UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~September 30, 2009~~March 31, 2010

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from to .

Commission file number 001-33099

BlackRock, Inc.

(Exact name of registrant as specified in its charter)


Delaware		32-0174431
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4055 East 52nd Street, New York, NY ~~10022~~10055
(Address of principal executive offices)		(Zip Code)

(212) 810-5300

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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 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 filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


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

As of ~~October 31, 2009,~~April 30, 2010, there were ~~51,051,400~~64,324,009 shares of the registrant’s common stock outstanding.

BlackRock, Inc.

Index to Form 10-Q

PART I

FINANCIAL INFORMATION


		Page

Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Financial Condition	1
	~~Condensed Consolidated Statements of Financial Condition~~	1
	Condensed Consolidated Statements of Income	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Statements of Changes in Equity	5
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4847

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	8880

Item 4.	Controls and Procedures	8982

~~PART II~~

~~OTHER INFORMATION~~


	PART II

	~~Item 1.~~OTHER INFORMATION	~~Legal Proceedings~~	90

Item 1.	Legal Proceedings	83

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9083

Item 6.	~~Exhibits~~	91Exhibits	84

~~- i -~~

PART I—FINANCIAL INFORMATION

Item 1.

Financial Statements

BlackRock, Inc.

Condensed Consolidated Statements of Financial Condition

(Dollar amounts in millions, except per share data)

(unaudited)


	September 30, 2009		December 31, 2008		March 31, 2010		December 31, 2009
Assets
Cash and cash equivalents	$	2,763	$	2,032	$	2,703	$	4,708
Accounts receivable		1,219		901		1,868		1,718
Due from related parties		91		309		170		189
Investments		1,041		1,429		1,096		1,049
Separate account assets		3,536		2,623		116,187		119,629
Assets of consolidated variable interest entities
Cash and cash equivalents						90		—
Bank loans and other investments						1,288		—
Collateral held under securities lending agreements						13,417		19,335
Deferred mutual fund sales commissions, net		106		135		100		103
Property and equipment (net of accumulated depreciation of $316 at September 30, 2009 and $259 at December 31, 2008)		250		260
Intangible assets (net of accumulated amortization of $432 at September 30, 2009 and $324 at December 31, 2008)		6,335		6,441
Property and equipment (net of accumulated depreciation of $366 and $333 at March 31, 2010 and December 31, 2009, respectively)						450		443
Intangible assets (net of accumulated amortization of $506 and $466 at March 31, 2010 and December 31, 2009, respectively)						17,626		17,666
Goodwill		5,718		5,533		12,641		12,638
Other assets		321		261		424		588

Total assets	$	21,380	$	19,924	$	168,060	$	178,066


Liabilities
Accrued compensation and benefits	$	584	$	826	$	616	$	1,482
Accounts payable and accrued liabilities		712		545		1,037		850
Due to related parties		107		103		391		490
Short-term borrowings		200		200		880		2,234
Liabilities of consolidated variable interest entities
Borrowings						1,214		—
Other liabilities						4		—
Convertible debentures		247		245		95		243
Long-term borrowings		696		697		3,191		3,191
Separate account liabilities		3,536		2,623		116,187		119,629
Collateral liability under securities lending agreements						13,417		19,335
Deferred tax liabilities		1,729		1,826		5,577		5,518
Other liabilities		268		299		504		492

Total liabilities		8,079		7,364		143,113		153,464

Commitments and contingencies (Note 13)
Commitments and contingencies (Note 12)

Temporary equity
Redeemable non-controlling interests		9		266		79		49
Convertible debentures		1		—

Total temporary equity		10		266

- 1 -

BlackRock, Inc.

Condensed Consolidated Statements of Financial ~~Condition—~~Condition (continued)

(Dollar amounts in millions, except per share data)

(unaudited)


	September 30, 2009			December 31, 2008			March 31, 2010			December 31, 2009
Permanent Equity
BlackRock, Inc. stockholders’ equity
Common stock, $0.01 par value;		1			1
Shares authorized: 500,000,000 at September 30, 2009 and December 31, 2008;
Shares issued: 50,983,192 at September 30, 2009 and 118,573,367 at December 31, 2008;
Shares outstanding: 50,071,926 at September 30, 2009 and 117,291,110 at December 31, 2008
Preferred stock (Note 12)		1			—
Common stock,$0.01 par value;								1			1
Shares authorized: 500,000,000 at March 31, 2010 and December 31, 2009;
Shares issued: 64,242,628 and 62,776,777 at March 31, 2010 and December 31, 2009, respectively;
Shares outstanding: 63,360,738 and 61,896,236 at March 31, 2010 and December 31, 2009, respectively
Preferred stock (Note 16)								1			1
Additional paid-in capital		11,003			10,473			22,174			22,127
Retained earnings		2,286			1,982			2,663			2,436
Appropriated retained earnings								114			—
Accumulated other comprehensive (loss)		(88	)		(186	)		(165	)		(96	)
Escrow shares, common, at cost (911,266 shares held at September 30, 2009 and December 31, 2008)		(143	)		(143	)
Treasury stock, common, at cost (0 and 370,991 shares held at September 30, 2009 and December 31, 2008, respectively)		—			(58	)
Escrow shares, common, at cost (868,940 shares held at March 31, 2010 and December 31, 2009)								(137	)		(137	)
Treasury stock, common, at cost (12,950 and 11,601 shares held at March 31, 2010 and December 31, 2009, respectively)								(3	)		(3	)

Total BlackRock, Inc. stockholders’ equity		13,060			12,069			24,648			24,329
Nonredeemable non-controlling interests		231			225			174			224
Nonredeemable non-controlling interests of consolidated variable interest entities								46			—

Total permanent equity		13,291			12,294			24,868			24,553

Total liabilities, temporary equity and permanent equity	$	21,380		$	19,924		$	168,060		$	178,066

See accompanying notes to condensed consolidated financial statements.

- 2 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Income

(Dollar amounts in millions, except per share data)

(unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2009			2008			2009			2008			2010			2009
Revenue
Investment advisory and administration base fees
Investment advisory, administration fees and securities lending revenue
Related parties	$	625		$	757		$	1,763		$	2,389		$	1,149		$	507
Other third parties		288			327			799			988			604			293

Investment advisory, administration fees and securities lending revenue														1,753			800
Investment advisory performance fees		49			55			77			154			50			11
Investment advisory and administration base and performance fees		962			1,139			2,639			3,531
BlackRock Solutions and advisory		127			113			383			273			113			135
Distribution fees		25			34			73			103			28			25
Other revenue		26			27			61			93			51			16

Total revenue		1,140			1,313			3,156			4,000			1,995			987

Expenses
Employee compensation and benefits		444			468			1,185			1,489			773			351
Portfolio administration and servicing costs
Distribution and servicing costs
Related parties		92			126			291			383			64			103
Other third parties		27			23			80			72			36			24
Amortization of deferred mutual fund sales commissions		23			34			76			97			26			27
Direct fund expenses														113			13
General and administration		161			171			505			593			289			140
Restructuring charges		—			—			22			—			—			22
Amortization of intangible assets		36			37			108			111			40			36

Total expenses		783			859			2,267			2,745			1,341			716

Operating income		357			454			889			1,255			654			271

Non-operating income (expense)
Net gain (loss) on investments		89			(143	)		5			(163	)		38			(172	)
Interest and dividend income		4			20			16			52			4			8
Interest expense		(15	)		(18	)		(45	)		(54	)		(40	)		(15	)

Total non-operating income (expense)		78			(141	)		(24	)		(165	)		2			(179	)

Income before income taxes		435			313			865			1,090			656			92
Income tax expense		101			117			225			394			228			30

Net income		334			196			640			696			428			62
Less:
Net income (loss) attributable to redeemable non-controlling interests		1			—			2			(3	)
Net income (loss) attributable to nonredeemable non-controlling interests		16			(21	)		19			(33	)		5			(22	)

Net income attributable to BlackRock, Inc.	$	317		$	217		$	619		$	732		$	423		$	84

Earnings per share attributable to BlackRock, Inc. common stockholders:
Basic	$	2.31		$	1.62		$	4.58		$	5.47		$	2.20		$	0.63
Diluted	$	2.27		$	1.59		$	4.50		$	5.36		$	2.17		$	0.62

Cash dividends declared and paid per share	$	0.78		$	0.78		$	2.34		$	2.34		$	1.00		$	0.78

Weighted-average common shares outstanding:
Basic		133,266,379			129,793,939			131,481,677			129,427,715			189,676,023			130,216,218
Diluted		135,902,241			132,270,351			134,001,799			131,998,448			192,152,251			131,797,189

See accompanying notes to condensed consolidated financial statements.

- 3 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Dollar amounts in millions)

(unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,					Three Months Ended March 31,
	2009			2008			2009		2008			2010			2009
Net income	$	334		$	196		$	640	$	696		$	428		$	62
Other comprehensive income:
Change in net unrealized gain (loss) from available-for-sale investments, net of tax⁽¹⁾		1			(7	)		16		(11	)
Change in net unrealized gains (losses) from available-for-sale investments, net of tax
Unrealized holding gains (losses), net of tax													3			(1	)
Less: reclassification adjustment included in net income													1			(8	)

Net change from available-for-sale investments, net of tax⁽¹⁾													2			7
Minimum pension liability adjustment		—			—			1		(1	)		(1	)		1
Foreign currency translation adjustments		(8	)		(138	)		81		(113	)		(70	)		(14	)

Comprehensive income attributable to BlackRock, Inc.	$	327		$	51		$	738	$	571		$	359		$	56

⁽¹⁾

The tax benefit (expense) on ~~the change in net~~ unrealized ~~gain (loss) from available-for-sale investments~~holding gains (losses) was ($2)1) million and $3($3) million during the three months ended ~~September 30,~~March 31, 2010 and 2009, ~~and 2008, respectively, and ($7) and $4 during the nine months ended September 30, 2009 and 2008,~~ respectively.

See accompanying notes to condensed consolidated financial statements.

- 4 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated ~~Statement~~Statements of Changes in Equity

(Dollar amounts in millions)

~~(unaudited)~~


	Additional Paid-in Capital¹			Retained Earnings			Appropriated Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Common Shares held in Escrow			Treasury Stock Common			Total Stockholders’ Equity			Nonredeemable Non- controlling Interests			Nonredeemable Non- controlling Interests of Consolidated VIEs			Total Permanent Equity			Redeemable Non-controlling Interests/ Temporary Equity
December 31, 2009	$	22,129		$	2,436		$	—	$	(96	)	$	(137	)	$	(3	)	$	24,329		$	224		$	—		$	24,553		$	49
January 1, 2010 initial recognition of ASU 2009-17		—			—			114		—			—			—			114			(49	)		49			114			—
Net income		—			423			—		—			—			—			423			4			1			428			—
Dividends paid, net of dividend expense for unvested RSUs		—			(196	)		—		—			—			—			(196	)		—			—			(196	)		—
Stock-based compensation		108			—			—		—			—			—			108			—			—			108			—
PNC LTIP capital contribution		5			—			—		—			—			—			5			—			—			5			—
Exchange of common stock for preferred shares series B		128			—			—		—			—			(128	)		—			—			—			—			—
Net issuance of common shares related to employee stock transactions		(171	)		—			—		—			—			64			(107	)		—			—			(107	)		—
Convertible debt conversions		(64	)		—			—		—			—			64			—			—			—			—			—
Net tax benefit (shortfall) from stock-based compensation		41			—			—		—			—			—			41			—			—			41			—
Minimum pension liability adjustment		—			—			—		(1	)		—			—			(1	)		—			—			(1	)		—
Subscriptions/(redemptions/distributions)—non-controlling interest holders		—			—			—		—			—			—			—			(6	)		(4	)		(10	)		19
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—		—			—			—			—			—			—			—			11
Other change in non-controlling interests		—			—			—		—			—			—			—			1			—			1			—
Foreign currency translation adjustments		—			—			—		(70	)		—			—			(70	)		—			—			(70	)		—
Change in net unrealized gain (loss) from available-for-sale investments, net of tax		—			—			—		2			—			—			2			—			—			2			—

March 31, 2010	$	22,176		$	2,663		$	114	$	(165	)	$	(137	)	$	(3	)	$	24,648		$	174		$	46		$	24,868		$	79

   BlackRock, Inc. Stockholders’ Equity
   Common
And
Preferred
Stock    Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (loss) Common
Shares
Held
In
Escrow Treasury
Stock
Common Total
Stockholders’
Equity Nonredeemable
Non-
controlling
Interests Total
Permanent
Equity Redeemable
Non-controlling
Interests/
Temporary
Equity
December 31, 2008
   $ 1    $ 10,473    $ 1,982    $ (186 ) $ (143 ) $ (58 ) $ 12,069    $ 225    $ 12,294    $ 266
Reclass to temporary equity—convertible debt
   —      (1 ) —      —      —      —      (1 ) —      (1 ) 1
Net income
   —      —      619    —      —      —      619    19    638    2
Dividends paid, net of dividend expense for unvested RSUs
   —      —      (315 ) —      —      —      (315 ) —      (315 ) —
Stock-based compensation
   —      231    —      —      —      1    232    —      232    —
Issuance of common shares to institutional investor
   1    299    —      —      —      —      300    —      300    —
Issuance of common shares for contingent consideration
   —      43    —      —      —      —      43    —      43    —
Net issuance of common shares related to employee stock transactions
   —      (79 ) —      —      —      57    (22 ) —      (22 ) —
PNC capital contribution
   —      6    —      —      —      —      6    —      6    —
Merrill Lynch capital contribution
   —      25    —      —      —      —      25    —      25    —
Net tax benefit (shortfall) from stock-based compensation
   —      6    —      —      —      —      6    —      6    —
Minimum pension liability adjustment
   —      —      —      1    —      —      1    —      1    —
Subscriptions/(redemptions/distributions)—non-controlling interest holders
   —      —      —      —      —      —      —      (1 ) (1 ) (251 )
Net deconsolidations of sponsored investment funds
   —      —      —      —      —      —      —      (9 ) (9 ) (8 )
Foreign currency translation adjustments
   —      —      —      81    —      —      81    —      81    —
Other changes in non-controlling interests
   —      —      —      —      —      —      —      (3 ) (3 ) —
Change in net unrealized gain (loss) from available-for sale investments, net of tax
   —      —      —      16    —      —      16    —      16    —

September 30, 2009
   $ 2    $ 11,003    $ 2,286    $ (88 ) $ (143 ) $ —      $ 13,060    $ 231    $ 13,291    $ 10

¹	Includes $1 of common stock and $1 of preferred stock at March 31, 2010 and December 31, 2009.

See accompanying notes to condensed consolidated financial ~~statements~~statements.

- 5 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated ~~Statement~~Statements of Changes in Equity

(Dollar amounts in millions)

~~(unaudited)~~


	Additional Paid-in Capital¹			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Common Shares held in Escrow			Treasury Stock Common			Total Stockholders’ Equity			Nonredeemable Non- controlling Interests			Total Permanent Equity			Redeemable Non-controlling Interests/ Temporary Equity
December 31, 2008	$	10,474		$	1,982		$	(186	)	$	(143	)	$	(58	)	$	12,069		$	225		$	12,294		$	266
Reclass to temporary equity – convertible debt		(3	)		—			—			—			—			(3	)		—			(3	)		—
Net income		—			84			—			—			—			84			(22	)		62			—
Dividends paid, net of dividend expense for unvested RSUs		—			(105	)		—			—			—			(105	)		—			(105	)		—
Stock-based compensation		82			—			—			—			—			82			—			82			—
Net issuance of common shares related to employee stock transactions		(70	)		—			—			—			33			(37	)		—			(37	)		—
PNC LTIP capital contribution		6			—			—			—			—			6			—			6			—
Net tax benefit (shortfall) from stock-based compensation		(17	)		—			—			—			—			(17	)		—			(17	)		—
Minimum pension liability adjustment		—			—			1			—			—			1			—			1			—
Subscriptions/(redemptions/distributions)—non-controlling interest holders		—			—			—			—			—			—			(2	)		(2	)		(132	)
Foreign currency translation adjustments		—			—			(14	)		—			—			(14	)		—			(14	)		—
Change in net unrealized gain (loss) from available-for-sale investments, net of tax		—			—			7			—			—			7			—			7			—

March 31, 2009	$	10,472		$	1,961		$	(192	)	$	(143	)	$	(25	)	$	12,073		$	201		$	12,274		$	134

   BlackRock, Inc. Stockholders’ Equity
   Common
And
Preferred
Stock    Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (loss) Common
Shares
Held
In
Escrow Treasury
Stock
Common Total
Stockholders’
Equity Nonredeemable
Non-
controlling
Interests Total
Permanent
Equity Redeemable
Non-controlling
Interests/
Temporary
Equity
December 31, 2007
   $ 1    $ 10,286    $ 1,616    $ 71    $ (188 ) $ (184 ) $ 11,602    $ 549    $ 12,151    $ 29
Net income
   —      —      732    —      —      —      732    (33 ) 699    (3 )
Dividends paid, net of dividend expense for unvested RSUs
   —      —      (313 ) —      —      —      (313 ) —      (313 ) —
Stock-based compensation
   —      203    —      —      —      1    204    —      204    —
Release of common stock from escrow agent in connection with Quellos Transaction
   —      —      —      —      45    —      45    —      45    —
Net issuance of common shares related to employee stock transactions
   —      (133 ) —      —      —      116    (17 ) —      (17 ) —
PNC capital contribution
   —      4    —      —      —      —      4    —      4    —
Net tax benefit (shortfall) from stock-based compensation
   —      59    —      —      —      —      59    —      59    —
Minimum pension liability adjustment
   —      —      —      (1 ) —      —      (1 ) —      (1 ) —
Subscriptions/(redemptions/distributions)—non-controlling interest holders
   —      —      —      —      —      —      —      30    30    (17 )
Net consolidations of sponsored investment funds
   —      —      —      —      —      —      —      —      —      317
Foreign currency translation adjustments
   —      —      —      (113 ) —      —      (113 ) —      (113 ) —
Other changes in non-controlling interests
   —      —      —      —      —      —      —      (3 ) (3 ) —
Change in net unrealized gain (loss) from available-for sale investments, net of tax
   —      —      —      (11 ) —      —      (11 ) —      (11 ) —

September 30, 2008
   $ 1    $ 10,419    $ 2,035    $ (54 ) $ (143 ) $ (67 ) $ 12,191    $ 543    $ 12,734    $ 326

¹	Includes $1 of preferred stock at March 31, 2009 and $1 of common stock at December 31, 2008.

See accompanying notes to condensed consolidated financial ~~statements~~statements.

- 6 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Cash Flows

(Dollar amounts in millions)

(unaudited)


	Nine Months Ended September 30,						Three Months Ended March 31,
	2009			2008			2010			2009
Cash flows from operating activities
Net income	$	640		$	696		$	428		$	62
Adjustments to reconcile net income to cash from operating activities:
Depreciation and other amortization		175			178
Depreciation and amortization								78			57
Amortization of deferred mutual fund sales commissions		76			97			26			27
Stock-based compensation		232			204			108			82
Deferred income tax expense (benefit)		(99	)		(88	)		55			(44	)
Net (gains) losses on non-trading investments		18			52			(12	)		48
Purchases of other investments within consolidated funds		(35	)		(110	)
Proceeds from sales and maturities of other investments within consolidated funds		265			112
Purchases of investments within consolidated funds								(8	)		(21	)
Proceeds from sale and maturities of investments within consolidated funds								14			152
Assets and liabilities of consolidated VIEs:
Change in cash and cash equivalents								(42	)		—
(Purchases)/sales of bank loans and other investments								36			—
(Earnings) losses from equity method investees		(32	)		90			(35	)		114
Distributions of earnings from equity method investees		11			18			4			4
Other adjustments		2			6			(1	)		2
Changes in operating assets and liabilities:
Accounts receivable		(307	)		14			(157	)		(51	)
Due from related parties		178			(65	)		11			163
Deferred mutual fund sales commissions		(47	)		(79	)		(23	)		(12	)
Investments, trading		(119	)		234			(59	)		(74	)
Other assets		(67	)		50			149			(13	)
Accrued compensation and benefits		(233	)		(263	)		(863	)		(599	)
Accounts payable and accrued liabilities		163			11			203			(10	)
Due to related parties		4			2			(99	)		7
Other liabilities		6			(3	)		23			(20	)

Cash flows from operating activities		831			1,156			(164	)		(126	)

Cash flows from investing activities
Purchases of investments		(60	)		(356	)		(28	)		(9	)
Proceeds from sales and maturities of investments								29			126
Purchases of assets held for sale		(2	)		(18	)		(1	)		(1	)
Proceeds from sales and maturities of investments		229			68
Return of capital from equity method investees		50			12
Distributions of capital from equity method investees								20			4
Net consolidations (deconsolidations) of sponsored investment funds		4			—			2			—
Contingent/other acquisition payments		(158	)		(5	)
Acquisitions, net of cash acquired								(8	)		—
Purchases of property and equipment		(52	)		(72	)		(44	)		(16	)

Cash flows from investing activities		11			(371	)		(30	)		104

- 7 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Cash ~~Flows—~~Flows (continued)

(Dollar amounts in millions)

(unaudited)

   Nine Months Ended
September 30,
   2009 2008
Cash flows from financing activities

Repayment of short-term borrowings
   —      (400 )
Proceeds from short-term borrowings
   —      300
Repayment of other borrowings
   (2 ) (1 )
Cash dividends paid
   (316 ) (313 )
Proceeds from stock options exercised
   15    22
Merrill Lynch capital contribution
   25    —
Proceeds from issuance of common stock
   304    5
Repurchases of common stock
   (41 ) (44 )
Net (redemptions/distributions paid)/subscriptions received from non-controlling interest holders
   (252 ) 13
Excess tax benefit from stock-based compensation
   26    59
Net borrowings/(repayment of borrowings) by consolidated sponsored investment funds
   70    (206 )

Cash flows from financing activities
   (171 ) (565 )

Effect of exchange rate changes on cash and cash equivalents
   60    (83 )

Net increase (decrease) in cash and cash equivalents
   731    137
Cash and cash equivalents, beginning of period
   2,032    1,656

Cash and cash equivalents, end of period
   $ 2,763    $ 1,793

Supplemental cash flow information:

Cash paid for interest
   $ 52    $ 61
Cash paid for income taxes
   $ 405    $ 432
Supplemental non-cash investing and financing activities:

Issuance of common stock
   $ 77    $ 128
Common stock released from escrow agent in connection with Quellos Transaction
   $ —      $ 44
Contingent common stock payment related to Quellos Transaction
   $ 43    $ —
Increase (decrease) in non-controlling interests due to net consolidations/(deconsolidations) of sponsored investment funds
   $ (17 ) $ 318


	Three Months Ended March 31,
	2010			2009
Cash flows from financing activities
Repayments of short-term borrowings		(1,354	)		—
Repayments of convertible debt		(148	)		—
Cash dividends paid		(196	)		(105	)
Proceeds from of stock options exercised		6			1
Proceeds from issuance of common stock		1			1
Repurchases of common stock		(114	)		(39	)
Net (redemptions/distributions paid)/subscriptions received from non-controlling interests holders		9			(134	)
Excess tax benefit from stock-based compensation		41			3
Net borrowings/(repayments of borrowings) by consolidated sponsored investment funds		—			72

Cash flows from financing activities		(1,755	)		(201	)

Effect of exchange rate changes on cash and cash equivalents		(56	)		(16	)

Net decrease in cash and cash equivalents		(2,005	)		(239	)
Cash and cash equivalents, beginning of period		4,708			2,032

Cash and cash equivalents, end of period	$	2,703		$	1,793


Supplemental disclosure of cash flow information is as follows:
Cash paid for:
Interest	$	26		$	26
Interest on borrowings of consolidated VIEs	$	12		$	—
Income taxes	$	67		$	133

Supplemental schedule of non-cash financing transactions is as follows:
Issuance of common stock	$	230		$	62
Increase in borrowings due to consolidation of VIEs	$	1,157		$	—

See accompanying notes to condensed consolidated financial statements.

- 8 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Notes to Condensed Consolidated Financial Statements

~~(Dollar amounts in millions, except per share data)~~

(unaudited)

1. Business Overview

BlackRock, Inc. ~~and~~(together, with its subsidiaries, ~~(“BlackRock”~~unless the context otherwise indicates, “BlackRock” or the “Company”) ~~provide~~provides diversified investment management and securities lending services to institutional clients and to individual investors through various investment vehicles. Investment management services primarily consist of the management of fixed income, cash management and equity client accounts, the management of a number of open-end and closed-end mutual fund families, exchange traded funds and other non-U.S. equivalent retail products serving the institutional and retail markets, and the management of other investment funds, including collective trusts and alternative funds, developed to serve various customer needs. In addition, BlackRock provides market risk management, financial markets advisory and enterprise investment system services to a broad base of clients. Financial markets advisory services include valuation services relating to illiquid securities, dispositions and workout assignments (including long-term portfolio liquidation assignments), risk management and strategic planning and execution.

In September 2006, Merrill Lynch & Co., Inc. (“Merrill Lynch”) contributed the entities and net assets that constituted its investment management business (the “MLIM Business”) to BlackRock via a capital contribution, referred to as the “MLIM Transaction”, and in October 2007, BlackRock acquired certain assets and assumed certain liabilities of the fund of funds business of Quellos Group, LLC (“Quellos”), referred to as the “Quellos Transaction”.

On ~~January~~December 1, 2009, ~~Bank~~BlackRock completed its acquisition of America Corporation (“Bank of America”) acquired Merrill Lynch, which continues as a subsidiary of Bank of America. In connection with this transaction, BlackRock entered into exchange agreements with each of Merrill Lynch and The PNC Financial Services Group, Inc. (“PNC”) pursuant to which on February 27, 2009 each exchanged a portion of the BlackRock common stock it held for an equal number of shares of non-voting preferred stock. See Note 12, Capital Stock, for more details on these transactions.

~~In June 2009, BlackRock announced that it entered into a definitive purchase agreement (the “Barclays Purchase Agreement”) to acquire~~ Barclays Global Investors (“BGI”) from Barclays Bank PLC (“Barclays”)~~, referred to as the~~ (the “BGI Transaction”). In exchange for BGI, BlackRock paid approximately $6.65 billion in cash and issued capital stock valued at $8.53 billion comprised of 3,031,516 shares of BlackRock common stock and 34,535,255 shares of BlackRock Series B and D Participating Preferred Stock. See Note ~~17, Pending Transaction.~~3, Mergers and Acquisitions, for more details on this transaction.

On March 31, 2010, equity ownership of BlackRock was as follows:


	Voting Common Stock		Capital Stock⁽¹⁾
Bank of America/Merrill Lynch & Co., Inc.	3.7	%	33.8	%
The PNC Financial Services Group, Inc. (“PNC”)	34.4	%	24.2	%
Barclays	4.7	%	19.6	%
Other	57.2	%	22.4	%

	100.0	%	100.0	%

⁽¹⁾	Includes outstanding common and preferred stock only.

- 9 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Notes to Condensed Consolidated Financial Statements—(continued)

(unaudited)

2. Significant Accounting Policies

Basis of Presentation

These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company and its controlled subsidiaries. Non-controlling interests on the condensed consolidated statements of financial condition include the portion of consolidated sponsored investment funds in which the Company does not have direct equity ownership. Significant accounts and transactions between consolidated entities have been eliminated.

~~- 9 -~~

~~BlackRock, Inc.~~

~~Notes to Condensed Consolidated Financial Statements—(continued)~~

~~(Dollar amounts in millions, except per share data)~~

~~(unaudited)~~

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Certain financial information that normally is included in annual financial statements, including certain financial statement footnotes, is not required for interim reporting purposes and has been condensed or omitted herein. These financial statements should be read in conjunction with the Company’s consolidated financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2008,~~2009, which was filed with the Securities and Exchange Commission (“SEC”) on March 2, 2009 and the Company’s Current Report on Form 8-K, which updated the financial information in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, which was filed with the SEC on September 17, 2009.10, 2010.

The interim financial information at ~~September 30, 2009~~March 31, 2010 and for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2010 and 2009 ~~and 2008~~ is unaudited. However, in the opinion of management, the interim information includes all normal recurring adjustments necessary for the fair presentation of the Company’s results for the periods presented. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year. ~~Certain prior year amounts have been revised or reclassified to conform to~~

Business Combinations

In accordance with the ~~2009 presentation including those required by the retrospective adoption~~requirements of ~~the applicable paragraphs within Financial Accounting Standards Board (“FASB”)~~ Accounting Standards Codification (“ASC”) ~~470-20,~~805,~~Debt with Conversion and Other Options~~~~issued (“ASC 470-20”) (FASB Staff Position (“FSP”) APB 14-1,~~~~Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)~~~~), ASC 260-10,~~~~Earnings per Share~~~~(“ASC 260-10”) (FSP Emerging Issues Task Force (“EITF”) 03-6-1,~~~~Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities~~~~) and ASC 810-10,~~~~Consolidation~~Business Combinations (“ASC ~~810-10”~~805”) ~~(Statement~~, certain line items on the condensed consolidated statement of ~~Financial Accounting Standards (“SFAS”) No. 160,~~~~Noncontrolling Interests~~financial condition, including goodwill, intangibles, and deferred tax liabilities, have been retrospectively adjusted as of December 31, 2009 to reflect new information obtained about facts that existed as of December 1, 2009, the BGI acquisition date. See Note 3, Mergers and Acquisitions, for the changes in ~~Consolidated Financial Statements—an amendment of ARB No. 51~~).the BGI purchase price allocation.

Fair Value Measurements

~~BlackRock adopted the applicable provisions of~~ ASC 820-10,Fair Value Measurements and Disclosures (“ASC 820-10”)~~(SFAS No. 157,~~~~Fair Value Measurements~~), ~~as of January 1, 2008, which require,~~requires among other things, enhanced disclosures about assets and liabilities that are measured and reported at fair value. The provisions of ASC 820-10 establish a hierarchy that prioritizes inputs to valuation techniques used to measure fair value and requires companies to disclose the fair value of their financial instruments according to a fair value hierarchy (i.e., Level 1, 2 and 3 inputs, as defined). The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. Additionally, companies are required to provide enhanced disclosure regarding instruments in the Level 3 category (which have inputs to the valuation techniques that are unobservable and require significant management judgment), including a reconciliation of the beginning and ending balances separately for each major category of assets and liabilities.

- 10 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Notes to Condensed Consolidated Financial Statements—(continued)

~~(Dollar amounts in millions, except per share data)~~(unaudited)

~~(unaudited)~~2. Significant Accounting Policies (continued)

Basis of Presentation(continued)

Fair Value Measurements (continued)

Financial instruments measured and reported at fair value are classified and disclosed in one of the following categories:

Level 1 ~~Inputs—~~Inputs – Quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date. Level 1 assets include listed mutual funds, equities and certain ~~debt securities.~~derivatives.

Level 2 ~~Inputs—~~Inputs – Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and inputs other than quoted prices that are observable, such as models or other valuation methodologies. Assets ~~which~~that generally are included in this category may include debt securities, bank loans, short-term floating rate notes and asset-backed securities, securities held within consolidated hedge funds, certain limited partnership interests in hedge funds in which the valuations for substantially all of the investments within the fund are based upon Level 1 or Level 2 inputs, ~~as well as~~ restricted public securities valued at a ~~discount.~~discount, as well as over the counter derivatives, including interest and inflation rate swaps and foreign exchange currency contracts that have inputs to the valuations that can be generally corroborated by observable market data.

Level 3 ~~Inputs—~~Inputs – Unobservable inputs for the valuation of the asset or ~~liability.~~liability, which may include non-binding broker quotes. Level 3 assets include investments for which there is little, if any, market activity. These inputs require significant management judgment or estimation. Assets included in this category generally include general and limited partnership interests in private equity funds, funds of private equity funds, real estate funds, hedge funds, and funds of hedge funds, direct private equity investments held within consolidated funds and certain held for sale real estate disposal assets. Liabilities included in this category include borrowings of consolidated collateralized loan obligations.

Level 3 inputs include BlackRock capital accounts for its partnership interests in various alternative investments, including distressed credit hedge funds, real estate and private equity funds, ~~as well as~~which may be adjusted by using the returns of certain market indices. The various partnerships are investment companies, which record their underlying investments at fair value based on fair value policies established by management of the underlying fund. Fair value policies at the underlying fund generally require the fund to utilize pricing/valuation information, including independent appraisals, from third party sources, however, in some instances current valuation information, for illiquid securities or securities in markets that are not active, may not be available from any third party source or fund management may conclude that the valuations that are available from third party sources are not reliable. In these instances, fund management may perform model-based analytical valuations that may be used to value these investments.

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

Collateral Assets Held and Liabilities Under Securities Lending Agreements

The Company facilitates securities lending arrangements whereby securities held by separate account assets are lent to third parties. In exchange, the Company receives collateral, principally cash and securities, ranging from 102% to 108% of the value of the securities lent in order to reduce credit risk. Under the Company’s securities lending arrangements, the Company can resell or re-pledge the collateral and the borrower can re-sell or re-pledge the loaned securities. The securities lending transactions entered into by the Company are accompanied by an agreement that entitles and obligates the Company to repurchase or redeem the transferred securities before their maturity. These transactions are not reported as sales under ASC 860,Transfers and Servicing, because of the obligation of the Company to repurchase the securities.

- 11 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Notes to Condensed Consolidated Financial Statements—(continued)

~~(Dollar amounts~~(unaudited)

2. Significant Accounting Policies (continued)

Basis of Presentation(continued)

Collateral Assets Held and Liabilities Under Securities Lending Agreements (continued)

As a result, the Company records the collateral received under these arrangements (both cash and non-cash), as its own asset in ~~millions, except per share data)~~

~~(unaudited)~~addition to a corresponding liability for the obligation to return the collateral. As with the securities lending collateral discussed above, the fair value of the asset and related obligation to return the collateral are recorded by the Company. At March 31, 2010, the fair value of loaned securities held by separate account assets was approximately $12 billion and the collateral held under these securities lending agreements was approximately $13.4 billion. The fair value of the collateral liability approximates the fair value of the collateral assets and is recorded in collateral liability under securities lending agreements on the Company’s condensed consolidated statements of financial condition.

Classification and Measurement of Redeemable Securities

The provisions of ASC 480-10,Distinguishing Liabilities from Equity,~~(“ASC 480-10”) (EITF Topic No. D-98~~~~, Classification and Measurement of Redeemable Securities~~), require temporary equity classification for instruments that are currently redeemable or convertible for cash or other assets at the option of the holder. At ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, the Company determined that $9$79 million and ~~$266,~~$49 million, respectively, of non-controlling interests related to certain consolidated sponsored investment funds were redeemable for cash or other assets at the option of the holder, resulting in temporary equity classification on the condensed consolidated statements of financial condition. The amount of temporary equity related to convertible instruments is measured as the excess of the amount of cash required to be exchanged in a hypothetical settlement, as of the balance sheet date, over the current carrying amount of the liability component. During the nine months ended September 30, 2009, the 2.625% convertible debentures became convertible at the option of the holders into cash and shares of the Company’s common stock. The amount of cash required to be paid out in a hypothetical settlement exceeded the current carrying amount of the liability component by $1, which was classified as temporary equity-convertible debentures on the condensed consolidated statement of financial condition.

Assets and Liabilities to be Disposed of by Sale

In the course of the business of establishing real estate and other alternative investment funds, the Company may purchase land, properties and other assets while incurring liabilities directly associated with the assets, together a disposal group, with the intention to sell the disposal group to sponsored investment funds upon their launch. In accordance with the provisions of ASC 360-10,Property, Plant, and Equipment, ~~(“ASC 360-10”) (SFAS No. 144,~~~~Accounting for the Impairment or Disposal of Long-lived Assets~~),the Company treats these assets and liabilities as a “disposal group”, measured at the lower of the carrying amount or fair value. Losses are recognized for any initial or subsequent write-down to fair value and gains are recognized for any subsequent increase in fair value, but not in excess of the cumulative loss previously recognized.

At ~~September 30, 2009,~~March 31, 2010, the Company held disposal group assets of ~~$50~~$24 million and related liabilities of ~~$48~~$22 million in other assets and other liabilities, respectively, on its condensed consolidated statement of financial condition. Disposal group liabilities include approximately ~~$47~~$20 million of borrowings directly associated with the disposal group assets. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2009, the Company recorded ~~a net loss of $0 and $1, respectively,~~($1) million within non-operating income (expense) on its condensed consolidated statement of income related to the disposal ~~group.~~

~~- 12 -~~

~~BlackRock, Inc.~~

~~Notes to Condensed Consolidated Financial Statements—(continued)~~

~~(Dollar amounts in millions, except per share data)~~

~~(unaudited)~~

~~Accounting Policies Adopted in the Nine Months Ended September 30, 2009~~

~~Non-Controlling Interests~~

~~In December 2007, the FASB issued new requirements within ASC 810-10, which established accounting~~group and reporting standards for a non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary and clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity, separate from the parent’s equity, in the consolidated financial statements. In addition, consolidated net income should be adjusted to include the net income attributed to the non-controlling interests. The Company adopted the applicable guidance of ASC 810-10 on January 1, 2009, which required retrospective adoption of the presentation and disclosure requirements for existing non-controlling interests. All other requirements of ASC 810-10 are applied prospectively. The adoption of the applicable provisions of ASC 810-10 did not ~~impact BlackRock’s stockholders’ equity on the condensed consolidated statements of financial condition.~~record any adjustments in 2010.

Convertible Debt Instruments

In ~~May 2008,~~accordance with the ~~FASB issued new requirements~~provisions within ASC 470-20, ~~which specify that for~~Debt (“ASC 470-20”), issuers of convertible debt instruments that may be settled in cash upon conversion, ~~issuers of such instruments~~ should separately account for the liability and equity components in the statement of financial condition. The excess of the initial proceeds of the convertible debt instrument over the amount allocated to the liability component creates a debt discount, which should be amortized as interest expense over the expected life of the liability. ~~The applicable provisions of ASC 470-20 are effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008 and is to be applied retrospectively.~~ At ~~December~~March 31, ~~2008,~~2010, the Company had ~~$249~~$95 million principal amount of convertible debentures outstanding, which were issued in February 2005, bear interest at a rate of 2.625%, and are due in 2035. The Company retrospectively adopted the ~~required paragraphs~~requirements of ASC 470-20 on January 1, 2009 resulting in a total cumulative impact of a $9 million reduction to retained earnings at December 31, 2008. The effective borrowing rate for nonconvertible debt at the time of issuance of the 2.625% convertible debentures was estimated to be 4.3%, which resulted in $18 million of the $250 million aggregate principal amount of the debentures issued, or $12 million after tax, being attributable to equity. ~~At December~~As of March 31, ~~2008 and September 30, 2009, $4 and $1, respectively, of~~2010, the initial $18 million debt discount remained unamortized, and is expected to be amortized to the first put date of the convertible debentures in February 2010. As a result, the Company recognized approximately $1 of additional interest expense in each of the three months ended September 30, 2009 and 2008 and $3 of additional interest expense in each of the nine months ended September 30, 2009 and 2008.

~~See below for retrospective EPS impact of adopting required guidance within ASC 470-20 for the three and nine months ended September 30, 2008.~~has been fully amortized.

- 1312 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Notes to Condensed Consolidated Financial Statements—(continued)

~~(Dollar amounts in millions, except per share data)~~

(unaudited)

~~Earnings Per Share~~

~~In June 2008, the FASB issued new requirements within ASC 260-10 (SFAS No. 128,~~~~Earnings per Share~~) which specify that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends or dividend equivalents are considered participating securities and should be included in the computation of EPS pursuant to the two-class method as defined in ASC 260-10. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. All prior period EPS data presented must be adjusted retrospectively. Prior to 2009, the Company awarded restricted stock and restricted stock units with nonforfeitable dividend equivalent rights. Restricted stock and restricted stock units awarded in 2009 are not considered participating securities as dividend equivalents are subject to forfeiture prior to vesting of the award. The Company adopted FSP EITF 03-6-1 on January 1, 2009. See below for the retrospective EPS impact of adopting FSP EITF 03-6-1 for the three and nine months ended September 30, 2008.

~~EPS Impact of Adoption of required guidance within ASC 470-20, ASC 260-10 and ASC 810-10~~

The following table illustrates the effect on net income attributable to BlackRock, Inc. and earnings per share upon retrospective application of the required guidance within ASC 470-20, ASC 260-10 and ASC 810-10 during the three and nine months ended September 30, 2008.

   Three Months
Ended
September 30,
2008 Nine Months
Ended
September 30,
2008
Net income, as previously reported
   $ 218    $ 734
Impact of new requirements within ASC 470-20
   (1 ) (2 )

Net income attributable to BlackRock, Inc., as currently reported
   $ 217    $ 732

Earnings per share attributable to BlackRock, Inc. common stockholders:

Basic earnings per common share, as previously reported⁽¹⁾
   $ 1.68    $ 5.67
Basic earnings per common share, as currently reported
   $ 1.62    $ 5.47
Diluted earnings per common share, as previously reported⁽¹⁾
   $ 1.62    $ 5.49
Diluted earnings per common share, as currently reported
   $ 1.59    $ 5.36

⁽¹⁾	~~As previously reported in prior year Form 10-Q.~~

~~- 14 -~~

~~BlackRock, Inc.~~

~~Notes to Condensed Consolidated Financial Statements—(continued)~~

~~(Dollar amounts in millions, except per share data)~~

~~(unaudited)~~

~~Fair Value Measurements~~

~~In February 2008, the FASB issued new guidance within ASC 820-10,~~~~Fair Value Measurements and Disclosures~~ ~~(“ASC 820-10”) (FSP FAS 157-2,~~~~Effective Date of FASB Statement No. 157~~), which delayed the effective date of the application of ASC 820-10 to fiscal years beginning after November 15, 2008 for all non-financial assets and liabilities recognized or disclosed at fair value in the financial statements on a non-recurring basis. Non-recurring non-financial assets and liabilities include goodwill, indefinite-lived and finite-lived intangible assets and long-lived assets each measured at fair value for purposes of impairment testing, asset retirement and guarantee obligations initially measured at fair value, and those assets and liabilities initially measured at fair value in a business combination or asset purchase. The adoption of the provisions of ASC 820-10 on January 1, 2009 for non-recurring non-financial assets and liabilities did not have a material impact on the Company’s condensed consolidated financial statements.

~~Fair Value Measurements Disclosures and Impairments of Securities:~~

In April 2009, the FASB issued the following three provisions intended to provide additional application guidance and enhance disclosures regarding fair value measurements and impairments of securities:

~~ASC 320-10-65-1,~~~~Investments—Debt and Equity Securities~~ ~~(“ASC 320-10-65-1”) (FSP FAS 115-2 and FAS 124-2,~~~~Recognition and Presentation of Other-Than-Temporary Impairments~~), amend current other-than-temporary impairment guidance in GAAP for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. Under ASC 320-10-65-1, an other-than-temporary impairment is triggered if (1) an entity has the intent to sell the security, (2) it is more likely than not that an entity will be required to sell the security before recovery, or (3) an entity does not expect to recover the entire amortized cost basis of the security. If an entity does not intend to sell a security and it is not more likely than not that the entity will be required to sell the security, but the security has suffered a credit loss, the impairment charge will be separated into the credit loss component, which is recorded in earnings, and the remainder is recorded in other comprehensive income. This FSP does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities.

~~ASC 820-10-65-4,~~~~Fair Value Measurements and Disclosures~~ ~~(“ASC 820-10-65-4”) (FSP FAS 157-4,~~~~Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly~~), provides additional guidance on determining when the volume and level of activity for an asset or liability has significantly decreased and includes guidance on identifying circumstances that indicate a transaction is not orderly.

~~- 15 -~~

~~BlackRock, Inc.~~

~~Notes to Condensed Consolidated Financial Statements—(continued)~~

~~(Dollar amounts in millions, except per share data)~~

~~(unaudited)~~

~~ASC 825-10-65-1,~~~~Financial Instruments~~~~(“ASC 825-10-65-1”) (FSP FAS 107-1 and APB 28-1~~~~, Interim Disclosures about Fair Value of Financial Instruments~~~~), amends ASC 825-10-50 (SFAS No. 107, Disclosures about Fair Value of Financial Instruments)~~, to expand the required qualitative and quantitative disclosures about fair value of financial instruments to interim reporting periods for publicly traded entities. FSP FAS 107-1 and APB 28-1 also amends APB Opinion No. 28, Interim Financial Reporting (ASC 270-10,~~Interim Reporting~~~~), to require those disclosures in summarized financial information at interim reporting periods.~~

~~The adoption of all three new provisions as of April 1, 2009, did not materially impact the Company’s condensed consolidated financial statements.~~

~~Business Combinations~~

~~In December 2007, the FASB issued new guidance within ASC 805,~~~~Business Combinations~~~~(“ASC 805”) (SFAS No. 141 (revised),~~~~Business Combinations~~~~), and in April 2009, the FASB issued additional guidance within ASC 805 (FSP 141(R)-1~~,2. Significant Accounting ~~for Assets Acquired and Liabilities Assumed in a Business Combination That Arise From Contingencies~~). ASC 805 retains the fundamental requirements that the acquisition method of accounting (the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. The new provisions within ASC 805 further define the acquirer, establishes the acquisition date and broadens the scope of transactions that qualify as business combinations.

Additionally, the new requirements within ASC 805 change the fair value measurement provisions for assets acquired, liabilities assumed and any non-controlling interest in the acquiree, provides guidance for the measurement of fair value in a step acquisition, changes the requirements for recognizing assets acquired and liabilities assumed subject to contingencies, provides guidance on recognition and measurement of contingent consideration and requires that acquisition-related costs of the acquirer generally be expensed as incurred. Liabilities for unrecognized tax benefits related to tax positions assumed in business combinations that settled prior to the adoption of the new requirements within ASC 805 affected goodwill. If such liabilities reverse subsequent to the adoption of the new requirements within ASC 805, such reversals will affect the income tax provision in the period of reversal. The new requirements within ASC 805 apply prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company adopted the new requirements within ASC 805 on January 1, 2009. The adoption of the new requirements within ASC 805 impacted the Company’s condensed consolidated financial statements in the nine months ended September 30, 2009 as certain acquisition related costs in connection with the BGI Transaction have been expensed as incurred. See Note 17, Pending Transaction.

~~- 16 -~~

~~BlackRock, Inc.~~

~~Notes to Condensed Consolidated Financial Statements—~~Policies (continued)

~~(Dollar amounts in millions, except per share data)~~

~~(unaudited)~~

~~Useful Life of Intangible Assets~~

~~In April 2008, the FASB issued additional guidance within ASC 350-30,~~~~General Intangibles Other than Goodwill~~ ~~(“ASC 350-30”) (FSP FAS 142-3,~~~~Determination of the Useful Life of Intangible Assets~~). The required provisions within ASC 350-30 amend the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under the prior guidance within ASC 350~~Intangibles—Goodwill and Other~~ ~~(SFAS No. 142,~~~~Goodwill and Other Intangible Assets~~). ASC 350-30 requires that an entity shall consider its own experience in renewing similar arrangements. ASC 350-30 is intended to improve the consistency between the useful life of an intangible asset determined under prior requirements within ASC 350 and the period of expected cash flows used to measure the fair value of the asset under ASC 805 and other GAAP. The new requirements of ASC 350-30 are effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The adoption on January 1, 2009 of the new requirements within ASC 350-30 did not materially impact the Company’s condensed consolidated financial statements.

~~Disclosures about Derivative Instruments~~

~~In March 2008, the FASB issued new guidance within ASC 815-10,~~~~Derivatives and Hedging~~~~(“ASC 815-10”)(SFAS No. 161,~~ ~~Disclosures about Derivative Instruments and Hedging Activities—an amendment of SFAS No. 133~~). ASC 815-10 expands the disclosure requirements for derivative instruments and hedging activities. ASC 815-10 specifically requires enhanced disclosures addressing: a) how and why an entity uses derivative instruments, b) how derivative instruments and related hedged items are accounted for under ASC 815 (SFAS No. 133) and its related interpretations and c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. ASC 815-10 is effective for fiscal years and interim periods beginning after November 15, 2008. The adoption on January 1, 2009 of the additional disclosure requirements of ASC 815-10 did not materially impact the Company’s condensed consolidated financial statements.

~~Meaning of Indexed to a Company’s Own Stock~~

~~In June 2008, the FASB issued new guidance within ASC 815-40,~~~~Derivatives and Hedging: Contracts in Entity’s Own Equity~~~~(“ASC 815-40”) (EITF No. 07-5,~~~~Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock~~. The new requirements of ASC 815-40 provide guidance for determining whether an equity-linked financial instrument (or embedded feature) is indexed to an entity’s own stock. To meet the definition of “indexed to its own stock,” an instrument’s contingent exercise provisions must not be based on an observable market other than the market for the issuer’s stock, and its settlement amount must be based only on those variables that are inputs to the fair value of a “fixed-for-fixed” forward or option on an entity’s equity shares. The required provisions of ASC 815-40 were adopted on January 1, 2009 and did not change the classification or measurement of the Company’s financial instruments.

~~- 17 -~~

~~BlackRock, Inc.~~

~~Notes to Condensed Consolidated Financial Statements—(continued)~~

~~(Dollar amounts in millions, except per share data)~~

~~(unaudited)~~

~~Subsequent Events~~

~~In May 2009, the FASB issued ASC 855-10,~~~~Subsequent Events~~~~(“ASC 855-10”) (SFAS No. 165,~~~~Subsequent Events~~), which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC 855-10 is effective for interim or fiscal periods ending after June 15, 2009. The Company adopted ASC 855-10 on June 30, 2009. The adoption of ASC 855-10 did not materially impact the Company’s condensed consolidated financial statements. See Note 18, Subsequent Events, for further discussion.

~~The FASB~~ Accounting ~~Standards Codification~~

~~In June 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-1,~~~~Amendments Based on SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162~~(“ASU 2009-1”). ASU 2009-1 established the FASB ASC as the single source of authoritative GAAP to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. All other accounting literature not includedPolicies Adopted in the ASC will become nonauthoritative. ASU 2009-1 is effective for financial statements for interim or annual reporting periods ending after September 15, 2009. The Company adopted ASU 2009-1 on September 30, 2009. As ASU 2009-1 does not change GAAP, its adoption did not impact amounts recorded or disclosures required as part of the Company’s condensed consolidated financial statements.

~~Recent Accounting Developments~~Three Months Ended March 31, 2010

New Consolidation Guidance for Variable Interest ~~Entities:~~Entities

In June 2009, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued ~~SFAS No. 167,~~Accounting Standards Update (“ASU”) 2009-17,~~Amendments~~Improvements to ~~FASB Interpretation No. 46(R)~~Financial Reporting by Enterprises Involved with Variable Interest Entities (“~~SFAS No. 167”~~ASU 2009-17”), which ~~amends~~amended the consolidation guidance for variable interest ~~entities under FIN 46(R).~~entities. The amendments include: (1) the elimination of the exemption from consolidation for qualifying special purpose entities, (2) a new approach for determining the primary beneficiary of a variable interest entity (“VIE”), which requires that the primary beneficiary have both (i) the power to control the most significant activities of the VIE and (ii) either the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, and (3) the requirement to continually reassess ~~who~~the primary beneficiary of a VIE.

In February 2010 the FASB issued ASU 2010-10,Amendments to Statement 167 for Certain Investment Funds(“ASU 2010-10”).This ASU defers the application of Statement of Financial Accounting Standards (“SFAS”) No. 167,Amendments to FASB Interpretation No. 46(R), for a reporting enterprise’s interest in an entity if all of the following conditions are met:

(1) the entity either has all of the attributes of an investment company, as specified in ASC 946-10,Financial Services-Investment Companies (“ASC 946-10”) or it is industry practice to apply measurement principles for financial reporting that are consistent with those in ASC 946-10; (2) the entity is not a securitization entity, an asset-backed financing entity, or an entity formerly considered a qualifying special-purpose entity and (3) the reporting enterprise does not have an explicit or implicit obligation to fund losses of the entity that could potentially be significant to the entity.

In addition, the deferral applies to a reporting entity’s interest in an entity that is required to comply or operate in accordance with the requirement of Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

The amendments in this ASU clarify that for entities that do not qualify for the deferral, related parties should ~~consolidate~~be considered when evaluating each of the criteria for determining whether a ~~variable-interest entity.~~decision maker or service provider fee represents a variable interest.

An entity that qualifies for the deferral will continue to be assessed for consolidation under the overall guidance on variable interest entities in ASC 810,Consolidation (“ASC 810”) (before its amendment by SFAS No. ~~167 is effective~~167) or other applicable consolidation guidance, including guidance for the ~~beginning~~consolidation of ~~an entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter.~~

partnerships in ASC 810. The ~~Company~~amendment does not ~~expect~~defer the disclosure requirements in ASU 2009-17.

On January 1, 2010, upon adoption of ~~SFAS No. 167~~the provisions of ASU 2009-17, the Company recorded a cumulative effect adjustment to ~~impact net income attributable~~appropriated retained earnings of $114 million.

Fair Value Option

ASC 825-10,Financial Instruments (“ASC 825-10”), provides a fair value option election that allows companies to ~~BlackRock, Inc. or its stockholders’ equity, however, it~~irrevocably elect fair value as the initial and subsequent measurement attribute for certain financial assets and liabilities. ASC 825-10 permits entities to choose to measure eligible financial assets and liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. The decision to elect the fair value option is ~~currently evaluating~~determined on an instrument by instrument basis, must be applied to an entire instrument and is irrevocable once elected. Assets and liabilities measured at fair value pursuant to ASC 825-10 are required to be reported separately in the ~~impact~~statement of financial condition from those instruments measured using another accounting method. On January 1, 2010, upon adoption of ASU 2009-17, the Company elected the fair value option for eligible financial assets and liabilities upon consolidation of three collateralized loan obligations (“CLOs”), to ~~its condensed consolidated financial statements as a result~~mitigate accounting mismatches between the carrying value of ~~consolidating~~ the assets and liabilities and ~~net income (loss) of certain VIEs in addition~~ to ~~a corresponding non-controlling interest liability and allocation of net income (loss) to non-controlling interests.~~achieve operational simplifications.

- 1813 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Notes to Condensed Consolidated Financial Statements—(continued)

~~(Dollar amounts in millions, except per share data)~~

(unaudited)

2. Significant Accounting Policies (continued)

Accounting Policies Adopted in the Three Months Ended March 31, 2010 (continued)

~~Measuring~~Appropriated Retained Earnings

Upon adoption of ASU 2009-17, BlackRock consolidated three CLOs and recorded a cumulative effect adjustment to appropriated retained earnings on the condensed consolidated statement of financial condition equal to the difference between the fair value of the CLOs’ assets and the fair value of their liabilities. Such amounts are recorded as appropriated retained earnings as the CLO noteholders, not BlackRock, ultimately will receive the benefits or absorb the losses associated with the CLOs’ assets and liabilities. Subsequent to adoption of ASU 2009-17, the net change in the fair value of the CLOs’ assets and liabilities will be recorded as net income (loss) attributable to non-controlling interests and as an adjustment to appropriated retained earnings.

Improving Disclosures about Fair Value ~~of Certain Alternative Investments~~Measurements

In ~~September~~January 2009, the FASB issued ASU ~~2009-12,~~2010-06,~~Investments in Certain Entities That Calculate Net Asset~~Fair Value ~~per Share (or Its Equivalent)~~Measurements and Disclosures(“ASU ~~2009-12”~~2010-06”). ASU ~~2009-12~~2010-06 amends ASC 820-10 to ~~provide guidance on measuring~~require new disclosures with regards to significant transfers into and out of Levels 1 and 2 and separate disclosures about purchases, sales, issuances, and other settlements within the Level 3 fair value ~~of certain alternative investments. The amendments in this~~rollforward. ASU ~~permit, as a practical expedient, a reporting entity to use the investment’s net asset value per share (“NAV”) to measure the~~2010-06 also clarifies existing fair value ~~of the investment provided that the NAV is calculated as of the reporting entity’s measurement date. ASU 2009-12 also requires enhanced~~ disclosures ~~by major investment category~~ about the ~~attributes~~appropriate level of ~~the investments within the scope, such as the nature~~disaggregation and about inputs and valuation techniques for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3. The new disclosures and clarifications of ~~the restrictions, the amount of the unfunded commitments and the description of the investment strategies of the investees. ASU 2009-12 is~~existing disclosures are effective for ~~the~~ interim and annual reporting periods ~~ending~~beginning after December 15, ~~2009. In~~2009, except for the ~~period~~disclosures about purchases, sales and settlements in the rollforward of activity in Level 3 fair value measurements, which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption an entity must disclose any change in valuation technique and related inputs and quantify the total effect, if practicable. The Company will adopt this ASU in fourth quarter 2009 and is currently evaluating the impacton January 1, 2010 of the ~~adoption on its~~additional disclosure requirements of ASU 2010-06 did not materially impact BlackRock’s condensed consolidated financial statements.

- 14 -

PART I—FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Notes to Condensed Consolidated Financial Statements—(continued)

(unaudited)

3. Mergers and Acquisitions

Barclays Global Investors

On December 1, 2009, BlackRock acquired from Barclays all of the outstanding equity interests of subsidiaries of Barclays conducting the investment management business of BGI in exchange for an aggregate of 37,566,771 shares of BlackRock common stock and participating preferred stock and $6.65 billion in cash. The fair value of the 37,566,771 shares at closing, on December 1, 2009, was $8.53 billion, at a price of $227.08 per share, the closing price of BlackRock’s common stock on November 30, 2009.

A summary of the initial and revised fair values of the assets acquired and liabilities and non-controlling interests assumed on December 1, 2009 in this acquisition is as follows:

(Dollar amounts in millions)    Initial
Estimate of
Fair Value Purchase
Price
Adjustments Revised
Estimate of
Fair Value
Accounts receivable
   $ 593    $ (12 ) $ 581
Investments
   125    —      125
Separate account assets
   116,301    —      116,301
Collateral held under securities lending agreements
   23,498    —      23,498
Property and equipment
   205    (2 ) 203
Finite-lived intangible management contracts (intangible assets)
   163    (7 ) 156
Indefinite-lived intangible management contracts (intangible assets)
   9,785    25    9,810
Trade names / trademarks (indefinite-lived intangible assets)
   1,403    —      1,403
Goodwill
   6,842    68    6,910
Other assets
   366    —      366
Separate account liabilities
   (116,301 ) —      (116,301 )
Collateral liability under securities lending agreements
   (23,498 ) —      (23,498 )
Deferred tax liabilities
   (3,799 ) 8    (3,791 )
Accrued compensation and benefits
   (885 ) —      (885 )
Other liabilities assumed
   (660 ) (80 ) (740 )
Non-controlling interests assumed
   (12 ) —      (12 )

Total consideration, net of cash acquired
   $ 14,126    $ —      $ 14,126

Summary of consideration, net of cash acquired:

Cash paid
   $ 6,650    $ —      $ 6,650
Cash acquired
   (1,055 ) —      (1,055 )
Capital stock at fair value
   8,531    —      8,531

Total cash and stock consideration
   $ 14,126    $ —      $ 14,126

At this time, the Company does not expect additional material changes to the value of the assets acquired or liabilities assumed in conjunction with the transaction.
Helix Financial Group LLC
In January 2010, the Company completed the acquisition of substantially all of the net assets of Helix Financial Group LLC, which provides advisory, valuation and analytics solutions to commercial real estate lenders and investors (the “Helix Transaction”). The assets acquired and liabilities assumed, as well as the total consideration paid for the acquisition, were not material to the Company’s condensed consolidated financial statements.
- 15 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
4. Investments
A summary of the carrying value of total investments is as follows:

   September 30,
2009    December 31,
2008    Carrying Value
(Dollar amounts in millions)
   March 31,
2010    December 31,
2009
Available-for-sale investments
   $ 103    $ 101    $ 65    $ 73
Held-to-maturity
   40    29
Trading investments
   143    122    237    167
Other investments:

Consolidated sponsored investment funds (non cash management funds)
   366    349
Consolidated sponsored cash management funds
   —      326
Consolidated sponsored investment funds
   318    360
Equity method investments
   403    501    393    376
Deferred compensation plan hedge fund equity method investments
   26    30    28    29
Cost method investments
   15    15

Total other investments
   795    1,206    754    780

Total investments
   $ 1,041    $ 1,429    $ 1,096    $ 1,049

At ~~September 30, 2009,~~March 31, 2010, the Company had ~~$444~~$493 million of total investments held by consolidated sponsored investment funds (non-VIEs) of which ~~$78~~$175 million and ~~$366~~$318 million were classified as trading investments and other investments, respectively.
At December 31, ~~2008,~~2009, the Company had ~~$728~~$463 million of total investments held by consolidated sponsored investment funds of which ~~$53~~$103 million and ~~$675~~$360 million were classified as trading investments and other investments, respectively. Other investments at December 31, 2009 included $40 million related to a consolidated VIE, which has been reclassified as of January 1, 2010 to bank loans and other investments of consolidated VIEs on the condensed consolidated statement of financial condition.

- 1916 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~(unaudited)
~~(unaudited)~~4. Investments (continued)
Available-for-sale ~~investments~~Investments
A summary of the cost and carrying value of investments classified as available-for-sale, is as follows:

(Dollar amounts in millions)
      Gross Unrealized Carrying
Value    Cost    Gross Unrealized Carrying
Value
September 30, 2009
   Cost    Gains    Losses
March 31, 2010
   Cost    Gains    Losses Carrying
Value
Available-for-sale investments:

Equity securities:

Sponsored investment funds
   $ 57    $ 1    $ (3 ) $ 55    $ 44    $ 3    $ (2 ) $ 45
Collateralized debt obligations (“CDOs”)
   3    —      —      3
Collateralized debt obligations
   2    1    —      3
Debt securities:

Mortgage debt
   23    1    —      24    5    1    —      6
Asset-backed debt
   12    1    —      13    9    2    —      11
Corporate debt
   3    —      —      3
Foreign government debt
   5    —      —      5

Total available-for-sale investments
   $ 103    $ 3    $ (3 ) $ 103    $ 60    $ 7    $ (2 ) $ 65

      GrossUnrealized Carrying
Value    Cost    Gross Unrealized Carrying
Value
December 31, 2008
   Cost    Gains    Losses
December 31, 2009
   Cost    Gains    Losses Carrying
Value
Available-for-sale investments:

Equity securities:

Sponsored investment funds
   $ 109    $ —      $ (16 ) $ 93    $ 53    $ 2    $ (1 ) $ 54
Collateralized debt obligations
   6    —      (2 ) 4    2    —      —      2
Other debt securities
   4    —      —      4
Debt securities:

Mortgage debt
   6    1    —      7
Asset-backed debt
   10    —      —      10

Total available-for-sale investments
   $ 119    $ —      $ (18 ) $ 101    $ 71    $ 3    $ (1 ) $ 73

Available-for-sale investments ~~includes~~include seed investments in BlackRock sponsored investment funds and debt securities received upon closure of an enhanced cash fund, in lieu of the Company’s remaining investment in the fund and securities purchased from another enhanced cash fund.
During the ~~nine~~three months ended ~~September 30,~~March 31, 2010 and 2009, ~~and 2008,~~ the Company ~~recorded~~did not record any other-than-temporary impairments ~~of $4, including $2 related to credit loss impairments~~ on available-for-sale debt securities, and $5, respectively, which was recorded in non-operating income (expense) on the condensed consolidated statements of income. The $2 credit loss impairment was determined by comparing the estimated discounted cash flows versus the amortized cost for each individual security.securities.
The Company has reviewed the gross unrealized losses of $3$2 million as of ~~September 30, 2009~~March 31, 2010 related to available-for-sale equity securities, of which $3approximately $1 million had been in a loss position for greater than twelve months, and determined that these unrealized losses were not other-than-temporary primarily because the Company has the ability and intent to hold the securities for a period of time sufficient to allow for recovery of such unrealized losses. As a result, the Company did not record additional impairments on such equity securities.

- 2017 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~
(unaudited)
~~The Company did not have any gross unrealized losses~~
4. Investments (continued)
Held-to-Maturity Investments
A summary of the carrying value of held-to-maturity investments is as follows:
   Carrying Value
(Dollar amounts in millions)
   March 31,
2010    December 31,
2009
Held-to-maturity investments:

Foreign government debt
   $ 39    $ 28
U.S. government debt
   1    1

Total held-to-maturity investments:
   $ 40    $ 29

Held-to-maturity investments include debt instruments held for regulatory purposes and the carrying value of ~~September 30, 2009 related to available-for-sale debt securities. As a result, the Company did not record additional impairments on such debt securities.~~these investments approximates fair value.
Trading and Other Investments
A summary of the cost and carrying value of trading and other investments is as follows:

   September 30, 2009    December 31, 2008    March 31, 2010    December 31, 2009
(Dollar amounts in millions)    Cost    Carrying
Value    Cost    Carrying
Value
   Cost    Carrying
Value    Cost    Carrying
Value
Trading investments:

Deferred compensation plan fund investments
   $ 49    $ 41    $ 32    $ 29
Deferred compensation plan mutual fund investments
   $ 49    $ 43    $ 49    $ 42
Equity securities
   91    74    109    75    157    145    112    97
Debt securities:

Municipal debt
   11    11    9    7    11    11    10    11
Mortgage debt
   4    4    —      —
Foreign government debt
   11    12    8    7    —      —      15    15
Corporate debt
   1    2    1    1    19    19    1    1
U.S. government debt
   3    3    3    3    6    6    1    1
Asset-backed debt
   9    9    —      —

Total trading investments
   $ 166    $ 143    $ 162    $ 122    $ 255    $ 237    $ 188    $ 167

Other investments:

Consolidated sponsored investment funds (non cash management funds)
   $ 381    $ 366    $ 376    $ 349
Consolidated sponsored cash management funds
   —      —      333    326
Consolidated sponsored investment funds
   $ 330    $ 318    $ 380    $ 360
Equity method
   553    403    752    501    492    393    499    376
Deferred compensation plan hedge fund equity method investments
   28    26    39    30    25    28    28    29
Cost method investments
   15    15    15    15

Total other investments
   $ 962    $ 795    $ 1,500    $ 1,206    $ 862    $ 754    $ 922    $ 780

Trading investments include certain deferred compensation plan mutual fund investments, equity and debt securities within certain consolidated sponsored investment funds and equity and debt securities held in separate accounts for the purpose of establishing an investment history in various investment strategies before being marketed to investors.

- 2118 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~(unaudited)
~~(unaudited)~~4. Investments (continued)
Cost Method Investments
Cost method investments include non-marketable securities, including $10 million of restricted Federal Reserve Bank stock, that is held for regulatory purposes.
As of March 31, 2010, there were no indicators of impairments on these investments.
Maturity ~~Dates~~dates
The carrying value of debt securities, classified as available-for-sale, held-to-maturity and trading ~~or other~~ investments, by maturity at ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008~~2009 is as follows:

Maturity date
   September 30,
2009    December 31,
2008
(Dollar amounts in millions)
Maturity date
   March 31,
2010    December 31,
2009
<1 year
   $ 24    $ 329    $ 43    $ 28
>1-5 years
   6    2    7    5
>5-10 years
   7    3    17    9
> 10 years
   36    14    39    32

Total
   $ 73    $ 348    $ 106    $ 74

At ~~September 30,~~March 31, 2010 and December 31, 2009, the debt securities in the table above primarily consisted of mortgage, asset-backed, municipal, corporate, U.S. and foreign government debt securities a portion of which are held by consolidated sponsored investment funds, which are consolidated in the Company’s condensed consolidated statements of financial condition. ~~In addition, at December 31, 2008, the debt securities in the table above included floating rate notes and asset backed securities held by consolidated sponsored cash management funds.~~
- 19 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
~~Impact of~~BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
5. Consolidated Sponsored Investment Funds
The Company consolidates certain sponsored investment funds primarily because it is deemed to control such ~~investments~~funds in accordance with GAAP. The investments that are owned by these consolidated sponsored investment funds are classified as other or trading investments. At ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, the following balances related to these funds were consolidated in the condensed consolidated statements of financial condition:

(Dollar amounts in millions)    March 31,
2010 December 31,
2009
   September 30,
2009 December 31,
2008
Cash and cash equivalents
   $ 52    $ 61       $ 123    $ 75
Investments
   444    728       493    463
Other net assets (liabilities)
   (5 ) 12       (24 ) (7 )
Non-controlling interests
   (240 ) (491 )    (253 ) (273 )

Total net interests in consolidated investment funds
   $ 251    $ 310       $ 339    $ 258

~~- 22 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~At December 31, 2009, the above balances included, a consolidated sponsored investment fund that was also deemed a VIE. This VIE as well as three consolidated CLOs, which are also VIEs, were excluded from the March 31, 2010 balances above. See Note 7, Variable Interest Entities, for further discussion.
BlackRock’s total exposure to consolidated sponsored investment funds of ~~$251~~$339 million and ~~$310~~$258 million at ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, respectively, represents the value of the Company’s economic ownership interest in these sponsored investment funds. Valuation changes associated with these consolidated investment funds are reflected in non-operating income (expense) and net income (loss) attributable to non-controlling interests. During the three months ended June 30, 2009, BlackRock took necessary steps to grant additional rights to the unaffiliated investors in one consolidated sponsored investment fund, which resulted in deconsolidation of this fund and the elimination of $85, $76, and $9 of investments, borrowings, and nonredeemable non-controlling interests, respectively. Approximately $0 and $6 of borrowings by consolidated sponsored investment funds at September 30, 2009 and December 31, 2008, respectively, were included in other liabilities on the condensed consolidated statements of financial condition.
The Company may not be readily able to access cash and cash equivalents held by consolidated sponsored investment funds to use in its operating activities. In addition, the Company may not be readily able to sell investments held by consolidated sponsored investment funds in order to obtain cash for use in its operations.

- 2320 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~
(unaudited)
4.6. Fair Value Disclosures
Fair Value Hierarchy
Assets and liabilities measured at fair value on a recurring basis at ~~September 30, 2009~~March 31, 2010 were as follows:

(Dollar amounts in millions)    Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)    Other Assets
Not Held at
Fair Value ⁽¹⁾    March 31,
2010
Assets:

Investments

Available-for-sale

Equity
   $ 45    $ 3    $ —      $ —      $ 48
Fixed income
   1    16    —      —      17

Total available-for-sale
   46    19    —      —      65
Held-to-maturity

Fixed income
   —      —      —      40    40

Total held-to-maturity
   —      —      —      40    40
Trading

Equity
   133    12    —      —      145
Fixed income
   —      49    —      —      49
Deferred compensation plan mutual fund investments
   43    —      —      —      43

Total trading
   176    61    —      —      237
Other investments:

Consolidated sponsored investment funds:

Hedge funds / Funds of funds
   —      —      25    —      25
Private equity
   13    —      280    —      293

Total Consolidated sponsored investment funds
   13    —      305    —      318
Equity method

Fixed income mutual fund
   —      10    —      —      10
Hedge funds / Funds of funds
   —      —      237    23    260
Private equity funds
   —      —      58    18    76
Real estate funds
   —      —      39    8    47

Total equity method
   —      10    334    49    393
Deferred compensation plan hedge fund equity method investments
   —      11    17    —      28
Cost method investments
   —      —      —      15    15

Total investments
   235    101    656    104    1,096
Separate account assets

Equity
   73,920    58    63    —      74,041
Fixed income
   —      37,027    1,090    —      38,117
Derivatives
   4    1,453    —      —      1,457
Money market funds
   1,764    —      —      —      1,764
Other
   —      —      —      808    808

Total separate account assets
   75,688    38,538    1,153    808    116,187
Collateral held under securities lending agreements

Equity
   8,463    —      —      —      8,463
Fixed income
   —      4,954    —      —      4,954

Total collateral held under securities lending agreements
   8,463    4,954    —      —      13,417

   Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)    Other Assets
Not Held at
Fair Value⁽¹⁾    September 30,
2009
Assets:

Investments:

Available-for-sale
   $ 60    $ 40    $ 3    $ —      $ 103
Trading
   132    11    —      —      143
Other investments:

Consolidated sponsored investment funds
   17    1    348    —      366
Equity method
   8    —      357    38    403
Deferred compensation plan hedge fund equity method investments
   —      12    14    —      26
Other assets⁽²⁾
   —      11    24    —      35
Assets of consolidated VIEs

Bank loans
   —      1,154    —      —      1,154
Bonds
   —      93    —      —      93
Private equity
   3    —      35    —      38
Other
   —      3    —      —      3

Total investments
   217    64    722    38    1,041
Separate account assets
   3,413    95    —      28    3,536
Other assets⁽²⁾
   —      11    50    —      61
Total investments of consolidated VIEs
   3    1,250    35    —      1,288

Total assets measured at fair value
   $ 3,630    $ 170    $ 772    $ 66    $ 4,638
Total
   $ 84,389    $ 44,854    $ 1,868    $ 912    $ 132,023

Liabilities:

Borrowings of consolidated VIEs
   $ —      $ —      $ 1,214    $ —      $ 1,214
Collateral liability under securities lending agreements
   8,463    4,954    —      —      13,417
Other liabilities
   —      7    —      —      7

Total liabilities measured at fair value
   $ 8,463    $ 4,961    $ 1,214    $ —      $ 14,638


⁽¹⁾
Comprised of equity method investments, which include investment companies and other assets, which in accordance with GAAP are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and financial liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.
⁽²⁾
Includes disposal group assets and company-owned and split-dollar life insurance policies.

- 2421 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~
(unaudited)
6. Fair Value Disclosures (continued)
Fair Value Hierarchy (continued)
Assets and liabilities measured at fair value on a recurring basis at December 31, ~~2008~~2009 were as follows:

   Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)    Other Assets
Not Held at
Fair Value⁽¹⁾    December 31,
2008
(Dollar amounts in millions)    Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)    Significant
Other
Observable
Inputs
(Level 2)    Significant
Unobservable
Inputs
(Level 3)    Other Assets
Not Held at
Fair Value ⁽¹⁾    December 31,
2009
Assets:

Investments:

Available-for-sale
   $ 63    $ 34    $ 4    $ —      $ 101    $ 53    $ 20    $ —      $ —      $ 73
Held-to-maturity
   —      —      —      29    29
Trading
   113    9    —      —      122    118    49    —      —      167
Other investments:

Consolidated sponsored investment funds (non cash management funds)
   —      21    328    —      349
Consolidated sponsored cash management funds
   —      326    —      —      326
Consolidated sponsored investment funds
   22    —      338    —      360
Equity method
   —      —      461    40    501    —      1    334    41    376
Deferred compensation plan hedge fund equity method investments
   —      10    20    —      30    —      14    15    —      29
Cost method investments
   —      —      —      15    15

Total investments
   176    400    813    40    1,429    193    84    687    85    1,049
Separate account assets
   2,461    85    4    73    2,623    99,983    17,599    1,292    755    119,629
Collateral held under securities lending agreements
   11,580    7,755    —      —      19,335
Other assets⁽²⁾
   —      9    64    —      73    —      11    46    —      57

Total assets measured at fair value
   $ 2,637    $ 494    $ 881    $ 113    $ 4,125
Total
   $ 111,756    $ 25,449    $ 2,025    $ 840    $ 140,070

Liabilities:

Collateral liability under securities lending agreements
   $ 11,580    $ 7,755    $ —      $ —      $ 19,335


⁽¹⁾
Comprised of equity method investments, which include investment companies and other assets, which in accordance with GAAP are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and financial liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.
⁽²⁾
Includes disposal group assets and company-owned and split-dollar life insurance policies.

- 2522 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~
(unaudited)
6. Fair Value ~~Measurements~~Disclosures (continued)
Separate Account Assets
BlackRock Pensions Limited aand BlackRock Asset Management Pensions Limited, both wholly-owned ~~subsidiary~~subsidiaries of the Company, ~~is a~~are registered life insurance ~~company~~companies that ~~maintains~~maintain separate account assets, representing segregated funds held for purposes of funding individual and group pension contracts, and equal and offsetting separate account non-financial liabilities. ~~At September 30, 2009 and December 31, 2008, the Level 3 separate account assets were approximately $0 and $4, respectively.~~ The changes in Level 3 assets in the three months ended March 31, 2009, primarily ~~relate~~related to purchases, sales and gains/(losses). The net investment income and net gains and losses attributable to separate account assets accrue directly to the contract owner and are not reported as non-operating income (expense) on the condensed consolidated statements of income.
Money Market Funds within Cash and Cash Equivalents
At March 31, 2010 and December 31, 2009, approximately $0.3 billion and $1.4 billion, respectively, of money market funds were recorded within cash and cash equivalents on the Company’s condensed consolidated statements of financial condition. Money market funds are valued through the use of quoted market prices (a Level 1 input), or $1, which is generally the net asset value of the fund.
Level 3 Assets
Level 3 assets recorded within investments, which include equity method investments and consolidated investments of real estate funds, private equity funds and funds of private equity funds, are valued based upon valuations received from internal as well as third party fund managers. Fair valuations at the underlying funds are based on a combination of methods, which may include third-party independent appraisals and discounted cash flow techniques. Direct investments in private equity companies held by funds of private equity funds are valued based on an assessment of each underlying investment, incorporating evaluation of additional significant third party financing, changes in valuations of comparable peer companies, the business environment of the companies and market indices, among other factors. Level 3 assets recorded within separate account assets may include single broker non-binding quotes for fixed income securities.
Level 3 assets recorded as investments of consolidated VIEs, include a private equity fund valued based upon valuations received from internal as well as well as third party funds managers.
Level 3 Liabilities
Level 3 liabilities recorded as borrowings of consolidated VIEs, include CLO borrowings valued based upon non-binding broker quotes.
- 23 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
6. Fair Value Disclosures (continued)
Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended March 31, 2010
(Dollar amounts in millions)    December 31,
2009    Realized
and
unrealized
gains /
(losses), net Purchases,
sales, other
settlements
and
issuances,
net Net
transfers in
and/or out
of Level 3 March 31,
2010    Total net
gains
(losses)
included in
earnings⁽¹⁾
Assets:

Investments:

Consolidated sponsored investment funds

Hedge funds / Funds of funds
   $ 26    $ —      $ (1 ) $ —      $ 25    $ (1 )
Private equity
   312    4    (36 ) —      280    5
Equity method

Hedge funds / Funds of funds
   247    13    (23 ) —      237    14
Private equity funds
   51    —      7    —      58    1
Real estate funds
   36    (1 ) 4    —      39    (1 )
Deferred compensation plan hedge funds
   15    2    —      —      17    2

Total investments
   687    18    (49 ) —      656    20
Separate account assets

Equity
   5    —      (3 ) 61    63
Fixed income
   1,287    34    185    (416 ) 1,090

Total separate account assets
   1,292    34    182    (355 ) 1,153    n/a ⁽²⁾
Other assets
   46    (12 ) (10 ) —      24    (12 )
Private equity assets of consolidated VIEs
   —      2    33    —      35    n/a ⁽³⁾

Total assets measured at fair value
   $ 2,025    $ 42    $ 156    $ (355 ) $ 1,868

Liabilities:

Borrowings of consolidated VIEs
   $ —      $ (57 ) $ 1,157    —      $ 1,214    n/a ⁽³⁾
n/a – Not applicable
⁽¹⁾
Earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date.
⁽²⁾
The net investment income and net gains and losses attributable to separate account assets accrue directly to the contract owner and are not reported as non-operating income (expense) on the Company’s condensed consolidated statements of income.
⁽³⁾
The net investment income (expense) attributable to assets and borrowings of consolidated VIEs are solely allocated to non-controlling interests on the Company’s condensed consolidated statements of income.
- 24 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
6. Fair Value Disclosures (continued)
Changes in Level 3 Investments and Other Assets Measured at Fair Value on a Recurring Basis for the Three Months Ended ~~September 30,~~March 31, 2009

   Investments Other Assets
June 30, 2009
   $ 696    $ 50
Realized and unrealized gains/(losses), net
   53    (1 )
Purchases, sales, other settlements and issuances, net
   (27 ) 1
Net transfers in and/or out of Level 3
   —      —

September 30, 2009
   $ 722    $ 50

Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date
   $ 53    $ (1 )
(Dollar amounts in millions)    December 31,
2008    Realized
and
unrealized
gains /
(losses),
net Purchases,
sales, other
settlements and
issuances, net Net
transfers
in and/or
out of
Level 3 March 31,
2009    Total net
gains
(losses)
included in
earnings⁽¹⁾
Investments
   $ 813    $ (118 ) $ (10 ) $ (19 ) $ 666    $ (116 )
Other assets
   64    (14 ) 1    —      51    (14 )

Total assets measured at fair value
   $ 877    $ (132 ) $ (9 ) $ (19 ) $ 717    $ (130 )


~~- 26 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
⁽¹⁾
Earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date.
~~Changes in~~Realized and unrealized gains and losses for Level 3 ~~Assets Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2009~~investments

   Investments Other Assets
December 31, 2008
   $ 813    $ 64
Realized and unrealized gains/(losses), net
   12    (16 )
Purchases, sales, other settlements and issuances, net
   (85 ) 2
Net transfers in and/or out of Level 3
   (18 ) —

September 30, 2009
   $ 722    $ 50

Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date
   $ 62    $ (16 )
~~Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis for the Three Months Ended September 30, 2008~~

   Investments Other Assets
June 30, 2008
   $ 1,386    $ 130
Realized and unrealized gains/(losses), net
   (89 ) (9 )
Purchases, sales, other settlements and issuances, net
   30    (51 )
Net transfers in and/or out of Level 3
   —      —

September 30, 2008
   $ 1,327    $ 70

Total net (losses) for the period included in earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date
   $ (61 ) $ (10 )
~~Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2008~~

   Investments Other Assets
December 31, 2007
   $ 1,239    $ —
Realized and unrealized gains/(losses), net
   (90 ) (16 )
Purchases, sales, other settlements and issuances, net
   209    8
Net transfers in and/or out of Level 3
   (31 ) 78

September 30, 2008
   $ 1,327    $ 70

Total net (losses) for the period included in earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date
   $ (80 ) $ (17 )
~~- 27 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
Realized and unrealized gains and losses recorded for Level 3 investments are reported in non-operating income (expense) on the Company’s condensed consolidated statements of income. A portion of net income (loss) for consolidated investments is allocated to non-controlling interests to reflect net income (loss) not attributable to the Company.
~~The Company transfers assets~~Significant Transfers in and/or out of ~~Level 3~~Levels
Transfers in and/or out of Levels are reflected as of the beginning of the period when significant inputs, including market inputs or performance attributes, used for the fair value measurement become observable or when the book value of certain equity method investments no longer ~~represent~~represents fair value as determined under fair value methodologies.
Upon a change in valuation sources, approximately $61 million of separate account assets transferred from Level 1 to Level 3 and $416 million from Level 3 to Level 2.
5.Significant Other Settlements
As of January 1, 2010, upon the adoption of ASU 2009-17 there was a $35 million reclass out of Level 3 private equity investments to Level 3 private equity assets of consolidated VIEs.
- 25 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
6. Fair Value Disclosures (continued)
Investments in Certain Entities that Calculate Net Asset Value Per Share
As a practical expedient to value certain investments, the Company relies on net asset values as the fair value for certain investments. The following table lists information regarding all investments that use a fair value measurement to account for both their financial assets and financial liabilities in their calculation of a net asset value per share (or its equivalent):
(Dollars amounts in millions)    Fair Value    Total
Unfunded
Commitment
Redemption
Frequency

Redemption
Notice Period
Trading:
Equity^(a)
   $ 12    $ —      Daily (100)%
n/a
Consolidated sponsored investment funds:
Private equity fund of funds^(b)
   280    78    n/a    n/a
Other fund of funds^(c)
   9    —
Monthly (39)%,
Quarterly (51)%
Semi-annually and
Annually (10)%
   30 – 120 days
Equity method⁽¹⁾:
Hedge funds/funds of hedge funds^(d)
   237    91
Monthly (8)%,
Quarterly (18)%,
n/a (74)%
   15 – 90 days
Private equity funds^(e)
   58    73    n/a    n/a
Real estate funds^(f)
   39    61    n/a    n/a
Deferred compensation plan hedge fund investments^(g)
   28    —
Monthly (10)%,
Quarterly (90)%
   30 – 60 days
Private equity assets of consolidated VIEs^(h)
   35    3    n/a    n/a

Total
   $ 698    $ 306

n/a— not applicable
⁽¹⁾
Comprised of equity method investments, which include investment companies, which in accordance with GAAP account for both their financial assets and financial liabilities under fair value measures; therefore, the Company’s investment in such equity method investees approximates fair value.
^(a)
This category includes several consolidated offshore feeder funds that invest in multiple equity strategies to diversify risks. The fair values of the investments in this category have been estimated using the net asset value of master offshore funds held by the feeder funds. Investments in this category can generally be redeemed, as long as there are no restrictions in place by the underlying master funds.
- 26 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
6. Fair Value Disclosures (continued)
Investments in Certain Entities that Calculate Net Asset Value Per Share (continued)
^(b)
This category includes the underlying third party private equity funds within consolidated BlackRock sponsored private equity funds of funds. The fair values of the investments in the third party funds have been estimated using the net asset value of the Company’s ownership interest in partners’ capital in each fund in the portfolio as well as other performance inputs. These investments are not subject to redemption, however for certain funds the Company may sell or transfer its interest, which may need approval by the general partner of the underlying funds. Due to the nature of the investments in this category, the Company reduces its investment via distributions that are received through the realization of the underlying assets of the funds. It is estimated that the underlying assets of these funds would be liquidated over a weighted average period of approximately 9 years.
Total remaining unfunded commitments to other third party funds is $78 million. The Company is contractually obligated to fund only $52 million to the consolidated funds, while the remaining unfunded balance in the table above would be funded by capital contributions from non-controlling interest holders.
^(c)
This category includes several consolidated funds of funds that invest in multiple strategies to diversify risks. The fair values of the investments in this category have been estimated using the net asset value of the fund’s ownership interest in partners’ capital of each fund in the portfolio. Investments in this category can generally be redeemed, as long as there are no restrictions in place by the underlying funds.
^(d)
This category includes hedge funds and funds of hedge funds that invest primarily in equities, fixed income securities, distressed credit and mortgage instruments and other third party hedge funds. The fair values of the investments in this category have been estimated using the net asset value of the Company’s ownership interest in partners’ capital. It is estimated that the investments in the funds that are not subject to redemptions would be liquidated over a weighted average period of less than 8 years.
^(e)
This category includes several private equity funds that initially invest in non-marketable securities of private companies, which ultimately may become public in the future. The fair values of these investments have been estimated using the net asset value of the Company’s ownership interest in partners’ capital as well as other performance inputs. The Company’s investment in each fund is not subject to redemption and is normally returned through distributions as a result of the liquidation of the underlying assets of the private equity funds. It is estimated that the investment in these funds would be liquidated over a weighted average period of approximately 8 years.
^(f)
This category includes several real estate funds that invest primarily to acquire, expand, renovate, finance, hold for investment, and ultimately sell income-producing apartment properties or to capitalize on the distress in the residential real estate market. The fair values of the investments in this category have been estimated using the net asset value of the Company’s ownership interest in partners’ capital. The Company’s investment in each fund is not subject to redemption and is normally returned through distributions as a result of the liquidation of the underlying assets of the real estate funds. It is estimated that the investments in these funds would be liquidated over a weighted average period of approximately 14 years.
^(g)
This category includes investments in certain hedge funds that invest in energy and health science related equity securities. The fair values of the investments in this category have been estimated using the net asset value of the Company’s ownership interest in partners’ capital as well as performance inputs.
^(h)
This category includes the underlying third party private equity funds within one consolidated BlackRock sponsored private equity fund of funds. The fair values of the investments in the third party funds have been estimated using the net asset value of the Company’s ownership interest in partners’ capital in each fund in the portfolio as well as other performance inputs. These investments are not subject to redemption, however for certain funds the Company may sell or transfer its interest, which may need approval by the general partner of the underlying funds. Due to the nature of the investments in this category, the Company reduces its investment via distributions that are received through the realization of the underlying assets of the funds. It is estimated that the underlying assets of these funds would be liquidated over a weighted average period of approximately 5 years. Total remaining unfunded commitments to other third party funds is $3 million, which will be funded by capital contributions from non-controlling interest holders.
- 27 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
6. Fair Value Disclosures (continued)
Fair Value Option
Upon consolidation of three CLOs, the Company elected to adopt the fair value accounting provisions for eligible assets, including bank loans and borrowings of the CLOs. To the extent there is a difference between the change in fair value of the assets and liabilities, the difference will be reflected as net income attributable to nonredeemable non-controlling interests on the condensed consolidated statements of income and offset by a change in appropriated retained earnings on the condensed consolidated statements of financial condition.
The following table presents, as of March 31, 2010, the fair value of those assets and liabilities selected for fair value accounting:
(Dollars amounts in millions)
CLO Bank Loans:    March 31, 2010
Fair value
   $ 1,154
Aggregate principal amounts outstanding
   $ 1,303
Aggregate unpaid principal balance in excess of fair value
   $ 149
Unpaid principal balance of loans more than 90 days past due
   $ 9
Aggregate fair value of loans more than 90 days past due
   $ 1
Aggregate unpaid principal balance in excess of fair value for loans more than 90 days past due
   $ 8
CLO Borrowings:
Fair value
   $ 1,214
Aggregate principal amounts outstanding
   $ 1,433
The principal amounts outstanding of the borrowings issued by the CLOs mature between 2016 and 2019.
During the three months ended March 31, 2010, the change in fair value of the bank loans, along with the bonds held at fair value, resulted in a $67 million gain which was offset by a $67 million loss in the fair value of the CLO borrowings, which were recorded in non-operating income (expense). The change in fair value of the assets and liabilities includes interest income and expense, respectively.
- 28 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
7. Variable Interest Entities
In the normal course of business, the Company is the manager of various types of sponsored investment vehicles, including collateralized ~~debt~~debt/loan obligations (“CDO” or “CLO”) and sponsored investment funds, which may be considered VIEs. The Company receives ~~management~~advisory fees or other incentive related fees for its services and may from time to time own equity or debt securities or enter into derivatives with the vehicles, each of which are considered variable interests. The Company enters into these variable interests principally to address client needs through the launch of such investment vehicles. The VIEs are primarily financed via capital contributed by equity and debt holders. The Company’s involvement in financing the operations of the VIEs is limited to its equity interests, unfunded capital commitments for certain sponsored investment funds and two capital support agreements for two enhanced cash funds at December 31, 2008 both of which have been terminated in 2009, due to closure of the funds.interests.
The primary beneficiary of a VIE that is an investment fund that meets the conditions of ASU 2010-10 is the enterprise that has a variable interest (or combination of variable interests, including those of related parties) that will absorb a majority of the entity’s expected losses, receive a majority of the entity’s expected residual returns or both. The primary beneficiary of a CDO/CLO that is a VIE that does not meet the conditions of ASU 2010-10 is the enterprise that has the power to direct activities of the entity and has the obligation to absorb losses or the right to receive benefits that potentially could be significant to the CDO/CLO.
In order to determine whether the Company is the primary beneficiary of a VIE, management must make significant estimates and assumptions of probable future cash flows ~~and assign probabilities to different cash flow scenarios.~~of the VIEs. Assumptions made in such analyses may include, but are not limited to, market prices of securities, market interest rates, potential credit defaults on individual securities or default rates on a portfolio of securities, pre-payments, realization of gains, liquidity or marketability of certain securities, discount rates and the probability of certain other outcomes.
VIEs in which BlackRock is the Primary Beneficiary
As of March 31, 2010
As of March 31, 2010, BlackRock was the primary beneficiary of four VIEs, which included three CLOs, in which it did not have an investment, however, BlackRock, as the collateral manager, was deemed to have both the power to control the activities of the CLOs and the right to receive benefits that could potentially be significant. In addition, BlackRock was the primary beneficiary of one private sponsored investment fund, in which it had a ~~result~~non-substantive investment, which absorbed the majority of ~~consolidating~~the variability due to its de-facto third party relationships with other partners in the fund. At March 31, 2010 the following balances related to these four VIEs were consolidated in the Company’s condensed consolidated statements of financial condition:
(Dollar amounts in millions)    March 31,
2010
Assets of consolidated VIEs

Cash and cash equivalents
   $ 90
Bank loans, bonds and other investments
   1,288
Liabilities of consolidated VIEs

Borrowings
   (1,214 )
Other liabilities
   (4 )
Appropriated retained earnings
   (114 )
Non-controlling interests of consolidated VIEs
   (46 )

Total net interests in consolidated VIEs
   $ —

For the three months ended March 31, 2010, the Company recorded non-operating income of $1 million offset by a $1 million net gain attributable to nonredeemable non-controlling interests on the Company’s condensed consolidated statements of income. For the three months ended March 31, 2009, the Company recorded a non-operating expense of $12 million offset by a $12 million net loss attributable to non-controlling interests on its condensed consolidated statements of income.
At March 31, 2010, bank loans, bonds and other investments were $1,154 million, $93 million, and $41 million, respectively. The weighted average maturity of the bank loans and bonds was approximately 4.1 years.
- 29 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
7. Variable Interest Entities (continued)
VIEs in which BlackRock is the Primary Beneficiary (continued)
As of December 31, 2009
As of December 31, 2009, BlackRock was the primary beneficiary of one VIE, a private sponsored investment fund, in which it had a non-substantive investment, due to its de-facto third party relationships with other partners in the fund. Due to the consolidation of this VIE, at ~~September 30,~~December 31, 2009, the Company recorded ~~$55~~$54 million of net assets, primarily comprised of investments and cash and cash equivalents. These net assets were offset by ~~$55~~$54 million of nonredeemable non-controlling interests, which reflect the equity ownership of third parties, on the Company’s condensed consolidated statements of financial condition. For the nine months ended September 30, 2009, the Company recorded a non-operating expense of $2 offset by a $2 net loss attributable to nonredeemable non-controlling interests on its condensed consolidated statements of income. The Company has no risk of loss with its involvement with this VIE.
~~- 28 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
~~As of December 31, 2008~~

   VIE Net
Assets That
the
Company
Consolidates    Maximum Risk of Loss
      Equity
Interests    Capital
Support
Agreements    Total
Sponsored enhanced cash management funds
   $ 328    $ 88    $ 45    $ 133
Other sponsored investment funds
   55    —      —      —

Total
   $ 383    $ 88    $ 45    $ 133

As a result of consolidating three private investment funds at December 31, 2008, the Company recorded $383 of net assets, primarily investments and cash and cash equivalents. These net assets were offset by $319 of non-controlling interests, which reflect the equity ownership of third parties, on its condensed consolidated statements of financial condition.
The maximum risk of loss related to the capital support agreements in the table above reflect the Company’s total obligation under the capital support agreements with the two enhanced cash funds. The fair value of the Company’s obligation related to the two capital support agreements recorded at December 31, 2008 was $18.
~~- 29 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
VIEs in which ~~BlackRock~~the Company holds significant variable interests or is the sponsor that holds a variable interest but is not the Primary Beneficiary of the VIE
At ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008,~~2009, the Company’s carrying value of assets and liabilities and its maximum risk of loss related to VIEs in which it holds a significant variable interest or is the sponsor that holds a variable interest, but for which it was not the primary beneficiary, ~~was~~were as follows:
As of ~~September 30, 2009~~March 31, 2010

   VIE Assets
That the
Company
Does Not
Consolidate    VIE
Liabilities
That the
Company
Does Not
Consolidate Variable Interests on the Condensed
Consolidated Statement of Financial
Condition       (Dollar amounts in millions)
   Investments    Receivables    Other Net
Assets
(Liabilities)    Maximum
Risk of
Loss    Variable Interests on the Condensed
Consolidated Statement of Financial
Condition
CDOs
   $ 7,182    $ 14,481 $ 3    $ 3    ($ 2 )    $ 23
Sponsored cash management fund
   2,431    —   —      —      —         —
   Investments    Advisory
Fee
Receivables    Other Net
Assets
(Liabilities) Maximum
Risk of
Loss
CDOs/CLOs
   $ 3    $ 2    $ (3 ) $ 22
Other sponsored investment funds
   12,576    3,892 12    12    —         24    14    318    (—   ) 332

Total
   $ 22,189    $ 18,373 $ 15    $ 15    ($ 2 )    $ 47    $ 17    $ 320    $ (3 ) $ 354

The size of the net assets of the VIEs that the Company does not consolidate related to CDOs/CLOs, collective trust funds and other sponsored investment funds were as follows:
CDOs/CLOs – approximately ($6) billion, comprised of approximately $9 billion of assets at fair value and $15 billion of liabilities, primarily comprised of unpaid principal debt obligations to CDO/CLO debt holders.
Other sponsored investments funds – approximately $1.5 trillion to $1.6 trillion
This amount includes approximately $1.1 trillion of collective trusts. Each collective trust has been aggregated separately and may include collective trusts that invest in other collective trusts.
The net assets of the VIEs are primarily comprised of cash and cash equivalents and investments ~~and the~~offset by liabilities ~~are~~ primarily comprised of ~~debt obligations (CDO debt holders) and~~ various accruals for the sponsored investment vehicles.
At ~~September 30, 2009,~~March 31, 2010, BlackRock’s maximum risk of loss associated with these VIEs primarily relates to: (i) BlackRock’s equity investments, (ii) ~~management~~advisory fee receivables and (iii) credit protection sold by BlackRock to a third party in a synthetic CDO transaction.

- 30 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts~~(unaudited)
7. Variable Interest Entities (continued)
VIEs in ~~millions, except per share data)~~
~~(unaudited)~~which BlackRock holds significant variable interests or is the sponsor that holds a variable interest but is not the Primary Beneficiary of the VIE (continued)
As of December 31, ~~2008~~2009

   VIE Assets
That the
Company
Does Not
Consolidate    VIE
Liabilities
That the
Company
Does Not
Consolidate Variable Interests on the Condensed
Consolidated Statement of Financial
Condition       (Dollar amounts in millions)
   Investments    Receivables    Other Net
Assets
(Liabilities)    Maximum
Risk of
Loss    Variable Interests on the Condensed
Consolidated Statement of Financial
Condition
CDOs
   $ 6,660    $ 14,487 $ 4    $ 5    $ (1 )    $ 25
Sponsored cash management fund
   733    —   —      —      —         —
   Investments    Advisory
Fee
Receivables    Other Net
Assets
(Liabilities) Maximum
Risk of
Loss
CDOs/CLOs
   $ 2    $ 2    $ (2 ) $ 21
Other sponsored investment funds
   5,813    440 9    9    (6 )    18    14    254    (7 ) 268

Total
   $ 13,206    $ 14,927 $ 13    $ 14    $ (7 )    $ 43    $ 16    $ 256    $ (9 ) $ 289

The size of the net assets of the VIEs that the Company does not consolidate related to CDOs/CLOs, collective trust funds and other sponsored investment funds were as follows:
CDOs/CLOs – approximately ($8) billion, comprised of approximately $10 billion of assets at fair value and $18 billion of liabilities, primarily comprised of unpaid principal debt obligations to CDO/CLO debt holders.
Other sponsored investments funds – approximately $1.5 trillion to $1.6 trillion
This amount includes approximately $1.1 trillion of collective trusts. Each collective trust has been aggregated separately and may include collective trusts that invest in other collective trusts.
The net assets of the VIEs are primarily comprised of cash and cash equivalents and investments ~~and the~~offset by liabilities ~~are~~ primarily comprised of ~~debt obligations (CDO debt holders) and~~ various accruals for the sponsored investment vehicles.
At December 31, ~~2008,~~2009, BlackRock’s maximum risk of loss associated with these VIEs primarily relates to: (i) BlackRock’s equity investments, (ii) ~~management~~advisory fee receivables and (iii) credit protection sold by BlackRock to a third party in a synthetic CDO transaction.
- 31 -
6.PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
8. Derivatives and Hedging
For the ~~nine~~three months ended ~~September 30,~~March 31, 2010 and the year ended December 31, 2009, ~~and 2008,~~ the Company did not hold any derivatives designated in a formal hedge relationship under ASC ~~815-10.~~815-10,Derivatives and Hedging (“ASC 815-10”).
By using derivative financial instruments, the Company exposes itself to market and counterparty risk. Market risk from forward foreign currency exchange contracts is the effect on the value of a financial instrument that results from a change in currency exchange rates. The Company manages exposure to market risk associated with foreign currency exchange contracts by establishing and monitoring parameters that limit the types and degrees of market risk that may be undertaken. At March 31, 2010, the Company had two outstanding forward foreign exchange contracts with two counterparties with an aggregate notional value of $100 million.
During ~~the nine months ended September 30, 2009 and 2008,~~2007, the Company ~~was~~commenced a ~~counterparty~~program to enter into a series of total return swaps to economically hedge against ~~changes in fair value of~~market price exposures with respect to certain seed investments in sponsored investment products. At ~~September 30, 2009,~~March 31, 2010, the Company had seven outstanding total return swaps ~~had~~with two counterparties with an aggregate notional value of approximately ~~$34~~$24 million.
The Company acts as the portfolio manager in a series of credit default swap transactions, referred to collectively as the Pillars synthetic CDO transaction (“Pillars”). The Company has entered into a credit default swap with Citibank, N.A. (“Citibank”), providing Citibank credit protection of approximately $17 million, representing the Company’s maximum risk of loss with respect to the provision of credit protection. Pursuant to ASC 815-10, the Company carries the Pillars credit default swap at fair value based on the expected future cash flows under the arrangement.
On behalf of clients that maintain separate accounts representing segregated funds held for the purpose of funding individual and ~~net realized~~group pension contracts, the Company invests in various derivative instruments, including forward foreign currency contracts, interest rate and inflation rate swaps.
The Company consolidates certain sponsored investment funds, which may utilize derivative instruments as a part of the fund’s investment strategy. The change in ~~unrealized gains/(losses)~~fair value of ~~approximately ($8) and $19 for the nine months ended September 30, 2009 and 2008, respectively,~~such derivatives, which ~~were included~~is recorded in non-operating income (expense) inis not material to the Company’s condensed consolidated ~~statements of income. At September 30, 2009, an unrealized loss of less than $1 was included in other liabilities on the condensed consolidated statement of~~ financial ~~condition.~~statements.

- 3132 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~(unaudited)
8. Derivatives and Hedging (continued)
The following table presents the fair value as of March 31, 2010 of derivative instruments not designated as hedging instruments:
   Assets    Liabilities
(Dollar amounts in millions)    Balance Sheet
Location    Fair Value    Balance Sheet
Location    Fair Value
Foreign exchange contracts
   Other assets    $ —      Other liabilities    $ 3.6
Total return swaps
   Other assets    —      Other liabilities    0.4
Credit default swap (Pillars)
   Other assets    —      Other liabilities    2.5
Separate account derivatives⁽¹⁾
   Separate account
assets    1,457.0    Separate account
liabilities    1,457.0

Total
      $ 1,457.0       $ 1,463.5

⁽¹⁾
Derivatives associated with separate account assets include interest rate, inflation rate swaps, futures and foreign currency contracts.
The following table presents the fair value as of December 31, 2009 of derivative instruments not designated as hedging instruments:
   Assets    Liabilities
(Dollar amounts in millions)    Balance Sheet
Location    Fair Value    Balance Sheet
Location    Fair Value
Foreign exchange contracts
   Other assets    $ 0.2    Other liabilities    $ —
Total return swaps
   Other assets    —      Other liabilities    0.4
Credit default swap (Pillars)
   Other assets    —      Other liabilities    2.5
Separate account derivatives⁽¹⁾
   Separate account
assets    1,501.0    Separate account
liabilities    1,501.0

Total
      $ 1,501.2       $ 1,503.9

⁽¹⁾
Derivatives associated with separate account assets include interest rate, inflation rate swaps, futures and foreign currency contracts.
- 33 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
~~In December 2007, BlackRock entered into capital support agreements, up~~
8. Derivatives and Hedging (continued)
The following table presents gains (losses) recognized in income for the three months ended March 31, 2010 on derivative instruments:
(Dollar amounts in millions)    Income Statement Location Amount of Gain (Loss)
Recognized in Income
on Derivative
Instruments
Foreign exchange contracts
   General and administration expense $ (3.8 )
Total return swaps
   Non-operating income (expense) (0.5 )
Credit default swap (Pillars)
   Non-operating income (expense) (0.1 )

Total
   $ (4.4 )

Net realized and unrealized gains and losses attributable to ~~$100, with two enhanced cash funds. These capital support agreements were backed~~derivatives held by ~~letters of credit issued under BlackRock’s revolving credit facility. In December 2008, the capital support agreements were modified to be up to $45~~separate account assets and ~~were no longer backed by the letters of credit. In January and May 2009, the capital support agreements were terminated, due~~liabilities accrue directly to the closure of the related funds. During the six months ended June 30, 2009, the Company provided approximately $4 of capital contributions to the funds under the capital support agreements. At December 31, 2008, the derivative liability for the fair value of the capital support agreements for the two funds totaled approximately $18. The fair value of these liabilities increasedcontract owner and ~~decreased~~are not reported as ~~BlackRock’s obligation under the guarantee fluctuated based on the fair value of the derivative. Upon closure of the funds, the liability decreased $11, while the change~~non-operating income (expense) in the ~~liability was included in general and administration expenses.~~Company’s condensed consolidated statements of income.
7.9. Goodwill
Goodwill at ~~September 30, 2009~~March 31, 2010 and changes during the ~~nine~~three months ended ~~September 30, 2009~~March 31, 2010 were as follows:

December 31, 2008
   $ 5,533
Net additions related to:

Quellos
   184
Other
   1

September 30, 2009
   $ 5,718

(Dollar amounts in millions)
December 31, 2009, as reported
   $ 12,570
BGI purchase price allocation adjustment
   68

December 31, 2009, as adjusted
   12,638
Other net additions
   3

March 31, 2010
   $ 12,641

In accordance with ASC 805, goodwill has been retrospectively adjusted to reflect new information obtained about facts that existed as of December 1, 2009, the BGI acquisition date. During the ~~nine~~three months ended ~~September 30, 2009, the Company~~March 31, 2010, goodwill increased ~~goodwill~~ by ~~$185.~~$71 million. The increase relates primarily to ~~a $156 cash payment and a common stock issuance of $43~~purchase price allocation adjustments related to the ~~first contingent payment in connection with~~BGI Transaction, the ~~Quellos Transaction,~~purchase of substantially all of the net assets of Helix Financial Group, LLC, offset by a ~~$15~~ decline related to tax benefits realized from tax-deductible goodwill in excess of book goodwill.
At ~~September 30, 2009,~~March 31, 2010, the balance of the Quellos tax-deductible goodwill in excess of book goodwill was approximately ~~$382.~~$364 million. Goodwill related to the Quellos Transaction will continue to be reduced in future periods by the amount of tax benefits realized from tax-deductible goodwill in excess of book goodwill.

- 3234 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~
(unaudited)
8.10. Intangible Assets
The carrying amounts of identifiable intangible assets are summarized as follows:

   Indefinite-lived
intangible assets    Finite-lived
intangible assets Total
December 31, 2008
   $ 5,378    $ 1,063    $ 6,441
Addition
   —      2    2
Amortization expense
   —      (108 ) (108 )

September 30, 2009
   $ 5,378    $ 957    $ 6,335

(Dollar amounts in millions)    Indefinite-lived
intangible assets    Finite-lived
intangible assets Total
December 31, 2009, as reported
   $ 16,566    $ 1,082    $ 17,648
BGI purchase price allocation adjustments
   25    (7 ) 18

December 31, 2009, as adjusted
   16,591    1,075    17,666
Amortization expense
   —      (40 ) (40 )

March 31, 2010
   $ 16,591    $ 1,035    $ 17,626

In ~~April~~accordance with ASC 805, intangible assets have been retrospectively adjusted to reflect new information obtained about facts that existed as of December 1, 2009, the ~~Company acquired $2 of finite-life management contracts with a five-year estimated useful life associated with~~BGI acquisition date. During the ~~acquisition of the R3 Capital Partners funds.~~three months ended March 31, 2010, intangible assets decreased $22 million related to amortization, partially offset by BGI purchase price allocation adjustments.
9.11. Borrowings
Short-Term Borrowings
2007 Facility
In August 2007, the Company entered into a five-year ~~$2,500~~$2.5 billion unsecured revolving credit facility (“(the “2007 facility”), which permits the ~~2007 facility”).~~Company to request an additional $500 million of borrowing capacity, subject to lender credit approval, up to a maximum of $3.0 billion. The 2007 facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less domestic unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than 1 to 1 at ~~September 30, 2009.~~March 31, 2010.
The 2007 facility provides back-up liquidity, funds ongoing working capital for general corporate purposes and funds various investment opportunities. At ~~September 30, 2009,~~March 31, 2010, the Company had ~~$200~~$100 million outstanding under the 2007 facility with an interest rate of 0.43% and a maturity date during ~~November 2009.~~ May 2010.
Lehman Commercial Paper Inc. has a $140 million participation under the 2007 ~~facility;~~Facility; however BlackRock does not expect that Lehman Commercial Paper Inc. will honor its commitment to fund additional amounts. Bank of America Corporation (“Bank of America”), a related party, has a $140 million participation under the 2007 facility.
- 35 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
11. Borrowings (continued)
Short-Term Borrowings (continued)
Commercial Paper Program
On October 14, 2009, BlackRock established a commercial paper program (the “CP Program”) under which the Company may issue unsecured commercial paper notes (the “CP Notes”) on a private placement basis up to a maximum aggregate amount outstanding at any time of $3 billion. The proceeds of the commercial paper issuances were used for the financing of a portion of the BGI Transaction. Subsidiaries of Bank of America and Barclays, as well as other third parties, act as dealers under the CP Program. The CP Program is supported by the 2007 facility.
The Company began issuance of CP Notes under the CP Program on November 4, 2009. As of March 31, 2010, BlackRock had approximately $780 million of outstanding CP Notes with a weighted average interest rate of 0.20% and a weighted average maturity of 22 days. As of May 6, 2010, BlackRock had $616 million of outstanding CP Notes with a weighted average interest rate of 0.23% and a weighted average maturity of 23 days.
Japan Commitment-line
In June 2009, BlackRock Japan Co., Ltd., a wholly owned subsidiary of the Company, renewed ~~its~~a five billion Japanese yen commitment-line agreement with a banking institution (the “Japan Commitment-line”) ~~for a~~. The term of the Japan Commitment-line was one ~~year.~~year and interest accrued at the applicable Japanese short-term prime rate. The Japan Commitment-line is intended to provide liquidity and flexibility for operating requirements in Japan. At ~~September 30, 2009,~~March 31, 2010, the Company had no borrowings outstanding ~~under~~on the Japan Commitment-line.
~~- 33 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
Convertible Debentures
The carrying value of the 2.625% convertible debentures due in 2035 included the following:

2.625% Convertible debentures due in 2035
   September 30,
2009 December 31,
2008
(Dollar amounts in millions)    March 31,
2010    December 31,
2009
Maturity amount
   $ 248    $ 249       $ 95    $ 243
Unamortized discount
   (1 ) (4 )    —      —

Total
   $ 247    $ 245
Carrying value
   $ 95    $ 243

The Company recognized ~~$8 in each of~~$1 million and $3 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2010 and 2009, ~~and 2008~~respectively of interest expense, comprised ~~in both periods~~ of $5$1 million and $2 million related to the coupon and $3less than $1 million and $1 million related to amortization of the ~~discount.~~discount for the three months ended March 31, 2010 and 2009, respectively. At ~~September 30, 2009,~~March 31, 2010, the estimated fair value of the convertible debentures was ~~$532,~~$204 million, which was estimated using a market price at ~~the end of September 2009.~~March 31, 2010.
On February 15, 2009, the convertible debentures became convertible at the option of the holder into cash and shares of the Company’s common stock at any time prior to maturity. ~~Subsequent to February 15, 2009,~~During the three months ended March 31, 2010, holders of $2$148 million of debentures ~~elected to convert~~converted their holdings into cash and shares. In addition, ~~during October 2009,~~through May 6, 2010, holders of $5an additional $24 million of debentures elected to convert their holdings into cash and shares.
~~Long-Term Borrowings~~
~~The carrying value of long-term borrowings included the following:~~

6.25% Senior notes due in 2017
   September 30,
2009 December 31,
2008
Maturity amount
   $ 700    $ 700
Unamortized discount
   (4 ) (5 )

Total long-term senior notes
   696    695
Other long-term borrowings
   —      2

Total long-term borrowings
   $ 696    $ 697

~~At September 30, 2009, the estimated fair value of the senior notes was $754, which was estimated using an applicable bond index at September 30, 2009.~~

- 3436 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~(unaudited)
11. Borrowings (continued)
Long-Term Borrowings
~~(unaudited)~~2017 Notes
In September 2007, the Company issued $700 million in aggregate principal amount of 6.25% senior unsecured notes maturing on September 15, 2017 (the “2017 Notes”). Interest is payable semi-annually on March 15 and September 15 of each year, or approximately $44 million per year. The 2017 Notes may be redeemed prior to maturity at any time in whole or in part at the option of the Company at a “make-whole” redemption price. The 2017 Notes were issued at a discount of $6 million, which is being amortized over their ten-year term. The Company incurred approximately $4 million in debt issuance costs, which are included in other assets on the condensed consolidated statements of financial condition and are being amortized over the term of the 2017 Notes.
~~10. Related Party Transactions~~2012, 2014 and 2019 Notes
~~Anthracite~~
~~At September 30,~~In December 2009, the Company ~~was committed~~issued $2.5 billion in aggregate principal amount of unsecured and unsubordinated obligations. These notes were issued as three separate series of senior debt securities including $0.5 billion of 2.25% notes, $1.0 billion of 3.50% notes and $1.0 billion of 5.0% notes maturing in December 2012, 2014 and 2019, respectively. Net proceeds of this offering were used to ~~provide financing~~repay borrowings under the CP Program and for general corporate purposes. Interest on these notes is payable semi-annually on June 10 and December 10 of upeach year beginning June 10, 2010, or approximately $96 million per year. These notes may be redeemed prior to ~~$60, until March 2010, to Anthracite Capital, Inc. (“Anthracite”),~~maturity at any time in whole or in part at the option of the Company at a ~~specialty commercial real estate finance company~~“make-whole” redemption price. These notes were issued collectively at a discount of $5 million that is managed by a subsidiary of BlackRock. The financing is collateralized by Anthracite pledging its ownership interest in a real estate debt investment fund, which also is managed by a subsidiary of BlackRock. At September 30, 2009, $33.5 of financing was outstanding, which matured in October 2009. Upon maturity Anthracite rolledbeing amortized over the ~~borrowings to January 2010. At June 30, 2009, the value~~term of the ~~collateral was estimated to be $28.5,~~notes. The Company incurred approximately $13 million in debt issuance costs, which ~~resulted~~are included in ~~a reduction in due from related parties~~other assets on the ~~Company’s~~ condensed consolidated ~~statement~~statements of financial condition and are being amortized over the terms of $5the these notes.
Carrying Value and ~~an equal amount recorded in general~~Fair Value of Long-Term Borrowings
The carrying value and ~~administration expense in the three months ended June 30, 2009. Based on the~~fair value of long-term borrowings estimated using an applicable bond index at March 31, 2010 included the collateral and the borrowings outstanding at September 30, 2009, the Company has no obligation to loan additional amounts to Anthracite under this facility. The Company has granted waivers for certain breaches of financial covenants of Anthracite’s credit facility.following:
On October 28, 2009, the Company and Anthracite entered into an amendment to the financing providing that interest shall be payable only to the extent of cash flow from the collateral and only if there is no default or event of default under Anthracite’s senior secured facilities. All accrued but unpaid interest is payable on the final maturity date.
~~Merrill Lynch and PNC~~
~~In July 2008, the Company entered into an amended and restated stockholder agreement and an amended and restated global distribution agreement with Merrill Lynch.~~
These changes to the stockholder agreement with Merrill Lynch, among other items, (i) provide Merrill Lynch with additional flexibility to form or acquire asset managers substantially all of the business of which is devoted to non-traditional investment management strategies such as short selling, leverage, arbitrage, specialty finance and quantitatively-driven structured trades; (ii) expand the definition of change in control of Merrill Lynch to include the disposition of two-thirds or more of its Global Private Client business; (iii) extend the general termination date to the later of July 16, 2013 or the date Merrill Lynch’s beneficial ownership of BlackRock voting securities falls below 20%; and (iv) clarify certain other provisions in the agreement.
The changes in the global distribution agreement in relation to the prior agreement, among other things, (i) provide for an extension of the term to five years from the date of a change in control of Merrill Lynch (to January 1, 2014 following Bank of America’s acquisition of Merrill Lynch) and one automatic 3-year extension if certain conditions are satisfied; (ii) strengthen the obligations of Merrill Lynch to achieve revenue neutrality across the range of BlackRock products distributed by Merrill Lynch if the pricing or structure of particular products is required to be changed; (iii) obligate Merrill Lynch to seek to obtain distribution arrangements for BlackRock products from buyers of any portion of its distribution business on the same terms as the global distribution agreement for a period of at least 3 years; and (iv) restrict the manner in which products managed by alternative asset managers in which Merrill Lynch has an interest may be distributed by Merrill Lynch.
In connection with the closings under the exchange agreements, (see Note 12, Capital Stock), on February 27, 2009 BlackRock entered into a second amended and restated stockholder agreement with Merrill Lynch and an amended and restated implementation and stockholder agreement with PNC, and a third amendment to the share surrender agreement with PNC.
(Dollar amounts in millions)    2.25%
Notes
due 2012 3.50%
Notes
due 2014 6.25%
Notes
due 2017 5.00%
Notes
due 2019 Total
Long-term
Borrowings
Maturity amount
   $ 500    $ 1,000    $ 700    $ 1,000    $ 3,200
Unamortized discount
   (1 ) (1 ) (4 ) (3 ) (9 )

Carrying value
   $ 499    $ 999    $ 696    $ 997    $ 3,191

Fair value
   $ 504    $ 1,010    $ 768    $ 1,001    $ 3,283

- 3537 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~
(unaudited)
~~Merrill Lynch and PNC (continued)~~
The changes contained in the amended and restated stockholder agreement with Merrill Lynch, in relation to the prior agreement, among other things, (i) revised the definitions of “Fair Market Value,” “Ownership Cap” and “Significant Stockholder”; and (ii) amended or supplemented certain other definitions and provisions therein to incorporate series B preferred stock and series C preferred stock, respectively. The changes contained in the amended and restated stockholder agreement with PNC, in relation to the prior agreement, among other things, (i) revised the definitions of “Fair Market Value,” “Ownership Cap,” “Ownership Percentage,” “Ownership Threshold” and “Significant Stockholder”; and (ii) amended or supplemented certain other provisions therein to incorporate series B preferred stock and series C preferred stock, respectively.
~~The amendment to the share surrender agreement provided for the substitution of series C preferred stock for the shares of common stock subject to the share surrender agreement.~~
~~Merrill Lynch Capital Contribution~~
In August 2009, Merrill Lynch reimbursed $25 to BlackRock for employee incentive awards issued to former MLIM employees who became BlackRock employees subsequent to the MLIM transaction. Upon receipt, the reimbursement was recorded as a capital contribution.
11. ~~Restructuring Charges~~Borrowings (continued)
~~During the three months ended March~~
Carrying Value and Fair Value of Long-Term Borrowings (continued)
The carrying value and fair value of long-term borrowings estimated using an applicable bond index at December 31, 2009 included the Company continued to reduce its workforce globally. This action was the result of business reengineering efforts designed to streamline operations, enhance competitiveness and better position the Company in the asset management marketplace. The Company recorded a pre-tax restructuring charge of $22 ($14 after-tax) for the three months ended March 31, 2009. This charge was comprised of $15 of severance and associated outplacement costs, $4 of property costs associated with the lease payments for the remaining term in excess of the estimated sublease proceeds and $3 of expenses related to the accelerated amortization of previously granted stock-based compensation awards.
The following table presents a rollforward of the Company’s restructuring liability, which is included within other liabilities on the Company’s condensed consolidated statements of financial condition.following:

Liability as of December 31, 2008
   $ 21
Additions
   22
Cash payments
   (33 )
Non-cash charges
   (3 )

Liability as of September 30, 2009
   $ 7

~~- 36 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
(Dollar amounts in millions)    2.25%
Notes
due 2012 3.50%
Notes
due 2014 6.25%
Notes
due 2017 5.00%
Notes
due 2019 Total Long-
term
Borrowings
Maturity amount
   $ 500    $ 1,000    $ 700    $ 1,000    $ 3,200
Unamortized discount
   (1 ) (1 ) (4 ) (3 ) (9 )

Carrying value
   $ 499    $ 999    $ 696    $ 997    $ 3,191

Fair value
   $ 497    $ 987    $ 751    $ 987    $ 3,222
12. ~~Capital Stock~~
On January 1, 2009, Bank of America acquired Merrill Lynch. In connection with this transaction, BlackRock entered into exchange agreements with each of Merrill Lynch and PNC pursuant to which each agreed to exchange a portion of the BlackRock common stock it held for an equal number of shares of non-voting participating preferred stock. On February 27, 2009, Merrill Lynch exchanged (i) 49,865,000 shares of BlackRock’s common stock for a like number of shares of BlackRock’s series B non-voting participating preferred stock, and (ii) 12,604,918 shares of BlackRock’s series A preferred stock for a like number of shares of series B preferred stock, and PNC exchanged (i) 17,872,000 shares of BlackRock’s common stock for a like number of shares of series B preferred stock and (ii) 2,889,467 shares of BlackRock’s common stock for a like number of shares of BlackRock’s series C non-voting participating preferred stock. On September 30, 2009, Bank of America/Merrill Lynch owned approximately 4.6% of BlackRock’s voting common stock and 46.1% of BlackRock’s capital stock on a fully diluted basis, and PNC owned approximately 43.8% of BlackRock’s voting common stock and 30.7% of BlackRock’s capital stock on a fully diluted basis.
~~Below is a summary description of the series B and C preferred stock issued in the exchanges.~~
~~The series B non-voting participating preferred stock:~~
~~is non-voting except as otherwise provided by applicable law;~~
~~participates in dividends on a basis generally equal to the common stock;~~
~~benefits from a liquidation preference of $0.01 per share; and~~
~~is mandatorily convertible to BlackRock common stock upon transfer to an unrelated party.~~
~~The series C non-voting participating preferred stock:~~
~~is non-voting except as otherwise provided by applicable law;~~
~~participates in dividends on a basis generally equal to the common stock;~~
~~benefits from a liquidation preference of $40.00 per share; and~~
~~is only convertible to BlackRock common stock upon the termination of the obligations of PNC under its share surrender agreement with BlackRock.~~
In June 2009, the Company issued 2,133,713 shares of BlackRock’s common stock at $140.60 per share. The proceeds of the issuance will be used to fund the purchase of Barclays Global Investors (see Note 17, Pending Transaction).
~~- 37 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
At September 30, 2009 and December 31, 2008, BlackRock had 20,000,000 series A non-voting participating preferred shares, $0.01 par value, authorized. At September 30, 2009, BlackRock had 150,000,000 and 6,000,000 series B and series C, respectively non-voting participating preferred shares, $0.01 par value, authorized.
~~The Company’s common and preferred shares issued and outstanding and activity for the nine months ended September 30, 2009 were as follows:~~

Shares Issued Shares Outstanding
Common
Shares Escrow
Common
Shares Treasury
Common
Shares Preferred
Shares
Series A Preferred
Shares
Series B Preferred
Shares
Series C Common
Shares Preferred
Shares
Series A Preferred
Shares
Series B Preferred
Shares
Series C
December 31, 2008
118,573,367    (911,266 ) (370,991 ) 12,604,918    —   —   117,291,110    12,604,918    —   —
Issuance of common shares to institutional investor
2,133,713    —      —      —      —   —   2,133,713    —      —   —
Issuance of common shares for contingent consideration
330,341    —      —      —      —   —   330,341    —      —   —
Net issuance of common shares related to employee stock transactions and convertible debt conversions
572,238    —      422,390    —      —   —   994,628    —      —   —
Exchange of preferred shares series A for preferred shares series B
—      —      —      (12,604,918 ) 12,604,918 —   —      (12,604,918 ) 12,604,918 —
Exchange of common shares for preferred shares series B
(67,737,000 ) —      —      —      67,737,000 —   (67,737,000 ) —      67,737,000 —
Exchange of common shares for preferred shares series C
(2,889,467 ) —      —      —      —   2,889,467 (2,889,467 ) —      —   2,889,467
PNC capital contribution
—      —      (51,399 ) —      —   —   (51,399 ) —      —   —

September 30, 2009
50,983,192    (911,266 ) —      —      80,341,918 2,889,467 50,071,926    —      80,341,918 2,889,467

~~- 38 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
~~13.~~ Commitments and Contingencies
~~Commitments~~
~~Investment/Loan~~Investment Commitments
At ~~September 30, 2009,~~March 31, 2010 the Company had approximately ~~$286~~$301 million of investment commitments relating primarily to funds of private equity funds, real estate funds and hedge funds. Amounts to be funded generally are callable at any point prior to the expiration of the commitment. This amount excludes additional commitments made by consolidated funds of funds to underlying third party funds as third party non-controlling interest holders have the legal obligation to fund the respective commitments of such funds of funds.
Legal Proceedings
From time to time, BlackRock receives subpoenas or other requests for information from various U.S. federal, state governmental and regulatory authorities in connection with certain industry-wide or other investigations or proceedings. It is BlackRock’s policy to cooperate fully with such inquiries. The Company and certain of its subsidiaries have been named as defendants in various legal actions, including arbitrations and other litigation arising in connection with BlackRock’s activities. Additionally, certain of the investment funds that the Company manages are subject to lawsuits, any of which potentially could 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 anticipate that the aggregate liability, if any, arising out of 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.
- 38 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
12. Commitments and Contingencies (continued)
Indemnifications
In the ordinary course of business, BlackRock enters into contracts pursuant to which it may agree to indemnify third parties in certain circumstances. The terms of these indemnities vary from contract to contract and the amount of indemnification liability, if any, cannot be determined.
Under the transaction agreement in the MLIM Transaction, the Company has agreed to indemnify Merrill Lynch & Co., Inc. (“Merrill Lynch”) for losses it may incur arising from (1) any alleged or actual breach, failure to comply, violation or other deficiency with respect to any regulatory or fiduciary requirements relating to the operation of BlackRock’s business, (2) any fees or expenses incurred or owed by BlackRock to any brokers, financial advisors or comparable other persons retained or employed by BlackRock in connection with the MLIM Transaction, and (3) certain specified tax covenants.
Under the transaction agreement in the BGI Transaction, the Company has agreed to indemnify Barclays for losses it may incur arising from (1) breach by the Company of certain representations, (2) breach by the Company of any covenant in the agreement, (3) liabilities of the entities acquired in the transaction other than liabilities assumed by Barclays or for which it is providing indemnification, and (4) certain taxes.
Management believes that the likelihood of any liability arising under ~~these~~the MLIM Transaction and BGI Transaction indemnification provisions is remote. Management cannot estimate any potential maximum exposure due both to the remoteness of any potential claims and the fact that items that would be included within any such calculated claim would be beyond the control of BlackRock. Consequently, no liability has been recorded on the Company’s condensed consolidated statements of financial condition.
~~- 39 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
Contingent Payments Related to ~~Quellos Transaction~~Business Acquisitions
On October 1, 2007, the Company acquired the fund of funds business of Quellos. As part of this transaction, Quellos is entitled to receive two contingent payments upon achieving certain investment advisory revenue measures through December 31, 2010, totaling up to an additional $969 million in a combination of cash and stock. The first contingent payment was paid in ~~second quarter~~ 2009 and the second contingent payment, of up to $595 million is payable in cash in 2011.
During ~~second quarter~~ 2009, the Company determined the first contingent payment to be $219 million, of which $11 million was previously paid in cash during 2008. Of the remaining $208 million, $156 million was paid in cash and $52 million was paid in common stock, or approximately 330,000 shares ~~converted at~~based on a price of ~~$157.33.~~$157.33 per share. Quellos may also be entitled to a “catch-up” payment related to the first contingent payment if certain performance measures are met in 2011 as the value of the first contingent payment was less than ~~$374.~~$374 million.
In connection with the SSR Transaction, which closed in January 2005, the Company will make an additional contingent payment in 2010 of approximately $9 million.
~~14.~~London Lease
In January 2010, the Company entered into an agreement with Mourant & Co Trustees Limited and Mourant Property Trustees Limited as Trustees of the Drapers Gardens Unit Trust, for the lease of approximately 292,418 square feet of office and ancillary (including retail) space located at Drapers Gardens, 12 Throgmorton Avenue, London, EC2, United Kingdom.
The term of the lease began on February 17, 2010 (the “Effective Date”) and will continue for twenty five years, with the option to renew for an additional five year term. The lease provides for total annual base rental payments of approximately £13 million (exclusive of value added tax and other lease charges, or approximately $21.7 million based on an exchange rate of $1.60 per £1), payable quarterly in advance. The annual rent is subject to increase on each fifth anniversary of the Effective Date to the then open market rent. The lease includes an initial rent free period for thirty six (36) months and twenty two (22) days following the Effective Date.
- 39 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
13. Stock-Based Compensation
The components of the Company’s stock-based compensation expense are comprised of the following:

   Three Months Ended
September 30,    Nine Months Ended
September 30,
   2009    2008    2009    2008
Stock-based compensation:

Restricted stock and restricted stock units (“RSUs”)
   $ 55    $ 54    $ 178    $ 153
Stock options
   3    3    9    7
Long-term incentive plans to be funded by PNC
   15    14    45    44

Total stock-based compensation
   $ 73    $ 71    $ 232    $ 204

~~- 40 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
~~Stock Options~~
~~Options outstanding at September 30, 2009 and changes during the nine months ended September 30, 2009 were as follows:~~

Outstanding at
   Shares
Under
Option Weighted
Average
Exercise
Price
December 31, 2008
   3,140,517    $ 88.82
Exercised
   (447,882 ) $ 34.44
Forfeited
   (8,064 ) $ 167.76

September 30, 2009
   2,684,571    $ 97.65

~~The aggregate intrinsic value of options exercised during the nine months ended September 30, 2009 was $55.~~
At September 30, 2009, the Company had $25 in unrecognized stock-based compensation expense related to unvested stock options. The unrecognized compensation cost is expected to be recognized over a remaining weighted-average period of 2.1 years.
   Three Months Ended
March 31,
(Dollar amounts in millions)    2010    2009
Stock-based compensation:

Restricted stock and restricted stock units (“RSUs”)
   $ 90    $ 64
Long-term incentive plans funded by PNC
   15    15
Stock options
   3    3

Total stock-based compensation
   $ 108    $ 82

Restricted Stock and RSUs
Restricted stock and RSU activity at ~~September 30, 2009~~March 31, 2010 and changes during the ~~nine~~three months ended ~~September 30, 2009~~March 31, 2010 were as follows:

Outstanding at
   Unvested
Restricted
Stock and
Units Weighted
Average
Grant Date
Fair Value
December 31, 2008
   4,603,953    $ 174.24
Granted
   1,861,275    $ 117.97
Converted
   (829,781 ) $ 179.41
Forfeited
   (214,527 ) $ 157.18

September 30, 2009
   5,420,920    $ 154.81

~~- 41 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
Outstanding at
   Unvested
Restricted
Stock and
Units Weighted
Average
Grant Date
Fair Value
December 31, 2009
   5,360,463    $ 154.75
Granted
   2,796,005    $ 239.47
Converted
   (1,279,522 ) $ 154.72
Forfeited
   (161,023 ) $ 161.92

March 31, 2010
   6,715,923    $ 189.86

The Company values restricted stock and RSUs at their grant-date fair value as measured by BlackRock’s common stock price.
In January ~~2009,~~2010, the Company granted ~~23,417 RSUs as long-term incentive compensation, which will be partially funded by shares currently held by PNC (see~~~~Long-Term~~the following awards under the BlackRock, Inc. 1999 Stock Award and Incentive ~~Plans to be Funded by PNC~~ ~~below). The awards cliff vest five years from the date of grant.~~Plan:
~~In January 2009, the Company granted 1,789,685~~
846,884 RSUs to employees as part of annual incentive compensation ~~under the BlackRock, Inc. 1999 Stock Award and Incentive Plan (the “Award Plan”)~~ that vest ratably over three years from the date of grant.
256,311 RSUs to employees that cliff vest on January 31, 2012. Awards to certain individuals require that BlackRock has actual GAAP earnings per share of at least $6.13 in 2010 or $6.50 in 2011 or has attained an alternative performance hurdle based on the Company’s earnings per share growth rate versus certain peers over the term of the awards. The RSUs may not be sold before the one-year anniversary of the vesting date.
- 40 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
13. Stock-Based Compensation (continued)
Restricted Stock and RSUs (continued)
1,497,222 RSUs to employees that vest 50% on both January 31, 2013 and 2014. Awards to certain individuals require that BlackRock has actual GAAP earnings per share of at least $6.13 in 2010 or $6.50 in 2011 or has attained an alternative performance hurdle based on the Company’s earnings per share growth rate versus certain peers over the term of the awards.
124,575 shares of restricted common stock to employees that vest in tranches on January 31, 2010, 2011 and 2012. The restricted common stock may not be sold before the one-year anniversary of each vesting date.
At ~~September 30, 2009,~~March 31, 2010, there was ~~$365~~$826 million in total unrecognized compensation cost related to unvested restricted stock and RSUs. The unrecognized compensation cost is expected to be recognized over the remaining ~~weighted average~~weighted-average period of 2.0 years.
Long-Term Incentive Plans ~~to be~~ Funded by PNC
Under a share surrender agreement, PNC committed to provide up to 4,000,000 shares of BlackRock ~~common~~ stock, held by PNC, to fund certain BlackRock long-term incentive plans (“LTIP”). In February 2009, the share surrender agreement was amended for PNC to provide BlackRock series C non-voting participating preferred stock to fund the remaining committed shares.
~~During 2007,~~The BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan (the “2002 LTIP Awards”) permitted the grant of up to $240 million in deferred compensation awards, of which the Company previously granted ~~additional long-term incentive awards, out~~approximately $233 million. Approximately $208 million of the ~~Award Plan~~2002 LTIP Awards were paid in January 2007. The 2002 LTIP Awards were payable approximately 16.7% in cash and the remainder in BlackRock stock contributed by PNC and distributed to plan participants. During the three months ended March 31, 2010, approximately $6 million of ~~approximately 1,600,000 RSUs that will be settled using~~previously issued 2002 LTIP Awards resulted in the settlement of cash and BlackRock shares held by PNC ~~in accordance with~~at a conversion price approximating the share surrender agreement. The RSU awards vest on September 29, 2011 provided that BlackRock has actual GAAP earnings per share of at least $5.20 in 2009, $5.52 in 2010 or $5.85 in 2011 or has attained an alternative performance hurdle based on the Company’s earnings per share growth rate versus certain peers over the term of the awards. The value of the RSUs was calculated using BlackRock’s closing stockmarket price on the settlement date. On the payment date, the Company recorded a capital contribution from PNC for the amount of ~~grant.~~ shares funded by PNC.
Stock Options
Options outstanding at March 31, 2010 and changes during the three months ended March 31, 2010 were as follows:
Outstanding at
   Shares
Under
Option Weighted
Average
Exercise
Price
December 31, 2009
   2,641,836    $ 98.59
Exercised
   (202,310 ) $ 38.49

March 31, 2010
   2,439,526    $ 103.57

The ~~grant date fair~~aggregate intrinsic value of options exercised during the ~~RSUs~~three months ended March 31, 2010 was $35 million.
At March 31, 2010, the Company had $18 million in unrecognized stock-based compensation expense related to unvested stock options. The unrecognized compensation cost is ~~being amortized as an expense on the straight-line method~~expected to be recognized over ~~the vesting~~a remaining weighted-average period ~~net~~ of expected forfeitures. The maximum value of awards that may be funded by PNC, prior to the earlier of September 29, 2011 or the date the performance criteria are met is approximately $271, all of which has been granted as of September 30, 2009.1.5 years.

- 4241 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar~~(unaudited)
14. Related Party Transactions
Loan Commitments with Anthracite
Prior to March 31, 2010, the Company was committed to provide financing of up to $60 million to Anthracite Capital, Inc. (“Anthracite”), a specialty commercial real estate finance company that was managed by a subsidiary of BlackRock. The financing is collateralized by a pledge by Anthracite of its ownership interest in a real estate debt investment fund, which is also managed by a subsidiary of BlackRock. At March 31, 2010, $33.5 million of financing was outstanding and remains outstanding as of May 2010, which is past its final maturity date of March 5, 2010. At March 31, 2010, the value of the collateral was estimated to be $10 million, which resulted in a $2.5 million reduction in due from related parties on the Company’s condensed consolidated statement of financial condition and an equal amount recorded in general and administrative expense in the three months ended March 31, 2010. The Company has no obligation to loan additional amounts to Anthracite under this facility. Anthracite filed a voluntary petition for relief under chapter 7 of title 11 of the U.S. Code in ~~millions, except per share data)~~the U.S. Bankruptcy Court for the Southern District of New York on March 15, 2010. The management agreement between the Company and Anthracite has expired. Recovery of any amount of the financing provided by the Company in excess of the value of the collateral is not anticipated. The Company continues to evaluate the collectability of the outstanding borrowings by reviewing the carrying value of the net assets of the collateral, which fluctuates each period.
15. Net Capital Requirements
The Company is required to maintain net capital in certain regulated subsidiaries within a number of jurisdictions, which is met in part by retaining cash and cash equivalent investments in those jurisdictions. As a result, such subsidiaries of the Company may be restricted in their ability to transfer cash between different jurisdictions and to their parents. Additionally, transfer of cash between international jurisdictions, including repatriation to the United States, may have adverse tax consequences that could discourage such transfers.
Banking Regulatory Requirements
BlackRock Institutional Trust Company, N.A. (“BTC”), a wholly-owned subsidiary of the Company, is chartered as a national bank whose powers are limited to trust activities. BTC is subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s condensed consolidated financial statements. Under the capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that invoke quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under the regulatory accounting practices. BTC’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
Broker-dealers
BlackRock Investments, LLC, BlackRock Capital Markets, LLC, BlackRock Execution Services and BlackRock Fund Distribution Company are registered broker-dealers and wholly-owned subsidiaries of BlackRock that are subject to the Uniform Net Capital requirements under the Securities Exchange Act of 1934, which requires maintenance of certain minimum net capital levels.
Capital Requirements as of March 31, 2010
At March 31, 2010, the Company was required to maintain approximately $818 million in net capital in certain regulated subsidiaries, including BTC, and is in compliance with all applicable regulatory minimum net capital requirements.
- 42 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
~~15.~~16. Capital Stock
Non-voting Participating Preferred Stock
   March 31,
2010    December 31,
2009
Series A
Shares authorized, $0.01 par value
   20,000,000    20,000,000
Shares issued
   —      —
Shares outstanding
   —      —
Series B
Shares authorized, $0.01 par value
   150,000,000    150,000,000
Shares issued
   124,620,593    112,817,151
Shares outstanding
   124,620,593    112,817,151
Series C
Shares authorized, $0.01 par value
   6,000,000    6,000,000
Shares issued
   2,866,439    2,889,467
Shares outstanding
   2,866,439    2,889,467
Series D
Shares authorized, $0.01 par value
   20,000,000    20,000,000
Shares issued
   —      11,203,442
Shares outstanding
   —      11,203,442
Capital Exchanges
In January 2010, 600,000 common shares were exchanged for Series B preferred stock and all 11,203,442 Series D preferred stock outstanding at December 31, 2009 were exchanged for Series B preferred stock.
PNC Contribution
During the three months ended March 31, 2010, PNC contributed 23,028 of Series C preferred stock in connection with its share surrender agreement to fund certain LTIP awards.
- 43 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
(unaudited)
17. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share for the three months ended ~~September 30, 2009~~March 31, 2010 and ~~2008:~~2009:

   Three Months Ended
September 30,
   2009    2008
   Basic    Diluted    Basic    Diluted
Net income attributable to BlackRock, Inc. allocated to:

Common shares
   $ 308    $ 308    $ 210    $ 210
Participating RSUs
   9    9    7    7

Total net income attributable to BlackRock, Inc.
   $ 317    $ 317    $ 217    $ 217

Weighted-average common shares outstanding
   133,266,379    133,266,379    129,793,939    129,793,939
Dilutive effect of stock options and non-participating restricted stock units
      1,713,363       1,132,591
Dilutive effect of convertible debt
      922,499       766,917
Dilutive effect of acquisition-related contingent stock payments
      —         576,904

Total weighted-average shares outstanding
      135,902,241       132,270,351

Earnings per share attributable to BlackRock, Inc., common stockholders:
   $ 2.31    $ 2.27    $ 1.62    $ 1.59
~~- 43 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
~~The following table sets forth the computation of basic and diluted earnings per share for the nine months ended September 30, 2009 and 2008:~~
   Nine Months Ended
September 30,    Three Months Ended
March 31,
   2009    2008    2010    2009
   Basic    Diluted    Basic    Diluted    Basic    Diluted    Basic    Diluted
Net income attributable to BlackRock, Inc. allocated to:

Common shares
   $ 602    $ 602    $ 708    $ 708    $ 417    $ 417    $ 82    $ 82
Participating RSUs
   17    17    24    24    6    6    2    2

Total net income attributable to BlackRock, Inc.
   $ 619    $ 619    $ 732    $ 732    $ 423    $ 423    $ 84    $ 84

Weighted-average common shares outstanding
   131,481,677    131,481,677    129,427,715    129,427,715    189,676,023    189,676,023    130,216,218    130,216,218
Dilutive effect of stock options and non-participating restricted stock units
      1,365,891       1,236,491       1,723,512       845,382
Dilutive effect of convertible debt
      1,154,231       757,338       752,716       379,270
Dilutive effect of acquisition-related contingent stock payments
      —         576,904       —         356,319

Total weighted-average shares outstanding
      134,001,799       131,998,448       192,152,251       131,797,189

Earnings per share attributable to BlackRock, Inc., common stockholders:
   $ 4.58    $ 4.50    $ 5.47    $ 5.36    $ 2.20    $ 2.17    $ 0.63    $ 0.62
Due to the similarities in terms between BlackRock series A, B, C and CD non-voting participating preferred stock and the Company’s common stock, the Company considers the series A, B, C and CD non-voting participating preferred stock to be a common stock ~~equivalents~~equivalent for purposes of earnings per share calculations. As such, the Company has included the outstanding series A, B, C and CD non-voting participating preferred stock in the calculation of average basic and diluted shares outstanding for the three ~~and nine~~ months ended ~~September 30, 2009~~March 31, 2010 and ~~2008.~~2009.
For the ~~nine~~three months ended ~~September 30, 2009, 1,242,487 stock options~~March 31, 2010, 743,869 RSUs were excluded from the calculation of diluted earnings per share because to include them would have an anti-dilutive effect.
Shares issued in ~~acquisition~~Quellos Transaction
On October 1, 2007, the Company acquired the fund of funds business of ~~Quellos.~~Quellos Group (“Quellos”). The Company issued 1,191,785 shares of ~~newly-issued~~ BlackRock common stock that were placed into an escrow account. In ~~April~~ 2008 ~~280,519~~and 2009, a total of 322,845 common shares were released to Quellos in accordance with the Quellos asset purchase agreement, which resulted in an adjustment to the recognized purchase ~~price and had a dilutive effect in 2008. In November 2009, 42,326 additional common shares were released and will have a dilutive effect for the three months ended December 31, 2009.~~price. The remaining 868,940 common shares may have a dilutive effect in future periods based on the timing of the release of shares from the escrow account in accordance with the Quellos asset purchase agreement. ~~The release of the remaining escrow could begin to occur in 2009 and be completed in 2010.~~

- 44 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~
(unaudited)
~~16.~~18. Segment ~~and Geographic~~ Information
The Company’s management directs BlackRock’s operations as one business, the asset management business. As such, the Company believes it operates in one business segment in accordance with ASC 280-10,Segment ~~Reporting~~Reporting.~~(SFAS No. 131,~~~~Disclosures About Segments of an Enterprise and Related Information~~).
The following table illustrates investment advisory, ~~and~~ administration ~~base~~fees, securities lending revenue and performance fees,BlackRock Solutions^® and advisory, distribution fees and other revenue for the three ~~and nine~~ months ended ~~September 30, 2009~~March 31, 2010 and ~~2008, respectively.~~2009.

   Three Months Ended
September 30,    Nine Months Ended
September 30,    Three Months Ended
   2009    2008    2009    2008    March 31,
(Dollar amounts in millions)    2010    2009
Equity
   $ 955    $ 242
Fixed income
   $ 226    $ 230    $ 640    $ 687    363    200
Multi-asset
   167    99
Alternative investment products
   186    95
Cash management
   149    176    490    535    132    175
Equity and balanced
   471    549    1,198    1,820
Alternative investment products
   116    184    311    489

Total investment advisory and administration base and performance fees
   962    1,139    2,639    3,531
Total investment advisory, administration fees, securities lending revenue and performance fees
   1,803    811
BlackRock Solutionsand advisory
   127    113    383    273    113    135
Distribution fees
   25    34    73    103    28    25
Other revenue
   26    27    61    93    51    16

Total revenue
   $ 1,140    $ 1,313    $ 3,156    $ 4,000    $ 1,995    $ 987

The following ~~tables illustrate~~table illustrates the Company’s total revenue for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2010 and 2009 ~~and 2008~~ by geographic region. These amounts are aggregated on a legal entity basis and do not necessarily reflect where the customer is sourced.

   Three Months Ended September 30,
Revenues
   2009    % of
total 2008    % of
total
North America
   $ 793    70 % $ 891    68 %
Europe
   296    26 % 366    28 %
Asia-Pacific
   51    4 % 56    4 %

Total revenues
   $ 1,140    100 % $ 1,313    100 %

(Dollar amounts in millions)    Three Months Ended March 31,
   Nine Months Ended September 30,       % of    % of
Revenues
   2009    % of
total 2008    % of
total    2010    total 2009    total
North America
   $ 2,324    74 % $ 2,635    66 %
Americas
   $ 1,364    68 % $ 767    78 %
Europe
   710    22 % 1,172    29 %    511    26 % 191    19 %
Asia-Pacific
   122    4 % 193    5 %    120    6 % 29    3 %

Total revenues
   $ 3,156    100 % $ 4,000    100 %    $ 1,995    100 % $ 987    100 %


- 45 -
PART I—FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
BlackRock, Inc.
Notes to Condensed Consolidated Financial Statements—(continued)
~~(Dollar amounts in millions, except per share data)~~(unaudited)
~~(unaudited)~~18. Segment Information (continued)
The following table shows the Company’s long-lived assets, including goodwill and property and equipment at ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008~~2009 and does not necessarily reflect where the asset is physically located.

Long-Lived Assets
   September 30,
2009 December 31,
2008
North America
   $ 5,895    99 % $ 5,714    99 %
(Dollar amounts in millions)
Long-Lived Assets
   March 31,
2010 December 31,
2009
Americas
   $ 12,969    99 % $ 12,961    99 %
Europe
   27    0 % 27    0 %    52    —   % 46    —   %
Asia-Pacific
   46    1 % 52    1 %    70    1 % 74    1 %

Total long-lived assets
   $ 5,968    100 % $ 5,793    100 %    $ 13,091    100 % $ 13,081    100 %

~~North America~~Americas primarily is comprised of the United States, Canada, Brazil and Mexico, while Europe primarily is comprised of the United Kingdom and Asia-Pacific primarily is comprised of Japan, Australia and Hong Kong.
~~17. Pending Transaction~~
BlackRock will acquire from Barclays all of the outstanding equity interests of subsidiaries of Barclays conducting the business of BGI in exchange for an aggregate of approximately 37.8 million shares of BlackRock common stock and participating preferred stock, subject to certain adjustments, and $6,600 in cash, subject to certain adjustments. The value of the 37.8 million shares will be determined at the time of closing, which is currently anticipated to be December 1, 2009, pending regulatory approvals and satisfaction of other customary closing conditions.
The shares of common stock and total capital stock issued to Barclays pursuant to the BGI Transaction will represent approximately 4.9% of the common stock and 19.9% of the total capital stock of BlackRock outstanding immediately following the closing of the BGI Transaction. Barclays will generally be restricted from purchasing additional shares of BlackRock common or preferred stock if it would result in Barclays holding more than 4.9% of the total voting power of BlackRock or more than 19.9% of the total capital stock of BlackRock on a fully diluted basis. In addition, Barclays will be restricted from transferring its BlackRock capital stock for one year after closing and 50% of its BlackRock capital stock for the next subsequent year, without the prior written consent of BlackRock.
The cash portion of the purchase price will be funded through a combination of existing cash, committed debt facilities and proceeds from the issuance of 19.9 million common and preferred shares to a group of institutional investors, including PNC. Both the debt facilities and the issuance of capital shares are 100% committed subject to the closing of the BGI Transaction.
~~- 46 -~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~
~~18.~~19. Subsequent Events
~~Commercial Paper Program~~
On October 14, 2009, BlackRock established a commercial paper program (the “Program”) under which the Company may issue unsecured commercial paper notes (the “Notes”) on a private placement basis up to a maximum aggregate amount outstanding at any time of $3,000. The proceeds of the commercial paper issuances will be used for general corporate purposes, including the financing of a portion of the BGI Transaction. Amounts available under the Program may be reborrowed. Subsidiaries of Bank of America and Barclays, as well as other third parties, will act as dealers under the Program.
The Company began issuance of notes under the Program on November 4, 2009. As of November 5, 2009, BlackRock had $525 of outstanding Notes with a weighted interest rate of 0.17% and a weighted maturity of 51 days.
Additional Subsequent Event Review
In addition to the subsequent events included in the notes to the financial statements, the Company ~~reviewed~~conducted a review for additional subsequent events ~~occurring through November 6, 2009, the date that these financial statements were issued,~~ and determined that no additional subsequent events had occurred that would require accrual or additional disclosures.

- 4746 -
PART I—FINANCIAL INFORMATION (continued)
~~Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations~~
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-looking Statements
This report, and other statements that BlackRock may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.
BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.
In addition to risk factors previously disclosed in BlackRock’s Securities and Exchange Commission (“SEC”) reports and those identified elsewhere in this report the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; (3) the relative and absolute investment performance of BlackRock’s investment products; (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions or divestitures; (7) the unfavorable resolution of legal proceedings; (8) the extent and timing of any share repurchases; (9) the impact, extent and timing of technological changes and the adequacy of intellectual property protection; (10) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock, Barclays Bank PLC, Bank of America Corporation, Merrill Lynch & Co., Inc. or The PNC Financial Services Group, Inc.; (11) terrorist activities and international hostilities, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (12) the ability to attract and retain highly talented professionals; (13) fluctuations in the carrying value of BlackRock’s economic investments; (14) fluctuations in foreign currency exchange rates, which may adversely affect the value of investment advisory and administration fees earned by BlackRock or the carrying value of certain assets and liabilities denominated in foreign currencies; (15) the impact of changes to tax legislation and, generally, the tax position of the Company; ~~(16)~~(15) BlackRock’s success in maintaining the distribution of its products; ~~(17)~~(16) the impact of BlackRock electing to provide support to its products from time to time; ~~(18)~~(17) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions; and ~~(19)~~(18) the ability of BlackRock to ~~complete the transaction with Barclays Bank PLC and~~ integrate the operations of Barclays Global Investors.

- 4847 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Overview
BlackRock, Inc. (“BlackRock” or the “Company”) is ~~one of~~ the largest publicly traded investment management ~~firms in~~firm. As of March 31, 2010, the ~~world with $1.435~~Company managed $3.364 trillion of assets under management (“AUM”) ~~at September 30, 2009. BlackRock manages assets~~ on behalf of institutional and individual investors ~~worldwide through a variety of~~worldwide. The Company’s products include equities, fixed income, multi-asset class, alternatives and cash management, ~~equity~~ and ~~balanced and alternative investment~~offer clients diversified access to global markets through separate accounts, collective trust funds, mutual funds, exchange traded funds, hedge funds and closed-end funds. In addition,BlackRock Solutions^® provides market risk management, financial markets advisory and enterprise investment system services to a broad base of clients. Financial markets advisory services include valuation of illiquid securities, dispositions and workout assignments (including long-term portfolio liquidation assignments), risk management and strategic planning and execution.
On ~~January~~December 1, 2009, ~~Bank of America Corporation (“Bank of America”)~~BlackRock acquired Merrill Lynch & Co., Inc. (“Merrill Lynch”). In connection with this transaction, BlackRock entered into exchange agreements with each of Merrill Lynch and The PNC Financial Services Group, Inc. (“PNC”) pursuant to which each agreed to exchange a portion of the BlackRock voting common stock they held for non-voting preferred stock. On September 30, 2009, Bank of America/Merrill Lynch owned approximately 4.6% of BlackRock’s voting common stock and 46.1% of BlackRock’s capital stock on a fully diluted basis, and PNC owned approximately 43.8% of BlackRock’s voting common stock and 30.7% of BlackRock’s capital stock on a fully diluted basis.
~~On June 16, 2009, BlackRock announced that~~from Barclays Bank PLC (“Barclays”) ~~accepted its offer to acquire~~ all of the outstanding equity interests of subsidiaries of Barclays conducting the business of Barclays Global Investors (“BGI”) in exchange for capital shares valued at closing of $8.53 billion and ~~entered into a definitive purchase agreement to acquire BGI from Barclays (the “BGI Transaction”). The purchase price consideration consists of $6.6~~$6.65 billion in cash, subject to certain adjustments, and approximately 37.8 million shares of common and participating preferred stock, subject to certain adjustments. The cash portion of the transaction will be financed by $800 million from BlackRock’s cash position, a new $2 billion credit facility, which is expected to eventually be replaced with term debt, $1 billion of additional short-term debt, and $2.8 billion of capital from a group of institutional investors, including PNC. The shares of common stock and total capital stock issued to Barclays pursuant to the BGI Transaction will represent approximately 4.9% of the common stock and 19.9% of the total capital stockcash.
At March 31, 2010, equity ownership of BlackRock ~~outstanding immediately following the closing of the BGI Transaction.~~was as follows:
   Voting
Common
Stock Capital Stock⁽¹⁾
Bank of America Corporation/Merrill Lynch & Co. Inc.
   3.7 % 33.8 %
The PNC Financial Services Group, Inc. (“PNC”)
   34.4 % 24.2 %
Barclays
   4.7 % 19.6 %
Other
   57.2 % 22.4 %

   100.0 % 100.0 %

⁽¹⁾
Includes outstanding common and preferred stock only.

- 4948 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Overview (continued)
BlackRock, Inc.
Financial Highlights
(Dollar amounts in millions, except per share data)
(unaudited)
The following table summarizes BlackRock’s operating performance for each of the three months ended ~~September 30, 2009, June 30,~~March 31, 2010, December 31, 2009 and September 30, 2008 and the nine months ended September 30, 2009 and 2008. Certain prior year amounts have been revised or reclassified to conform to 2009 presentation as required by the retrospective adoption of the applicable paragraphs within Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 470-20,~~Debt with Conversion and Other Options~~~~issued (“ASC 470-20”), (FASB Staff Position (“FSP”) APB 14-1,~~~~Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement~~~~)), ASC 260-10,~~~~Earnings per Share~~~~(“ASC 260-10”) (FSP Emerging Issues Task Force (“EITF”) 03-6-1,~~~~Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities~~~~) and ASC 810-10,~~~~Consolidation~~ ~~(“ASC 810-10”)(Statement of Financial Accounting Standards (“SFAS”) No. 160,~~~~Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51~~~~). For more information please refer to the Company’s Annual Report on Form 10K for the year ended December~~March 31, 2008, which was filed with the Securities and Exchange Commission (“SEC”) on March 2, 2009 and the Company’s Current Report on Form 8-K, which updated the financial information in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, which was filed with the SEC on September 17, 2009.

   Three Months Ended Variance vs. Three Months Ended    Three Months Ended Variance vs. Three Months Ended
   September 30, June 30, September 30, 2008 June 30, 2009    March 31, December 31, March 31, 2009 December 31, 2009
   2009 2008 2009 Amount % Change Amount % Change    2010 2009 2009 Amount % Change Amount % Change
GAAP basis:

Total revenue
   $ 1,140    $ 1,313    $ 1,029    $ (173 ) (13 )% $ 111    11 %    $ 1,995    $ 987    $ 1,544    $ 1,008    102 % $ 451    29 %
Total expenses
   $ 783    $ 859    $ 768    $ (76 ) (9 )% $ 15    2 %    $ 1,341    $ 716    $ 1,155    $ 625    87 % $ 186    16 %
Operating income
   $ 357    $ 454    $ 261    $ (97 ) (21 )% $ 96    37 %    $ 654    $ 271    $ 389    $ 383    141 % $ 265    68 %
Operating margin
   31.3 % 34.6 % 25.4 % (3.3 )% (9 )% 5.9 % 23 %    32.8 % 27.5 % 25.2 % 5.3 % 19 % 7.6 % 30 %
Non-operating income (expense), less net income (loss) attributable to non-controlling interests
   $ 61    $ (120 ) $ 51    $ 181    151 % $ 10    20 %
Non-operating income (expense), less net income (loss) attributable to non-controlling interests¹
   $ (3 ) $ (157 ) $ 17    $ 154    98 % $ (20 ) NM
Net income attributable to BlackRock, Inc.
   $ 317    $ 217    $ 218    $ 100    46 % $ 99    45 %    $ 423    $ 84    $ 256    $ 339    404 % $ 167    65 %
Diluted earnings per common share^(e)
   $ 2.27    $ 1.59    $ 1.59    $ 0.68    43 % $ 0.68    43 %    $ 2.17    $ 0.62    $ 1.62    $ 1.55    250 % $ 0.55    34 %
As adjusted:

Operating income^(a)
   $ 400    $ 432    $ 302    $ (32 ) (7 )% $ 98    32 %    $ 727    $ 307    $ 561    $ 420    137 % $ 166    30 %
Operating margin^(a)
   40.1 % 38.4 % 34.4 % 1.7 % 4 % 5.7 % 17 %    38.9 % 37.2 % 39.7 % 1.7 % 5 % (0.8 )% (2 )%
Non-operating income (expense), less net income (loss) attributable to non-controlling interests^(b)
   $ 52    $ (81 ) $ 42    $ 133    164 % $ 10    24 %
Non-operating income (expense), less net income (loss) attributable to non-controlling interests^1,^(b)
   $ (6 ) $ (153 ) $ 13    $ 147    96 % $ (19 ) NM
Net income attributable to BlackRock, Inc.^(c),(d)
   $ 293    $ 229    $ 239    $ 64    28 % $ 54    23 %    $ 469    $ 110    $ 379    $ 359    326 % $ 90    24 %
Diluted earnings per common share^(c),(d),(e)
   $ 2.10    $ 1.67    $ 1.75    $ 0.43    26 % $ 0.35    20 %
Diluted earnings per common share^(c),d),(e)
   $ 2.40    $ 0.81    $ 2.39    $ 1.59    196 % $ 0.01    —   %
Other:

Diluted weighted-average common shares outstanding^(e)
   135,902,241    132,270,351    133,364,611    3,631,890    3 % 2,537,630    2 %    192,152,251    131,797,189    155,040,242    60,355,062    46 % 37,112,009    24 %
Assets under management
   $ 1,434,769    $ 1,258,598    $ 1,373,160    $ 176,171    14 % $ 61,609    4 %    $ 3,363,898    $ 1,283,355    $ 3,346,256    $ 2,080,543    162 % $ 17,642    1 %
NM – Not Meaningful
¹
Includes net income (loss) attributable to non-controlling interests (redeemable and nonredeemable) related to investment activities.

- 5049 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Overview (continued)
BlackRock, Inc.
Financial ~~Highlights—~~Highlights
(continued)
~~(Dollar amounts in millions, except per share data)~~
~~(unaudited)~~

   Nine Months Ended
September 30, Variance vs. Nine
Months Ended
September 30, 2008
   2009 2008 Amount   % Change
GAAP basis:

Total revenue
   $ 3,156    $ 4,000    $ (844 ) (21 )%
Total expenses
   $ 2,267    $ 2,745    $ (478 ) (17 )%
Operating income
   $ 889    $ 1,255    $ (366 ) (29 )%
Operating margin
   28.2 % 31.4 % (3.2 )% (10 )%
Non-operating income (expense), less net income (loss) attributable to non-controlling interests
   $ (45 ) $ (129 ) $ 84    65 %
Net income attributable to BlackRock, Inc.
   $ 619    $ 732    $ (113 ) (15 )%
Diluted earnings per common share^(e)
   $ 4.50    $ 5.36    $ (0.86 ) (16 )%
As adjusted:

Operating income^(a)
   $ 1,009    $ 1,292    $ (283 ) (22 )%
Operating margin^(a)
   37.4 % 37.9 % (0.5 )% (1 )%
Non-operating income (expense), less net income (loss) attributable to non-controlling interests^(b)
   $ (59 ) $ (114 ) $ 55    48 %
Net income attributable to BlackRock, Inc.^(c),(d)
   $ 642    $ 766    $ (124 ) (16 )%
Diluted earnings per common share^(c),(d),(e)
   $ 4.66    $ 5.61    $ (0.95 ) (17 )%
Other:

Diluted weighted-average common shares outstanding^(e)
   134,001,799    131,998,448    2,003,351    2 %
Assets under management
   $ 1,434,769    $ 1,258,598    $ 176,171    14 %
~~- 51 -~~
~~BlackRock, Inc.~~
~~Financial Highlights—(continued)~~
BlackRock reports its financial results ~~on a GAAP basis;~~in accordance with accounting principles generally accepted in the United States (“GAAP”); however, management believes that evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP basis financial measures. Management reviews non-GAAP financial measures to assess ongoing operations and, for the reasons described below, considers them to be effective indicators, for both management and investors, of BlackRock’s financial performance over time. BlackRock’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
Certain prior period non-GAAP data has been reclassified to conform to the current presentation. Computations for all periods are derived from the Company’s condensed consolidated statements of income as follows:
(a) Operating income, as adjusted, and operating margin, as adjusted:
Operating income, as adjusted, equals operating income, GAAP basis, excluding certain items deemed non-recurring by management or transactions that ultimately will not impact BlackRock’s book value, as indicated in the table below. Operating income used for operating margin measurement equals operating income, as adjusted, excluding the impact of closed-end fund launch costs and commissions. Operating margin, as adjusted, equals operating income used for operating margin measurement, divided by revenue used for operating margin measurement, as indicated in the table below.

   Three Months Ended Nine Months Ended
(Dollar amounts in millions)    Three Months Ended
   September 30, June 30, September 30,    March 31, December 31,
   2009 2008 2009 2009 2008    2010 2009 2009
Operating income, GAAP basis
   $ 357    $ 454    $ 261    $ 889    $ 1,255       $ 654    $ 271    $ 389
Non-GAAP adjustments:

Restructuring charges
   —      —      —      22    —
BGI transaction/integration costs

Employee compensation and benefits
   18    —      60
General and administration
   34    —      92

Total BGI transaction/integration costs
   52    —      152
PNC LTIP funding obligation
   15    14    15    45    44       15    15    14
Merrill Lynch compensation contribution
   3    3    2    8    8       3    3    2
Barclays Global Investors (“BGI”) transaction/integration costs
   16    —      15    31    —
Compensation expense related to (depreciation) appreciation on deferred compensation plans
   9    (39 ) 9    14    (15 )
Restructuring charges
   —      22    —
Compensation expense related to appreciation (depreciation) on deferred compensation plans
   3    (4 ) 4

Operating income, as adjusted
   400    432    302    1,009    1,292       727    307    561
Closed-end fund launch costs
   —      —      —      2    9       —      2    —
Closed-end fund launch commissions
   —      —      —      1    —         —      1    —

Operating income used for operating margin measurement
   $ 400    $ 432    $ 302    $ 1,012    $ 1,301       $ 727    $ 310    $ 561

Revenue, GAAP basis
   $ 1,140    $ 1,313    $ 1,029    $ 3,156    $ 4,000       $ 1,995    $ 987    $ 1,544
Non-GAAP adjustments:

Portfolio administration and servicing costs
   (119 ) (149 ) (125 ) (371 ) (455 )
Distribution and servicing costs
   (100 ) (127 ) (106 )
Amortization of deferred mutual fund sales commissions
   (23 ) (34 ) (26 ) (76 ) (97 )    (26 ) (27 ) (24 )
Reimbursable property management compensation
   —      (6 ) —      —      (18 )

Revenue used for operating margin measurement
   $ 998    $ 1,124    $ 878    $ 2,709    $ 3,430       $ 1,869    $ 833    $ 1,414

Operating margin, GAAP basis
   31.3 % 34.6 % 25.4 % 28.2 % 31.4 %    32.8 % 27.5 % 25.2 %

Operating margin, as adjusted
   40.1 % 38.4 % 34.4 % 37.4 % 37.9 %    38.9 % 37.2 % 39.7 %


- 5250 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Overview (continued)
BlackRock, Inc.
Financial ~~Highlights—~~Highlights
(continued)
(a) (continued)
Management believes that operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRock’s performance over time. As such, management believes that operating income, as adjusted, and operating margin, as adjusted, provide useful disclosure to investors.
Operating income, as adjusted:
Restructuring charges recorded in 2009 consist of compensation costs, occupancy costs and professional fees. BGI transaction/integration costs recorded in 2010 and 2009 consist principally of certain advisory payments, compensation expense, legal fees, marketing and consulting expenses incurred in conjunction with the BGI transaction. The expenses associated with restructuring and BGI transaction and integration costs have been deemed non-recurring by management and ~~thus~~ have been excluded from operating income, as adjusted, to help ~~ensure~~enhance the comparability of this information to prior periods. ~~BGI transaction/integration costs recorded in 2009 consist principally of certain advisory fees, legal fees and consulting expenses incurred in conjunction with the announced transaction.~~ As such, management believes that operating margins exclusive of these costs are useful measures in evaluating BlackRock’s operating performance for the respective periods.
The portion of compensation expense associated with certain long-term incentive plans (“LTIP”) that will be funded through the distribution to participants of shares of BlackRock stock held by PNC and ~~the~~a Merrill Lynch & Co., Inc. (“Merrill Lynch”) cash compensation contribution, a portion of which has been received, have been excluded because these charges ultimately do not impact BlackRock’s book value.
Compensation expense associated with appreciation (depreciation) on assets related to certain BlackRock deferred compensation plans has been excluded as returns on investments set aside for these plans, which substantially offset this expense, are reported in non-operating income.
Operating margin, as adjusted:
Operating income used for measuring operating margin, as adjusted, is equal to operating income, as adjusted, excluding the impact of closed-end fund launch costs and commissions. Management believes that excluding such costs and commissions is useful because these costs can fluctuate considerably and revenues associated with the expenditure of these costs will not fully impact the Company’s results until future periods.
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, commissions and fluctuations in 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 uses both the GAAP and non-GAAP financial ~~measures.~~measures in evaluating the financial performance for BlackRock. The non-GAAP ~~measures~~measure by ~~themselves~~itself may pose limitations because ~~they do~~it does not include all of the Company’s revenues and expenses.
Revenue used for operating margin, as adjusted, excludes ~~portfolio administration~~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 ~~Company receives offsetting revenue~~treatment for ~~these services.~~certain contracts for similar services, which due to the terms of the contracts, are accounted for 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”). 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 bear no 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.

- 5351 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Overview (continued)
BlackRock, Inc.
Financial ~~Highlights—~~Highlights
(continued)
(b) 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 (“NCI”), as adjusted, equals non-operating income (expense), GAAP basis, less net income (loss) attributable to ~~non-controlling interests,~~NCI, GAAP basis, adjusted for compensation expense associated with depreciation (appreciation) on assets related to certain BlackRock deferred compensation plans. The compensation expense offset is recorded in operating income. This compensation expense has been included in non-operating income (expense), less net income (loss) attributable to ~~non-controlling interests,~~NCI, as adjusted, to offset returns on investments set aside for these plans, which are reported in non-operating income (expense), GAAP basis.

   Three Months Ended Nine Months Ended
   September 30, June 30, September 30,
   2009 2008 2009 2009 2008
Non-operating income (expense), GAAP basis
   $ 78    $ (141 ) $ 77    $ (24 ) $ (165 )
Net income (loss) attributable to non-controlling interests, GAAP basis
   17    (21 ) 26    21    (36 )

Non-operating income (expense), less net income (loss) attributable to non-controlling interests
   61    (120 ) 51    (45 ) (129 )
Compensation expense related to (appreciation) depreciation on deferred compensation plans
   (9 ) 39    (9 ) (14 ) 15

Non-operating income (expense), less net income (loss) attributable to non-controlling interests, as adjusted
   $ 52    $ (81 ) $ 42    $ (59 ) $ (114 )

(Dollar amounts in millions)    Three Months Ended
   March 31, December 31,
   2010 2009 2009
Non-operating income (expense), GAAP basis
   $ 2    $ (179 ) $ 18
Less: Net income (loss) attributable to NCI, GAAP basis
   5    (22 ) 1

Non-operating income (expense)⁽¹⁾
   (3 ) (157 ) 17
Compensation expense related to (appreciation) depreciation on deferred compensation plans
   (3 ) 4    (4 )

Non-operating income (expense), less net income (loss) attributable to NCI, as adjusted⁽¹⁾
   $ (6 ) $ (153 ) $ 13

⁽¹⁾
Includes net income (loss) attributable to NCI (redeemable and non-redeemable) related to investment activities.
Management believes that non-operating income (expense), less net income (loss) attributable to ~~non-controlling interests,~~NCI, as adjusted, provides for comparability of this information to prior periods and is an effective measure for reviewing BlackRock’s non-operating contribution to its results. As compensation expense associated with depreciation (appreciation) on assets related to certain ~~BlackRock~~ deferred compensation plans, which is included in 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,~~NCI, as adjusted, provides a useful ~~measures to~~measure, for both management and investors, of BlackRock’s non-operating ~~results.~~results that impact book value.

- 5452 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Overview (continued)
BlackRock, Inc.
Financial ~~Highlights—~~Highlights
(continued)
(c) Net income attributable to BlackRock, Inc., as adjusted:
Management believes that net income attributable to BlackRock, Inc., as adjusted, and diluted ~~common~~ earnings per common share, as adjusted, are useful measures of BlackRock’s profitability and financial performance. Net income attributable to BlackRock, Inc., as adjusted, equals net income attributable to BlackRock, Inc., GAAP basis, adjusted for significant non-recurring items as well as charges that ultimately will not impact BlackRock’s book value.

   Three Months Ended    Nine Months Ended
   September 30,    June 30,    September 30,
   2009 2008    2009    2009 2008
(Dollar amounts in millions)    Three Months Ended
March 31,    December 31,
2010    2009    2009
Net income attributable to BlackRock, Inc., GAAP basis
   $ 317    $ 217    $ 218    $ 619    $ 732    $ 423    $ 84    $ 256
Non-GAAP adjustments, net of tax:^(d)

Restructuring charges
   —      —      —      14    —
BGI transaction/integration costs
   34    —      108
PNC LTIP funding obligation
   9    10    10    29    29    10    10    12
Merrill Lynch compensation contribution
   1    2    1    4    5    2    2    3
BGI transaction/integration costs
   11    —      10    21    —
Local income tax law changes
   (45 ) —      —      (45 ) —
Restructuring charges
   —      14    —

Net income attributable to BlackRock, Inc., as adjusted
   $ 293    $ 229    $ 239    $ 642    $ 766    $ 469    $ 110    $ 379


Allocation of net income attributable to BlackRock, Inc., as adjusted:^(f)

Common shares^(e)
   $ 285    $ 221    $ 233    $ 625    $ 741    $ 462    $ 107    $ 371
Participating RSUs
   8    8    6    17    25    7    3    8

Net income attributable to BlackRock, Inc., as adjusted
   $ 293    $ 229    $ 239    $ 642    $ 766    $ 469    $ 110    $ 379


Diluted weighted average common shares outstanding^(e)
   135,902,241    132,270,351    133,364,611    134,001,799    131,998,448    192,152,251    131,797,189    155,040,242

Diluted earnings per common share, GAAP basis^(e)
   $ 2.27    $ 1.59    $ 1.59    $ 4.50    $ 5.36    $ 2.17    $ 0.62    $ 1.62

Diluted earnings per common share, as adjusted^(e)
   $ 2.10    $ 1.67    $ 1.75    $ 4.66    $ 5.61    $ 2.40    $ 0.81    $ 2.39

The restructuring charges and BGI ~~transaction/~~transaction and integration costs reflected in GAAP net income attributable to BlackRock, Inc. have been deemed non-recurring by management and have been excluded from net income attributable to BlackRock, Inc., as adjusted, to help ~~ensure~~enhance the comparability of this information to prior reporting periods.
The portion of the compensation expense associated with LTIP awards that will be funded through the distribution to participants of shares of BlackRock stock held by PNC and the Merrill Lynch cash compensation contribution, a portion of which has been received, ~~have~~has been excluded from net income attributable to BlackRock, Inc., as adjusted, because these charges ultimately do not impact BlackRock’s book value.

- 5553 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Overview (continued)
BlackRock, Inc.
Financial ~~Highlights—~~Highlights
(continued)
During third quarter 2009, legislation was enacted primarily with respect to New York City corporate income taxes, effective January 1 2009, which resulted in a revaluation of deferred income tax assets and liabilities. The resulting decrease in income taxes has been excluded from net income attributable to BlackRock, Inc., as adjusted, as it is non-recurring and to ensure comparability of this information to prior reporting periods.
(d) ~~The tax rates used represent BlackRock’s corporate effective tax rates in the respective periods, which exclude certain adjustments that were recorded.~~ For ~~each of~~ the quarters ended ~~September 30,~~March 31, 2010, March 31, 2009 ~~September 30, 2008~~ and ~~June 30,~~December 31, 2009 non-GAAP adjustments were tax effected at 35%~~. For each~~, 35% and 26.8%, respectively, which reflect the blended rate applicable to the adjustments. BlackRock’s tax rate in fourth quarter 2009 includes the impact of changes in the ~~nine months ended September 30, 2009 and 2008, non-GAAP adjustments were tax effected at 35%.~~fourth quarter to the respective full year blended rate applicable to the adjustments.
(e) Series A, B, C and CD non-voting participating preferred stock are considered to be common stock equivalents for purposes of determining basic and diluted earnings per share calculations. Certain unvested restricted stock units (“RSUs”) are not included in this number as they are deemed participating securities in accordance with ~~required provisions of ASC~~Accounting Standards Codification (“ASC”) 260-10,Earnings per Share ~~(FSP EITF 03-6-1,~~~~Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities~~(“ASC 260-10”).
(f) Allocation of net income attributable to BlackRock, Inc., as adjusted, to common shares and participating RSUs is calculated pursuant to the two-class method as defined in ASC ~~260-10 (SFAS No. 128,~~~~Earnings per Share~~).260-10.

- 5654 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Overview (continued)
BlackRock has portfolio managers located around the world, including the United States, the United Kingdom, the Netherlands, Japan, Hong Kong, Australia and ~~Australia.~~Germany. The Company provides a wide array of taxable and tax-exempt fixed income, equity and ~~balanced~~multi-asset class investment funds, including exchange traded funds and mutual funds, and separate accounts, as well as a wide assortment of index-based equity and alternative investment products for a diverse global clientele. BlackRock provides global advisory services for ~~mutual~~investment funds and other non-U.S. ~~equivalent~~ retail products. The Company’s non-U.S. ~~mutual~~investment funds are based in a number of domiciles and cover a range of asset classes, including cash management, fixed income and equities. The BlackRock Global Funds, the Company’s primary retail fund group offered outside the United States, are authorized for distribution in more than 35 jurisdictions worldwide. In the United States, the primary retail offerings include various open-end and closed-end funds, including exchange traded funds. Additional fund offerings include structured products, real estate funds, hedge funds, hedge funds of funds, private equity funds and funds of funds, managed futures funds and exchange funds. These products are sold to both U.S. and non-U.S. high net worth, retail and institutional investors in a wide variety of active and passive strategies covering both equity and fixed income assets.
BlackRock’s client base consists of financial institutions and other corporate clients, pension plans, charities, official institutions, such as central banks, sovereign wealth funds, supranationals and other government entities; high net worth individuals and retail investors around the world. BlackRock maintains a significant sales and marketing presence both inside and outside the United States that is focused on establishing and maintaining retail and institutional investment management relationships by marketing its services to retail and institutional investors directly and through financial professionals, pension consultants and establishing third-party distribution relationships. BlackRock also distributes its products and services through Merrill Lynch under a global distribution agreement, which following Bank of ~~America’s~~America Corporation’s acquisition of Merrill Lynch, runs through January 2014. After such term, the agreement will renew for one automatic three-year extension if certain conditions are met.
BlackRock derives a substantial portion of its revenue from investment advisory and administration fees, which are recognized as the services are performed. Such fees are primarily based on pre-determined percentages of the market value of AUM, percentages of committed capital during investment periods of certain alternative products, or, in the case of certain real estate equity clients, net operating income generated by the underlying properties, and are affected by changes in AUM, including market appreciation or depreciation, foreign exchange gains or losses and net subscriptions or redemptions. Net subscriptions or redemptions represent the sum of new client assets, additional fundings from existing clients (including dividend reinvestment), withdrawals of assets from, and termination of, client accounts, ~~and~~ purchases and redemptions of ~~mutual~~investment fund ~~shares.~~shares and distributions to investors representing return of capital and return on investments to investors. Market appreciation or depreciation includes current income earned on, and changes in the fair value of, securities held in client accounts.
BlackRock also earns revenue by lending securities on behalf of clients, primarily to brokerage institutions. Such revenues are accounted for on an accrual basis. The securities loaned are secured by collateral in the form of cash and securities, ranging from approximately 102% to 108% of the value of the loaned securities. The net income earned on the collateral is shared between BlackRock and the funds or other third-party accounts managed by the Company from which the securities are borrowed.
Investment advisory agreements for certain separate accounts and BlackRock’s alternative investment products provide for performance fees, based upon relative and/or absolute investment performance, in addition to base fees based on AUM. Investment advisory performance fees generally are earned after a given period of time orand when investment performance exceeds a contractual threshold. As such, the timing of recognition of performance fees may increase the volatility of BlackRock’s revenue and earnings. Historically, the magnitude of performance fees in the fourth quarter exceeds the first three calendar quarters in a year due to the higher number of products with performance measurement periods that end on December 31.
- 55 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Overview (continued)
BlackRock provides a variety of risk management, investment analytic and investment system and advisory services to financial institutions, pension funds, asset managers, foundations, consultants, mutual fund sponsors, real estate investment trusts and government agencies. These services are provided under the brand nameBlackRock Solutions^® and include a wide array of risk management services, valuation services related to illiquid securities, disposition and workout assignments (including long-term portfolio liquidation assignments), strategic planning and execution, and enterprise investment system outsourcing to clients. Fees earned forBlackRock Solutionsand advisory services are determined using some, or all, of the following methods: (i) fixed fees, (ii) percentages of various attributes of advisory assets under management and (iii) performance fees if contractual thresholds are met.
The Company also earns fees for transition management services comprised of referral fees or agency commissions from acting as an introducing broker-dealer in buying and selling securities on behalf of its customers. Commissions and clearing expenses related to transition management services are recorded on a trade-date basis as securities transactions occur.
Operating expenses reflect employee compensation and benefits, ~~portfolio administration~~distribution and servicing costs, amortization of deferred mutual fund sales commissions, direct fund expenses, general and administration expenses and amortization of finite-lived intangible assets.
Employee compensation and benefits expense reflects salaries, commissions, severance, deferred and incentive compensation, employer payroll taxes and related benefit costs. ~~Portfolio administration~~
Distribution and servicing costs include payments made to Merrill Lynch-affiliated entities under a global distribution agreement and to PNC-affiliated entities, as well as other third parties, primarily associated with ~~the administration~~obtaining and ~~servicing of~~retaining client investments in certain BlackRock products.

~~- 57 -~~Direct fund expenses consist primarily of third party non-advisory expenses incurred by BlackRock related to certain funds for the use of index trademarks, reference data for indices, custodial services, fund administration, fund accounting, transfer agent services, shareholder reporting services, legal expenses, audit and tax services as well as other fund related expenses directly attributable to the non-advisory operations of the fund. These expenses may vary over time with fluctuations in AUM, number of shareholder accounts, or other attributes directly related to volume of business.
BlackRock holds investments primarily in sponsored investment products that invest in a variety of asset classes, including private equity, distressed credit/mortgage ~~funds,~~debt securities, hedge funds and real estate. Investments generally are made for co-investment purposes, to establish a performance track record, or to hedge exposure to certain deferred compensation ~~plans.~~plans, or for regulatory purposes. Non-operating income (expense) and other comprehensive income for available-for-sale investments includes the impact of changes in the valuations or pick up of equity method earnings of these investments, as well as interest and dividend income and interest expense.
In addition, non-operating income (expense) includes the impact of changes in the valuations of ~~these investments.~~consolidated sponsored investment funds and collateralized loan obligations. The portion of non-operating income (expense) not attributable to BlackRock is allocated to non-controlling interests.
- 56 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Assets Under Management
AUM for reporting purposes is generally based upon how investment advisory and administration fees are calculated for each portfolio. Net asset values, total assets, committed assets or other measures may be used to determine portfolio AUM.
BlackRock, Inc.
Assets Under Management¹
By Asset Class
      Variance vs.
(Dollar amounts in millions)    March 31,
2010    December 31,
2009    March 31,
2009    December 31,
2009 March 31,
2009
Equity

Index
   $ 1,229,253    $ 1,183,005    $ 50,065    4 % NM
Active
   353,269    353,050    141,447    —   % 150 %
Fixed income

Index
   470,589    459,744    3,075    2 % NM
Active
   588,594    595,883    469,581    (1 )% 25 %
Multi-asset class
   154,750    142,029    73,972    9 % 109 %
Alternative
   101,886    102,101    53,592    —   % 90 %

Long-term
   2,898,341    2,835,812    791,732    2 % 266 %
Cash management
   306,536    349,277    322,478    (12 )% (5 )%

Sub-total
   3,204,877    3,185,089    1,114,210    1 % 188 %
Advisory²
   159,021    161,167    169,145    (1 )% (6 )%

Total
   $ 3,363,898    $ 3,346,256    $ 1,283,355    1 % 162 %

NM—Not Meaningful
¹
Data reflects the reclassification of prior period AUM into the current period presentation.
²
Advisory AUM represents long-term portfolio liquidation assignments.
- 57 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Assets Under Management ~~Summary~~
~~(Dollar amounts in millions)~~(continued)

            Variance vs.
   September 30,
2009    June 30,
2009    September 30,
2008    June 30,
2009 September 30,
2008
Fixed income
   $ 539,590    $ 509,656    $ 502,066    6 % 7 %
Equity and balanced
   390,643    329,622    351,428    19 % 11 %
Alternative investment products
   51,210    51,562    71,308    (1 )% (28 )%

Long-dated
   981,443    890,840    924,802    10 % 6 %
Cash management
   290,440    316,702    290,692    (8 )% 0 %

Sub-total
   1,271,883    1,207,542    1,215,494    5 % 5 %
Advisory AUM¹
   162,886    165,618    43,104    (2 )% 278 %

Total
   $ 1,434,769    $ 1,373,160    $ 1,258,598    4 % 14 %

BlackRock, Inc.
Mix of Assets Under Management
By Asset Class¹

   September 30,
2009 June 30,
2009 September 30,
2008    March 31,
2010 December 31,
2009 March 31,
2009
Equity

Index
   37 % 35 % 4 %
Active
   10 % 11 % 11 %
Fixed income
   38 % 37 % 40 %
Equity and balanced
   27 % 24 % 28 %
Alternative investment products
   4 % 4 % 6 %
Index
   14 % 14 % —   %
Active
   17 % 18 % 37 %
Multi-asset class
   5 % 4 % 6 %
Alternative
   3 % 3 % 4 %

Long-dated
   69 % 65 % 74 %
Long-term
   86 % 85 % 62 %
Cash management
   20 % 23 % 23 %    9 % 10 % 25 %

Sub-total
   89 % 88 % 97 %    95 % 95 % 87 %
Advisory AUM¹
   11 % 12 % 3 %
Advisory²
   5 % 5 % 13 %

Total
   100 % 100 % 100 %    100 % 100 % 100 %


¹
Data reflects the reclassification of prior period AUM into the current period presentation.
²
Advisory AUM represents long-term portfolio liquidation assignments.

- 58 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Assets Under Management (continued)
The following table presents the component changes in BlackRock’s AUM¹ for the three months ended ~~September 30, 2009.~~March 31, 2010.

(Dollar amounts in millions)    June 30,
2009    Net
subscriptions
(redemptions)¹ Market
appreciation
(depreciation) Foreign
Exchange² September 30,
2009    December 31,    Net
subscriptions Market
appreciation Foreign March 31,
   2009    (redemptions)² (depreciation) exchange³ 2010
Equity

Index
   $ 1,183,005    $ 4,560    $ 51,662    $ (9,974 ) $ 1,229,253
Active
   353,050    (7,929 ) 11,833    (3,685 ) 353,269
Fixed income
   $ 509,656    $ 3,454    $ 24,262    $ 2,218    $ 539,590
Equity and balanced
   329,622    11,907    46,944    2,170    390,643
Alternative investment products
   51,562    (845 ) 383    110    51,210
Index
   459,744    13,608    7,412    (10,175 ) 470,589
Active
   595,883    (14,350 ) 11,305    (4,244 ) 588,594
Multi-asset class
   142,029    10,559    4,346    (2,184 ) 154,750
Alternative
   102,101    2,465    (1,686 ) (994 ) 101,886

Long-dated
   890,840    14,516    71,589    4,498    981,443
Long-term
   2,835,812    8,913    84,872    (31,256 ) 2,898,341
Cash management
   316,702    (26,388 ) 173    (47 ) 290,440    349,277    (39,599 ) 77    (3,219 ) 306,536

Sub-total
   1,207,542    (11,872 ) 71,762    4,451    1,271,883    3,185,089    (30,686 ) 84,949    (34,475 ) 3,204,877
Advisory AUM³
   165,618    (4,600 ) (176 ) 2,044    162,886
Advisory⁴
   161,167    (2,864 ) (177 ) 895    159,021

Total
   $ 1,373,160    $ (16,472 ) $ 71,586    $ 6,495    $ 1,434,769    $ 3,346,256    $ (33,550 ) $ 84,772    $ (33,580 ) $ 3,363,898


¹
Data reflects the reclassification of prior period AUM into the current period presentation.
²
Includes distributions representing return of capital and return on investment to investors.
²³
Foreign exchange reflects the impact of converting ~~non-dollar~~non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
³
~~Advisory AUM represents long-term portfolio liquidation assignments.~~
AUM increased approximately $62 billion, or 4%, to $1.435 trillion at September 30, 2009, compared to $1.373 trillion at June 30, 2009. The growth in AUM was attributable to $72 billion in net market appreciation, $6 billion in foreign exchange translation, offset by $16 billion in net redemptions. Net market appreciation of $72 billion included $47 billion of appreciation in equity and balanced assets due to an increase in global equity markets and $24 billion in fixed income products due to current income and changes in interest rate spreads. The $6 billion net increase in AUM from foreign exchange was due to the weakening of the U.S. dollar primarily against the Euro and Japanese Yen, which resulted in an increase in AUM from converting non U.S. dollar denominated AUM into U.S. dollars.
~~Net Subscriptions/(Redemptions)~~
Net redemptions of $16 billion for the three months ended September 30, 2009 included net redemptions, including distributions, of $21 billion from institutional clients, offset by net subscriptions of $5 billion from retail and high net worth clients.
Net subscriptions of $12 billion in equity and balanced products were primarily the result of net subscriptions of $4 billion in passive index strategies, $3 billion in global allocation and balanced products, and $4 billion in equity products spread across U.S. equity, sector and regional/country funds. Net subscriptions of $3 billion in fixed income products were concentrated in U.S. core bond and local currency strategies, partially offset by net redemptions in targeted duration products due to rebalancing into equities. Net outflows included $26 billion in cash management products as a result of asset reallocation by both institutional and retail investors due to exceptionally low level yields. Cash management outflows from primarily institutional U.S. clients accounted for $30 billion of net outflows, which were partially offset by $4 billion of inflows from international investors. Advisory AUM outflows included $5 billion of net distributions from long-term liquidation portfolios.
~~- 59 -~~
~~The following table presents the component changes in BlackRock’s AUM for the nine months ended September 30, 2009.~~

(Dollar amounts in millions)    December 31,
2008    Net
subscriptions
(redemptions)¹ Acquisition²    Market
appreciation
(depreciation) Foreign
exchange³    September 30,
2009
Fixed income
   $ 483,173    $ 12,536    $ —      $ 39,125    $ 4,756    $ 539,590
Equity and balanced
   280,821    33,271    —      69,094    7,457    390,643
Alternative investment products
   59,723    (6,092 ) 1,344    (4,295 ) 530    51,210

Long-dated
   823,717    39,715    1,344    103,924    12,743    981,443
Cash management
   338,439    (49,534 ) —      258    1,277    290,440

Sub-total
   1,162,156    (9,819 ) 1,344    104,182    14,020    1,271,883
Advisory AUM⁴
   144,995    14,154    —      3    3,734    162,886

Total
   $ 1,307,151    $ 4,335    $ 1,344    $ 104,185    $ 17,754    $ 1,434,769

¹
~~Includes distributions representing return of capital and return on investment to investors.~~
²
~~Net assets acquired from R3 Capital Management, LLC in April 2009.~~
³
~~Foreign exchange reflects the impact of converting non U.S.-dollar denominated AUM into U.S. dollars for reporting purposes.~~
⁴
~~Advisory AUM represents long-term portfolio liquidation assignments.~~
AUM increased approximately $128 billion, or 10%, to $1.435 trillion at September 30, 2009, compared with $1.307 trillion at December 31, 2008. The increase in AUM was attributable to $104 billion in net market appreciation, $18 billion in AUM from foreign exchange translation, $4 billion in net subscriptions and $1 billion as a result of the acquisition of the R3 Capital Partners funds. Net market appreciation of $104 billion included $69 billion of appreciation in equity and balanced products and $39 billion in fixed income products due to significant improvements in second and third quarters in both the equity and fixed income markets, partially offset by $4 billion of net market depreciation in alternative investment products, primarily in real estate products. The $18 billion increase in AUM from foreign exchange was across all asset classes due to the weakening of the U.S. dollar primarily against the British pound, which resulted in an increase in AUM from converting non U.S. dollar denominated AUM into U.S. dollars.
~~Net Subscriptions/(Redemptions)~~
Net subscriptions of $4 billion for the nine months ended September 30, 2009 included $12 billion from retail and high net worth clients offset by net redemptions of $8 billion from institutional clients.
Net subscriptions were attributable to net new business of $33 billion in equity and balanced products, including $16 billion in passive index strategies, $7 billion in asset allocation strategies and $10 billion in equity products spread across U.S. equity, sector and regional/country funds, $13 billion in fixed income products including $8 billion in local currency strategies and net new business of $14 billion in long-term advisory liquidation assignments. Cash management products had $50 billion of net outflows primarily in government and prime funds as clients reallocated capital to long-dated assets, and $6 billion in alternative investment products.
~~- 60 -~~
~~The following table presents the component changes in BlackRock’s AUM for the twelve months ended September 30, 2009.~~

(Dollar amounts in millions)    September 30,
2008    Net
subscriptions
(redemptions)¹ Acquisition²    Market
appreciation
(depreciation) Foreign
exchange³ September 30,
2009
Fixed income
   $ 502,066    $ (3,646 ) $ —      $ 39,277    $ 1,893    $ 539,590
Equity and balanced
   351,428    30,990    —      12,057    (3,832 ) 390,643
Alternative investment products
   71,308    (8,992 ) 1,344    (12,303 ) (147 ) 51,210

Long-dated
   924,802    18,352    1,344    39,031    (2,086 ) 981,443
Cash management
   290,692    (930 ) —      546    132    290,440

Sub-total
   1,215,494    17,422    1,344    39,577    (1,954 ) 1,271,883
Advisory AUM⁴
   43,104    115,977    —      71    3,734    162,886

Total
   $ 1,258,598    $ 133,399    $ 1,344    $ 39,648    $ 1,780    $ 1,434,769

¹
~~Includes distributions representing return of capital and return on investment to investors.~~
²
~~Net assets acquired from R3 Capital Management, LLC in April 2009.~~
³
~~Foreign exchange reflects the impact of converting non U.S.-dollar denominated AUM into U.S. dollars for reporting purposes.~~
⁴
Advisory AUM represents long-term portfolio liquidation assignments.
AUM increased approximately ~~$176~~$18 billion, or ~~14%~~1%, to ~~$1.435~~$3.364 trillion at ~~September 30, 2009,~~March 31, 2010, compared ~~with $1.259~~to $3.346 trillion at ~~September 30, 2008.~~December 31, 2009. The ~~increase~~growth in AUM was primarily attributable to ~~$133 billion in net subscriptions, $40~~$85 billion in net market appreciation $2and $9 billion in net subscriptions in long-term mandates, partially offset by $34 billion in net foreign exchange ~~translation~~movements, $40 billion of net outflows in cash management products and $1$3 billion ~~as a result~~ of ~~the acquisition of the R3 Capital Partners funds.~~distributions in advisory assignments. Net market appreciation of ~~$40~~$85 billion included ~~$39~~$63 billion of net appreciation in equity products due to an increase in global equity markets, $19 billion in fixed income products ~~and $12 billion of appreciation in equity and balanced~~ due to ~~significant improvements~~current income and changes in ~~second~~interest rate spreads and ~~third quarters~~$4 billion in ~~both the equity and fixed income markets, partially offset by $12 billion of net market depreciation in alternative investment products, primarily in real estate~~multi-asset class products. The $2$34 billion net ~~increase~~decrease in AUM from foreign exchange movements was due to the strengthening of the U.S. dollar primarily against the Pound Sterling, which resulted in a decrease in AUM from converting non-U.S. dollar denominated AUM into U.S. dollars.
- 59 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Assets Under Management (continued)
Net Subscriptions/(Redemptions)
Net redemptions of $34 billion for the three months ended March 31, 2010 included distributions of $40 billion from institutional clients, partially offset by net subscriptions of $2 billion from retail and high net worth clients and $4 billion from iShares^® clients.
Net subscriptions in long-term mandates of $9 billion were primarily the result of $11 billion net subscriptions in multi-asset class products related to $8 billion in asset allocation products and $3 billion in target date/risk and other products, $14 billion in index fixed income products concentrated in U.S. target duration and U.S. sector-specialty strategies, $5 billion in index equity products and $2 billion in alternative products, which were offset by $14 billion net redemptions in active fixed income products primarily related to U.S. targeted duration and global fixed income products and $8 billion in net redemptions in active equity products concentrated in U.S. equity and regional/country quantitative funds. Net outflows included $40 billion in cash management products as a result of asset reallocation by both institutional and retail/high net worth investors due to exceptionally low level yields. Cash management net outflows included $34 billion and $6 billion from U.S. institutional and retail/high net worth clients, respectively. Advisory AUM outflows included $3 billion of net distributions from long-term liquidation portfolios.
The following table presents the component changes in BlackRock’s AUM¹ for the twelve months ended March 31, 2010.
March 31,    Net
subscriptions    Market
appreciation Foreign March 31,
(Dollar amounts in millions) 2009    (redemptions)² Acquisitions³    (depreciation) exchange⁴ 2010
Equity

Index
$ 50,065    $ 32,632    $ 1,055,456    $ 105,007    $ (13,907 ) $ 1,229,253
Active
141,447    1,548    132,205    76,986    1,083    353,269
Fixed income

Index
3,075    20,318    467,768    (3,744 ) (16,828 ) 470,589
Active
469,581    17,202    49,491    51,131    1,189    588,594
Multi-asset class
73,972    21,436    36,408    23,011    (77 ) 154,750
Alternative
53,592    542    49,395    (1,209 ) (434 ) 101,886

Long-term
791,732    93,678    1,790,723    251,182    (28,974 ) 2,898,341
Cash management
322,478    (73,070 ) 59,530    65    (2,467 ) 306,536

Sub-total
1,114,210    20,608    1,850,253    251,247    (31,441 ) 3,204,877
Advisory⁵
169,145    (15,742 ) —      103    5,515    159,021

Total
$ 1,283,355    $ 4,866    $ 1,850,253    $ 251,350    $ (25,926 ) $ 3,363,898

¹
Data reflects the reclassification of prior period AUM into the current period presentation.
²
Includes distributions representing return of capital and return on investment to investors.
³
Includes AUM acquired from Barclays in December 2009 and R3 Capital Management, LLC in April 2009 and acquisition adjustments to conform to current period combined AUM policy.
⁴
Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
⁵
Advisory AUM represents long-term portfolio liquidation assignments.
- 60 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Assets Under Management (continued)
AUM increased approximately $2.081 trillion, or 162%, to $3.364 trillion at March 31, 2010, compared to $1.283 trillion at March 31, 2009. The growth in AUM was primarily attributable to $1.849 trillion acquired in the BGI Transaction, $1 billion acquired from R3 Capital Management, LLC, $251 billion in net market appreciation, $94 billion of net subscriptions in long-term mandates, partially offset by $73 billion of net outflows in cash management products, $26 billion in foreign exchange movements and $16 billion in advisory ~~long-term portfolio liquidation assignments~~assignments. Net market appreciation of $251 billion included $182 billion of net appreciation in equity products due to an increase in global equity markets, $47 billion in fixed income products due to current income and ~~fixed income~~changes in interest rate spreads and $23 billion in multi-asset class products. The $26 billion net decrease in AUM from foreign exchange movements was across long-term products, partially offset by a foreign exchange ~~decrease~~increase in ~~equity and balanced products.~~advisory long-term portfolio liquidation assignments.
Net Subscriptions/(Redemptions)
Net subscriptions of ~~$133~~$5 billion for the twelve months ended ~~September 30, 2009~~March 31, 2010 included ~~$129~~$16 billion from ~~institutional clients~~investors in iShares and $4$14 billion from retail and high net worth clients, partially offset by $25 billion of net redemptions from institutional clients.
Net subscriptions ~~of $133 billion for the twelve months ended September 30, 2009~~ were attributable to net new business of ~~$116~~$33 billion in ~~long-term advisory liquidation assignments, $31~~index equity products spread across U.S. equity and regional/country strategies, $2 billion in active equity products, $20 billion in index fixed income products including U.S. sector, targeted duration and ~~balanced~~local currency strategies, $21 billion in multi-asset class products primarily related to ~~index, sector, and regional/country~~asset allocation strategies, ~~partially offset by net outflows of $4~~$17 billion in active fixed income products including ~~$16 billion of outflows in global and targeted duration strategies, offset by $12~~$20 billion of inflows in local currency, ~~and municipal~~$11 billion in U.S. sector products, $6 billion in U.S. core strategies and $9$4 billion in U.S. municipals partially offset by net redemptions of $16 billion in active targeted duration and $8 billion in global strategies. Cash management products had $73 billion of net outflows primarily in prime, government and tax exempt cash funds, as clients reallocated capital to long-term assets or bank deposit programs, which follows industry trends as investors search for higher yields in alternative ~~investment products.~~products as interest rates remained at historic lows. Advisory AUM outflows included $16 billion of net distributions from long-term liquidation portfolios.

- 61 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Operating results for the three months ended ~~September 30, 2009,~~March 31, 2010, as compared with the three months ended ~~September 30, 2008.~~March 31, 2009.
The three months ended March 31, 2010 reflects the results of the BGI Transaction, which closed on December 1, 2009. Given the magnitude of the acquired business, certain line items variances are driven primarily by the inclusion of BGI results.
Revenue

   Three Months Ended
   Three Months Ended
September 30,    Variance    March 31,    Variance
(Dollar amounts in millions)
   2009    2008    Amount % Change    2010    2009    Amount % Change
Investment advisory and administration fees:

Investment advisory, administration fees and securities lending revenue:

Equity

Index
   $ 489    $ 5    $ 484    NM
Active
   461    232    229    99 %
Fixed income
   $ 224    $ 230    $ (6 ) (3 )%
Index
   96    1    95    NM
Active
   254    196    58    30 %
Multi-asset class
   166    98    68    69 %
Alternative
   155    93    62    67 %
Cash management
   149    176    (27 ) (15 )%    132    175    (43 ) (25 )%
Equity and balanced
   454    540    (86 ) (16 )%
Alternative investment products
   86    138    (52 ) (38 )%

Investment advisory and administration base fees
   913    1,084    (171 ) (16 )%
Total
   1,753    800    953    119 %
Investment advisory performance fees

Equity
   5    5    —      —   %
Fixed income
   2    —      2    NM       13    3    10    333 %
Equity and balanced
   17    9    8    89 %
Alternative investment products
   30    46    (16 ) (35 )%
Multi-asset class
   1    1    —      —   %
Alternative
   31    2    29    NM

Investment advisory performance fees
   49    55    (6 ) (11 )%

Total investment advisory and administration base and performance fees
   962    1,139    (177 ) (16 )%
Total
   50    11    39    355 %
BlackRock Solutions and advisory
   127    113    14    12 %    113    135    (22 ) (16 )%
Distribution fees
   25    34    (9 ) (26 )%    28    25    3    12 %
Other revenue
   26    27    (1 ) (4 )%    51    16    35    219 %

Total revenue
   $ 1,140    $ 1,313    $ (173 ) (13 )%    $ 1,995    $ 987    $ 1,008    102 %


NM—Not Meaningful
Total revenue for the three months ended ~~September 30, 2009 decreased $173~~March 31, 2010 increased $1,008 million, or ~~13%~~102%, to ~~$1,140~~$1,995 million, compared with ~~$1,313~~$987 million for the three months ended ~~September 30, 2008.~~March 31, 2009. Total revenue for the three months ended March 31, 2010 reflects the full quarter effect of the BGI acquisition. The ~~$173~~$1,008 million ~~decrease~~increase was the result of a ~~$177~~$953 million ~~decrease~~increase in total investment advisory, administration fees and ~~administration base and~~securities lending revenue, a $39 million increase in performance fees, a ~~$10~~$35 million ~~decrease~~increase in other revenue and a $3 million increase in distribution fees, ~~and other revenue,~~partially offset by a ~~$14~~$22 million ~~increase~~decrease inBlackRock Solutions and advisory revenue.
- 62 -
PART I—FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Operating results for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009.
Revenue (continued)

Investment Advisory, Administration Fees and ~~Administration Base and Performance Fees~~Securities Lending Revenue

The ~~decrease~~increase in investment advisory, ~~and~~ administration fees and securities lending revenues of ~~$177 million, or 16%, was the result of a decrease in investment advisory and administration base fees of $171 million, or 16%, to $913~~$953 million for the three months ended ~~September 30, 2009,~~March 31, 2010, compared with ~~$1,084~~the three months ended March 31, 2009 consisted of increases of $484 million in index equity products, $229 million in active equity products, $95 million in index fixed income products, $58 million in active fixed income products, $68 million in multi-asset class products and $62 million in alternative investment products, partially offset by a $43 million decrease in cash management products. The $953 million net increase primarily related to products acquired in the BGI acquisition as well as growth in long-term AUM due to market growth and net new business, partially offset by net redemptions in cash management products.

Performance Fees

Investment advisory performance fees increased $39 million, or 355%, to $50 million for the three months ended ~~September 30, 2008 and a decrease of $6 million in performance fees.~~

~~The decrease in investment advisory and administration base fees of $171~~March 31, 2010, as compared to $11 million for the three months ended ~~September 30,~~March 31, 2009, compared with the three months ended September 30, 2008 consisted of decreases in base fees of $86 million in equity and balanced products, $52 million in alternative investment products, $27 million in cash management products and $6 million in fixed income products primarily ~~associated with a market driven reduction in average AUM of equity and balanced and alternative investment products and a reduction of average AUM of cash management products~~ due to ~~net outflows.~~

~~- 62 -~~

Investment advisory performance fees decreased $6 million, or 11%, to $49 million for the three months ended September 30, 2009, as compared to $55 million for the three months ended September 30, 2008. The decrease relates primarily to a reductionan increase in performance fees in ~~alternative~~ equity hedge funds ~~partially offset by an increase in international equity~~ and ~~balanced separate accounts.~~fixed income products.

BlackRock Solutions and Advisory

BlackRock Solutions and advisory revenue for the three months ended ~~September 30, 2009 increased $14~~March 31, 2010 decreased $22 million, or ~~12%~~16%, compared with the three months ended ~~September 30, 2008.~~March 31, 2009. The ~~increase~~decrease inBlackRock Solutions and advisory revenue was primarily due to ~~additional~~fewer advisory assignments, including portfolio liquidation assignments, which have AUM based fees, ~~and~~partially offset by additional Aladdin ~~and risk management~~^® mandates. Revenue earned on advisory assignments was comprised of advisory and portfolio structuring assignment fees and ongoing fees based on AUM of the respective portfolio assignments.

~~Distribution Fees~~Other Revenue

~~Distribution fees decreased $9 million to $25~~


	Three Months Ended
	March 31,				Variance
(Dollar amounts in millions)	2010		2009		Amount		% Change
Other revenue:
Transition management service fees	$	18	$	6	$	12	200	%
Commissions revenue		9		5		4	80	%
Equity method investment earnings⁽¹⁾		6		1		5	500	%
iPath^® marketing fees⁽²⁾		6		—		6	NM
Other miscellaneous revenue		12		4		8	200	%

Total other revenue	$	51	$	16	$	35	219	%

NM – Not Meaningful

⁽¹⁾	Related to operating and advisory company investments.

⁽²⁾	Related to exchange traded notes issued by Barclays.

Other revenue of $51 million for the three months ended ~~September 30, 2009, as compared to $34~~March 31, 2010 increased $35 million, ~~for the three months ended September 30, 2008. The decrease in distribution fees was primarily the result of lower sales, redemptions and AUM in certain share classes of open-end mutual funds.~~

~~Other Revenue~~

~~Other revenue of $26 million for the three months ended September 30, 2009 decreased $1 million~~or 219%, compared with the three months ended September 30, 2008. Other revenue for the three months ended September 30, 2009 included $11 million in BlackRock’s share of underlying earnings from certain operating/advisory company investments, $4 million of unit trust sales commissions, $2 million of net interest related to securities lending, and $9 million of other revenue.

March 31, 2009. The ~~decrease~~increase in other revenue ~~of $1 million, or 4%, for the three months ended September 30, 2009, as compared to the three months ended September 30, 2008,~~ was primarily the result of a $9$12 million ~~decline~~increase in ~~real estate property~~fees earned for transition management services, a $6 million increase in marketing fees ~~related to~~for the ~~outsourcing in the fourth quarter of 2008 of Metric contracts with BlackRock real estate clients,~~Barclays iPath products (exchange traded notes issued by Barclays), a ~~$4 million decrease in net interest earned related to securities lending, offset by a $12~~$5 million increase in BlackRock’s share of underlying earnings from certain ~~operating/~~operating and advisory company ~~investments.~~investments and a $4 million increase in sales commissions as a result of the BGI acquisition.

- 63 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Operating results for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009. (continued)

Expenses


											Three Months ended
	Three Months Ended September 30,					Variance					March 31,					Variance
(Dollar amounts in millions)	2009		2008			Amount			% Change		2010		2009			Amount			%
Expenses:
Employee compensation and benefits	$	444	$	468		$	(24	)	(5	)%	$	773	$	351		$	422		120	%
Portfolio administration and servicing costs		119		149			(30	)	(20	)%
Distribution and servicing costs												100		127			(27	)	(21	)%
Amortization of deferred mutual fund sales commissions		23		34			(11	)	(32	)%		26		27			(1	)	(4	)%
Direct fund expenses												113		13			100		NM
General and administration		161		171			(10	)	(6	)%		289		140			149		106	%
Restructuring charges												—		22			(22	)	(100	)%
Amortization of intangible assets		36		37			(1	)	(3	)%		40		36			4		11	%

Total expenses, GAAP	$	783	$	859		$	(76	)	(9	)%	$	1,341	$	716		$	625		87	%


Total expenses, GAAP	$	783	$	859		$	(76	)	(9	)%	$	1,341	$	716		$	625		87	%
Less: Non-GAAP adjustments:
BGI integration costs
Employee compensation and benefits												18		—			18		NM
General and administration												34		—			34		NM

Total BGI transaction/integration costs												52		—			52		NM
PNC LTIP funding obligation		15		14			1		7	%		15		15			—		—	%
Merrill Lynch compensation contribution		3		3			—		0	%		3		3			—		—	%
BGI transaction/integration costs		16		—			16		NM
Compensation expense related to (depreciation) appreciation on deferred compensation plans		9		(39	)		48		123	%
Restructuring charges												—		22			(22	)	(100	)%
Compensation expense related to appreciation (depreciation) on deferred compensation plans												3		(4	)		7		NM

Total non-GAAP adjustments		43		(22	)		65		295	%		73		36			37		103	%

Total expenses, as adjusted	$	740	$	881		$	(141	)	(16	)%	$	1,268	$	680		$	588		86	%


Employee compensation and benefits, as adjusted⁽¹⁾											$	734	$	337		$	397		118	%

NM—Not Meaningful

⁽¹⁾	Adjusted for BGI integration costs, PNC LTIP funding obligation, Merrill Lynch compensation cash contribution and compensation expense related to appreciation (depreciation) on certain deferred compensation plans.

Total GAAP expenses ~~decreased $76~~increased $625 million, or 9%87%, to ~~$783~~$1,341 million for the three months ended ~~September 30, 2009,~~March 31, 2010, compared ~~with $859~~to $716 million for the three months ended ~~September 30, 2008.~~March 31, 2009. Excluding certain items deemed non-recurring by management or transactions that ultimately will not ~~impact~~affect the Company’s book value, total expenses, ~~decreased $141~~as adjusted, increased $588 million, or ~~16%~~86%. The ~~decrease~~increase in total expenses, as adjusted, is primarily attributable to ~~decreases~~increases in employee compensation and benefits, ~~portfolio administration and servicing costs, amortization of deferred mutual~~direct fund ~~sales commissions and~~expenses, general and administration ~~expenses.~~expenses, partially offset by a reduction of distribution and servicing costs.

- 64 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Operating results for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009 (continued)

Expenses (continued)

Employee Compensation and Benefits

Employee compensation and benefits expense ~~decreased $24~~increased $422 million, or 5%120%, to ~~$444~~$773 million, for the three months ended ~~September 30, 2009,~~March 31, 2010, compared to ~~$468~~$351 million for the three months ended ~~September 30, 2008.~~ March 31, 2009.

The ~~decrease~~increase in employee compensation and benefits expense, after excluding $18 million of BGI integration costs, was ~~primarily~~ attributable to a ~~$52~~$166 million ~~decrease~~increase in salaries, benefits and ~~benefits primarily due to lower employment levels as~~commissions, a ~~result of BlackRock’s cost control efforts and a $22~~$198 million ~~decline~~increase in incentive compensation associated with the ~~decrease~~increase in operating income, ~~offset partially by~~ a ~~$50~~$31 million increase in stock-based compensation expense related to additional grants to a larger population at the end of January 2010 and a $9 million increase in deferred compensation, ~~expense. The increase in deferred compensation expense~~which is primarily offset by ~~a $48 million~~an increase in non-operating income related to appreciation on assets associated with certain deferred compensation plans. ~~Employees~~The $166 million increase in salaries, benefits and commissions reflects an increase in the number of employees primarily resulting from the BGI Transaction. Full time employees at ~~September 30, 2009~~March 31, 2010 totaled ~~5,044~~approximately 8,400 as compared to ~~6,262 (including 387 Metric employees) and 5,875 (excluding Metric employees)~~5,200 at ~~September 30, 2008.~~March 31, 2009.

~~- 64 -~~

~~Portfolio Administration~~Distribution and Servicing Costs

~~Portfolio administration~~Distribution and servicing costs decreased ~~$30~~$27 million to ~~$119 million during the three months ended September 30, 2009, compared to $149~~$100 million for the three months ended ~~September 30, 2008.~~March 31, 2010, compared to $127 million for the three months ended March 31, 2009. These costs include payments to Bank of ~~America/~~America Corporation (“Bank of America”)/Merrill Lynch under a global distribution agreement and payments to PNC as well as other third parties, primarily associated with the ~~administration~~distribution and servicing of client investments in certain BlackRock products. The ~~$30~~$27 million decrease primarily related to lower levels of average ~~AUM in~~ cash management ~~and open-end funds~~AUM serviced by Merrill Lynch and an increase in ~~fee~~ waivers within certain cash management funds, resulting in lower distribution payments.

~~Portfolio administration~~Distribution and servicing costs for the three months ended ~~September 30, 2009~~March 31, 2010 included ~~$88~~$59 million of costs attributable to Bank of America/Merrill Lynch and affiliates and $4$5 million of costs attributable to PNC and affiliates as compared to ~~$119~~$98 million and $7$5 million, respectively, ~~for~~in the three months ended ~~September 30, 2008. Portfolio administration~~March 31, 2009. Distribution and servicing costs related to other third parties increased $4$12 million to ~~$27~~$36 million for the three months ended ~~September 30, 2009,~~March 31, 2010, as compared to ~~$23~~$24 million for the three months ended ~~September 30, 2008~~March 31, 2009 due to an expansion of distribution platforms.

~~Amortization of Deferred Mutual~~Direct Fund ~~Sales Commissions~~Expenses

~~Amortization~~Direct fund expenses increased $100 million primarily related to the addition of ~~deferred mutual~~BGI funds subject to these arrangements, under which BlackRock pays certain fund ~~sales commissions decreased to $23 million~~expenses.

- 65 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Operating results for the three months ended ~~September 30, 2009,~~March 31, 2010, as compared ~~to $34 million for~~with the three months ended ~~September 30, 2008. The decrease in amortization of deferred mutual fund sales commissions was primarily the result of continued lower sales in certain share classes of open-end mutual funds.~~March 31, 2009 (continued)

Expenses (continued)

General and Administration Expenses


										Three months ended
	Three Months Ended September 30,				Variance					March 31,				Variance
(Dollar amounts in millions)	2009		2008		Amount			% Change		2010		2009		Amount			% Change
General and administration expenses:
Marketing and promotional	$	20	$	41	$	(21	)	(51	)%	$	70	$	14	$	56		400	%
Occupancy											68		35		33		94	%
Portfolio services											41		23		18		78	%
Technology		27		32		(5	)	(16	)%		39		25		14		56	%
Portfolio services		35		38		(3	)	(8	)%
Occupancy		36		34		2		6	%
Professional services		28		18		10		56	%		32		12		20		167	%
Closed-end fund launch costs											—		2		(2	)	(100	)%
Other general and administration		15		8		7		88	%		39		29		10		34	%

Total general and administration expenses	$	161	$	171	$	(10	)	(6	)%	$	289	$	140	$	149		106	%


Total general and administration expenses, as adjusted⁽¹⁾										$	255	$	140	$	115		82	%

~~- 65 -~~

⁽¹⁾	Adjusted for $34 million of BGI integration costs in the three months ended March 31, 2010.

General and administration expenses ~~decreased $10~~increased $149 million, or 6%106%, ~~to $161 million~~ for the three months ended ~~September 30, 2009~~March 31, 2010 compared ~~to $171 million for~~with the three months ended ~~September 30, 2008.~~ March 31, 2009.

The three months ended ~~September 30, 2009,~~March 31, 2010 included $3$16 million, $1$9 million, $4 million, $2 million and ~~$12~~$3 million of marketing, ~~and promotional,~~professional services, occupancy, technology, and ~~professional services~~other general and administration expenses, respectively, related to the ~~BGI Transaction.~~integration of BGI. Excluding these expenses, general and administration expenses ~~decreased $26~~increased $115 million, or ~~15%~~82%, for the three months ended ~~September 30, 2009~~March 31, 2010 compared to the three months ended ~~September 30, 2008.~~March 31, 2009.

Marketing and promotional expenses ~~decreased $21~~increased $56 million, or ~~51%~~400%, primarily due to ~~a decline~~increase in travel, promotional and ~~promotional~~rebranding and advertising expenses. Occupancy increased $33 million primarily related to the BGI Transaction. Portfolio service costs ~~decreased $3~~increased $18 million, or 8%78%, to ~~$35~~$41 million, due to ~~a reduction of AUM on certain products, which BlackRock incurs fund related~~an increase in market data and research expenses. ~~Technology expenses decreased $5~~Professional services increased $20 million, or ~~16%~~167%, to ~~$27~~$32 million compared to ~~$32~~$12 million for the three months ended ~~September 30, 2008~~March 31, 2009 primarily ~~due~~related to ~~a decrease~~consulting and legal costs incurred in ~~software licensing~~connection with the BGI Transaction. Other general and ~~maintenance and outsourced services expenses. Professional services~~administration expenses increased $10 million, or ~~56%~~34%, to ~~$28~~$39 million compared to ~~$18~~$29 million for the three months ended ~~September 30, 2008~~March 31, 2009, primarily related to ~~$12~~increases in communication and other non-income taxes, partially offset by a $10 million of BGI transaction/integration costs incurred in third quarter 2009. Other general and administration expenses increased $7 million, or 88%, to $15 million from $8 million, primarily the result of a $27 million decreaseincrease in foreign currency remeasurement benefits ~~partially offset by the~~and an $11 million decrease as a result of ~~cost control efforts~~an expense recorded in first quarter 2009 for a potentially uncollectible fee.

- 66 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Operating results for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009 (continued)

Expenses (continued)

Restructuring Charges

For the three months ended March 31, 2009, BlackRock recorded pre-tax restructuring charges of $22 million, primarily related to severance, outplacement costs, occupancy costs and ~~$3 million~~accelerated amortization of ~~costs incurred in 2008~~certain previously granted stock awards associated with a reduction in work force and reengineering efforts.

Amortization of Intangible Assets

Amortization of intangible assets increased $4 million to $40 million for the ~~support~~three months ended March 31, 2010, as compared to $36 million for the three months ended March 31, 2009. The increase in amortization of ~~two enhanced cash funds.~~intangible assets reflects amortization of finite-lived management contracts acquired in the BGI Transaction.

- 67 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Non-operating results for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009

Non-Operating Income (Expense), Less Net Income (Loss) Attributable to Non-Controlling Interests

Non-operating income (expense), less net income (loss) attributable to non-controlling interests for the three months ended ~~September 30,~~March 31, 2010 and 2009 ~~and 2008~~ was as follows:


												Three months ended
	Three Months Ended September 30,						Variance					March 31,						Variance
(Dollar amounts in millions)	2009			2008			Amount			% Change		2010			2009			Amount			%
Non-operating income (expense), GAAP basis	$	78		$	(141	)	$	219		155	%	$	2		$	(179	)	$	181		NM
Net income (loss) attributable to non-controlling interests, GAAP basis		17			(21	)		38		181	%
Less: Net income (loss) attributable to NCI, GAAP basis													5			(22	)		(27	)	NM

Non-operating income (expense)¹		61			(120	)		181		151	%
Non-operating (expense)¹													(3	)		(157	)		154		98	%
Compensation expense related to (appreciation) depreciation on deferred compensation plans		(9	)		39			(48	)	(123	)%		(3	)		4			(7	)	NM

Non-operating income (expense), as adjusted¹	$	52		$	(81	)	$	133		164	%
Non-operating (expense), as adjusted¹												$	(6	)	$	(153	)	$	147		96	%

NM—Not Meaningful

¹	Includes net income (loss) attributable to non-controlling interests (redeemable and nonredeemable) related to investment activities.

The components of non-operating income (expense), less net income (loss) attributable to non-controlling interests, for the three months ended March 31, 2010 and 2009 were as follows:


	Three months ended
	March 31,						Variance
(Dollar amounts in millions)	2010			2009			Amount			%
Net gain (loss) on investments¹
Private equity	$	8		$	(20	)	$	28		NM
Real estate		(1	)		(93	)		92		99	%
Distressed credit/mortgage funds		20			(12	)		32		NM
Hedge funds/funds of hedge funds		6			(6	)		12		NM
Other investments²		(3	)		(15	)		12		80	%

Sub-total		30			(146	)		176		NM
Investments related to deferred compensation plans		3			(4	)		7		NM

Total net gain (loss) on investments¹		33			(150	)		183		NM

Interest and dividend income		4			8			(4	)	(50	)%
Interest expense		(40	)		(15	)		(25	)	167	%

Net interest expense		(36	)		(7	)		(29	)	414	%

Total non-operating income (expense)¹		(3	)		(157	)		154		98	%
Compensation expense related to depreciation (appreciation) on deferred compensation plans		(3	)		4			(7	)	NM

Non-operating income (expense), as adjusted¹	$	(6	)	$	(153	)	$	147		96	%

NM—Not Meaningful

¹	Includes net income (loss) attributable to non-controlling interests (redeemable and nonredeemable) related to investment ~~and non-investment activities.~~

~~- 66 -~~

~~The components of non-operating income (expense), less net income (loss) attributable to non-controlling interests, for the three months ended September 30, 2009 and 2008 were as follows:~~

   Three Months Ended
September 30, Variance
(Dollar amounts in millions)    2009 2008 Amount % Change
Net gain (loss) on investments¹

Private equity
   $ 13    $ (4 ) $ 17    425 %
Real estate
   (6 ) (14 ) 8    57 %
Distressed credit/mortgage funds
   47    (48 ) 95    198 %
Hedge funds/funds of hedge funds
   7    (18 ) 25    139 %
Other investments²
   2    1    1    100 %

Sub-total
   63    (83 ) 146    176 %
Investments related to deferred compensation plans
   9    (39 ) 48    123 %

Total net gain (loss) on investments¹
   72    (122 ) 194    159 %
Interest and dividend income
   4    20    (16 ) (80 )%
Interest expense
   (15 ) (18 ) 3    (17 )%

Total non-operating income (expense)¹
   61    (120 ) 181    151 %
Compensation expense related to (appreciation) on deferred compensation plans
   (9 ) 39    (48 ) (123 )%

Non-operating income (expense), as adjusted¹
   $ 52    $ (81 ) $ 133    164 %

¹	~~Includes net income (loss) attributable to non-controlling interests (redeemable and nonredeemable) related to investment and non-investment~~ activities.

²	Includes net ~~gains/~~gains / (losses) related to equity and fixed income investments and BlackRock’s seed capital hedging program.

- 68 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Non-operating results for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009 (continued)

Non-Operating Income (Expense), Less Net Income (Loss) Attributable to Non-Controlling Interests (continued)

Non-operating expense, less net income ~~net of~~(loss) attributable to non-controlling interests, ~~increased $181~~decreased $154 million to ~~$61~~$3 million for the three months ended ~~September 30, 2009,~~March 31, 2010, as compared to ~~$120~~$157 million offor the three months ended March 31, 2009. The $3 million non-operating expense, net of non-controlling interests, was comprised of $33 million of net gains on investments which was more than offset by $36 million of net interest ~~for the three months ended September 30, 2008.~~ expense.

The ~~$61~~$33 million ~~non-operating income,~~ net ofgain on investments, less non-controlling interests, related to the Company’s ~~co-investments~~co-investment and seed investments, included net gains in private equity products of $8 million, distressed credit/mortgage funds of ~~$47 million, private equity products of $13~~$20 million, hedge funds/funds of hedge funds of $7$6 million, ~~fixed income~~ and ~~equity investments of $2 million, and investments related to~~ deferred compensation plans of $9$3 million, partially offset by a $6$3 million and a $1 million decrease in valuations from other investments and real estate equity/debt ~~products. In addition, net~~products, respectively.

Net interest expense was ~~$11~~$36 million, an increase of ~~$13~~$29 million primarily due to ~~a decline~~an increase in interest ~~rates earned on cash equivalents and paid on~~expense related to the ~~Company’s revolving credit facility.~~December 2009 issuances of $2.5 billion of long-term notes.

~~- 67 -~~

Net Economic Investment Portfolio

The Company reviews its net economic exposure to its investment portfolio by reducing its GAAP investments by the net assets attributable to non-controlling interests of consolidated sponsored investment funds. Changes in the investment portfolio are due to purchases, sales, maturities, distributions as well as the impact of valuations. The following table represents the carrying value, by asset type, at ~~September 30, 2009~~March 31, 2010 and ~~2008:~~2009:


	September 30, 2009			September 30, 2008			Variance
(Dollar amounts in millions)										March 31,			March 31,			Variance
	September 30, 2009		September 30, 2009				September 30, 2008			Amount				% Change			2010		2009			Amount			% Change
Private equity			September 30, 2009		$	(24	September 30, 2008		)		(9	)%		$	239		$	212	$	27			13	%
Real estate		45			235			(190	)		(81	)%			47			64		(17	)		(27	)%
Distressed credit/mortgage funds		216			226			(10	)		(4	)%			200			160		40			25	%
Hedge funds/funds of hedge funds		112			192			(80	)		(42	)%			125			112		13			12	%
Other investments		145			267			(122	)		(46	)%			236			137		99			72	%

Total net “economic” investment exposure		747			1,173			(426	)		(36	)%			847			685		162			24	%
Deferred compensation investments		67			97			(30	)		(31	)%			71			54		17			31	%
Hedged investments		34			63			(29	)		(46	)%			24			44		(20	)		(45	)%

Total net “economic” investments	$	848		$	1,333		$	(485	)		(36	)%		$	942		$	783	$	159			20	%

Income Tax Expense

Income tax expense was ~~$101~~$228 million and ~~$117~~$30 million for the three months ended ~~September 30,~~March 31, 2010 and 2009, ~~and 2008,~~ respectively. The effective income tax rate for the three months ended ~~September 30, 2009~~March 31, 2010 was ~~24.2%~~35.0%, as compared to ~~35.0%~~26.3% for the three months ended ~~September 30, 2008.~~March 31, 2009. Excluding ~~approximately $45~~a $10 million oftax benefit related to a decrease in unrecognized tax benefits related to ~~legislation effective January 1,~~the final resolution of an outstanding tax matter in the three months ended March 31, 2009, ~~with respect to New York City corporate income taxes which was enacted during third quarter 2009, which resulted in a revaluation of certain deferred income tax assets and liabilities,~~ the effective income tax rate for this period was ~~35.0%~~approximately 35%.

- 69 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Operating results for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009 (continued)

Operating Income and Operating Margin

GAAP

Operating income totaled ~~$357~~$654 million for the three months ended ~~September 30, 2009,~~March 31, 2010, which was ~~a decrease~~an increase of ~~$97~~$383 million compared to the three months ended ~~September 30, 2008.~~March 31, 2009. Operating income for the three months ended March 31, 2010 included the full quarter effect of revenue and expenses related to the acquisition of BGI and $52 million of BGI integration costs. The ~~reduction~~integration expenses are not part of the on-going business and are principally comprised of compensation expense, legal fees, marketing and consulting expenses.

The increase in operating income for the three months ended ~~September 30, 2009~~March 31, 2010 included the ~~impact~~effect of a ~~$171~~$953 million ~~decrease~~increase in investment advisory, administration fees and ~~administration base fees,~~securities lending revenue associated with the acquired BGI AUM and growth in long-term AUM related to net market appreciation and net subscriptions, a ~~market-driven~~$39 million increase in performance fees revenue and a $38 million increase in distribution fees and other revenue, partially offset by a $22 million reduction in ~~average AUM of equity~~BlackRock Solutions and ~~balanced, and alternative investment products classes and a $6 million decrease in performance fee~~advisory revenue. The ~~decrease~~increase in total revenue is partially offset by a ~~$76~~$625 million ~~decrease~~net increase in operating expenses due to ~~declines~~increases in employee compensation and benefits, ~~portfolio administration and servicing costs,~~direct fund expenses, general and administration expenses and amortization of ~~deferred mutual fund sales commissions.~~intangible assets, partially offset by decreases in distribution and servicing costs and restructuring expenses.

The Company’s operating margin was ~~31.3%~~32.8% for the three months ended ~~September 30, 2009,~~March 31, 2010, compared to ~~34.6%~~27.5% for the three months ended ~~September 30, 2008.~~March 31, 2009. The ~~decrease~~increase in operating margin ~~includes~~for three months ended March 31, 2010 as compared to the ~~impact~~three months ended March 31, 2009 included the effect of the BGI Transaction, an $11 million decrease in expenses as a ~~$27 million decline~~result of an expense recorded in first quarter 2009 for a potentially uncollectible fee and an increase in foreign currency remeasurement ~~benefits.~~benefits from $2 million in the three months ended March 31, 2009 to $12 million in the three months ended March 31, 2010, partially offset by $52 million of BGI integration costs, an increase in stock-based compensation expense related to RSU grants in January 2010 as well as the commencement of additional strategic investments to grow the franchise.

~~- 68 -~~

As Adjusted

Operating income, as adjusted, totaled ~~$400~~$727 million for the three months ended ~~September 30, 2009,~~March 31, 2010, which was ~~a decrease~~an increase of ~~$32~~$420 million compared to the three months ended ~~September 30, 2008.~~March 31, 2009. The ~~decline of~~increase in operating income, as adjusted, for the three months ended ~~September 30, 2009~~March 31, 2010 as compared to the three months ended ~~September 30, 2008~~March 31, 2009 is related to the ~~impact~~effect of the ~~$173~~$1,008 million ~~decrease~~increase in total revenue, partially offset by a ~~$141~~$588 million ~~decrease~~increase in operating expenses ~~as adjusted, primarily~~ due to ~~declines~~increases in employee compensation and benefits, ~~portfolio administration and servicing costs and~~ general and administration ~~expenses.~~expenses, direct fund expenses and amortization of intangible assets, partially offset by a decrease in distribution and servicing costs.

Operating margin, as adjusted, was ~~40.1%~~38.9% and ~~38.4%~~37.2% for the three months ended ~~September 30,~~March 31, 2010 and 2009, respectively. The increase in operating margin reflects the initial synergies from the acquisition of BGI, an $11 million decrease in expenses as a result of an expense recorded in first quarter 2009 for a potentially uncollectible fee and ~~2008, respectively. Operating margin, as adjusted was impacted by $3 million and $30 million of~~an increase in foreign currency remeasurement benefits from $2 million in ~~third quarter~~the three months ended March 31, 2009 to $12 million in the three months ended March 31, 2010, partially offset by an increase in stock-based compensation related to RSU grants in January 2010 and ~~third quarter 2008, respectively.~~the commencement of additional strategic investments to grow the franchise.

Operating income, as adjusted, and operating margin, as adjusted, are described in more detail in the Overview to Management’s Discussion and Analysis of Financial Condition and Results of Operations.

- 6970 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Operating results for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009 (continued)

Net Income Attributable to BlackRock, Inc.

The components of net income attributable to BlackRock, Inc. and net income attributable to BlackRock, Inc., as adjusted, for the three months ended ~~September 30,~~March 31, 2010 and 2009 ~~and 2008~~ are as follows:


	Three Months Ended September 30,								Three Months Ended September 30,								Three months ended March 31,								Three months ended March 31,
	2009			2008					2009			2008					2010			2009					2010			2009
(Dollar amounts in millions, except per share data)	GAAP			GAAP			% Change		As adjusted			As adjusted			% Change		GAAP			GAAP			% Change		As adjusted			As adjusted			% Change
Operating income	$	357		$	454		(21	)%	$	400		$	432		(7	)%	$	654		$	271		141	%	$	727		$	307		137	%
Non-operating income (expense), less net income (loss) attributable to non-controlling interests		61			(120	)	151	%		52			(81	)	164	%
Non-operating (expense)¹																		(3	)		(157	)	98	%		(6	)		(153	)	96	%
Income tax expense		(101	)		(117	)	(14	)%		(159	)		(122	)	30	%		(228	)		(30	)	NM			(252	)		(44	)	473	%

Net income attributable to BlackRock, Inc.	$	317		$	217		46	%	$	293		$	229		28	%	$	423		$	84		404	%	$	469		$	110		326	%

Net income allocated to:
Allocation of net income attributable to BlackRock, Inc.:
Common shares	$	308		$	210		47	%	$	285		$	221		29	%	$	417		$	82		409	%	$	462		$	107		332	%
Participating RSUs		9			7		29	%		8			8		0	%		6			2		200	%		7			3		133	%

Net income attributable to BlackRock, Inc.	$	317		$	217		46	%	$	293		$	229		28	%	$	423		$	84		404	%	$	469		$	110		326	%


Total weighted-average common shares outstanding¹		135,902,241			132,270,351		3	%		135,902,241			132,270,351		3	%
Diluted earnings attributable to BlackRock, Inc. shareholders per common share	$	2.27		$	1.59		43	%	$	2.10		$	1.67		26	%
Diluted weighted-average common shares outstanding²																		192,152,251			131,797,189		46	%		192,152,251			131,797,189		46	%
Diluted earnings per common share																	$	2.17		$	0.62		250	%	$	2.40		$	0.81		196	%

¹	Includes net income (loss) attributable to non-controlling interests (redeemable and nonredeemable) related to investment activities.

Series A, B, C, and CD non-voting participating preferred stock are considered to be common stock equivalents for purposes of determining basic and diluted earnings per share calculations. Certain unvested restricted stock units are not included in this number as they are deemed participating securities in accordance with ~~required provisions of~~ ASC 260-10~~Earnings per Share.~~.

~~- 70 -~~

Net income attributable to BlackRock, Inc. for the three months ended September 30, 2009 included operating income of $357 million, or $1.66 per diluted common share, non-operating income, less net income attributable to non-controlling interests, of $61 million, or $0.28 per diluted common share and a $45 million, or $0.33 per diluted common share, tax benefit related to the local income tax law changes. Net income attributable to BlackRock, Inc. totaled $317 million, or $2.27 per diluted common share, for the three months ended September 30, 2009, which was an increase of $100 million, or $0.68 per diluted common share, compared to the three months ended September 30, 2008.GAAP

Net income attributable to BlackRock, Inc. for the three months ended ~~September 30, 2009 included the after-tax impact~~March 31, 2010 includes operating income of ~~BGI transaction/integration costs~~$654 million, or $2.18 per diluted common share and non-operating expenses, less net income attributable to non-controlling interests, of ~~$11~~$3 million, ~~the portion of LTIP awards which will be funded through a capital contribution of~~or $0.01 per diluted common share. Net income attributable to BlackRock, ~~stock held by PNC of $9~~Inc. totaled $423 million, and an expected contribution, a portion of which has been paid by Merrill Lynch in third quarter 2009, of $1 million to fund certain compensation of former Merrill Lynch Investment Managers (“MLIM”) employees. In addition, net incomeor $2.17 per diluted common share, for the three months ended ~~September 30,~~March 31, 2010, which was an increase of $339 million, or $1.55 per diluted common share, compared to the three months ended March 31, 2009.

- 71 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Operating results for the three months ended March 31, 2010, as compared with the three months ended March 31, 2009 ~~included a $45 million one-time reduction in income tax expense as a result of enacted legislation primarily with respect~~(continued)

Net Income Attributable to ~~New York City corporate income taxes, which resulted in a revaluation of certain deferred income tax assets and liabilities.~~BlackRock, Inc. (continued)

Net income attributable to BlackRock, Inc. ~~of $217 million~~ for the three months ended ~~September 30, 2008~~March 31, 2010 included the after-tax ~~impact~~effect of the BGI integration costs of $34 million, the after-tax effect of the portion of ~~certain~~ LTIP awards, which will be funded through a capital contribution of BlackRock stock held by PNC of $10 million, and an expected contribution by Merrill Lynch of $2 million to fund certain compensation of former MLIM ~~employees, a portion of which has been received by BlackRock in third quarter 2009.~~

Exclusive of these items in both periods, diluted earnings per common share, as adjusted, of $2.10 for the three months ended September 30, 2009 increased $0.43, or 26%, compared to the three months ended September 30, 2008. Diluted earnings per common share, as adjusted, is described in more detail in the Overview to Management’s Discussion and Analysis of Financial Condition and Results of Operations.

~~- 71 -~~

~~Revenue~~

   Nine Months Ended
September 30,    Variance
(Dollar amounts in millions)    2009    2008    Amount % Change
Investment advisory and administration fees:

Fixed income
   $ 630    $ 685    $ (55 ) (8 )%
Cash management
   490    535    (45 ) (8 )%
Equity and balanced
   1,173    1,743    (570 ) (33 )%
Alternative investment products
   269    414    (145 ) (35 )%

Investment advisory and administration base fees
   2,562    3,377    (815 ) (24 )%
Fixed income
   10    2    8    400 %
Equity and balanced
   25    77    (52 ) (68 )%
Alternative investment products
   42    75    (33 ) (44 )%

Investment advisory performance fees
   77    154    (77 ) (50 )%

Total investment advisory and administration base and performance fees
   2,639    3,531    (892 ) (25 )%
BlackRock Solutions and advisory
   383    273    110    40 %
Distribution fees
   73    103    (30 ) (29 )%
Other revenue
   61    93    (32 ) (34 )%

Total revenue
   $ 3,156    $ 4,000    $ (844 ) (21 )%

Total revenue for the nine months ended September 30, 2009 decreased $844 million, or 21%, to $3,156 million, compared with $4,000 million for the nine months ended September 30, 2008. The $844 million decrease was the result of an $892 million decrease in total investment advisory and administration base and performance fees, a $32 million decrease in other revenue and a $30 million decrease in distribution fees, offset by a $110 million increase in~~BlackRock Solutions~~ ~~and advisory revenue.~~

~~Investment Advisory and Administration Base and Performance Fees~~

The decrease in investment advisory and administration base and performance fees of $892 million, or 25%, was the result of a decrease in investment advisory and administration base fees of $815 million, or 24%, to $2,562 million for the nine months ended September 30, 2009, compared with $3,377 million for the nine months ended September 30, 2008 and a decrease of $77 million in performance fees.

The decrease in investment advisory and administration base fees of $815 million for the nine months ended September 30, 2009, compared with the nine months ended September 30, 2008 consisted of decreases in base fees of $570 million in equity and balanced products, $145 million in alternative investment products, $55 million in fixed income products and $45 million in cash management products primarily associated with a market driven reduction in average AUM for the nine months ended September 30, 2009, compared to the nine months ended September 30, 2008 for all asset classes.

~~- 72 -~~

Investment advisory performance fees decreased $77 million, or 50%, to $77 million for the nine months ended September 30, 2009, as compared to $154 million for the nine months ended September 30, 2008, primarily due to a reduction in performance fees in international equity and balanced separate accounts and alternative equity hedge funds.

~~BlackRock Solutions and Advisory~~

~~BlackRock Solutions~~ ~~and advisory revenue for the nine months ended September 30, 2009 increased $110 million, or 40%, compared with the nine months ended September 30, 2008. The increase in~~~~BlackRock Solutions~~ and advisory revenue was primarily the result of additional advisory assignments during the period, as well as additional Aladdin and risk management mandates. Revenue earned on advisory assignments was comprised of advisory and portfolio structuring assignment fees and ongoing fees based on AUM of the respective portfolio assignments.

~~Distribution Fees~~

Distribution fees decreased $30 million to $73 million for the nine months ended September 30, 2009, as compared to $103 million for the nine months ended September 30, 2008. The decrease in distribution fees was primarily the result of lower sales, redemptions and AUM in certain share classes of open-end mutual funds.

~~Other Revenue~~

Other revenue of $61 million for the nine months ended September 30, 2009 decreased $32 million compared with the nine months ended September 30, 2008. Other revenue for the nine months ended September 30, 2009 included $13 million of unit trust sales commissions, $13 million in BlackRock’s share of underlying earnings from certain operating/advisory company investments, $10 million of net interest related to securities lending, $6 million in fees earned for fund accounting services and $19 million of class A sales commissions and other revenue.

The decrease in other revenue of $32 million, or 34%, for the nine months ended September 30, 2009, as compared to the nine months ended September 30, 2008, was primarily the result of a $26 million decline in property management fees primarily related to the outsourcing in the fourth quarter of 2008 of Metric contracts with BlackRock real estate clients, a $13 million decrease in net interest earned related to securities lending and a $6 million decline in unit trust sales commissions, partially offset by a $13 million increase in BlackRock’s share of underlying earnings from certain operating/advisory company investments.

~~- 73 -~~

~~Expenses~~

   Nine Months Ended
September 30, Variance
(Dollar amounts in millions)    2009    2008 Amount % Change
Expenses:

Employee compensation and benefits
   $ 1,185    $ 1,489    $ (304 ) (20 )%
Portfolio administration and servicing costs
   371    455    (84 ) (18 )%
Amortization of deferred mutual fund sales commissions
   76    97    (21 ) (22 )%
General and administration
   505    593    (88 ) (15 )%
Restructuring charges
   22    —      22    NM
Amortization of intangible assets
   108    111    (3 ) (3 )%

Total expenses, GAAP
   $ 2,267    $ 2,745    $ (478 ) (17 )%

Total expenses, GAAP
   $ 2,267    $ 2,745    $ (478 ) (17 )%
Less: Non-GAAP adjustments:

Restructuring charges
   22    —      22    NM
PNC LTIP funding obligation
   45    44    1    2 %
Merrill Lynch compensation contribution
   8    8    —      0 %
BGI transaction/integration costs
   31    —      31    NM
Compensation expense related to (depreciation) appreciation on deferred compensation plans
   14    (15 ) 29    193 %

Total non-GAAP adjustments
   120    37    83    224 %

Total expenses, as adjusted
   $ 2,147    $ 2,708    $ (561 ) (21 )%

~~NM—Not Meaningful~~

Total GAAP expenses decreased $478 million, or 17%, to $2,267 million for the nine months ended September 30, 2009, compared to $2,745 million for the nine months ended September 30, 2008. Excluding certain items deemed non-recurring by management or transactions that ultimately will not impact the Company’s book value, total expenses, as adjusted, decreased $561 million, or 21%. The decrease is attributable to decreases in employee compensation and benefits, general and administration expenses, portfolio administration and servicing costs and amortization of deferred mutual funds sales commissions.

~~- 74 -~~

~~Employee Compensation and Benefits~~

Employee compensation and benefits expense decreased $304 million, or 20%, to $1,185 million, for the nine months ended September 30, 2009, compared to $1,489 million for the nine months ended September 30, 2008. The decrease in employee compensation and benefits expense was attributable to a $182 million reduction in incentive compensation primarily associated with the decrease in operating income and performance fees, a $155 million decrease in salaries, benefits and commissions due to lower employment levels as a result of the Company’s cost control efforts and outsourcing of Metric services, partially offset by a $33 million increase in deferred compensation which is offset primarily by an increase in non-operating income related to appreciation on assets associated with certain deferred compensation plans. Employees at September 30, 2009 totaled 5,044 as compared to 6,262 (including 387 Metric employees) and 5,875 (excluding Metric employees) at September 30, 2008.

~~Portfolio Administration and Servicing Costs~~

Portfolio administration and servicing costs decreased $84 million to $371 million during the nine months ended September 30, 2009, compared to $455 million for the nine months ended September 30, 2008. These costs include payments to Bank of America/Merrill Lynch under a global distribution agreement, and payments to PNC as well as other third parties, primarily associated with the administration and servicing of client investments in certain BlackRock products. The $84 million decrease primarily related to lower levels of average AUM serviced by related parties across all asset classes and an increase in waivers within certain cash management funds, resulting in lower payments.

Portfolio administration and servicing costs for the nine months ended September 30, 2009 included $277 million of costs attributable to Bank of America/Merrill Lynch and affiliates and $14 million of costs attributable to PNC and affiliates as compared to $359 million and $24 million, respectively, in the nine months ended September 30, 2008. Portfolio administration and servicing costs related to other third parties increased $8 million to $80 million for the nine months ended September 30, 2009, as compared to $72 million for the nine months ended September 30, 2008 due to an expansion of distribution platforms.

~~Amortization of Deferred Mutual Fund Sales Commissions~~

Amortization of deferred mutual fund sales commissions decreased $21 million to $76 million for the nine months ended September 30, 2009, as compared to $97 million for the nine months ended September 30, 2008. The decrease in amortization of deferred mutual fund sales commissions was primarily the result of continued lower sales and redemptions in certain share classes of U.S. open-end mutual funds.

~~- 75 -~~

~~General and Administration Expenses~~

   Nine Months Ended
September 30,    Variance
(Dollar amounts in millions)    2009    2008    Amount % Change
General and administration expenses:

Marketing and promotional
   $ 52    $ 128    $ (76 ) (59 )%
Portfolio services
   105    125    (20 ) (16 )%
Technology
   78    93    (15 ) (16 )%
Closed-end fund launch costs
   2    9    (7 ) (78 )%
Occupancy
   107    102    5    5 %
Professional services
   70    59    11    19 %
Other general and administration
   91    77    14    18 %

Total general and administration expenses
   $ 505    $ 593    $ (88 ) (15 )%

General and administration expenses decreased $88 million, or 15%, for the nine months ended September 30, 2009 compared with the nine months ended September 30, 2008. The nine months ended September 30, 2009 included $3 million, $1 million and $27 million of marketing and promotional, technology and professional services expenses, respectively related to the BGI Transaction. Excluding these expenses, general and administration expenses decreased $119 million, or 20%, for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008.

Marketing and promotional expenses decreased $76 million, or 59%, primarily due to a decline in travel and promotional expenses. Portfolio service costs decreased $20 million, or 16%, to $105 million, due to a reduction of AUM on certain products that BlackRock incurs fund related expenses. Technology expenses decreased $15 million, or 16%, to $78 million compared to $93 million for the nine months ended September 30, 2008 primarily due to a decrease in software licensing/maintenance and technology consulting expenses. Professional services increased $11 million, or 19%, to $70 million compared to $59 million for the nine months ended September 30, 2008 primarily related to legal, advisory and consulting costs incurred in connection with the BGI Transaction. Other general and administration expenses increased $14 million, or 18%, to $91 million from $77 million, primarily related to an increase in balance sheet related foreign currency remeasurement and expenses for potentially uncollectible receivables, partially offset by a reduction of various expenses primarily the result of cost control efforts.

~~Restructuring Charges~~

For the nine months ended September 30, 2009 BlackRock recorded pre-tax restructuring charges of $22 million, primarily related to severance, outplacement costs, occupancy costs and accelerated amortization of certain previously granted stock awards associated with a reduction in work force and reengineering efforts. See Note 11, Restructuring Charges, to the Company’s condensed consolidated financial statements contained in Part I, Item 1 of this filing.

~~- 76 -~~

~~Non-Operating Income (Expense), Less Net Income (Loss) Attributable to Non-Controlling Interests~~

~~Non-operating income (expense), less net income (loss) attributable to non-controlling interests for the nine months ended September 30, 2009 and 2008 was as follows:~~

   Nine Months Ended
September 30, Variance
(Dollar amounts in millions)    2009 2008 Amount % Change
Non-operating (expense), GAAP basis
   $ (24 ) $ (165 ) $ 141    85 %
Net income (loss) attributable to non-controlling interests, GAAP basis
   21    (36 ) 57    158 %

Non-operating (expense)¹
   (45 ) (129 ) 84    65 %
Compensation expense related to (appreciation) depreciation on deferred compensation plans
   (14 ) 15    (29 ) (193 )%

Non-operating (expense), as adjusted¹
   $ (59 ) $ (114 ) $ 55    48 %

¹	~~Includes net income (loss) attributable to non-controlling interests (redeemable and nonredeemable) related to investment and non-investment activities.~~

~~- 77 -~~

~~The components of non-operating income (expense), less net income (loss) attributable to non-controlling interests, for the nine months ended September 30, 2009 and 2008 were as follows:~~

   Nine Months Ended
September 30, Variance
(Dollar amounts in millions)    2009 2008 Amount % Change
Net gain (loss) on investments¹

Private equity
   $ 4    $ 6    $ (2 ) (33 )%
Real estate
   (111 ) (36 ) (75 ) (208 )%
Distressed credit/mortgage funds
   79    (44 ) 123    280 %
Hedge funds/funds of hedge funds
   9    (26 ) 35    135 %
Other investments²
   (11 ) (11 ) —      0 %

Sub-total
   (30 ) (111 ) 81    73 %
Investments related to deferred compensation plans
   14    (15 ) 29    193 %

Total net gain (loss) on investments¹
   (16 ) (126 ) 110    87 %
Net income (loss) attributable to other non-controlling interests³
   —      (1 ) 1    100 %
Interest and dividend income
   16    52    (36 ) (69 )%
Interest expense
   (45 ) (54 ) 9    (17 )%

Total non-operating income (expense)¹
   (45 ) (129 ) 84    65 %
Compensation expense related to (appreciation) on deferred compensation plans
   (14 ) 15    (29 ) (193 )%

Non-operating expense, as adjusted¹
   $ (59 ) $ (114 ) $ 55    48 %

¹	~~Includes net income (loss) attributable to non-controlling interests (redeemable and nonredeemable) includes investment and non-investment activities.~~

²	~~Includes net gains/(losses) related to equity and fixed income investments and BlackRock’s seed capital hedging program.~~

³	~~Includes non-controlling interests related to operating entities (non-investment activities).~~

Non-operating expense, less net income (loss) attributable to non-controlling interests, decreased $84 million to $45 million for the nine months ended September 30, 2009, as compared to $129 million for the nine months ended September 30, 2008. The $45 million non-operating expense, less non-controlling interests, related to the Company’s co-investment and seed investments, included net losses in real estate products of $111 million and other investments of $11 million, partially offset by valuation gains in distressed credit/mortgage funds of $79 million, investments related to deferred compensation plans of $14 million, hedge funds/funds of hedge funds of $9 million and private equity products of $4 million. In addition, net interest expense was $29 million, an increase of $27 million primarily due to a decline in interest rates earned on cash equivalents and paid on its line of credit.

~~- 78 -~~

~~Income Tax Expense~~

Income tax expense was $225 million and $394 million for the nine months ended September 30, 2009 and 2008, respectively. The effective income tax rate for the nine months ended September 30, 2009 was 26.7%, as compared to 35.0% for the nine months ended September 30, 2008. Excluding approximately $45 million of tax benefits, related to legislation which was enacted with respect to New York City corporate income taxes and $25 million of tax benefits primarily related to a favorable tax ruling and the final resolution of outstanding tax matters, the effective income tax rate for the nine months ended September 30, 2009 was 35.0%.

~~Operating Income and Operating Margin~~

~~GAAP~~

Operating income totaled $889 million for the nine months ended September 30, 2009, which was a decrease of $366 million compared to the nine months ended September 30, 2008. Operating income for the nine months ended September 30, 2009 included the impact of an $815 million decrease in investment advisory and administration base fees, associated with a market driven reduction in average AUM for all asset classes for the nine months ended September 30, 2009 as compared to the nine months ended September 30, 2008, a $77 million decrease in performance fees revenue, and a $62 million reduction in other revenue and distribution fees, offset by a $110 million increase in~~BlackRock Solutions~~ and advisory revenue and a $478 million decrease in operating expenses primarily due to declines in employee compensation and benefits, general and administration expenses and portfolio administration and servicing costs offset by $22 million of restructuring charges.

The Company’s operating margin was 28.2% for the nine months ended September 30, 2009, compared to 31.4% for the nine months ended September 30, 2008. The reduction in operating margin in 2009 as compared to 2008 included the impact of $31 million of BGI Transaction costs, $22 million of restructuring charges in first quarter 2009 and a $32 million increase in foreign currency remeasurement costs.

~~As Adjusted~~

Operating income, as adjusted, totaled $1,009 million for the nine months ended September 30, 2009, which was a decrease of $283 million compared to the nine months ended September 30, 2008. The decline of operating income, as adjusted, for the nine months ended September 30, 2009 as compared to the nine months ended September 30, 2008 is related to the impact of the $844 million decrease in total revenue offset by a $561 million decrease in operating expenses due to decreases in employee compensation and benefits, general and administration expenses, portfolio administration and servicing costs and amortization of deferred mutual fund sales commissions.

~~Operating margin, as adjusted, was 37.4% and 37.9% for the nine months ended September 30, 2009 and 2008, respectively.~~

~~- 79 -~~

~~Net Income Attributable to BlackRock, Inc.~~

~~The components of net income attributable to BlackRock, Inc. and net income attributable to BlackRock, Inc., as adjusted, for the nine months ended September 30, 2009 and 2008 are as follows:~~

   Nine Months Ended
September 30, Nine Months Ended
September 30,
   2009 2008 2009 2008
(Dollar amounts in millions, except per share data)    GAAP GAAP % Change As adjusted As adjusted % Change
Operating income
   $ 889    $ 1,255    (29 )% $ 1,009    $ 1,292    (22 )%
Non-operating income (expense), less net income (loss) attributable to non-controlling interests
   (45 ) (129 ) 65 % (59 ) (114 ) 48 %
Income tax expense
   (225 ) (394 ) (43 )% (308 ) (412 ) (25 )%

Net income attributable to BlackRock, Inc.
   $ 619    $ 732    (15 )% $ 642    $ 766    (16 )%

Net income allocated to:

Common shares
   $ 602    $ 708    (15 )% $ 625    $ 741    (16 )%
Participating RSUs
   17    24    (29 )% 17    25    (32 )%

Net income attributable to BlackRock, Inc.
   $ 619    $ 732    (15 )% $ 642    $ 766    (16 )%

Total weighted-average common shares outstanding¹
   134,001,799    131,998,448    2 % 134,001,799    131,998,448    2 %
Diluted earnings attributable to BlackRock, Inc. shareholders per common share
   $ 4.50    $ 5.36    (16 )% $ 4.66    $ 5.61    (17 )%

Series A, B and C non-voting participating preferred stock are considered to be common stock equivalents for purposes of determining basic and diluted earnings per share calculations. Certain unvested restricted stock units are not included in this number as they are deemed participating securities in accordance with required provisions of ASC 260-10,~~Earnings per Share.~~

~~- 80 -~~

Net income attributable to BlackRock, Inc. for the nine months ended September 30, 2009 includes operating income of $889 million, or $4.20 per diluted common share, non-operating losses, less net loss attributable to non-controlling interests, of $45 million, or $0.21 per diluted common share and $70 million, or $0.51 per diluted common share, of tax benefits related to local income tax rate changes, a favorable tax ruling and the final resolution of outstanding tax matters. Net income attributable to BlackRock, Inc. totaled $619 million, or $4.50 per diluted common share, for the nine months ended September 30, 2009, which was a decrease of $113 million, or $0.86 per diluted common share, compared to the nine months ended September 30, 2008.

Net income attributable to BlackRock, Inc. for the nine months ended September 30, 2009 included the after-tax impact of the portion of LTIP awards which will be funded through a capital contribution of BlackRock stock held by PNC of $29 million, BGI transaction/integration costs of $21 million, restructuring charges of $14 million, and an expected contribution, a portion of which has been paid by Merrill Lynch in third quarter 2009 of $4 million to fund certain compensation of former MLIM employees. In addition, net income for the nine months ended September 30, 2009 included a $45 million one-time reduction in income tax expense as a result of enacted legislation primarily with respect to New York City corporate income taxes, which resulted in a revaluation of certain deferred income tax assets and liabilities.

Net income attributable to BlackRock, Inc. of ~~$732~~$84 million for the ~~nine~~three months ended ~~September 30, 2008~~March 31, 2009 included the after-tax ~~impact~~effect of the portion of certain LTIP awards, which will be funded through a capital contribution of BlackRock stock held by PNC of ~~$29~~$10 million, restructuring charges of $14 million and an expected contribution by Merrill Lynch of $5$2 million to fund certain compensation of former MLIM employees, a portion of which ~~has been~~was received by BlackRock in third quarter 2009.

As Adjusted

Exclusive of ~~these~~the items ~~in both periods,~~discussed above, diluted earnings per common share, as adjusted, of ~~$4.66~~$2.40 for the ~~nine~~three months ended ~~September 30, 2009 decreased $0.95,~~March 31, 2010 increased $1.59, or ~~17%~~196%, compared to the ~~nine~~three months ended ~~September 30, 2008.~~March 31, 2009.

Net income attributable to BlackRock, Inc., as adjusted, for the three months ended March 31, 2010 includes operating income of $727 million, or $2.42 per diluted common share, non-operating expenses, less net income attributable to non-controlling interests, of $6 million, or $0.02 per diluted common share. Diluted earnings per common share, as adjusted, is described in more detail in the Overview to Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Liquidity and Capital Resources

BlackRock Cash Flows Excluding the Impact of Consolidated Sponsored Investment Funds and VIEs

In accordance with GAAP, certain BlackRock sponsored investment funds and collateralized loan obligations (“CLOs”) are consolidated into the ~~condensed~~ financial statements of BlackRock, notwithstanding the fact that BlackRock may only have a minority ~~economic~~equity interest, if any, in these ~~funds.~~funds or CLOs. As a result, BlackRock’s condensed consolidated statements of cash flows include the cash flows of consolidated sponsored investment ~~funds.~~funds and CLOs. The Company uses an adjusted cash flow statement, which excludes the impact of consolidated sponsored investment funds and CLOs, as a supplemental non-GAAP measure to assess liquidity and capital requirements. The Company believes that its cash flows, excluding the impact of the consolidated sponsored investment funds and CLOs, provide investors with useful information on the cash flows of BlackRock relating to our ability to fund additional operating, investing and financing activities. BlackRock’s management does not advocate that investors consider such non-GAAP measures in isolation from, or as a substitute for its cash flow presented in accordance with GAAP.

- 8172 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Liquidity and Capital Resources (continued)

BlackRock Cash Flows Excluding the Impact of Consolidated Sponsored Investment Funds and VIEs (continued)

The following table presents a reconciliation of the Company’s condensed consolidated statements of cash flows presented on a GAAP basis to the Company’s condensed consolidated statements of cash flows, excluding the impact of the cash flows of consolidated sponsored investment ~~funds:~~funds and VIEs:


(Dollar amounts in millions)	Nine Months Ended September 30, 2009									Three Months Ended March 31, 2010
(Dollar amounts in millions)	GAAP Basis			Impact on Cash Flows of Consolidated Sponsored Investment Funds			Cash Flows Excluding Impact of Consolidated Sponsored Investment Funds			GAAP Basis			Impact on Cash Flows of Consolidated Sponsored Investment Funds			Impact on Cash Flows of Consolidated VIEs			Cash Flows Excluding Impact of Consolidated Sponsored Investment Funds and VIEs
Cash flows from operating activities	$	831		$	158		$	673		$	(164	)	$	37		$	(5	)	$	(196	)
Cash flows from investing activities		11			15			(4	)		(30	)		(2	)		—			(28	)
Cash flows from financing activities		(171	)		(182	)		11			(1,755	)		13			(4	)		(1,764	)
Effect of exchange rate changes on cash and cash equivalents		60			—			60			(56	)		—			—			(56	)

Net change in cash and cash equivalents		731			(9	)		740	��		(2,005	)		48			(9	)		(2,044	)
Cash and cash equivalents, beginning of period		2,032			61			1,971			4,708			75			9			4,624

Cash and cash equivalents, end of period	$	2,763		$	52		$	2,711		$	2,703		$	123		$	—		$	2,580

Cash and cash equivalents, excluding cash held by consolidated sponsored investment funds and VIEs at ~~September 30, 2009 increased $740~~March 31, 2010 decreased $2,044 million from December 31, ~~2008,~~2009, primarily resulting from ~~$673~~$196 million of cash ~~inflows~~outflows from operating activities, ~~$11~~$1,764 million of cash ~~inflows~~outflows from financing activities, $4$28 million of cash outflows from investing activities and a ~~$60~~$56 million ~~increase~~decrease due to the effect of foreign exchange rate changes.

- 73 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Liquidity and Capital Resources (continued)

BlackRock Cash Flows Excluding the Impact of Consolidated Sponsored Investment Funds and VIEs (continued)

Operating Activities

Sources of BlackRock’s operating cash primarily include investment advisory, ~~and~~ administration fees and securities lending revenue, revenues fromBlackRock Solutions and advisory products and services and mutual fund distribution fees. BlackRock uses its cash to pay compensation and benefits, ~~portfolio administration~~distribution and servicing costs, direct fund expenses, general and administration expenses, interest and principal on the Company’s borrowings, ~~purchase co-investments and seed investments, capital expenditures,~~ income taxes and dividends on BlackRock’s capital ~~stock.~~stock and to purchase co-investments and seed investments, and pay for capital expenditures.

Net cash ~~inflows~~outflows from operating activities, excluding the impact of consolidated sponsored investment funds and VIEs, for the ~~nine~~three months ended ~~September 30, 2009,~~March 31, 2010, primarily include the receipt of investment advisory and administration fees, securities lending revenue and other revenue offset by the payment of operating expenses incurred in the normal course of business. Cash ~~inflows from operating activities, excluding~~outflows for the ~~impact of consolidated sponsored investment funds, in the nine~~three months ended ~~September 30, 2009~~March 31, 2010 included cash payments related to ~~2008~~ year end incentive compensation, ~~that was paid~~including the payments for BGI employee compensation accruals assumed in the ~~first quarter.~~BGI Transaction.

Investing Activities

Cash outflows from investing activities, excluding the impact of consolidated sponsored investment funds and VIEs, for the ~~nine~~three months ended ~~September 30, 2009~~March 31, 2010 were $28 million and primarily included ~~$241~~$28 million of purchases of investments and $44 million of purchases of property and equipment, partially offset by $29 million of net proceeds from sales and maturities of investments ~~$50~~and $20 million of return of capital from equity method investees, partially offset by a $156 million contingent consideration payment to Quellos paid in the second quarter, $83 million of purchases of investments and $52 million of purchases of property and equipment.investees.

~~- 82 -~~

Financing Activities

Cash ~~inflows~~outflows from financing activities, excluding the impact of consolidated sponsored investment funds and VIEs, for the ~~nine~~three months ended ~~September 30, 2009~~March 31, 2010 primarily included ~~the receipt~~repayments of ~~$300~~short-term borrowings and convertible debt of $1,354 million ~~from equity raised in connection with the BGI Transaction~~ and ~~a $25~~$148 million, ~~receipt of a Merrill Lynch capital contribution in the second quarter, partially offset by $316~~respectively, $196 million of payments for ~~quarterly~~ cash ~~dividends.~~dividends and $114 million related to repurchases of common stock to satisfy tax withholding obligations of employees related to vesting of certain restricted stock awards.

- 74 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Liquidity and Capital Resources (continued)

Capital Resources

The Company manages its financial condition and funding to maintain appropriate liquidity for the business. Capital resources at ~~September 30, 2009~~March 31, 2010 and December 31, ~~2008~~2009 were as follows:


	September 30, 2009			December 31, 2008				Variance							March 31,				December 31,				Variance
(Dollar amounts in millions)	September 30, 2009						Amount				% Change			2010				2009				Amount				%
Cash and cash equivalents	$	2,763		December 31, 2008	$	2,032			$	731			36	%		$	2,703			$	4,708			$	(2,005	)		(43	)%
Cash and cash equivalents held by consolidated sponsored investment funds¹		(52	)		(61	)			9			15	%			(123	)			(75	)			(48	)		(64	)%
Required regulatory capital²		(196	)		(172	)			(24	)		(14	)%
2007 credit facility—undrawn³		2,171			2,171				—			—	%

Committed access	$	4,686		$	3,970			$	716			18	%
Subtotal																2,580				4,633				(2,053	)		(44	)%
2007 credit facility—undrawn²																2,266				2,171				95			4	%
Commercial paper³																(780	)			(2,034	)			1,254			62	%

Total liquidity															$	4,066			$	4,770			$	(704	)		(15	)%

Required regulatory capital⁴															$	818			$	857			$	(39	)		(5	)%

¹	The Company may not be able to access such cash to use in its operating activities.

²	~~Partially met with cash~~Excludes $134 million and ~~cash equivalents.~~$129 million of undrawn amounts at March 31, 2010 and December 31, 2009, respectively related to Lehman Commercial Paper, Inc.

³	~~Excludes $129 million~~The outstanding commercial paper notes that are supported by the 2007 credit facility reduce the availability of ~~undrawn amounts at September 30, 2009 and December 31, 2008 related to Lehman Commercial Paper, Inc.~~the facility.

⁴	A portion of the required regulatory capital is partially met with cash and cash equivalents.

The $704 million decline in total liquidity during the three months ended March 31, 2010 is predominantly related to the payments of cash bonuses related to 2009 year end awards.

In addition, a significant portion of the Company’s ~~$848~~$942 million of net economic investments are illiquid in nature and, as such, may not be readily convertible to cash.

Investment/Loan Commitments

At ~~September 30, 2009,~~March 31, 2010, the Company had ~~$286~~$301 million of various capital commitments to fund sponsored investment funds. This amount excludes additional commitments made by consolidated funds ~~primarily for co-investment purposes.~~of funds to underlying third party funds as third party non-controlling interest holders have the legal obligation to fund the respective commitments of such funds of funds. Generally, the timing of the funding of ~~capital~~these commitments is ~~uncertain~~unknown. Therefore, amounts are shown to be paid upon the expiration date of the commitment. Actual payments could be made at any time prior to such expiration date and, if not called by that date, such commitments ~~could expire before funding.~~would expire. These commitments have not been recorded on the Company’s condensed consolidated statements of financial condition at March 31, 2010. The Company intends to make additional capital commitments from time to time to fund additional investment products for, and with, its clients.

~~During the nine months ended September 30, 2009, approximately $174 million of loans outstanding were repaid from a warehouse entity established for certain private equity funds of funds.~~

~~- 83 -~~

~~At September 30, 2009,~~Prior to March 31, 2010, the Company was committed to provide financing of up to $60 million ~~until March 2010,~~ to Anthracite Capital, Inc. (“Anthracite”), a specialty commercial real estate finance company that iswas managed by a subsidiary of BlackRock. The financing is collateralized by a pledge by Anthracite ~~pledging~~of its ownership interest in a real estate debt investment fund, which is also managed by a subsidiary of BlackRock. At ~~September 30, 2009,~~March 31, 2010, $33.5 million of financing was outstanding and remains outstanding as of May 2010, which ~~matured in October 2009. Upon~~is past its final maturity ~~Anthracite rolled over the borrowings to January~~date of March 5, 2010. At ~~September 2009,~~March 31, 2010, the value of the collateral was estimated to be ~~$28.5~~$10 million, which resulted in a $2.5 million reduction in due from related parties on the Company’s condensed consolidated statement of financial condition ~~of $5 million~~ and an equal amount recorded in general and ~~administration~~administrative expense in the three months ended ~~June 30, 2009. Based on the value of the collateral and the borrowings outstanding at such date, the~~March 31, 2010. The Company has no obligation to ~~lend~~loan additional amounts to Anthracite under this facility. Anthracite filed a voluntary petition for relief under chapter 7 of title 11 of the U.S. Code in the U.S. Bankruptcy Court for the Southern District of New York on March 15, 2010. The management agreement between the Company and Anthracite has expired. Recovery of any amount of the financing provided by the Company in excess of the value of the collateral is not anticipated. The Company continues to evaluate the collectability of the outstanding borrowings by reviewing the ~~assets and liabilities of the underlying collateral, as well as the fair~~carrying value of the net assets of the collateral, which fluctuates each period. ~~The Company has granted waivers for certain breaches of financial covenants of Anthracite’s credit facility.~~

~~On October 28, 2009, the Company~~

- 75 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Liquidity and Anthracite entered into an amendment to the financing providing that interest shall be payable only to the extent of cash flow from the collateral and only if there is no default or event of default under Anthracite’s senior secured facilities. All accrued but unpaid interest and fees are payable on the final maturity date.Capital Resources (continued)

~~Short-Term~~Short-term Borrowings

2007 Facility

In August 2007, the Company entered into a five-year, $2.5 billion unsecured revolving credit facility (the “2007 facility”). The 2007 facility requires the Company not to exceed a maximum leverage ratio (ratio of net debt to ~~EBITDA,~~earnings before interest, taxes, depreciation and amortization, where net debt equals total debt less domestic unrestricted cash) of 3 to 1, which was satisfied with a ratio of less than ~~0.5~~1 to 1 at ~~September 30, 2009.~~March 31, 2010. At ~~September 30, 2009,~~March 31, 2010, the Company had ~~$200~~$100 million outstanding under the 2007 facility with an interest rate of 0.43% and a maturity date during ~~November 2009.~~May 2010. Lehman Commercial Paper, Inc. has a $140 million participation under the 2007 facility; however, BlackRock does not expect that Lehman Commercial Paper, Inc. will honor its commitment to fund additional amounts. Bank of America, a related party, has a $140 million participation under the 2007 facility.

Commercial Paper Program

On October 14, 2009, BlackRock established a commercial paper program (the ~~“Program”~~“CP Program”) under which the Company may issue unsecured commercial paper notes (the ~~“Notes”~~“CP Notes”) on a private placement basis up to a maximum aggregate amount outstanding at any time of $3 billion. The proceeds of the commercial paper issuances ~~will be~~were used ~~for general corporate purposes, including the financing of~~to finance a portion of the BGI Transaction. ~~Amounts available under the Program may be reborrowed.~~ Subsidiaries of Bank of America and Barclays, both related parties, as well as other third parties, ~~will~~ act as dealers under the CP Program. At March 31, 2010 the CP Program was supported by the 2007 facility.

The Company began ~~issuance of~~to issue CP Notes under the CP Program on November 4, 2009. As of ~~November 5, 2009,~~March 31, 2010, BlackRock had ~~$525~~approximately $780 million of outstanding CP Notes with a weighted average interest rate of ~~0.17%,~~0.20% and a weighted average maturity of 5122 days. As of May 6, 2010, BlackRock had $616 million of outstanding CP Notes supported by the 2007 facility with a weighted average interest rate of 0.23% and a weighted average maturity of 23 days. The Company expects that the outstanding balance of CP Notes may fluctuate throughout the year.

Japan Commitment-line

In June 2009, BlackRock Japan Co., Ltd., a wholly owned subsidiary of the Company, renewed its five billion Japanese yen commitment-line agreement (the “Japan Commitment-line”) for a term of one year. The Japan Commitment-line is intended to provide liquidity and flexibility for operating requirements in Japan. At ~~September 30, 2009,~~March 31, 2010, the Company had no borrowings outstanding under the Japan Commitment-line.

~~- 84 -~~

Convertible Debentures ~~and Long-Term Borrowings~~

OnIn February ~~15,~~2005, the Company issued $250 million aggregate principal amount of convertible debentures due in 2035 and bearing interest at a rate of 2.625% per annum. Beginning in February 2009, the convertible debentures became convertible at the option of the ~~holder~~holders at any time and on, and after, February 20, 2010 the convertible debentures became callable by the Company at any time following not more than 60 but not less than 30 days notice. During the three months ended March 31, 2010, holders of $148 million of debentures converted their holdings into cash and ~~shares~~shares. At March 31, 2010, $95 million in convertible debentures were outstanding.

As of March 31, 2010, debt service and repayment requirements, assuming the ~~Company’s common stock at any time prior to maturity. Between February 15 and September 30, 2009,~~convertible debentures are fully repaid in 2010, are $96 million for the remainder of 2010.

In addition, through May 6, 2010, holders of $2an additional $24 million of debentures elected to convert their holdings into cash and shares. ~~In addition, during October 2009, holders of $5 million debentures elected to convert their holdings into cash~~

- 76 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Liquidity and ~~shares.~~Capital Resources (continued)

At September 30, 2009, convertible debentures and long-term borrowings were $943 million. Debt service and repayment requirements, assuming the Company’s 2.625% convertible debentures due 2035 (the “convertible debentures”) are converted for cash equal to the principal at the option of the holders in fourth quarter 2009, are $248 million for the remainder of 2009 and $44 million in each of 2010, 2011, 2012 and 2013.

Contingent Payments Related to Quellos Transaction

~~On October 1, 2007,~~In connection with the ~~Company acquired the fund of funds business of Quellos. As part of this transaction~~Quellos Transaction, Quellos is entitled to receive two contingent payments, ~~upon~~subject to achieving certain investment advisory ~~revenue~~base and performance fee measures through December 31, 2010, totaling up to an additional $969 million in a combination of cash and stock. ~~The first contingent payment, of up to $374 million, was paid in second quarter 2009 and the second payment, of up to $595 million is payable in cash in 2011.~~

During second quarter 2009, the Company determined the amount of the first contingent payment to be $219 million, of which $11 million was previously paid in cash during 2008. Of the remaining $208 million, during second quarter 2009, $156 million was paid in cash and $52 million was paid in common stock, or approximately 330,000 shares ~~converted at~~based on a price of ~~$157.33.~~$157.33 per share.

The second contingent payment, of up to $595 million, is payable in cash in 2011. Quellos may also be entitled to a “catch-up” payment in 2011 if certain ~~performance~~investment advisory base fee measures are met ~~in 2011~~through 2010 as the value of the first contingent payment was less than $374 million.

~~BGI Transaction~~

In June 2009, BlackRock announced that Barclays PLC accepted its offer to acquire BGI from Barclays. The price consideration consists of $6.6 billion in cash, subject to certain adjustments, and a capital stock sale of approximately 37.8 million common and participating preferred shares to Barclays, subject to certain adjustments, which would give Barclays approximately a 19.9% economic stake in BlackRock. The cash A portion of the ~~deal~~second contingent payment, not to exceed $90 million, may be paid to Quellos based on factors including the continued employment of certain employees with BlackRock. Therefore, this portion, not to exceed $90 million, would be recorded as employee compensation.

Other Cash Uses

As certain acquired BGI receivables are collected, the Company will pay Barclays approximately $330 million, which was recorded as of December 31, 2009 in due to related parties on the condensed consolidated statement of financial condition, to settle certain non-interest bearing notes assumed in the BGI Transaction. As of March 2010, the Company had repaid approximately $100 million. In addition, in April 2010 the Company repaid approximately $155 million and it is anticipated that substantially all of the remainder of the notes will be ~~financed by $800~~repaid during the remainder of 2010.

In addition, BlackRock Institutional Trust Company, N.A. (“BTC”), a wholly-owned subsidiary of the Company, may be required to purchase approximately $300 million ~~from cash currently held by BlackRock, a new $2 billion credit facility, which is expected to ultimately be replaced with term debt, $1 billion~~ of additional ~~short term debt, and $2.8 billion~~Federal Reserve Bank stock during the second quarter of ~~capital proceeds from the sale of 19.9 million common shares and participating preferred shares~~2010 pursuant to a group of institutional investors, of which $300 million from the sale of 2.1 million common shares was received prior to June 30, 2009. The BGI Transaction is anticipated to close on December 1, 2009, pendingits regulatory ~~approvals and the satisfaction of other customary closing conditions.~~requirements.

- 8577 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Liquidity and Capital Resources (continued)

Barclays Support of ~~Two Enhanced~~Certain Securities Lending Related Cash Funds

~~In December 2007, BlackRock entered into~~Barclays has provided capital support agreements ~~with~~to support certain securities lending related cash management products acquired by BlackRock in the ~~two funds, backed by letters of credit drawn under BlackRock’s existing credit facility.~~BGI Transaction. Pursuant to the terms of the capital support agreements, ~~BlackRock~~Barclays agreed to ~~make subsequent capital contributions to~~cover losses on covered securities within the ~~funds to cover realized losses,~~products in the aggregate of up to ~~$100 million, related~~$2.2 billion from December 1, 2009 through December 1, 2013. BlackRock and Barclays have procedures in place to ~~specified~~determine loss events on covered securities ~~held by~~within the ~~funds. In December 2008, BlackRock’s~~products and to ensure support payments from Barclays. At March 2010, Barclays’ remaining maximum potential obligation in the aggregate under the capital support agreements was reduced to $45 million, and in 2009, both capital support agreements were terminated, due to the closure of the related funds. BlackRock provided approximately $3 million of capital contributions to these funds for the six months ended June 30, 2009 under the capital support agreements.

~~BlackRock holds debt securities it received in lieu of its remaining investment in one fund and securities it directly purchased from both enhanced cash funds prior to the closure of the funds.~~$2.2 billion. At ~~September 30, 2009, the carrying value of the remaining debt securities was $28 million, of which $15 million matured in October 2009.~~

~~In applying the provisions of ASC 810-10,~~March 31, 2010, BlackRock concluded that although these funds were variable interest entities, it was not the primary beneficiary of ~~the two enhanced cash funds at December 31, 2008, which resulted in consolidation of the funds on its condensed consolidated statements of financial condition.~~these funds.

Net Capital Requirements

The Company is required to maintain net capital in certain regulated subsidiaries within a number of jurisdictions, which is met in part by retaining cash and cash equivalents in those jurisdictions. As a result, such subsidiaries of the Company may be restricted in ~~its~~their ability to transfer cash between different ~~jurisdictions.~~jurisdictions and to their parents. Additionally, transfers of cash between international jurisdictions, including repatriation to the United States, may have adverse tax consequences that could discourage such transfers.

BTC is chartered as a national bank that does not accept client deposits and whose powers are limited to trust activities. BTC provides investment management services, including investment advisory and securities lending agency services to institutional investors and other clients. BTC is subject to various regulatory capital and liquid asset requirements administered by Federal banking agencies.

At ~~September 30, 2009,~~March 31, 2010, the Company was required to maintain approximately ~~$196~~$818 million in net capital ~~at these~~in certain regulated subsidiaries, including BTC, and is in compliance with all applicable regulatory minimum net capital ~~requirements.~~requirements.

- 8678 -

PART I—FINANCIAL INFORMATION (continued)

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Critical Accounting Policies

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ significantly from those estimates. In addition to Fair Value Measurements, discussed below, see Note 2, Significant Accounting Policies, to the Company’s condensed consolidated financial statements contained in Part I, Item 1 of this filing and the Company’s Significant Accounting Policies in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Current Report on Form 8-K, which was filed with the Securities and Exchange Commission on September 17, 2009, which updated the financial information in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.filing.

Fair Value Measurements

BlackRock reports its investments on a GAAP basis, which includes investment balances, which are owned by sponsored investment funds that are deemed to be controlled by BlackRock in accordance with GAAP and therefore are consolidated even though BlackRock may not own a majority of such funds. As a result, management reviews its investments on an “economic” basis, which eliminates the portion of investments that do not impact BlackRock’s book value. BlackRock’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

The following table represents investments measured at fair value on a recurring basis at ~~September 30, 2009:~~March 31, 2010:


(Dollar amounts in millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Other Investments Not Held at Fair Value⁽³⁾		Investments at September 30, 2009			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)			Other Investments Not Held at Fair Value⁽³⁾		Investments at March 31, 2010
Total investments, GAAP	$	217		$	64	$	722		$	38	$	1,041		$	235		$	101	$	656		$	104	$	1,096
Net assets for which the Company does not bear “economic” exposure⁽¹⁾		(23	)		—		(170	)		—		(193	)		(46	)		21		(129	)		—		(154	)

Net “economic” investments⁽²⁾	$	194		$	64	$	552		$	38	$	848		$	189		$	122	$	527		$	104	$	942

⁽¹⁾	Consists of net assets attributable to non-controlling investors of consolidated non VIE sponsored investment funds.

⁽²⁾	Includes BlackRock’s portion of cash and cash equivalents, other assets, accounts payable and accrued liabilities, and other liabilities that are consolidated from sponsored investment funds.

⁽³⁾

Comprised of equity method investments, which include investment companies, and other assets which in accordance with GAAP are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and financial liabilities under fair value measures, therefore the Company’s investment in such equity method investees may not represent fair value.

- 8779 -

PART I—FINANCIAL INFORMATION (continued)

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

AUM Market Price Risk

BlackRock’s investment management revenues are 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 realized on AUM. At March 31, 2010, the majority of our investment advisory and administration fees were based on average or period end AUM of the applicable investment funds or separate accounts. Movements in equity market prices, interest rates/credit spreads, foreign exchange rates, or all three could cause the value of AUM to decline, which would result in lower investment advisory and administration fees.

Corporate Investments Portfolio Risks

As a leading investment management firm, BlackRock devotes significant resources across all of its operations to identifying, measuring, monitoring, managing and analyzing market and operating risks, including the management and oversight of its own investment portfolio. The Board of Directors of the Company has adopted guidelines for the review of investments to be made by the Company, requiring, among other things, that all investments be reviewed by the Company’s Capital Committee, which consists of senior officers of the Company, and that certain investments may be referred to the Audit Committee or the Board of Directors, depending on the circumstances, for approval.

~~AUM Market Price Risk~~

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 realized on AUM. At September 30, 2009, the majority of our investment advisory and administration fees were based on average or period end AUM of the applicable mutual funds or separate accounts. Movements in equity market prices, interest rates/credit spreads, foreign exchange rates, or all three could cause the value of AUM to decline, which would result in lower investment advisory and administration fees.

~~Corporate Investments Portfolio Risks~~

In the normal course of its business, BlackRock is exposed to equity market price risk, interest rate/credit spread risk and foreign exchange rate risk associated with its corporate investments.

BlackRock has investments primarily in sponsored investment products that invest in a variety of asset classes including real estate, private equity and hedge funds. Investments generally are made for co-investment purposes, to establish a performance track record, or to hedge exposure to certain deferred compensation ~~plans.~~plans or for regulatory purposes. Currently, the Company has a seed capital hedging program in which it enters into total return swaps to hedge exposure to certain equity investments. At ~~September 30, 2009,~~March 31, 2010, the outstanding total return swaps had an aggregate notional value of approximately ~~$34~~$24 million.

- 80 -

PART I—FINANCIAL INFORMATION (continued)

Item 3.

Quantitative and Qualitative Disclosures About Market Risk (continued)

Corporate Investments Portfolio Risks (continued)

At ~~September 30, 2009,~~March 31, 2010, approximately ~~$444~~$493 million of BlackRock’s total investments were maintained in sponsored investment funds that are deemed to be controlled by BlackRock in accordance with GAAP and therefore are consolidated even though BlackRock may not own a majority of such funds. Excluding the impact of investments made to hedge exposure to certain deferred compensation plans and certain equity investments that are hedged via the seed capital hedging program, the Company’s net economic exposure to its investment portfolio is as follows:

(Dollar amounts in millions)
   September 30,
2009 December 31,
2008 Variance
   Amount % Change
Total investments, GAAP
   $ 1,041    $ 1,429    $ (388 ) (27 )%
Investments held by consolidated sponsored investment funds
   (444 ) (728 ) 284    39 %
Net exposure to consolidated investment funds
   251    310    (59 ) (19 )%

Total net “economic” investments
   848    1,011    (163 ) (16 )%
Deferred compensation investments
   (67 ) (59 ) (8 ) (14 )%
Hedged investments
   (34 ) (49 ) 15    31 %

Total net “economic” investment exposure
   $ 747    $ 903    $ (156 ) (17 )%

~~- 88 -~~


(Dollar amounts in millions)	March 31, 2010			December 31, 2009			Variance
(Dollar amounts in millions)	March 31, 2010			December 31, 2009			Amount			%
Total investments, GAAP	$	1,096		$	1,049		$	47		4	%
Investments held by consolidated sponsored investment funds		(493	)		(463	)		(30	)	(6	)%
Net exposure to consolidated investment funds		339			258			81		31	%

Total net “economic” investments		942			844			98		12	%
Deferred compensation investments		(71	)		(71	)		—		—	%
Hedged investments		(24	)		(36	)		12		33	%

Total net “economic” investment exposure	$	847		$	737		$	110		15	%

The net “economic” investment exposure of the portfolio is presented in either the market price or the interest rate/credit spread risk disclosures below:

Market Price Risk

At ~~September 30, 2009,~~March 31, 2010, the Company’s net exposure to market price risk in its investment portfolio was approximately ~~$442~~$466 million of the Company’s net economic investment exposure. Investments that are subject to market price risk include public equity and real estate investments, as well as certain hedge funds. The Company estimates that a 10% adverse change in market prices would result in a decrease of approximately ~~$44~~$46.6 million in the carrying value of such investments.

Interest Rate/Credit Spread Risk

At ~~September 30, 2009,~~March 31, 2010, the Company was exposed to interest-rate risk and credit spread ~~risks~~risk as a result of approximately ~~$305~~$381 million of investments in debt securities and sponsored investment products that invest primarily in debt securities. Management considered a hypothetical 100 basis point fluctuation in interest rates or credit spreads and estimates that the impact of such a fluctuation on these investments, in the aggregate, would result in a decrease, or increase, of approximately $3$7 million in the carrying value of such investments.

Foreign Exchange Rate Risk

As discussed above, the Company invests in sponsored investment products that invest in a variety of asset classes. The carrying value of the net economic investment exposure denominated in foreign currencies, primarily the ~~Euro, British~~euro, pound sterling, South Korean won and Australian dollars, was ~~$70~~$78 million. A 10% adverse change in foreign exchange rates would result in approximately ~~a $7~~an $8 million decline in the carrying value of such investments.

- 81 -

PART I—FINANCIAL INFORMATION (continued)

Item 4.

Controls and Procedures

Disclosure Controls and Procedures

Under the direction of BlackRock’s Chief Executive Officer and Chief Financial Officer, BlackRock evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d—15(e) under the Exchange Act) at ~~September 30, 2009.~~March 31, 2010. Based on this evaluation, BlackRock’s Chief Executive Officer and Chief Financial Officer have concluded that BlackRock’s disclosure controls and procedures were effective at ~~September 30, 2009.~~March 31, 2010.

Internal Control ~~and~~over Financial Reporting

~~There~~Other than the integration of certain information technology systems and processes of the acquired BGI business to those of BlackRock, there have been no changes in internal control over financial reporting during the quarter ended ~~September 30, 2009~~March 31, 2010 that have materially affected or are reasonably likely to materially affect, such internal control over financial reporting. BlackRock is continuing to evaluate its internal controls as well as the internal controls of the acquired BGI business as BlackRock integrates the BGI business into the existing BlackRock business.

- 8982 -

PART II—OTHER INFORMATION

Item 1.

Legal Proceedings

See Note ~~13,~~12, Commitments and Contingencies, to the Company’s condensed consolidated financial statements contained in Part I, Item 1 of this filing.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended ~~September 30, 2009,~~March 31, 2010, the Company made the following purchases of its common stock, which are registered pursuant to Section 12(b) of the Exchange Act.

   Total Number of
Shares
Purchased¹    Average Price
Paid per Share    Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
Of Programs    Maximum
Number of
Shares that May
Yet Be Purchased
Under the Plansor
Programs²
July 1, 2009 through

July 31, 2009
   978    $ 174.98    —      751,400
August 1, 2009 through

August 31, 2009
   4,550    $ 187.64    —      751,400
September 1, 2009
through September 30, 2009
   617    $ 201.15    —      751,400

Total
   6,145    $ 186.98    —      751,400


	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans Of Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs¹
January 1, 2010 through
January 31, 2010	4,032	²	$	236.74	—	751,400

February 1, 2010 through
February 28, 2010	514,073	^2,3	$	213.45	—	751,400

March 1, 2010 through March 31, 2010	14,640	²	$	217.05	—	751,400

Total	532,745		$	213.73	—	751,400

¹	On August 2, 2006, the Company announced a 2.1 million share repurchase program with no stated expiration date.

Reflects purchases made by the Company primarily to satisfy income tax withholding obligations of employees and members of our Board of Directors related to the vesting of certain restricted stock or restricted stock unit awards. All such purchases were made outside of the publicly announced share repurchase program.

²³

~~On August 2, 2006,~~Includes 18,886 shares repurchased by the Company ~~announced~~from employees in February 2010 pursuant to a ~~2.1 million share repurchase program~~put feature available in connection with ~~no stated expiration date. An additional indeterminable number~~the payment of ~~shares may be repurchased under the~~certain 2002 ~~Long-Term Incentive Plan (“2002 LTIP”).~~LTIP awards.

- 9083 -

PART II—OTHER INFORMATION (continued)

Item 6.

Exhibits


Exhibit No.		Description

10.1(1)		Lease Agreement, dated as of February 17, 2010, among BlackRock Investment Management (UK) Limited and Mourant & Co Trustees Limited and Mourant Property Trustees Limited as Trustees of the Drapers Gardens Unit Trust for the lease of Drapers Gardens, 12 Throgmorton Avenue, London, EC2, United Kingdom.

12.1		Computation of Ratio of Earnings to Fixed ~~Charges.~~Charges

31.1		Section 302 Certification of Chief Executive ~~Officer.~~Officer

31.2		Section 302 Certification of Chief Financial ~~Officer.~~Officer

32.1		Section 906 Certification of Chief Executive Officer and Chief Financial ~~Officer.~~Officer

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

(1)	Incorporated by reference to BlackRock’s Annual report on Form 10-K for the year ended December 31, 2009.

- 9184 -

SIGNATURES

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


BLACKROCK, INC. (Registrant)

By:		/S/ ANN MARIE PETACH
		Ann Marie Petach
		Managing Director & Chief Financial Officer

Date: ~~November 6, 2009~~May 10, 2010

- 9285 -

EXHIBIT INDEX


Exhibit No.		Description

10.1(1)		Lease Agreement, dated as of February 17, 2010, among BlackRock Investment Management (UK) Limited and Mourant & Co Trustees Limited and Mourant Property Trustees Limited as Trustees of the Drapers Gardens Unit Trust for the lease of Drapers Gardens, 12 Throgmorton Avenue, London, EC2, United Kingdom.

12.1		Computation of Ratio of Earnings to Fixed ~~Charges.~~Charges

31.1		Section 302 Certification of Chief Executive ~~Officer.~~Officer

31.2		Section 302 Certification of Chief Financial ~~Officer.~~Officer

32.1		Section 906 Certification of Chief Executive Officer and Chief Financial ~~Officer.~~Officer

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

(1)	Incorporated by reference to BlackRock’s Annual report on Form 10-K for the year ended December 31, 2009.


	BlackRock, Inc. Stockholders’ Equity
	Common And Preferred Stock		Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (loss)			Common Shares Held In Escrow			Treasury Stock Common			Total Stockholders’ Equity			Nonredeemable Non- controlling Interests			Total Permanent Equity			Redeemable Non-controlling Interests/ Temporary Equity
December 31, 2008	$	1	$	10,473		$	1,982		$	(186	)	$	(143	)	$	(58	)	$	12,069		$	225		$	12,294		$	266
Reclass to temporary equity—convertible debt		—		(1	)		—			—			—			—			(1	)		—			(1	)		1
Net income		—		—			619			—			—			—			619			19			638			2
Dividends paid, net of dividend expense for unvested RSUs		—		—			(315	)		—			—			—			(315	)		—			(315	)		—
Stock-based compensation		—		231			—			—			—			1			232			—			232			—
Issuance of common shares to institutional investor		1		299			—			—			—			—			300			—			300			—
Issuance of common shares for contingent consideration		—		43			—			—			—			—			43			—			43			—
Net issuance of common shares related to employee stock transactions		—		(79	)		—			—			—			57			(22	)		—			(22	)		—
PNC capital contribution		—		6			—			—			—			—			6			—			6			—
Merrill Lynch capital contribution		—		25			—			—			—			—			25			—			25			—
Net tax benefit (shortfall) from stock-based compensation		—		6			—			—			—			—			6			—			6			—
Minimum pension liability adjustment		—		—			—			1			—			—			1			—			1			—
Subscriptions/(redemptions/distributions)—non-controlling interest holders		—		—			—			—			—			—			—			(1	)		(1	)		(251	)
Net deconsolidations of sponsored investment funds		—		—			—			—			—			—			—			(9	)		(9	)		(8	)
Foreign currency translation adjustments		—		—			—			81			—			—			81			—			81			—
Other changes in non-controlling interests		—		—			—			—			—			—			—			(3	)		(3	)		—
Change in net unrealized gain (loss) from available-for sale investments, net of tax		—		—			—			16			—			—			16			—			16			—

September 30, 2009	$	2	$	11,003		$	2,286		$	(88	)	$	(143	)	$	—		$	13,060		$	231		$	13,291		$	10


	Three Months Ended September 30, 2008			Nine Months Ended September 30, 2008
Net income, as previously reported	$	218		$	734
Impact of new requirements within ASC 470-20		(1	)		(2	)

Net income attributable to BlackRock, Inc., as currently reported	$	217		$	732

Earnings per share attributable to BlackRock, Inc. common stockholders:
Basic earnings per common share, as previously reported⁽¹⁾	$	1.68		$	5.67
Basic earnings per common share, as currently reported	$	1.62		$	5.47
Diluted earnings per common share, as previously reported⁽¹⁾	$	1.62		$	5.49
Diluted earnings per common share, as currently reported	$	1.59		$	5.36


(Dollar amounts in millions)	Initial Estimate of Fair Value			Purchase Price Adjustments			Revised Estimate of Fair Value
Accounts receivable	$	593		$	(12	)	$	581
Investments		125			—			125
Separate account assets		116,301			—			116,301
Collateral held under securities lending agreements		23,498			—			23,498
Property and equipment		205			(2	)		203
Finite-lived intangible management contracts (intangible assets)		163			(7	)		156
Indefinite-lived intangible management contracts (intangible assets)		9,785			25			9,810
Trade names / trademarks (indefinite-lived intangible assets)		1,403			—			1,403
Goodwill		6,842			68			6,910
Other assets		366			—			366
Separate account liabilities		(116,301	)		—			(116,301	)
Collateral liability under securities lending agreements		(23,498	)		—			(23,498	)
Deferred tax liabilities		(3,799	)		8			(3,791	)
Accrued compensation and benefits		(885	)		—			(885	)
Other liabilities assumed		(660	)		(80	)		(740	)
Non-controlling interests assumed		(12	)		—			(12	)

Total consideration, net of cash acquired	$	14,126		$	—		$	14,126


Summary of consideration, net of cash acquired:
Cash paid	$	6,650		$	—		$	6,650
Cash acquired		(1,055	)		—			(1,055	)
Capital stock at fair value		8,531			—			8,531

Total cash and stock consideration	$	14,126		$	—		$	14,126


	September 30, 2009		December 31, 2008		Carrying Value
(Dollar amounts in millions)					March 31, 2010		December 31, 2009
Available-for-sale investments	$	103	$	101	$	65	$	73
Held-to-maturity						40		29
Trading investments		143		122		237		167
Other investments:
Consolidated sponsored investment funds (non cash management funds)		366		349
Consolidated sponsored cash management funds		—		326
Consolidated sponsored investment funds						318		360
Equity method investments		403		501		393		376
Deferred compensation plan hedge fund equity method investments		26		30		28		29
Cost method investments						15		15

Total other investments		795		1,206		754		780

Total investments	$	1,041	$	1,429	$	1,096	$	1,049


(Dollar amounts in millions)
			Gross Unrealized					Carrying Value		Cost			Gross Unrealized						Carrying Value
September 30, 2009	Cost		Gains		Losses			Carrying Value											Carrying Value
March 31, 2010										Cost		Cost			Gains			Losses			Carrying Value
Available-for-sale investments:																					Carrying Value
Equity securities:												Cost
Sponsored investment funds	$	57	$	1	$	(3	)	$	55	$	44		$	3		$	(2	)	$	45
Collateralized debt obligations (“CDOs”)		3		—		—			3
Collateralized debt obligations											2			1			—			3
Debt securities:
Mortgage debt		23		1		—			24		5			1			—			6
Asset-backed debt		12		1		—			13		9			2			—			11
Corporate debt		3		—		—			3
Foreign government debt		5		—		—			5

Total available-for-sale investments	$	103	$	3	$	(3	)	$	103	$	60		$	7		$	(2	)	$	65


			GrossUnrealized					Carrying Value		Cost			Gross Unrealized						Carrying Value
December 31, 2008	Cost		Gains		Losses			Carrying Value											Carrying Value
December 31, 2009										Cost		Cost			Gains			Losses			Carrying Value
Available-for-sale investments:																					Carrying Value
Equity securities:												Cost
Sponsored investment funds	$	109	$	—	$	(16	)	$	93	$	53		$	2		$	(1	)	$	54
Collateralized debt obligations		6		—		(2	)		4		2			—			—			2
Other debt securities		4		—		—			4
Debt securities:
Mortgage debt											6			1			—			7
Asset-backed debt											10			—			—			10

Total available-for-sale investments	$	119	$	—	$	(18	)	$	101	$	71		$	3		$	(1	)	$	73


Maturity date	September 30, 2009		December 31, 2008
(Dollar amounts in millions) Maturity date					March 31, 2010		December 31, 2009
<1 year	$	24	$	329	$	43	$	28
>1-5 years		6		2		7		5
>5-10 years		7		3		17		9
> 10 years		36		14		39		32

Total	$	73	$	348	$	106	$	74


(Dollar amounts in millions)											Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Other Assets Not Held at Fair Value ⁽¹⁾		March 31, 2010
Assets:
Investments
Available-for-sale
Equity											$	45	$	3	$	—	$	—	$	48
Fixed income												1		16		—		—		17

Total available-for-sale												46		19		—		—		65
Held-to-maturity
Fixed income												—		—		—		40		40

Total held-to-maturity												—		—		—		40		40
Trading
Equity												133		12		—		—		145
Fixed income												—		49		—		—		49
Deferred compensation plan mutual fund investments												43		—		—		—		43

Total trading												176		61		—		—		237
Other investments:
Consolidated sponsored investment funds:
Hedge funds / Funds of funds												—		—		25		—		25
Private equity												13		—		280		—		293

Total Consolidated sponsored investment funds												13		—		305		—		318
Equity method
Fixed income mutual fund												—		10		—		—		10
Hedge funds / Funds of funds												—		—		237		23		260
Private equity funds												—		—		58		18		76
Real estate funds												—		—		39		8		47

Total equity method												—		10		334		49		393

Deferred compensation plan hedge fund equity method investments												—		11		17		—		28
Cost method investments												—		—		—		15		15

Total investments												235		101		656		104		1,096

Separate account assets
Equity												73,920		58		63		—		74,041
Fixed income												—		37,027		1,090		—		38,117
Derivatives												4		1,453		—		—		1,457
Money market funds												1,764		—		—		—		1,764
Other												—		—		—		808		808

Total separate account assets												75,688		38,538		1,153		808		116,187
Collateral held under securities lending agreements
Equity												8,463		—		—		—		8,463
Fixed income												—		4,954		—		—		4,954

Total collateral held under securities lending agreements												8,463		4,954		—		—		13,417

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Other Assets Not Held at Fair Value⁽¹⁾		September 30, 2009
Assets:
Investments:
Available-for-sale	$	60	$	40	$	3	$	—	$	103
Trading		132		11		—		—		143
Other investments:
Consolidated sponsored investment funds		17		1		348		—		366
Equity method		8		—		357		38		403
Deferred compensation plan hedge fund equity method investments		—		12		14		—		26
Other assets⁽²⁾												—		11		24		—		35
Assets of consolidated VIEs
Bank loans												—		1,154		—		—		1,154
Bonds												—		93		—		—		93
Private equity												3		—		35		—		38
Other												—		3		—		—		3

Total investments		217		64		722		38		1,041
Separate account assets		3,413		95		—		28		3,536
Other assets⁽²⁾		—		11		50		—		61
Total investments of consolidated VIEs												3		1,250		35		—		1,288

Total assets measured at fair value	$	3,630	$	170	$	772	$	66	$	4,638
Total											$	84,389	$	44,854	$	1,868	$	912	$	132,023


Liabilities:
Borrowings of consolidated VIEs											$	—	$	—	$	1,214	$	—	$	1,214
Collateral liability under securities lending agreements												8,463		4,954		—		—		13,417
Other liabilities												—		7		—		—		7

Total liabilities measured at fair value											$	8,463	$	4,961	$	1,214	$	—	$	14,638


(Dollar amounts in millions)	December 31, 2009		Realized and unrealized gains / (losses), net			Purchases, sales, other settlements and issuances, net			Net transfers in and/or out of Level 3			March 31, 2010		Total net gains (losses) included in earnings⁽¹⁾
Assets:
Investments:
Consolidated sponsored investment funds
Hedge funds / Funds of funds	$	26	$	—		$	(1	)	$	—		$	25	$	(1	)
Private equity		312		4			(36	)		—			280		5
Equity method
Hedge funds / Funds of funds		247		13			(23	)		—			237		14
Private equity funds		51		—			7			—			58		1
Real estate funds		36		(1	)		4			—			39		(1	)
Deferred compensation plan hedge funds		15		2			—			—			17		2

Total investments		687		18			(49	)		—			656		20
Separate account assets
Equity		5		—			(3	)		61			63
Fixed income		1,287		34			185			(416	)		1,090

Total separate account assets		1,292		34			182			(355	)		1,153		n/a	⁽²⁾

Other assets		46		(12	)		(10	)		—			24		(12	)

Private equity assets of consolidated VIEs		—		2			33			—			35		n/a	⁽³⁾


Total assets measured at fair value	$	2,025	$	42		$	156		$	(355	)	$	1,868

Liabilities:

Borrowings of consolidated VIEs	$	—	$	(57	)	$	1,157			—		$	1,214		n/a	⁽³⁾


	Investments			Other Assets
June 30, 2009	$	696		$	50
Realized and unrealized gains/(losses), net		53			(1	)
Purchases, sales, other settlements and issuances, net		(27	)		1
Net transfers in and/or out of Level 3		—			—

September 30, 2009	$	722		$	50

Total net gains (losses) for the period included in earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date	$	53		$	(1	)


	Investments			Other Assets
June 30, 2008	$	1,386		$	130
Realized and unrealized gains/(losses), net		(89	)		(9	)
Purchases, sales, other settlements and issuances, net		30			(51	)
Net transfers in and/or out of Level 3		—			—

September 30, 2008	$	1,327		$	70

Total net (losses) for the period included in earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date	$	(61	)	$	(10	)


	Investments			Other Assets
December 31, 2007	$	1,239		$	—
Realized and unrealized gains/(losses), net		(90	)		(16	)
Purchases, sales, other settlements and issuances, net		209			8
Net transfers in and/or out of Level 3		(31	)		78

September 30, 2008	$	1,327		$	70

Total net (losses) for the period included in earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date	$	(80	)	$	(17	)


(Dollars amounts in millions)	Fair Value		Total Unfunded Commitment		Redemption Frequency	Redemption Notice Period

Trading:
Equity^(a)	$	12	$	—	Daily (100)%	n/a

Consolidated sponsored investment funds:
Private equity fund of funds^(b)		280		78	n/a	n/a

Other fund of funds^(c)		9		—	Monthly (39)%, Quarterly (51)% Semi-annually and Annually (10)%	30 – 120 days

Equity method⁽¹⁾:
Hedge funds/funds of hedge funds^(d)		237		91	Monthly (8)%, Quarterly (18)%, n/a (74)%	15 – 90 days
Private equity funds^(e)		58		73	n/a	n/a
Real estate funds^(f)		39		61	n/a	n/a

Deferred compensation plan hedge fund investments^(g)		28		—	Monthly (10)%, Quarterly (90)%	30 – 60 days

Private equity assets of consolidated VIEs^(h)		35		3	n/a	n/a

Total	$	698	$	306


(Dollars amounts in millions)

CLO Bank Loans:	March 31, 2010
Fair value	$	1,154
Aggregate principal amounts outstanding	$	1,303
Aggregate unpaid principal balance in excess of fair value	$	149
Unpaid principal balance of loans more than 90 days past due	$	9
Aggregate fair value of loans more than 90 days past due	$	1
Aggregate unpaid principal balance in excess of fair value for loans more than 90 days past due	$	8

CLO Borrowings:
Fair value	$	1,214
Aggregate principal amounts outstanding	$	1,433


	VIE Net Assets That the Company Consolidates		Maximum Risk of Loss
	VIE Net Assets That the Company Consolidates		Equity Interests		Capital Support Agreements		Total
Sponsored enhanced cash management funds	$	328	$	88	$	45	$	133
Other sponsored investment funds		55		—		—		—

Total	$	383	$	88	$	45	$	133


	VIE Assets That the Company Does Not Consolidate			VIE Liabilities That the Company Does Not Consolidate			Variable Interests on the Condensed Consolidated Statement of Financial Condition													(Dollar amounts in millions)
				VIE Liabilities That the Company Does Not Consolidate		Investments			Receivables			Other Net Assets (Liabilities)				Maximum Risk of Loss			Variable Interests on the Condensed Consolidated Statement of Financial Condition
CDOs	VIE Assets That the Company Does Not Consolidate	$	7,182		$	14,481		$	3		$	3		($	2	)		$	23
Sponsored cash management fund		2,431			—			—			—			—				—
																				Investments		Advisory Fee Receivables		Other Net Assets (Liabilities)			Maximum Risk of Loss
CDOs/CLOs																				$	3	$	2	$	(3	)	$	22
Other sponsored investment funds		12,576			3,892			12			12			—				24			14		318		(—	)		332

Total	$	22,189		$	18,373		$	15		$	15		($	2	)		$	47		$	17	$	320	$	(3	)	$	354


(Dollar amounts in millions)	Income Statement Location	Amount of Gain (Loss) Recognized in Income on Derivative Instruments
Foreign exchange contracts	General and administration expense	$	(3.8	)
Total return swaps	Non-operating income (expense)		(0.5	)
Credit default swap (Pillars)	Non-operating income (expense)		(0.1	)

Total		$	(4.4	)


December 31, 2008	$	5,533
Net additions related to:
Quellos		184
Other		1

September 30, 2009	$	5,718


(Dollar amounts in millions)
December 31, 2009, as reported	$	12,570
BGI purchase price allocation adjustment		68

December 31, 2009, as adjusted		12,638
Other net additions		3

March 31, 2010	$	12,641


	Indefinite-lived intangible assets		Finite-lived intangible assets			Total
December 31, 2008	$	5,378	$	1,063		$	6,441
Addition		—		2			2
Amortization expense		—		(108	)		(108	)

September 30, 2009	$	5,378	$	957		$	6,335


2.625% Convertible debentures due in 2035	September 30, 2009			December 31, 2008
(Dollar amounts in millions)							March 31, 2010		December 31, 2009
Maturity amount	$	248		$	249		$	95	$	243
Unamortized discount		(1	)		(4	)		—		—

Total	$	247		$	245
Carrying value							$	95	$	243


6.25% Senior notes due in 2017	September 30, 2009			December 31, 2008
Maturity amount	$	700		$	700
Unamortized discount		(4	)		(5	)

Total long-term senior notes		696			695
Other long-term borrowings		—			2

Total long-term borrowings	$	696		$	697


(Dollar amounts in millions)	2.25% Notes due 2012			3.50% Notes due 2014			6.25% Notes due 2017			5.00% Notes due 2019			Total Long-term Borrowings
Maturity amount	$	500		$	1,000		$	700		$	1,000		$	3,200
Unamortized discount		(1	)		(1	)		(4	)		(3	)		(9	)

Carrying value	$	499		$	999		$	696		$	997		$	3,191

Fair value	$	504		$	1,010		$	768		$	1,001		$	3,283


Liability as of December 31, 2008	$	21
Additions		22
Cash payments		(33	)
Non-cash charges		(3	)

Liability as of September 30, 2009	$	7


	Shares Issued										Shares Outstanding
	Common Shares		Escrow Common Shares		Treasury Common Shares		Preferred Shares Series A		Preferred Shares Series B	Preferred Shares Series C	Common Shares		Preferred Shares Series A		Preferred Shares Series B	Preferred Shares Series C
December 31, 2008	118,573,367		(911,266	)	(370,991	)	12,604,918		—	—	117,291,110		12,604,918		—	—
Issuance of common shares to institutional investor	2,133,713		—		—		—		—	—	2,133,713		—		—	—
Issuance of common shares for contingent consideration	330,341		—		—		—		—	—	330,341		—		—	—
Net issuance of common shares related to employee stock transactions and convertible debt conversions	572,238		—		422,390		—		—	—	994,628		—		—	—
Exchange of preferred shares series A for preferred shares series B	—		—		—		(12,604,918	)	12,604,918	—	—		(12,604,918	)	12,604,918	—
Exchange of common shares for preferred shares series B	(67,737,000	)	—		—		—		67,737,000	—	(67,737,000	)	—		67,737,000	—
Exchange of common shares for preferred shares series C	(2,889,467	)	—		—		—		—	2,889,467	(2,889,467	)	—		—	2,889,467
PNC capital contribution	—		—		(51,399	)	—		—	—	(51,399	)	—		—	—

September 30, 2009	50,983,192		(911,266	)	—		—		80,341,918	2,889,467	50,071,926		—		80,341,918	2,889,467


Outstanding at	Shares Under Option		Weighted Average Exercise Price
December 31, 2008	3,140,517		$	88.82
Exercised	(447,882	)	$	34.44
Forfeited	(8,064	)	$	167.76

September 30, 2009	2,684,571		$	97.65


Outstanding at	Unvested Restricted Stock and Units		Weighted Average Grant Date Fair Value
December 31, 2008	4,603,953		$	174.24
Granted	1,861,275		$	117.97
Converted	(829,781	)	$	179.41
Forfeited	(214,527	)	$	157.18

September 30, 2009	5,420,920		$	154.81


	March 31, 2010	December 31, 2009
Series A
Shares authorized, $0.01 par value	20,000,000	20,000,000
Shares issued	—	—
Shares outstanding	—	—
Series B
Shares authorized, $0.01 par value	150,000,000	150,000,000
Shares issued	124,620,593	112,817,151
Shares outstanding	124,620,593	112,817,151
Series C
Shares authorized, $0.01 par value	6,000,000	6,000,000
Shares issued	2,866,439	2,889,467
Shares outstanding	2,866,439	2,889,467
Series D
Shares authorized, $0.01 par value	20,000,000	20,000,000
Shares issued	—	11,203,442
Shares outstanding	—	11,203,442


	Three Months Ended September 30,
Revenues	2009		% of total		2008		% of total
North America	$	793	70	%	$	891	68	%
Europe		296	26	%		366	28	%
Asia-Pacific		51	4	%		56	4	%

Total revenues	$	1,140	100	%	$	1,313	100	%


(Dollar amounts in millions)									Three Months Ended March 31,
	Nine Months Ended September 30,										% of				% of
Revenues	2009		% of total		2008		% of total		2010		total		2009		total
North America	$	2,324	74	%	$	2,635	66	%
Americas									$	1,364	68	%	$	767	78	%
Europe		710	22	%		1,172	29	%		511	26	%		191	19	%
Asia-Pacific		122	4	%		193	5	%		120	6	%		29	3	%

Total revenues	$	3,156	100	%	$	4,000	100	%	$	1,995	100	%	$	987	100	%


Long-Lived Assets	September 30, 2009				December 31, 2008
North America	$	5,895	99	%	$	5,714	99	%
(Dollar amounts in millions) Long-Lived Assets									March 31, 2010				December 31, 2009
Americas									$	12,969	99	%	$	12,961	99	%
Europe		27	0	%		27	0	%		52	—	%		46	—	%
Asia-Pacific		46	1	%		52	1	%		70	1	%		74	1	%

Total long-lived assets	$	5,968	100	%	$	5,793	100	%	$	13,091	100	%	$	13,081	100	%