products; large, mid and debt, hedge funds of funds, single-strategy hedge funds, long-only absolute return strategies, commoditiessmall cap strategies; and structured products. The Company also manages sector-specific mandates across asset classes as well as multi-asset class strategies.selected sector funds.

Item 1.

BUSINESS (continued)

Products (continued)

Equity (continued)

At year-end 2009, index strategies represented $1.183 trillion, or 77%, of equity AUM. Active equity portfolios totaled $353.1 billion, or 23%, of equity AUM, including $208.7 billion in active fundamental strategies and $144.3 billion in active scientific products. During the year, investors reallocated from cash earning near zero to higher risk assets, helping to fuel a strong recovery in the global equity markets. Index strategies, including ETFs, attracted significant flows as an efficient means of gaining market exposure, in some cases pending longer-term allocations to active strategies. On a pro forma combined basis, BlackRock had net new business of $146.8 billion in index funds and $10.4 billion in active fundamental portfolios, which more than offset $33.0 billion of net outflows in active scientific equities.

BlackRock manages equity portfolios for a diverse base of institutional and retail clients globally. At December 31, 2009, 65% of equity AUM or $1.001 trillion was managed on behalf of institutional investors in separate accounts, collective investment trusts and mutual funds. An additional $381.4 billion or 25% of equity AUM were managed iniShares products, which are purchased by both institutional and retail investors on stock exchanges worldwide. The remaining 10%, or $153.9 billion, of equity AUM was managed for retail and high net worth investors, largely through open-end mutual funds and separately managed accounts. Approximately 59%, or $912.2 billion, of our equity AUM was managed for clients based in the United States and Canada. The remaining 41% or $623.9 billion of equity AUM included $444.5 billion managed for clients in Europe, the Middle East and Africa (“EMEA”), $167.8 billion in Asia Pacific and $11.5 billion for investors in Latin America and Iberia. Net inflows of $124.2 billion were positive across all regions, with $56.9 billion of net new business from the United States and Canada, $46.3 billion from EMEA, $18.8 billion from Asia Pacific and $2.1 billion from Latin America and Iberia.

Global equity markets were volatile throughout 2009, reaching their two-year lows in March and rebounding sharply thereafter. For example, the MSCI World Index declined to a low of 172.7 in March before rebounding to 299.4 at year-end, a 73% increase from its nadir and a 32% overall return for the full year. BlackRock’s index equity accounts closely tracked their corresponding benchmarks, with 68% of AUM achieving returns within 1% of index returns and 56% of AUM outperforming their benchmarks. Our active fundamental equity strategies maintained strong long-term track records, with 59%, 76% and 86% of active fundamental AUM above their benchmarks (which for certain non-U.S. products are based upon peer medians), while 10%, 19% and 24% of active scientific AUM outperformed their benchmarks (which for certain non-U.S. products are based upon peer medians) for the one-, three- and five-year periods ended December 31, 2009, respectively. Although active scientific equity strategies have struggled industry-wide since mid-2007, we believe in the long-term viability of the approach and have committed substantial resources to research and development of the next generation of active scientific equity investing.

Item 1.

BUSINESS (continued)

Products (continued)

Fixed Income

BlackRock’s fixed income AUM ended 2009 at $1.056 trillion, representing an increase of $574.2 billion or 119%, over the previous year’s reported results. The BGI Transaction added $517.3 billion of AUM. On a pro forma combined basis, fixed income AUM rose 18%, or $161.0 billion. During the year, we were awarded net new business of $77.1 billion, driving 48% of the year’s increase in AUM. Investment performance and market appreciation contributed $80.3 billion, or 50%, of the combined growth.

Component Changes in Fixed Income AUM

BlackRock offers an arraya broad range of index and actively managed fixed income products across various bond marketsregions, sectors, credit quality and sectors as well as various maturities alongmaturities. Actively managed strategies may employ a fundamental or model-driven investment process. The former emphasizes risk-controlled sector rotation and security selection driven by sector experts and direct interaction with issuers and market makers, while the yield curve. BlackRock tailors client portfolioslatter employs models to reflect specificidentify relative return opportunities and to apply those results, subject to a pragmatic review of model risk, on a systematic basis across portfolios. Fixed income mandates are often tailored to client-specified liabilities, accounting, regulatory or rating agency requirements, or other investment guidelines and objectives with respect to interest rate exposure, sector allocation and credit quality. In 2007, BlackRock’spolicies. Year-end fixed income AUM increased 15% year-over-yearconsisted of $459.3 billion, or 44%, in index portfolios and $596.3 billion in active strategies. Investors returned to $513.0 billion at year-end.

Allthe bond portfolios are managed by BlackRock’smarkets in 2009, driving a substantial tightening in credit spreads from the historically high levels reached during 2008. Demand for fixed income team, which is comprised of regional and sector specialists as well as credit and quantitative analysts, all of whom work closely together to share information, formulate investment themes and implement specific strategies in accordanceofferings was strong across products, with each portfolio’s investment objectives and guidelines. They are supported by extensive analytical tools and a shared research database that includes reports from both equity and credit analysts throughout the Company.

Net new business in fixed income totaled $27.2 billion in 2007, with flows representative of the trend toward more customized solutions and a broader array of investment strategies. Inflows demonstrated continued allocation of capital to global fixed income ($9.6 billion into global portfolios), the growth of target date and target return funds ($19.1 billion net new business in targeted duration portfolios), and the redefinition of “traditional” fixed income strategies to include a range of absolute return and structured products ($10.4 billion net inflows into CDOs and the reclassification of $14.0 billion of alternative assets to fixed income to better align with the evolution of the business). Along with moderate inflows in municipal bonds, the strong net inflows offset outflows in core, sector-specialty and equity plus mandates.

During 2007, BlackRock further diversified its fixed income client base geographically with 79% of net new business, or $21.5 billion, from non-U.S. investors. At December 31, 2007, 35% of fixed income AUM was managed for non-U.S. investors, up from 31% at year-end 2006. Inflows were positive across all regions, with net new business of $5.7 billion and $21.5 billion from U.S. and international clients, respectively.

The fixed income business remains largely institutional, with 83% of total bond AUM and 93%, or $25.3$62.8 billion of net new business from institutional clients duringin index products, including iShares, and $14.2 billion in active strategies. Key areas of growth included non-dollar denominated products, such as liability driven investment solutions in the U.K., and U.S. core strategies, with $38.2 billion and $15.8 billion of net inflows, respectively, throughout the year. At December 31, 2007, 44% of

Of BlackRock’s total fixed income AUM, was from tax-exempt clients, with 79%81%, or $21.6$860.0 billion, was managed on behalf of institutional investors, 10% or $102.5 billion of netAUM was managed iniSharesproducts, including 22 new fixed income business from tax-exempt institutions in 2007. Inflows through theofferings launched during 2009, and 9% or $93.2 billion was managed for retail and high net worth channels increased from a slight net outflowinvestors. The client base was well diversified geographically, with 54% or $572.2 billion of fixed income AUM managed for clients based in 2006 to netthe United States and Canada. The remaining 46% or $483.4 billion of fixed income AUM included $332.4 billion managed for clients in EMEA, $143.0 billion in Asia Pacific and $8.0 billion for investors in Latin America and Iberia. Net inflows of $1.9$38.9 billion and $45.7 billion from U.S and Canadian and EMEA clients, respectively, more than offset cumulative net outflows of $7.6 billion from clients in 2007.

5

Products (continued)Asia Pacific and Latin America and Iberia.

Fixed Income (continued)

A significant rally in credit spreads drove strong performance in the bond markets, with the Barclays Global Aggregate Index posting a 6.9% return for the year. BlackRock’s fixed income portfolio management team seeks competitive investmentindex accounts closely tracked their benchmarks, with 77% of accounts achieving returns within 1% of index returns and 53% of AUM outperforming their benchmarks. Our active fixed income strategies achieved strong performance by consistently employing a disciplined process designed to add incremental returns in excess2009, with 79%, 33% and 40% of benchmarks. While competitive performance is key, ensuring that portfolio risks are consistent with client objectives is paramount. For the one-, three- and five-year periods ended December 31, 2007, 58%, 74% and 64% of bond fund assets ranked in the top two quartiles of their peer groups.

Equity and Balanced

BlackRock manages a range of equity strategies that span the risk/return spectrum, along with several targeted opportunities in specific market sectors. BlackRock closed 2007 with equity and balanced AUM of $459.2 billion, up 17% year-over-year.

The Company’s equity and balanced products employ primarily either an active quantitative approach or an active fundamental approach, bothAUM above their benchmarks (which for certain non-U.S. products are based upon peer medians) and 71%, 70% and 89% of which seek to add value principally through stock selection. BlackRock’s quantitative strategies employ sophisticated, proprietary models to drive the investment process. The firm’s fundamental strategies emphasize in-depth company and industry research as well as macro-economic analysis as the basisactive model-based AUM above their benchmarks (which for stock selection. Portfolioscertain non-U.S. products are managed by distinct teams that each invest according to their own philosophy, process and style and all benefit from shared information and a common trading, systems, operations, administration and compliance platform.

Despite market volatility in the latter half of 2007, net new business in the equity platform totaled $23.5 billion in 2007. Concerns about the market drove investors to investments with more embedded advice and a broader global allocation, as evidenced by $13.9 billion of net inflows into balanced and asset allocation funds over the year. The equity platform has also had strong inflows into U.S. equity, quantitative/enhanced index and sector funds, particularly natural resources, offsetting outflows from regional/country funds.

BlackRock’s equity platform is diversified across its clients and channels. At December 31, 2007, 46% of the Company’s total equity and balanced AUM, or $211.1 billion, was managed for U.S. investors and 54%, or $248.1 billion, was managed for non-U.S. investors. We continue to benefit from our global reach, expanding our presence in Asia and opening an investment center in Hong Kong in 2007. While net inflows in 2007 were heavily weighted from retail and high net worth investors (97% of net new business or $22.7 billion), the channel mix at year-end remained well balanced with 42% of assets managed on behalf of institutions and 58% managed on behalf of retail and high net worth investors.

BlackRock’s equity investment teams sustained strong performance track records, with 84%, 90% and 90% of equity fund assets ranked in the top two quartiles of theirbased upon peer groupsmedians) for the one-, three- and five-year periods ended December 31, 2007.

Cash Management

BlackRock cash management products cover the short end of the duration spectrum and reflect a firm focus on credit quality and risk management. BlackRock is a leading provider of cash management products with $313.3 billion in global cash management AUM at December 31, 2007, including a variety of money market funds and customized portfolios. AUM in these strategies increased $77.6 billion, or 33%, during 2007. Net new business totaled $75.3 billion during the year.

62009, respectively.

Products (continued)

Cash Management (continued)Multi-Asset Class

Net inflowsIn view of $52.4 billion into cash management products in the thirdgrowing demand for investment solutions that utilize a combination of fixed income, equities and fourth quarters highlight the industry-wide reallocation of funds out of higher risk strategies and into money market funds in response to credit market concerns and reaction to Federal Reserve rate cuts. Although inflows had continued in early 2008, we anticipate outflows when overnight rates stabilize and investors return to more typicalalternative investments, BlackRock is recognizing multi-asset class as a separate product category. Strategies include asset allocation strategies.

and balanced mandates, target date and target risk funds, and fiduciary outsourcing relationships. BlackRock’s cash management activities are primarily conducted on behalfmulti-asset class AUM closed the year at $142.0 billion, an increase of U.S. clients, although there is increasing demand among international clients for similar products. At December 31, 2007, cash management83%, or $64.5 billion, from the $77.5 billion multi-asset class AUM for U.S. investors reached $286.4 billionthat was reported as part of equity and assets for international investors were $26.9 billion. For 2007, net inflows from U.S. investors totaled $71.0 billion and $4.3 billion was raised from international investors. Institutional clients represent the largest percentage of BlackRock’s cash management platform with $248.4 billion of assetsbalanced AUM at December 31, 2007. Retail and high net worth client cash management assets have grown from $53.6 billion at year-end 2006 to $64.9 billion at year-end 2007.

For2008. TheLifePath^® portfolios, the one-, three- and five-year periods ended December 31, 2007, 100% of BlackRock’s U.S. institutional money market fund assets outperformed their benchmarks.

Alternative Investment Products

BlackRock’s alternative investment products capitalize on evolving capital market opportunities that benefit from the Company’s resources in risk management, product development, client service and operational support. Strategies are designed to provide returns with low correlations to the broad equity and bond markets. BlackRock’s capabilities include private equity, private equityindustry’s first target date funds, of funds, real estate equity and debt, hedge funds of funds, single-strategy hedge funds, long-only absolute return strategies, commodities and structured products. Total assets managed in alternative investments increased by $23.0 billion to $71.1 billion at December 31, 2007. The increase accounts for $21.9 billion of assets acquired in the Quellos Transaction and a reclassification of $14.0 billion of structured products and absolute return products to fixed income earlier in the year.

In 2007, BlackRock launched BlackRock Alternative Advisors (“BAA”), created by the mergerrepresented over half of the Quellos Business with our existing absolute return and private equity fund of funds business. BAA will continue to manage assets across absolute return, private capital and hybrid strategies, with emphasis on the Company’s long-standing investment philosophy and process.acquired AUM. On a pro forma combined basis, multi-asset class AUM in these strategies totaled $29.5rose 33% or $35.4 billion, at year-end. We have already begun to realize the power of the combined businesses, with $1.4including $13.5 billion of net new business, largely driven by retail investors into mutual funds. The multi-asset class products were further spurred by the recovery in global financial markets as positive market movements added another $21.5 billion throughout the year.

Component Changes in Multi-Asset Class AUM

Cash Management

AUM in over 36 countries, bringing the total managed for international clients to $483.3cash management products stood at $349.3 billion at December 31, 2007. New business efforts encompass direct contact with institutional2009, up $10.8 billion, or 3%, from AUM reported at year-end 2008. The BGI Transaction added $59.5 billion of AUM. The 2008 surge in cash management assets reversed in 2009, as investors tired of earning little to no return reallocated to various long-dated strategies offering the potential for higher returns. On a pro forma combined basis, net outflows totaled $59.4 billion, resulting in a 15% decrease in spot AUM and their consultants, as well as wholesale distributionan approximately 10% decline in average AUM relative to 2008.

Component Changes in Cash Management AUM

BlackRock employs a conservative investment style that emphasizes quality, liquidity and superior client service throughout all market cycles. Disciplined risk management, including a rigorous credit surveillance process, is an integral part of the investment process. Products include taxable and tax-exempt money market funds and unit trusts through broker-dealers and other financial intermediaries. International clients are served by officescustomized separate accounts. Portfolios may be denominated in over 29 cities outside the U.S.

BlackRock also serves a large and growing base dollar, Euro or Sterling. The BGI Transaction added substantial scale in our non-dollar offerings: 63% or $37.5 billion of U.S. investors. In 2007, net new business from U.S. clients totaled $100.1 billion across a wide range of products, increasing total assets managed for U.S. investors to $873.3 billion at year-end. Client channels served include pension and other tax exempt clients, insurance and other taxable investors, institutionalacquired cash management and institutional and retail fund investors.

BlackRock’s asset base is also diversified by the types of clients served. At December 31, 2007, BlackRock managed $935.6 billion, or 69% of total AUM on behalf of institutional investors and $421.0 billion, or 31% of total AUM, on behalf of retail and high net worth clients globally. During the year, institutional investor AUM grew $168.6 billion with $100.4 billion from net new business across client segments, including $9.4 billion from a single client. Institutional clients include pension funds, official institutions, foundations, endowments and charities, insurance companies, banks, sub-advisory relationships and private bankswas invested in more than 60 countries.

Assets managed for tax-exempt institutions, including defined benefit and defined contribution pension plans, foundations, endowments and other non-profit organizations, increased 21% to $423.3 billion at December 31, 2007. For the year, net new business from these investors totaled $25.3 billion. BlackRock works with pension plan sponsors and their consultants to address changing asset allocation strategies and to consider appropriate investment opportunities. Management believes that these clients increasingly demonstrate a preference for more services from fewer managers and that BlackRock can benefit from this trend. In addition, management believes a more robust mutual fund family should be of interest to defined contribution plans and smaller institutional investors, while expanded alternative investment offerings should appeal to foundations and endowments.

AUM for taxable institutions worldwide increased 13% during the year to $255.0 billion at year-end 2007.offshore markets.

The Company’s insurance business encompasses customized investmentcash management specializedteam also manages the cash we receive as collateral for securities on loan in other portfolios. Securities lending, which is offered as a potential source of incremental returns on long-dated portfolios, is managed by a dedicated team, supported by quantitative analysis, proprietary technology and disciplined risk management and accounting services. BlackRock is onemanagement. Fees for securities lending can be structured as a share of earnings or a percentage of the largest managersvalue of insurance assets worldwide, benefiting from an ongoing trend toward investment outsourcing. This businessthe cash collateral. The value of the securities on loan is however, subject to event risk arising from insurance company mergersreported as well as client decisions to internalizeAUM in the corresponding asset management.

9class. The value of the cash collateral is not included in cash management AUM.

Products (continued)

ClientsCash Management (continued)

At year-end 2007, AUM in institutionalOur cash management products was $248.4 billion, up 36% from December 31, 2006, including $64.2clientele remained largely institutional, with 80%, or $280.4 billion, of cash AUM managed on behalf of institutions and 19%, or $67.6 billion, managed for retail investors at year-end 2009. An additional $1.3 billion of cash AUM was managed in iShares products. The investor base was also predominantly domestic, with 76% or $265.4 billion of AUM managed for U.S. and Canadian investors and 24%, or $83.9 billion, managed for international clients, almost all of which were based in EMEA. While we suffered significant net outflows from U.S. clients reallocating out of cash, we attracted net inflows internationally where we gained market share as a relatively new business. BlackRock continually seeks ways to provide innovativeentrant. We expect cash management solutionsAUM to clients. In 2007, these efforts focusedremain volatile, with outflows likely as the economy stabilizes and central banks end their quantitative easing programs and eventually raise interest rates.

BlackRock Solutions and Advisory

BlackRock offers investment systems, risk management, outsourcing and advisory services under theBlackRock Solutions brand name. Over $9.0 trillion of positions are processed on helping clients identify opportunities to successfully manage aroundourAladdin operating platform, which serves as the highly unsettled market conditions while maintaining competitive yields.investment system for BlackRock and a growing number of sophisticated institutional investors.BlackRock Solutionsalso focuses on providing flexible and responsive client service, which is conducted through its call center and online account management tools. Management believes that these efforts will continue to enable BlackRock to better withstand volatility in asset flows, build its client base and increase market share over time.

The investmentoffers comprehensive risk reporting via theGreen Package^® and risk management expertise that advisory services, interactive fixed income analytics through our web-based calculator,AnSer^®, middle and back office outsourcing services and investment accounting. Clients have also retainedBlackRock bringsSolutions for a variety of financial markets advisory engagements, such as valuation and risk assessment of illiquid assets, portfolio restructuring, workouts and dispositions of distressed assets and financial and balance sheet strategies.

As the global capital markets began to recover, clients remained focused on risk management, and demand forBlackRock Solutions continued to grow. During the management of institutional products is also available globally through separate accounts, open-end and closed-end funds, offshore funds, unit trusts and alternative investment vehicles for individual investors. As of December 31, 2007, year,BlackRock managed $421.1 billion on behalf of retail and high net worth investors worldwide, including $273.1 billion for U.S. and $148.0 billion for international investors, up 18% from year-end 2006. In 2007, $37.3 billion ofSolutions added 48 net new business from retailassignments and high net worth clientsrevenue increased 21% to $477 million. Growth was largely drivenwell balanced acrossAladdin, risk management and financial markets advisory services. Advisory AUM increased 11% to $161.2 billion, buoyed by $23.3$11.6 billion of net inflows from U.S. investors and $14.0 billion from investors internationally. These results reflect the growing strength of BlackRock’s retail platform globally. The Company sustained the strength of its Merrill Lynch distribution and is seeing increased traction in the U.S. outside of Merrill Lynch, recording over 30 new wins on broker-dealer mutual fund and Separately Managed Account (“SMA”) platforms. The $14.0$4.5 billion of net new businessgrowth driven by market performance in international retail represents an annualized organic growth ratethese long-term liquidation portfolios. At year-end,BlackRock Solutions served 130 clients, including banks, insurance companies, official institutions, pension funds, asset managers and other institutional investors across North America, Europe, Asia and Australia.

TheBlackRock Solutions, Aladdin and technology teams are also supporting key aspects of 13%the BGI integration. These efforts, which are expected to continue through 2011, are vital to establishing a unified operating platform and consistent operating processes. We expect the integration of BGI’s extensive quantitative tools, risk management models and portfolio construction applications across asset classes to enhance theAladdinplatform over time. Additionally, we will seek to leverage our scale for the benefit of our clients through the creation of a robust global trading platform.

Transition Management Services

BlackRock also offers transition management services, involving the temporary oversight of a client’s assets as they transition from one manager to another or from one strategy to another. We provide a comprehensive service that includes $9.6 billionproject management and implementation based on achieving best execution consistent with the client’s risk management tolerances. We useAladdin and other state-of-the-art tools and work closely with BlackRock’s trading cost research team to manage four dimensions of net inflows into equityrisk throughout the transition: exposure, execution, process and balanced mandates.

10operational risk. The average transition assignment is executed within two weeks, although the duration can be longer or shorter depending on the size, complexity and liquidity of the related assets. These portfolios are not included in AUM unless BlackRock has been retained to manage the assets after the transition phase.

Products (continued)

* Product Performance Notes

Past performance is not indicative of future results. The performance information reflects all benchmark-based client accounts and products managed by BlackRock, other than ETFs and structured products. Source of performance information is BlackRock, Inc. and peer medians are based in part on data from Morningstar, Inc. for non-U.S. funds. Fund performance reflects the reinvestment of dividends and distributions, but does not reflect fees or sales charges. If fees or sales charges were reflected, the performance information shown could have differed significantly.

Clients

BlackRock manages money for institutional and retail investors worldwide. Our client base is diversified by both geography and client type. We serve clients through 74 offices across four regions: United States and Canada, EMEA, Asia Pacific and Latin America and Iberia. Clients include tax-exempt institutions, such as defined benefit and defined contribution pension plans, charities, foundations and endowments; official institutions, such as central banks, sovereign wealth funds, supranationals and other government entities; taxable institutions, including insurance companies, financial institutions, corporations and third party fund sponsors; and retail and high net worth investors. We also serve both institutional and retail investors who acquireiShares on stock exchanges worldwide.

AUM by Client Domicile and Client Type

Year ended December 31, 2009

Global Presence

BlackRock serves clients in more than 100 countries through the efforts of professionals located in 24 countries. Our global presence enables us to deliver highly responsive service and to tailor our offerings to best serve the needs of local investors. Portfolios may be invested in local, regional or global capital markets. Products may be structured to address location-specific issues, such as regulations, taxation, operational infrastructure, and market liquidity, and client-specific issues, such as investment policy, liability structure and ratings.

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Global Presence (continued)

Institutional Investors

Assets managed for institutional investors totaled $2.462 trillion at year-end 2009, up 142%, or $1.447 trillion, relative to reported AUM at year-end 2008. Our institutional clients invest in the full range of products offered by BlackRock. At year-end, institutional AUM included $2.182 trillion invested in a wide variety of long-dated mandates and $280.4 billion invested in institutional cash management products. Net new business during the year reflected the shift in investor appetite for higher returns and the resulting reallocation from money market funds to equities, fixed income, multi-asset class and alternative investments. On a pro forma combined basis, AUM increased $397.0 billion, or 19%, during the year, including $126.5 billion of net new business in long-dated assets, which was partially offset by $37.9 billion of net outflows in institutional cash products. The remaining pro forma combined growth of $309.8 billion represented investment performance and market and foreign exchange appreciation.

Our institutional client base is well diversified by both client domicile and client segment. At December 31, 2009, approximately 56% or $1.370 trillion of AUM was managed for clients based in the United States and Canada, 32% or $776.5 billion for clients in EMEA, 13% or $309.3 billion for clients in Asia Pacific and less than 1% or $6.5 billion for clients in Latin America and Iberia. Globally, these clients spanned a broad range of tax-exempt, taxable and official institutions, as described below.

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Institutional Investors (continued)

Retail and High Net Worth Investors

BlackRock’s investment management expertise is offered to retail investors globally through separate accounts, open-end and closed-end funds, unit trusts and private investment funds. At December 31, 2009, assets managed for retail and high net worth investors totaled $388.7 billion, up 33%, or $96.9 billion, versus year-end 2008 reported AUM. On a pro forma combined basis, we were awarded net new business of $27.9 billion in long-dated assets, which was partially offset by $21.5 billion of net outflows in money market funds. Investment performance and market appreciation contributed $61.3 billion of additional AUM growth.

Retail and high net worth investors are largely served through intermediaries, including broker-dealers, banks, trust companies, insurance companies and independent financial advisors. Clients invest primarily in mutual funds, which totaled $289.4 billion or 74% of retail and high net worth AUM at December 31, 2009, with the remainder invested in private investment funds and separately managed accounts. The product mix is well diversified, with 40%, or $153.9 billion, invested in equities, 24%, or $93.2 billion, in fixed income, 17% in each of multi-asset class ($65.2 billion) and cash management ($67.6 billion), and 2%, or $8.9 billion, in alternative investment products.

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Clients (continued)

Retail and High Net Worth Investors (continued)

The client base is also diversified geographically, with $213.8 billion, or 67%, of long-dated AUM managed for retail and high net worth investors based in the United States and Canada, $71.5 billion, or 22%, for investors based in EMEA, $29.6 billion, or 9%, in Asia Pacific, and $6.3 billion, or 2%, in Latin America and Iberia. The remaining $67.6 billion, or 17%, of retail and high net worth AUM is invested in cash management products, principally money market funds offered in the United States. Our success in each of these regions reflects strong relationships with intermediaries and an established ability to deliver our global investment expertise in funds and other products tailored to local regulations and requirements.

Our retail and high net worth offerings include theBlackRock Funds in the United States, our Luxembourg cross-border fund families,BlackRock Global Funds(“BGF”) andBlackRock Strategic Funds, and a range of retail funds in the U.K. BGF is registered in 37 countries and has more S&P rated funds than any cross-border mutual fund family. In 2009, we were ranked as the third largest cross border fund provider and the third largest asset gatherer in that universe³. In the U.K., we ranked among the seven largest fund managers³, and are known for our innovative product offerings, including the absolute alpha products we introduced in 2005. In the United States, we had over 50 product placements on broker-dealer platforms during the year and have grown our market position from tenth to fourth largest fund manager since we acquired MLIM in late-2006⁴. In 2009, BlackRock won the Dalbar award for customer service in financial services, the tenth occasion on which we have been recognized for outstanding achievement in this area.

iShares

At December 31, 2009,iShares AUM reached $495.5 billion, all of which was added in connection with the BGI acquisition.iShares is the industry’s leading ETF platform, with more than 51% market share in the United States and 38% market share in EMEA⁵. In addition, we are the largest ETF manager in Mexico, have pioneered the product in Chile and Peru, and have introduced products in Brazil, Australia and Asia Pacific.iShares AUM increased $169.6 billion, or 52%, during 2009 on a pro forma combined basis, including $64.6 billion of net new business and $101.3 billion in market appreciation and favorable foreign exchange movements. At year-end, ouriShares product mix included $381.4 billion, or 77%, in equity offerings and $102.5 billion, or 21%, in bond funds. The remainder was split between alternative investments ($10.1 billion, or 2%) and cash management products ($1.3 billion, or less than 1%).

BlackRock brings institutional quality index management to the public market via ETFs withiShares. Our global leadership position in the ETF market is reflected in the size, liquidity and range of our products. As of year-end, we managed three of the top five, six of the top ten, and 13 of the top 20 ETFs by AUM in the marketplace⁵. Our 417iShares offerings, up from 362 at year-end 2008, were traded on 19 exchanges throughout the world. These included 220 funds in the United States and Canada with $394.3 billion, or 80%, ofiShares AUM. Assets in these funds increased $128.7 billion, or 48%, during the year, including $48.4 billion of net inflows.

TheiShares platform also has an expansive international business, with local operations in EMEA, Asia Pacific, and Latin America and Iberia. At December 31, 2009, $101.2 billion of AUM was managed in 197 funds across these regions. InternationaliShares AUM increased $41.0 billion or 68% during 2009, with $16.2 billion of the growth attributable to net inflows and $21.0 billion to favorable market and foreign exchange rate movements. In addition, the acquisition of the NAFTRAC ETF platform in Mexico in early 2009 added $3.8 billion in AUM to theiShares complex and solidified our leading position in Mexico and Latin America.

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Competition

BlackRock competes with investment management firms, mutual fund complexes, insurance companies, banks, brokerage firms and other financial institutions that offer products that are similar to, or alternatives to, those offered by BlackRock. In order to grow its business, BlackRock must be able to compete effectively for AUM. Key competitive factors include investment performance track records, the efficient delivery of beta, investment style and discipline, client service and brand name recognition. Historically, the Company has competed principally on the basis of its long-term investment performance track record, its investment process, its risk management and analytic capabilities and the quality of its client service. BlackRock has historically grown aggregate AUM and management believes that the Company will continue to do so by focusing on strong investment performance and client service and by developing new products and new distribution capabilities. ManyCertain of the Company’s competitors, however, have greater marketing resources and better brand name recognition than BlackRock, particularly in retail channels and outside the United States.channels. These factors may place BlackRock at a competitive disadvantage and there can be no assurance that the Company’s strategies and efforts to maintain its existing AUM and to attract new business will be successful.

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Geographic Information

BlackRock has clients in over 60100 countries across the globe, including the United States, the United Kingdom, and Japan.

The following chart showstable illustrates the Company’s revenues and long-lived assets, which includesincluding goodwill and property and equipment for the years ended December 2007, 20062009, 2008 and 2005.2007. These amounts are aggregated on a legal entity jurisdiction basis and do not necessarily reflect in all cases, where the customer is sourced or where the asset is physically located.sourced.

Revenues and long-lived assets in North America areAmericas primarily is comprised of the United States, Canada, Brazil and Mexico, while Europe and Asia-Pacific are primarily is comprised of the United Kingdom and Asia-Pacific primarily is comprised of Japan, respectively.Australia and Hong Kong.

Employees

At December 31, 2007,2009, BlackRock had a total of 5,9528,629 full-time employees, including 435 Metric Property Management, Inc. (“Metric”) employees whose salaries are fully reimbursed by certain real estate funds.employees. Of all full-time employees, 1,7953,532 are located in offices outside the United States.

11 At December 31, 2008, BlackRock had a total of 5,341 full-time employees.

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Regulation

Virtually all aspects of BlackRock’s business are subject to various laws and regulations both in and outside the United States, some of which are summarized below. These laws and regulations are primarily intended to protect investment advisory clients, stockholders of registered and unregistered investment companies, trust customers of BlackRock Institutional Trust Company, N.A. (“BTC”) and PNC’sthe bank subsidiaries of Bank of America and PNC and their customers. Under these laws and regulations, agencies that regulate investment advisers, investment funds and financial and bank holding companies and their subsidiaries, such as BlackRock and its subsidiaries, have broad administrative powers, including the power to limit, restrict or prohibit the regulated entity from carrying on business if it fails to comply with such laws and regulations. Possible sanctions for significant compliance failures include the suspension of individual employees, limitations on engaging in certain lines of business for specified periods of time, revocation of investment adviser and other registrations, censures and fines.

Recent market disruptions have led to numerous proposals both in and outside the United States for changes in the regulation of the financial services industry. New laws or regulations, or changes in enforcement of existing laws or regulations, could adversely impact the scope or profitability of BlackRock’s business activities, could require BlackRock to change certain business practices and could expose BlackRock to additional costs (including compliance and tax costs) and liabilities, as well as reputational harm. Regulatory changes could also lead to business disruptions, could adversely impact the value of assets in which BlackRock has invested directly and/or on behalf of clients, and, to the extent the regulations strictly control the activities of financial services firms, could make it more difficult for BlackRock to conduct certain businesses or distinguish itself from competitors.

Additional legislation, changes in rules promulgated by our regulators and self-regulatory organizations, or changes in the interpretation or enforcement of existing laws and rules may directly affect the method of operation and profitability of BlackRock. The profitability of BlackRock also could be affected by rules and regulations that impact the business and financial communities in general, including changes to the laws governing taxation, antitrust regulation and electronic commerce.

The rules governing the regulation of financial institutions and their holding companies and subsidiaries are very detailed and technical. Accordingly, the below discussion is general in nature and does not purport to be complete.

U.S. Regulation

Certain of BlackRock’s U.S. subsidiaries are subject to regulation, primarily at the federal level, by the Securities and Exchange Commission (the “SEC”), the Department of Labor (the “DOL”), the Board of Governors of the Federal Reserve BankSystem (the “FRB”“Federal Reserve”), the Office of the Comptroller of the Currency of the United States (the “OCC”), the Financial Industry Regulatory Authority (“FINRA”), the National Futures Association (the “NFA”), the Commodity Futures Trading Commission (the “CFTC”) and other government agencies and regulatory bodies. Certain BlackRock U.S. subsidiaries are also subject to various terrorist financing, privacy, anti-money laundering regulations including the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “PATRIOT Act”), the Bank Secrecy Acteconomic sanctions, laws and regulations promulgatedestablished by the Office of Foreign Assets Control of the U.S. Treasury Department.various agencies.

The Investment Advisers Act of 1940, as amended (the “Advisers Act”), imposes numerous obligations on registered investment advisers such as BlackRock, including record-keeping, operational and marketing requirements, disclosure obligations and prohibitions on fraudulent activities. The Investment Company Act of 1940, as amended (the “Investment Company Act”), imposes stringent governance, compliance, operational, disclosure and related obligations on registered investment companies and ontheir investment advisers to those companies and distributors, such as BlackRock. The SEC is authorized to institute proceedings and impose sanctions for violations of the Advisers Act and the Investment Company Act, ranging from fines and censure to termination of an investment adviser’s registration. Investment advisers also are subject to certain state securities laws and regulations. Non-compliance with certain provisions of the Advisers Act, the Investment Company Act or other federal and state securities laws and regulations could result in investigations, sanctions, disgorgement, fines and reputational damage.

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U.S. Regulation (continued)

BlackRock’s trading and investment activities for client accounts are regulated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as the rules of various U.S. and non-U.S. securities exchanges and self-regulatory organizations, including laws governing trading on inside information, market manipulation and a broad number of technical trading requirements (e.g., volume limitations, reporting obligations) and market regulation policies in the United States and globally. In addition, BlackRock manages a variety of investment funds listed on U.S. and non-U.S. exchanges, which are subject to the rules of such exchanges. Violation of these laws and regulations could result in restrictions on the Company’s activities and in damage to its reputation. BlackRock manages a variety of private pools of capital, including hedge funds, funds of hedge funds, private equity funds, real estate funds, collective investment trusts, managed futures funds and hybrid funds. Congress, regulators, tax authorities and others continue to explore, on their own and in response to demands from the investment community and the public, increased regulation related to private pools of capital, including changes with respect to investor eligibility, certain limitations on trading activities, the scope of anti-fraud protections, safekeeping of client assets and a variety of other matters. BlackRock may be adversely affected by new legislation, or rule-making or changes in the interpretation or enforcement of existing rules and regulations imposed by various regulators.

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U.S. Regulation (continued)

Certain BlackRock subsidiaries are subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and to regulations promulgated thereunder by the DOL, insofar as they act as a “fiduciary” under ERISA with respect to benefit plan clients. ERISA and applicable provisions of the Internal Revenue Code impose certain duties on persons who are fiduciaries under ERISA, prohibit certain transactions involving ERISA plan clients and impose excise taxes for violations of these prohibitions, mandate certain required periodic reporting and disclosures and require BlackRock to carry bonds ensuring against losses caused by fraud or dishonesty. ERISA also imposes additional compliance, reporting and operational requirements on BlackRock that otherwise are not applicable to non-benefit plan clients.

BlackRock has two subsidiaries that are registered as commodity pool operators and commodity trading advisers, and one additional subsidiarytwo other subsidiaries that are registered as commodity trading advisers and three additional subsidiaries only aregistered as commodity pool operator,operators with the CFTC. All threeseven of these subsidiaries are members of the National Futures Association (the “NFA”).NFA. The CFTC and NFA each administer a comparable regulatory system covering futures contracts and various other financial instruments in which certain BlackRock clients may invest. OneFour of BlackRock’s other subsidiaries, BlackRock Investments, Inc.LLC (“BII”BRIL”), isBlackRock Capital Markets, LLC, BlackRock Execution Services, and BlackRock Fund Distribution Company (“BFDC”) are registered with the SEC as a broker-dealerbroker-dealers and is a member-firmare member-firms of FINRA. BII’s FINRAEach broker-dealer has a membership agreement with FINRA that limits itsthe scope of such broker-dealer’s permitted activities to the sale of investment company securities, certain private placements of securities, and certain investment banking and financial consulting activities. Although BII has limited business activities, it is subject to the customer dealing, reporting and other requirements of FINRA, as well as the net capital and other requirements of the SEC. BIIBRIL is also an approved person with the New York Stock Exchange (“NYSE”), which subjects its operations. BRIL and BFDC are members of the Municipal Securities Rulemaking Board (“MSRB”) and are subject to NYSE regulation.MSRB rules.

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U.S. Banking Regulation

Each of Bank of America and PNC is a bank holding company and a “financial holding company” regulated by the FRBFederal Reserve under the Bank Holding Company Act of 1956, as amended (the “BHC Act”). Since PNC’sBecause the ownership interestinterests of each of Bank of America and PNC in BlackRock exceeds 25%, on an economic or voting basis, BlackRock is deemed to be a non-bank subsidiary of Bank of America and PNC and is therefore subject to the supervision and regulation of the Federal Reserve and to most banking laws, regulations and orders that are applicableapply to PNCBank of America and consequently to the supervision, regulation, and examination of the FRB.PNC. The supervision and regulation of Bank of America, PNC and itstheir respective subsidiaries under the applicable banking laws is intended primarily for the protection of PNC’stheir respective banking subsidiaries, their depositors, the deposit insurance funds of the Federal Deposit Insurance Corporation, and the banking system as a whole, rather than for the protection of stockholders, creditors or clients of Bank of America, PNC or BlackRock. Bank of America’s and PNC’s relationships and good standing with itstheir regulators are important to the conduct of BlackRock’s business. BlackRock may also be subject to foreign banking laws and supervision that could affect its business.

BTC is a national trust company that does not accept deposits and is a member of the Federal Reserve System. Accordingly, BTC is examined and supervised by the OCC and is subject to various banking laws and regulations enforced by the OCC, such as capital adequacy, regulations governing fiduciaries, conflicts of interest, self-dealing, and anti-money laundering laws and regulations. BTC is also subject to various Federal Reserve regulations applicable to member institutions, such as regulations restricting transactions with affiliates. These laws and regulations are meant for the protection of BTC’s customers, and not BTC, BTC’s affiliates or shareholders.

BlackRock generally may conduct only activities that are authorized for a “financial holding company” under the BHC Act. Investment management is an authorized activity, but must be conducted within applicable regulatory requirements, which in some cases are more restrictive than those BlackRock faces under applicable securities laws. BlackRock may also invest in investment companies and private investment funds to which it provides advisory, administrative or other services, to the extent consistent with applicable law and regulatory interpretations. The FRBFederal Reserve has broad powers to approve, deny or refuse to act upon applications or notices for BlackRock to conduct new activities, acquire or divest businesses or assets, or reconfigure existing operations. There are limits on the ability of bank subsidiaries of Bank of America and PNC to extend credit to or conduct other transactions with BlackRock. Bank of America, PNC and itstheir subsidiaries are also subject to examination by various banking regulators, which results in examination reports and ratings that may adversely impact the conduct and growth of BlackRock’s businesses.

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U.S. Banking Regulation (continued)

The FRBFederal Reserve has broad enforcement authority over BlackRock, including the power to prohibit BlackRock from conducting any activity that, in the FRB’sFederal Reserve’s opinion, is unauthorized or constitutes an unsafe or unsound practice in conducting its business, and toBlackRock’s business. The Federal Reserve may also impose substantial fines and other penalties.penalties for violations of applicable banking laws, regulations and orders.

Any failure of either Bank of America or PNC to maintain its status as a financial holding company could result in the imposition of substantial limitations on certain BlackRock activities and its growth. Such a change of status could be caused by any failure of one of Bank of America’s or PNC’s bank subsidiaries to remain “well capitalized,” by anany examination downgrade of PNCone of Bank of America’s or itsPNC’s bank subsidiaries, or by any failure of one of Bank of America’s or PNC’s bank subsidiaries to maintain a satisfactory rating under the Community Reinvestment Act.

Non-U.S. Regulation

BlackRock’s international operations are subject to the laws and regulations of non-U.S. jurisdictions and non-U.S. regulatory agencies and bodies. As BlackRock continues to expand its international business, a number of its subsidiaries and international operations have become subject to regulatory systems comparable to those affecting its operations in the United States.

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Regulation (continued)

Non-U.S. Regulation (continued)

The Financial Services Authority (the “FSA”) regulates BlackRock’s subsidiaries in the United Kingdom. Authorization by the FSA is required to conduct any financial services related business in the United Kingdom pursuant to the Financial Services and Markets Act 2000. The FSA’s rules govern a firm’s capital resources requirements, senior management arrangements, conduct of business, interaction with clients and systems and controls. Breaches of these rules may result in a wide range of disciplinary actions against the Company’s U.K.-regulated subsidiaries. In addition, these subsidiaries and other European subsidiaries orand branches, must comply with the pan-European regime established by the Markets in Financial Instruments Directive (“MiFID”), which came into effect on November 1, 2007 and regulates the provision of investment services throughout the European Economic Area, as well as the Capital Requirements Directive, which delineates regulatory capital requirements. MiFID replaced and expanded upon the Investment Services Directive (the “ISD”), which had been in place since 1995. MiFID sets out more detailed requirements governing the organization and conduct of business of investment firms and regulated markets. It also includes new pre- and post-trade transparency requirements for equity markets and more extensive transaction reporting requirements.

MiFID seeks to further harmonize the provision of financial services across Europe by implementing requirements for key areas such as senior management systems and controls. MiFID also attempts to clarify jurisdictional uncertainties that arose under the ISD to facilitate cross border services. The United Kingdom has adopted the newMiFID rules into national legislation. Implementationlegislation, as have those other European jurisdictions (excluding Switzerland which is not part of the directive throughout the European Union is ongoing, however, andEU) in which BlackRock has a presence. However, the introduction of further new regulations that will apply to BlackRock’s European activities remains likely as a possibility.result of further EU-wide legislation. A review of MiFID by the European Commission is mandated for 2010 to report on the need for extensions to the pre- and post-trade transparency obligations and may result in further rules in this area. A new EU directive, the Alternative Investment Fund Managers Directive, is currently in draft form and is likely to be implemented in 2013. This will regulate managers of, and service providers to, alternative investment funds domiciled within Europe and the marketing of all alternative investment funds into Europe. There are also ongoing plans to reform the framework to which regulated firms are subject, including in relation to regulatory capital and the protection of client assets.

In addition to the FSA, the activities of certain BlackRock subsidiaries, branches, and investment fundsrepresentative offices are regulatedoverseen by among othercomparable regulators the Irish Financial Services Regulatory Authority, the Cayman Islands Monetary Authority, the Commission de Surveillance du Secteur Financier in Germany, The Netherlands, Ireland, Luxembourg, Switzerland, Isle of Man, Jersey, Guernsey, France, Belgium, Italy, Poland, Spain and the Financial Services Commission in Jersey.Sweden. Regulators in these jurisdictions have authority with respect to financial services including, among other things, the authority to grant or cancel required licenses or registrations. In addition, these regulators may also subject certain BlackRock subsidiaries to net capital requirements.

14

Regulation (continued)

Non-U.S. Regulation (continued)

Other BlackRock subsidiaries, branches, and representative offices are regulated in China, Hong Kong, Singapore, Taiwan, South Korea, India, Dubai, Brazil, Chile, Mexico and Canada.

In Japan, certain BlackRock subsidiaries are subject to the Financial Instruments and Exchange Law (the “FIEL”) and the Law Concerning Investment Trusts and Investment Corporations. These laws are administered and enforced by the Japanese Financial Services Agency (the “JFSA”), which establishes standards for compliance, with these laws including capital adequacy and financial soundness requirements, customer protection requirements and conduct of business rules. The JFSA is empowered to conduct administrative proceedings that can result in censure, fine, the issuance of cease and desist orders or the suspension or revocation of registrations and licenses granted under the FIEL.

In Australia, BlackRock’s Australian-based subsidiary issubsidiaries are subject to various Australian federal and state laws and iscertain subsidiaries are regulated primarily by the Australian Securities and Investments Commission (the “ASIC”) and the Australian Prudential Regulatory Authority (the “APRA”). The ASIC regulates companies and financial services in Australia and is responsible for promoting investor, creditor and consumer protection. The APRA is the prudential regulator of the Australian financial services industry and oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies and most members of the superannuation (pension) industry. Failure to comply with applicable law and regulations could result in the cancellation, suspension or variation of this subsidiary’s licensethe regulated subsidiaries licenses in Australia.

Item 1.

BUSINESS (continued)

Regulation (continued)

The activities of certain BlackRock subsidiaries in Hong Kong are subject to the Securities and Futures Ordinance (the “SFO”) which governs the securities and futures markets and the non-bank retail leveraged foreign exchange market in Hong Kong. The SFO is administered by the Securities and Futures Commission (the “SFC”), an independent non-governmental body. The relevant subsidiaries, and certain individuals representing them, which conduct business in any of the regulated activities specified in the SFO are generally required to be registered or licensed with the SFC, and are subject to the rules, codes and guidelines issued by the SFC from time to time.

There are parallel legal and regulatory arrangements in force in many other non-U.S. jurisdictions where BlackRock’s subsidiaries are authorized to conduct business, including Taiwan, Hong Kong, Singapore, Germany and The Netherlands.business.

Other Regulation

Additional legislation, changes in rules promulgated by our regulators and self-regulatory organizations, or changes in the interpretation or enforcement of existing laws and rules may directly affect the method of operation and profitability of BlackRock. The profitability of BlackRock also could be affected by rules and regulations that impact the business and financial communities in general, including changes to the laws governing taxation, antitrust regulation and electronic commerce.

The rules governing the regulation of financial institutions and their holding companies and subsidiaries are very detailed and technical. Accordingly, the above discussion is general in nature and does not purport to be complete.

15

Available Information

BlackRock files annual, quarterly and current reports, proxy statements and all amendments to these reports and other information with the SEC. BlackRock makes available free-of–charge, on or through its website athttp://www.blackrock.com, the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and all amendments to those filings, as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The Company also makes available on its website the charters for the Audit Committee, Management Development and Compensation Committee and Nominating and Governance Committee of the Board of Directors, its Code of Business Conduct and Ethics, its Code of Ethics for Chief Executive and Senior Financial Officers and its Corporate Governance Guidelines. Further, BlackRock will provide, without charge, upon written request, a copy of the Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and all amendments to those filings as well as the committee charters, its Code of Business Conduct and Ethics, its Code of Ethics for Chief Executive and Senior Financial Officers and its Corporate Governance Guidelines. Requests for copies should be addressed to Investor Relations, BlackRock, Inc., 55 East 52nd Street, New York, New York 10055. Investors may read and copy any document BlackRock files at the SEC’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Reports, proxy statements and other information regarding issuers that file electronically with the SEC, including BlackRock’s filings, are also available to the public from the SEC’s website athttp://www.sec.gov.

16

As a leading investment management firm, risk is an inherent part of BlackRock’s business. Global markets, by their nature, are prone to uncertainty and subject participants to a variety of risks. While BlackRock devotes significant resources across all of its operations to identify, measure, monitor, manage and analyze market and operating risks, BlackRock’s business, financial condition, operating results or non-operating results of operations could be materially adversely affected, however, by any of the following risks.

Risks Related to BlackRock’s Business and Competition

Changes in the securitiesvalue levels of the capital markets or other marketsasset classes could lead to a decline in revenues.revenues and earnings.

BlackRock’s investment management revenues are primarily comprised of fees based on a percentage of the value of AUM and, in some cases, performance fees expressed as a percentage of the returns earned on AUM. Movements in equity market prices, interest rates, foreign exchange rates, or all three could cause the following, which would result in lower investment advisory, administration and administration fees:performance fees or earnings:

Poor investment performance could lead to the loss of clients and a decline in revenues.revenues and earnings.

The Company’s management believes that investment performance is one of the most important factors for the growth and retention of AUM. Poor investment performance relative to applicable portfolio benchmarks andor to competitors could reduce revenues and growth because:cause earnings to decline as a result of:

BlackRock may elect to invest in or provide other support to its products from time to time.

BlackRock may, at its option, from time to time support investment products through seed or follow-on investments, warehouse lending facilities or other forms of capital or credit support. See, for example, “Management’s Discussion and Analysis of Financial Condition and Results of Operations —Other Operating Items” and “—Operations—Liquidity and Capital Resources.” Such investments or support utilizeutilizes capital that would otherwise be available for other corporate purposes. Losses on such investments or support, or failure to have or devote sufficient capital to support products, could have an adverse impact on revenues and earnings.

Changes in the securitiesvalue levels of the capital markets or other marketsasset classes could lead to a decline in the value of investments that BlackRock owns.

At December 31, 2007,2009, BlackRock held approximately $2.0$1 billion of investments that are reflected on its statement of financial condition. Approximately $1.1$0.5 billion of this amount is the result of consolidation of certain sponsored investment funds. BlackRock’s economic interest in these investments is primarily the result of seed investmentsand co-investments in its sponsored investment funds. A decline in the prices of stocks or bonds, or the value of real estate or other alternative investments within or outside the United States could lower the value of these investments and result in a decline of non-operating income.

17income and increased volatility to earnings.

Continued capital losses on investments could have adverse income tax consequences.

The Company may generate realized and unrealized capital losses on seed investments and co-investments. Realized capital losses may be carried back three years and carried forward five years and offset against realized capital gains for federal income tax purposes. The Company has unrealized capital losses for which a deferred tax asset has been established. In the event such unrealized losses are realized, the Company may not be able to offset such losses within the carryback or carryforward period or from future realized capital gains, in which case the deferred tax asset will not be realized. The failure to utilize the deferred tax asset could materially increase BlackRock's income tax expense.

The soundness of other financial institutions could adversely affect BlackRock.

Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. BlackRock, and the products and accounts that it manages, have exposure to many different industries and counterparties, and routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, mutual and hedge funds, and other institutional clients. Many of these transactions expose BlackRock or the funds and accounts that it manages to credit risk in the event of default of its counterparty or client. There is no assurance that any such losses would not materially and adversely impact BlackRock’s revenues and earnings.

The failure or negative performance of products of other financial institutions could lead to reduced AUM in similar products of BlackRock without regard to the performance of BlackRock’s products.

The failure or negative performance of products of other financial institutions could lead to a loss of confidence in similar products of BlackRock without regard to the performance of BlackRock’s products. Such a negative contagion could lead to withdrawals, redemptions and liquidity issues in such products and have a material adverse impact on our AUM, revenues and earnings.

Loss of key employees could lead to the loss of clients and a decline in revenues.

The ability to attract and retain quality personnel has contributed significantly to BlackRock’s growth and success and is important to attracting and retaining clients. The market for qualified fund managers, investment analysts, financial advisers and other professionals is competitive. Key employees may depart because of issues relating to the difficulties in integrating the MLIM or Quellos Businesses. There can be no assurance that the Company will be successful in its efforts to recruit and retain required personnel. Loss of key personnel could have an adverse effect on the Company.

BlackRock’s investment advisory contracts may be terminated or may not be renewed by clients and the liquidation of certain funds may be accelerated at the option of investors.

Separate account and commingled trust clients may terminate their investment management contracts with BlackRock or withdraw funds on short notice. The Company has, from time to time, lost separate accounts and could, in the future, lose accounts or significant assets under managementAUM under various circumstances such as adverse market conditions or poor performance.

Additionally, BlackRock manages its U.S. mutual funds pursuant toand exchanged traded funds under management contracts with the funds that must be renewed and approved by the funds’ boards of directors annually. A majority of the directors of each mutual fund are independent from BlackRock. Consequently, there can be no assurance that the board of directors of each fund thatmanaged by the Company manages will approve the fund’s management contract each year, or will not condition its approval on the terms of the management contract being revised in a way that is adverse to the Company.Company.

Further, the governing agreements of many of the Company’s private investment funds generally provide that, subject to certain conditions, investors in those funds, and in some cases independent directors of those funds, may remove the investment adviser, general partner or the equivalent of the fund or liquidate the fund without cause by a simple majority vote, resulting in a reduction in the management or incentiveperformance fees as well as the total carried interest we wouldBlackRock could earn.

Item 1A.

RISK FACTORS (continued)

Failure to comply with client contractual requirements and/or guidelines could result in damage awards against BlackRock and loss of revenues due to client terminations.

When clients retain BlackRock to manage assets or provide products or services on their behalf, they specify guidelines or contractual requirements that the Company is required to observe in the provision of its services. A failure to comply with these guidelines or contractual requirements could result in damage to BlackRock’s reputation or in its clients seeking to recover losses, withdrawing their AUM or terminating their contracts, any of which could cause the Company’s revenues and earnings or stock price to decline.

Competitive fee pressures could reduce revenues and profit margins.

The investment management business is highly competitive and has relatively low barriers to entry. To the extent that the Company is forced to compete on the basis of price, it may not be able to maintain its current fee structure. Fee reductions on existing or future new business could cause revenues and profit margins to decline.

Performance fees may increase earnings volatility, which could decrease BlackRock’s stock price.

A portion of the Company’s revenues is derived from performance fees on investment and risk management advisory assignments. In most cases, performance fees are based on relative or absolute investment returns, although in some cases they are based on achieving specific service standards. Generally, the Company is entitled to performance fees only if the returns on the related portfolios exceed agreed-upon periodic or cumulative return targets. If these targets are not exceeded, performance fees for that period will not be earned and, if targets are based on cumulative returns, the Company may not earn performance fees in future periods. Performance fees will vary from period to period in relation to volatility in investment returns and the timing of revenue recognition, causing earnings to be more volatile than if assets were not managed on a performance fee basis.volatile. The volatility in earnings may decrease BlackRock’s stock price. Performance fees represented $350.2$202 million, or 7.2%4%, of total revenue for the year ended December 31, 2007.

18

2009.

Additional acquisitions may decrease earnings and harm the Company’s competitive position.

BlackRock employs a variety of strategies intended to enhance earnings and expand product offerings in order to improve profit margins. These strategies have included smaller-sized lift-outs of investment teams and acquisitions of investment management businesses, such as the MLIM, Quellos and QuellosBGI Transactions. In general, theseThese strategies may not be effective and failure to successfully develop and implement these strategies may decrease earnings and harm the Company’s competitive position in the investment management industry. In the event BlackRock pursues additional sizeable acquisitions, it may not be able to find suitable businesses to acquire at acceptable prices and it may not be able to successfully integrate or realize the intended benefits from thesesuch acquisitions.

Item 1A.

RISK FACTORS (continued)

Risks Related to BlackRock’s Operations

Failure to maintain adequate infrastructure could impede the ability to support businessBlackRock’s productivity and growth.

BlackRock has experienced significant growth inThe Company’s infrastructure, including its business activities as a result of the MLIM and Quellos Transactions and other efforts. The Company is in the process of building out its infrastructure to integrate the MLIM and Quellos Businesses and to support continued growth, including technological capacity, data centers, backup facilities and sufficientoffice space, for expanding staff levels.is vital to the competitiveness of its business. The failure to maintain an adequate infrastructure commensurate with the size and scope of its business, including any expansion, could impede the Company’s productivity and growth, which could cause the Company’s earnings or stock price to decline.

Expansion intoOperating in international markets increases BlackRock’s operational, regulatory and other risks.

BlackRock has increased its international business activities as a result of the MLIM Transaction and other efforts. As a result of such expansion,BlackRock’s extensive international business activities, the Company faces increased operational, regulatory, reputationreputational and foreign exchange rate risks. The failure of the Company’s systems of internal control to properly mitigate such additional risks, or of its operating infrastructure to support such international expansionactivities, could result in operational failures and regulatory fines or sanctions, which could cause the Company’s earnings or stock price to decline.

Failure to maintain a technological advantage could lead to a loss of clients and a decline in revenues.

A key element to BlackRock’s continued success is the ability to maintain a technological advantage both in terms of operational efficiency and in providing the sophisticated risk analytics incorporated into BlackRock’s operating systems that support investment advisory andBlackRock Solutions clients. Moreover, the Company’s technological and software advantage is dependent on a number of third parties who provide various types of data. The failure of these third parties to provide such data or software could result in operational difficulties and adversely impact BlackRock’s ability to provide services to its investment advisory andBlackRock Solutions clients. There can be no assurance that the Company will be able to maintain this technological advantage or be able to effectively protect and enforce its intellectual property rights in these systems and processes.

19

Failure to implement effective information security policies, procedures and capabilities could disrupt operations and cause financial losses that could result in a decrease in BlackRock’s earnings or stock price.

BlackRock is dependent on the effectiveness of its information security policies, procedures and capabilities to protect its computer and telecommunications systems and the data that reside on or are transmitted through them. An externally caused information security incident, such as a hacker attack, or a virus or worm, or an internally caused issue, such as failure to control access to sensitive systems, could materially interrupt business operations or cause disclosure or modification of sensitive or confidential information and could result in material financial loss, regulatory actions, breach of client contracts, reputational harm or legal liability, which, in turn, could cause a decline in the Company’s earnings or stock price.

The failure of a key vendor to BlackRock to fulfill its obligations could have a material adverse effect on BlackRock and its products.

BlackRock depends on a number of key vendors for various fund administration, custody and transfer agent roles and other operational needs. The failure or inability of BlackRock to diversify its sources for key services or the failure of any key vendors to fulfill their obligations could lead to operational issues in certain products, which could result in financial losses for the Company and its clients.

Item 1A.

RISK FACTORS (continued)

The continuing integration of the MLIM and Quellos businessesBGI business creates numerous risks and uncertainties that could adversely affect profitability.

The MLIM and Quellos businessesBGI business and personnel are in the process of being integrated with BlackRock’s previously existing business and personnel. These transition activities are complex and the Company may encounter unexpected difficulties or incur unexpected costs including:

As a result, the Company may not be able to realize the expected revenue growth and other benefits that it hopes to achieve from the respective transactions.transaction. In addition, BlackRock may be required to spend additional time or money on integration that would otherwise be spent on the development and expansion of its business and services.

Failure to manage risks in operating securities lending for clients could lead to a loss of clients and a decline in revenues and liquidity

The size of BlackRock’s securities lending programs increased significantly with the completion of the BGI transaction. As part of these programs, BlackRock must manage risks associated with (i) ensuring that the value of the collateral held against the securities on loan does not decline in value or become illiquid and that its nature and value complies with regulatory requirements, (ii) the potential that a borrower may not return a security on a timely basis, (iii) the potential that the collateral held may not be sufficient to repurchase the loaned security, and (iv) errors in the settlement of securities, daily mark-to-market valuations and collateral collection. The failure of the Company’s controls to mitigate these risks could result in financial losses for our clients that participate in our securities lending programs as well as for the Company.

Risks Related to Relationships with Bank of America/Merrill Lynch, PNC, Barclays and PNCOther Institutional Investors

Merrill Lynch is an important distributor of BlackRock’s products, and the Company is therefore subject to risks associated with the business of Merrill Lynch.

Under a global distribution agreement entered into with Merrill Lynch, in connection with the MLIM Transaction, Merrill Lynch provides distribution, portfolio administration and servicing for certain BlackRock assetinvestment management products and services through its various distribution channels. The Company may not be successful in distributing products through Merrill Lynch or in distributing its products and services through other third party distributors. If BlackRock is unable to distribute its products and services successfully or if it experiences an increase in distribution-related costs, BlackRock’s business, results of operations or financial condition may be adversely affected.

Item 1A.

RISK FACTORS (continued)

Loss of market share with Merrill Lynch’s Global Private Client GroupWealth & Investment Management business could harm operating results.

A significant portion of theBlackRock’s revenue of the MLIM business has historically come from AUM generated by Merrill Lynch’s Global Private Client GroupWealth & Investment Management (“GPC”GWIM”). business. BlackRock’s ability to maintain a strong relationship with GPCGWIM is material to the Company’s future performance. If one of the Company’s competitors gains significant additional market share within the GPCGWIM retail channel at the expense of BlackRock, then BlackRock’s business, results of operations or financial condition may be negatively impacted.

The failure of Barclays to fulfill its commitments, or the inadequacy of the support provided, under certain capital support agreements in favor of a number of securities lending related cash management funds acquired in the BGI Transaction, could negatively impact such funds and BlackRock.

20

Barclays has provided capital support agreements to support certain securities lending related cash management products acquired by BlackRock in the BGI Transaction. The failure of Barclays to fulfill its obligations under these agreements, or the inadequacy of the support provided, could cause our clients to suffer losses and BlackRock to suffer reputational and other adverse impacts. For a discussion on the capital support agreements see “Management, Discussion and Analysis – Liquidity and Capital Resources – Barclays Support of Certain Securities Lending Related Cash Funds.”

For so long as Bank of America/Merrill Lynch, PNC and PNCBarclays maintain certain levels of stock ownership, Bank of America/Merrill Lynch, PNC and PNCBarclays will vote as stockholders in accordance with the recommendation of BlackRock’s Board of Directors, and certain actions will require special board approval or the prior approval of Bank of America/Merrill Lynch, PNC and PNC.Barclays.

As a resultBank of the stockholder agreements entered into withAmerica/Merrill Lynch, PNC and Merrill Lynch in connection with the MLIM Transaction, together with the Company’s ownership structure, stockholders may have no effective power to influence corporate actions. As of December 31, 2007, Merrill Lynch owned approximately 45.1% of BlackRock’s issued and outstanding common stock and approximately 49.0% of total capital stock on a fully-diluted basis, and PNC owned approximately 33.5% of BlackRock’s total capital stock.

Merrill Lynch and PNCBarclays have agreed to vote all of their shares in accordance with the recommendation of BlackRock’s Board of Directors to the extent consistent with the provisions of the Merrill Lynchtheir respective stockholder agreement and the PNC implementation and stockholder agreement.agreements with BlackRock. As a consequence, matters submitted to a stockholder vote that require a majority or a plurality of votes for approval, including elections of directors, will likely be approved or disapproved solely in accordance with the determinations of the BlackRock Board of Directors, so long as the shares held by Bank of America/Merrill Lynch, PNC and PNCBarclays constitute a majoritysubstantial portion of the outstanding shares. This arrangement has the effect of concentrating control over BlackRock in its Board of Directors, whether or not stockholders agree with any particular determination of the Board. At December 31, 2009, Bank of America/Merrill Lynch, PNC and Barclays owned approximately 3.7%, 35.2% and 4.8%, respectively, of BlackRock’s voting common stock.

The majority of our stock is held by a group of large shareholders. Future sales of our common stock in the public market by us or our large stockholders could adversely affect the trading price of our common stock.

As of December 31, 2009, Bank of America/Merrill Lynch, PNC and Barclays owned 34.2%, 24.5% and 19.8% of our capital stock, respectively. In connection with the BGI Transaction, 16.4 million shares were sold to other institutional investors. We have entered into registration rights agreements with Bank of America/Merrill Lynch, PNC and Barclays, as well as the institutional investors who purchased shares of BlackRock capital stock in connection with the BGI Transaction. The registration rights agreements, which include customary “piggyback” registration provisions, allow the respective stockholders to cause us to file one or more registration statements for the resale of their respective shares of capital stock and cooperate in certain underwritten offerings. Sales by us or our large stockholders of a substantial number of shares of our common stock in the public market pursuant to registration rights or otherwise, or the perception that these sales might occur, could cause the market price of our common stock to decline.

Item 1A.

RISK FACTORS (continued)

Legal and Regulatory Risks

BlackRock is subject to extensive regulation in the United States and internationally.

BlackRock’s business is subject to extensive regulation in the United States and around the world. See the discussion under the heading “Business – Regulation.” Violation of applicable laws or regulations could result in fines, temporary or permanent prohibition of the engagement in certain activities, reputational harm, suspensions of personnel or revocation of their licenses, suspension or termination of investment adviser or broker-dealer registrations, or other sanctions, which could cause the Company’s earnings or stock price to decline. Additionally, BlackRock’s business

BlackRock may be adversely impacted by legal and regulatory changes in the United States and legislative initiatives imposed by various U.S.internationally.

Recent market disruptions have led to numerous proposals in the United States and non-U.S. regulatoryinternationally for changes in the regulation of the financial services industry. New laws or regulations, or changes in enforcement of existing laws or regulations, could adversely impact the scope or profitability of BlackRock’s business activities, could require BlackRock to change certain business practices and exchange authorities,could expose BlackRock to additional costs (including increased capital, compliance and industry participants that continuetax costs) as well as reputational harm. Regulatory changes could also lead to reviewbusiness disruptions, could adversely impact the value of assets in which BlackRock has invested directly and in many cases, adopt changeson behalf of clients, and, to their established rules and policies.the extent the regulations strictly control the activities of financial services firms, could make it more difficult for BlackRock to conduct certain businesses or to distinguish itself from competitors.

Failure to comply with the Advisers Act and the Investment Company Act and related regulations could result in substantial harm to BlackRock’s reputation and results of operations.

Certain BlackRock subsidiaries are registered with the SEC under the Advisers Act and BlackRock’s U.S. mutual funds are registered with the SEC under the Investment Company Act. The Advisers Act imposes numerous obligations and fiduciary duties on registered investment advisers, including record-keeping, operating and marketing requirements, disclosure obligations and prohibitions on fraudulent activities. The Investment Company Act imposes similar obligations, as well as additional detailed operational requirements, on investment advisers to registered investment companies. The failure of any of BlackRock’s subsidiaries to comply with the Advisers Act or the Investment Company Act could cause the SEC to institute proceedings and impose sanctions for violations of either of these acts, including censure, termination of an investment adviser’s registration or prohibition to serve as adviser to SEC-registered funds, and could lead to litigation by investors in those funds or harm to the Company’s reputation, any of which could cause its earnings or stock price to decline.

21

Failure to comply with ERISA regulations could result in penalties and cause the Company’s earnings or stock price to decline.

Certain BlackRock subsidiaries are subject to ERISA and to regulations promulgated thereunder, insofar as they act as a “fiduciary” under ERISA with respect to benefit plan clients. ERISA and applicable provisions of the Internal Revenue Code impose duties on persons who are fiduciaries under ERISA, prohibit specified transactions involving ERISA plan clients and provide monetary penalties for violations of these prohibitions. The failure of any of BlackRock’sthe relevant subsidiaries to comply with these requirements could result in significant penalties that could reduce the Company’s earnings or cause its stock price to decline.

Item 1A.

RISK FACTORS (continued)

BlackRock is subject to banking regulations that may limit its business activities.

Since PNC’sBecause the total equity ownership interest of each of Bank of America and PNC in BlackRock exceeds 25%, on an economic or voting basis, BlackRock is deemed to be a non-bank subsidiary of each of Bank of America and PNC, awhich are both financial holding company, which subjectscompanies under the Bank Holding Company Act of 1956, as amended. As a non-bank subsidiary of Bank of America and PNC, BlackRock is subject to general banking regulations that limitregulation, including the supervision and regulation of the Federal Reserve. Such banking regulation limits the activities and the types of businesses that BlackRock may conduct. The Federal Reserve has broad enforcement authority over BlackRock, including the power to prohibit BlackRock from conducting any activity that, in which it may engage. Banking regulationsthe Federal Reserve’s opinion, is unauthorized or constitutes an unsafe or unsound practice in conducting BlackRock’s business, and to impose substantial fines and other penalties for violations. Any failure of either Bank of America or PNC to maintain its status as a financial holding company could result in substantial limitations on certain BlackRock activities and its growth. In addition, BlackRock’s trust bank subsidiary is subject to regulation by the OCC parallel in many respects to that imposed under the Advisers Act and the Investment Company Act as described above and to capital requirements established by the OCC. The OCC has broad enforcement authority over BlackRock’s trust bank subsidiary. Being subject to banking regulation may put BlackRock at a competitive disadvantage because most of its competitors are not subject to these limitations. As

Failure to comply with laws and regulations in the United Kingdom, other member states of the European Union, Hong Kong, Japan, Australia and other non-U.S. jurisdictions in which BlackRock operates could result in substantial harm to BlackRock’s reputation and results of operations.

The Financial Services Authority (the “FSA”) regulates BlackRock’s subsidiaries in the United Kingdom. Authorization by the FSA is required to conduct any financial services-related business in the United Kingdom under the Financial Services and Markets Act 2000. The FSA’s rules govern a non-bank subsidiaryfirm’s capital resources requirements, senior management arrangements, conduct of PNC,business, interaction with clients and systems and controls. Breaches of these rules may result in a wide range of disciplinary actions against the Company’s U.K.-regulated subsidiaries.

In addition, these subsidiaries, and other European subsidiaries, branches or representative offices, must comply with the pan-European regime established by the Markets in Financial Instruments Directive, which regulates the provision of investment services throughout the European Economic Area, as well as the Capital Requirements Directive, which delineates regulatory capital requirements.

In Japan, certain BlackRock issubsidiaries are subject to the supervision, regulationFinancial Instruments and examinationExchange Law (the “FIEL”) and the Law Concerning Investment Trusts and Investment Corporations. These laws are administered and enforced by the Japanese Financial Services Agency (the “JFSA”), which establishes standards for compliance, including capital adequacy and financial soundness requirements, customer protection requirements and conduct of business rules. The JFSA is empowered to conduct administrative proceedings that can result in censure, fines, the issuance of cease and desist orders or the suspension or revocation of registrations and licenses granted under the FIEL.

In Australia, BlackRock’s subsidiaries are subject to various Australian federal and state laws and certain subsidiaries are regulated by the Australian Securities and Investments Commission (the “ASIC”) and the Australian Prudential Regulation Authority. The ASIC regulates companies and financial services in Australia and is responsible for promoting investor, creditor and consumer protection. Failure to comply with applicable law and regulations could result in the cancellation, suspension or variation of the FRB. relevant subsidiaries’ licenses in Australia.

Item 1A.

RISK FACTORS (continued)

The Company is alsoactivities of certain BlackRock subsidiaries in Hong Kong are subject to the broad enforcement authoritySecurities and Futures Ordinance (the “SFO”) which governs the securities and futures markets and the non-bank retail leveraged foreign exchange market in Hong Kong. The SFO is administered by the Securities and Futures Commission (the “SFC”), an independent non-governmental body. The relevant subsidiaries, and certain individuals representing them, which conduct business in any of the FRB, includingregulated activities specified in the FRB’s powerSFO are generally required to prohibit BlackRockbe registered or licensed with the SFC, and are subject to the rules, codes and guidelines issued by the SFC from engagingtime to time.

There are parallel legal and regulatory arrangements in force in many other non-U.S. jurisdictions where BlackRock’s subsidiaries conduct business or where the funds and products it manages are organized. Failure to comply with laws and regulations in any activity that,of these jurisdictions could result in the FRB’s opinion, constitutes an unsafe or unsound practice in conducting the Company’s business. The FRB also may impose substantial finesharm to BlackRock’s reputation and other penalties for violationsresults of applicable banking regulations.operation.

Legal proceedings could adversely affect operating results and financial condition for a particular period.

Many aspects of BlackRock’s business involve substantial risks of legal liability. The Company and certain of its subsidiaries have been named as defendants in various legal actions, including arbitrations, class actions and other litigation arising in connection with BlackRock’s activities. While Merrill Lynch has agreedFrom time to indemnify the Companytime, BlackRock receives subpoenas or other requests for information from various U.S. and non-U.S. governmental and regulatory authorities in connection with certain industry-wide or other investigations or proceedings. Additionally, certain of the pre-closing liabilities related to legal proceedings acquired in the MLIM Transaction, entities that BlackRock now owns may be named as defendants in these matters and the Company’s reputation may be negatively impacted. Liability for legal actions for which no indemnification is available could reduce earnings and cash flows and cause BlackRock’s stock price to decline. Additionally, the investment funds that the Company manages are subject to lawsuits, any of which could potentially harm the investment returns of the applicable fund or result in the Company being liable to the funds for any resulting damages.

The legislative and economic effects of climate change could impact investment strategies and the value of assets that BlackRock manages.

BlackRock invests in a variety of sectors on behalf of its clients. To the extent certain of these sectors are negatively impacted by climate change or legislation or international agreements related to climate change, the value of, and the returns realized on, the related AUM could decrease or cause clients to withdraw funds in favor of products in sectors that BlackRock may not offer.

Item 1B.

UNRESOLVED STAFF COMMENTS

The Company has no unresolved comments from the SEC staff relating to BlackRock’s periodic or current reports filed with the SEC pursuant to the Exchange Act of 1934.

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BlackRock’s principal office, which is leased, is located at 4055 East 52nd Street, New York, New York. BlackRock leases additional office space in New York City at 5540 East 52nd Street and throughout the world, including Boston, Chicago, Edinburgh, Florham Park (New Jersey), Hong Kong, London, Melbourne, Munich, Plainsboro (New Jersey), San Francisco, Seattle, Singapore, MelbourneSydney and Tokyo. The Company also owns an 84,500 square foot office building in Wilmington (Delaware).

From time to time, BlackRock has receivedreceives subpoenas or other requests for information from various U.S. federal, and state governmental and regulatory authorities and various information requests from the SEC in connection with certain industry-wide or other investigations of U.S. mutual fund matters. BlackRockor proceedings. It is continuingBlackRock’s policy to fully cooperate fully in these matters. From time to time, BlackRock is also subject to other regulatory inquiries and proceedings.

with such inquiries. The Company and certain of its subsidiaries have been named as defendants in various legal actions, including arbitrations class actions, and other litigation and regulatory proceedings arising in connection with BlackRock’s activities. While Merrill Lynch has agreed to indemnify the Company for certain pre-closing liabilities related to legal and regulatory proceedings acquired in the MLIM Transaction, entities that BlackRock now owns may be named as defendants in these matters and the Company’s reputation may be negatively impacted. Additionally, certain of the investment funds that the Company manages are subject to lawsuits, any of which could potentially harm the investment returns of the applicable fund or result in the Company being liable to the funds for any resulting damages.

Management, after consultation with legal counsel, currently does not currently anticipate that the aggregate liability, if any, arising out of such regulatory matters or lawsuits will have a material adverse effect on BlackRock’s earnings, financial position, or cash flows although, at the present time, management is not in a position to determine whether any such pending or threatened matters will have a material adverse effect on BlackRock’s results of operations in any future reporting period.

No matters were submitted to a vote of BlackRock’s security holders during the fourth quarter of the year ended December 31, 2007.

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Part II

BlackRock’s common stock is listed on the NYSE and is traded under the symbol “BLK”. At the close of business on January 31, 2008,2010, there were 582441 common stockholders of record. Common stockholders include institutional or omnibus accounts that hold common stock for multiple underlying investors.

The following table sets forth for the periods indicated the high and low reported sale prices, period-end closing prices for the common stock and dividends declared per share for the common stock as reported on the NYSE:

BlackRock’s closing common stock price as of February 27, 2008March 5, 2010 was $201.30.$219.83.

Dividends

On February 15, 2008,25, 2010, the Board of Directors approved an increase of BlackRock’s quarterly dividend to $0.78$1.00 to be paid on March 24, 200823, 2010 to stockholders of record on March 7, 2008.8, 2010.

Barclays, Merrill Lynch, PNC and itstheir respective affiliates asalong with other institutional investors receive dividends on the sole holders of BlackRock’s series A non-voting participating preferred stock receive dividends on the preferred stockthat they hold equivalent to the dividends received by common stockholders and may elect to receive such dividends in cash or BlackRock common stock, subject to the ownership limitations contained within the stockholders agreement with BlackRock.

24stockholders.

Issuer Purchases of Equity Securities

During the three months ended December 31, 2007,2009, the Company made the following purchases of its common stock, which areis registered pursuant to Section 12(b) of the Exchange Act.

2	On August 2, 2006, the Company announced a 2.1 million share repurchase program with no stated expiration date.

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The selected financial data presented below has been derived in part from, and should be read in conjunction with, the consolidated financial statements of BlackRock and Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operationsincluded in this Form 10-K. Prior year data reflects certain reclassifications to conform to the current year presentation.