UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~Washington, DC~~WASHINGTON, D.C. 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 March 31, ~~2010~~2011

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

For the transition period fromto.

Commission file number 001-33099

BlackRock, Inc.

(Exact name of registrant as specified in its charter)


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

~~55 East 52nd Street,~~ ~~New York, NY 10055~~
~~(Address of principal executive offices)~~Organization)		(~~Zip Code)~~I.R.S. Employer Identification No.)

55 East 52nd Street, New York, NY 10055

(Address of Principal Executive Offices)

(Zip Code)

(212) 810-5300

(Registrant’s ~~telephone number, including area code)~~Telephone Number, Including Area Code)

(Former ~~name, former address~~Name, Former Address and ~~former fiscal year,~~Former Fiscal Year, if ~~changed since last report)~~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. (Check one):


Large accelerated filer	x		Accelerated filer	¨

Non-accelerated filer	¨	~~(Do~~ (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 April 30, ~~2010,~~2011, there were ~~64,324,009~~132,318,957 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)
~~Item 1.~~		~~Financial Statements (unaudited)~~
			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				47	46

Item 3.	Quantitative and Qualitative Disclosures About Market Risk				80	88

Item 4.	Controls and Procedures				82	90

PART II OTHER INFORMATION

Item 1.	~~PART II~~Legal Proceedings					91

Item 2.	~~OTHER INFORMATION~~

~~Item 1.~~	~~Legal Proceedings~~		83

~~Item 2.~~	Unregistered Sales of Equity Securities and Use of Proceeds		83	91

Item 6.	Exhibits				84	92

- i -

PART I—I – FINANCIAL INFORMATION

Item 1.

Financial Statements

BlackRock, Inc.

Condensed Consolidated Statements of Financial Condition

(Dollar amounts in millions, except per share data)

(unaudited)


					March 31, 2011		December 31, 2010
	March 31, 2010		December 31, 2009
Assets
Cash and cash equivalents	$	2,703	$	4,708	$	2,779	$	3,367
Accounts receivable		1,868		1,718		2,223		2,095
Due from related parties		170		189		136		150
Investments		1,096		1,049		1,528		1,540
Separate account assets		116,187		119,629
Assets of consolidated variable interest entities
Cash and cash equivalents		90		—		133		93
Bank loans and other investments		1,288		—		1,274		1,312
Separate account assets						121,903		121,137
Collateral held under securities lending agreements		13,417		19,335		17,236		17,638
Deferred mutual fund sales commissions, net		100		103
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
Deferred sales commissions, net						60		66
Property and equipment (net of accumulated depreciation of $460 and $426 at March 31, 2011 and December 31, 2010, respectively)						479		428
Intangible assets (net of accumulated amortization of $655 and $615 at March 31, 2011 and December 31, 2010, respectively)						17,472		17,512
Goodwill		12,641		12,638		12,804		12,805
Other assets		424		588		395		316

Total assets	$	168,060	$	178,066	$	178,422	$	178,459


Liabilities
Accrued compensation and benefits	$	616	$	1,482	$	538	$	1,520
Accounts payable and accrued liabilities		1,037		850		1,366		1,068
Due to related parties		391		490		26		57
Short-term borrowings		880		2,234		—		100
Liabilities of consolidated variable interest entities
Borrowings		1,214		—		1,297		1,278
Other liabilities		4		—		7		7
Convertible debentures		95		243		63		67
Long-term borrowings		3,191		3,191		3,192		3,192
Separate account liabilities		116,187		119,629		121,903		121,137
Collateral liability under securities lending agreements		13,417		19,335
Deferred tax liabilities		5,577		5,518
Collateral liabilities under securities lending agreements						17,236		17,638
Deferred income tax liabilities						5,526		5,477
Other liabilities		504		492		552		584

Total liabilities		143,113		153,464		151,706		152,125

Commitments and contingencies (Note 12)

Commitments and contingencies (Note 11)
Temporary equity
Redeemable non-controlling interests		79		49		4		6

~~- 1 -~~

-1-

PART I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Financial Condition (continued)

(Dollar amounts in millions, except per share data)

(unaudited)


								March 31, 2011			December 31, 2010
	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 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
Common stock, $0.01 par value;									1			1
Shares authorized: 500,000,000 at March 31, 2011 and December 31, 2010;
Shares issued: 132,282,360 and 131,923,624 at March 31, 2011 and December 31, 2010, respectively;							��
Shares outstanding: 132,268,423 and 131,216,561 at March 31, 2011 and December 31, 2010, respectively
Preferred stock (Note 14)									1			1
Additional paid-in capital		22,174			22,127				22,455			22,502
Retained earnings		2,663			2,436				4,019			3,723
Appropriated retained earnings		114			—				58			75
Accumulated other comprehensive (loss)		(165	)		(96	)
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	)
Accumulated other comprehensive loss									(52	)		(96	)
Escrow shares, common, at cost (3,603 shares held at March 31, 2011 and December 31, 2010)									(1	)		(1	)
Treasury stock, common, at cost (10,334 and 703,460 shares held at March 31, 2011 and December 31, 2010, respectively)									(2	)		(111	)

Total BlackRock, Inc. stockholders’ equity		24,648			24,329				26,479			26,094
Nonredeemable non-controlling interests		174			224				188			189
Nonredeemable non-controlling interests of consolidated variable interest entities		46			—				45			45

Total permanent equity		24,868			24,553				26,712			26,328

Total liabilities, temporary equity and permanent equity	$	168,060		$	178,066			$	178,422		$	178,459

See accompanying notes to condensed consolidated financial statements.

- 2 -

PART I—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 March 31,						Three Months Ended March 31,
	2010			2009			2011			2010
Revenue
Investment advisory, administration fees and securities lending revenue
Related parties	$	1,149		$	507		$	1,357		$	1,149
Other third parties		604			293			627			604

Investment advisory, administration fees and securities lending revenue		1,753			800			1,984			1,753
Investment advisory performance fees		50			11			83			50
BlackRock Solutions and advisory		113			135			128			113
Distribution fees		28			25			28			28
Other revenue		51			16			59			51

Total revenue		1,995			987			2,282			1,995

Expenses
Employee compensation and benefits		773			351			830			773
Distribution and servicing costs
Related parties		64			103			1			64
Other third parties		36			24			108			36
Amortization of deferred mutual fund sales commissions		26			27
Amortization of deferred sales commissions								22			26
Direct fund expenses		113			13			143			113
General and administration		289			140			340			289
Restructuring charges		—			22
Amortization of intangible assets		40			36			40			40

Total expenses		1,341			716			1,484			1,341

Operating income		654			271			798			654

Non-operating income (expense)
Net gain (loss) on investments		38			(172	)		59			37
Net gain (loss) on consolidated variable interest entities								(15	)		1
Interest and dividend income		4			8			9			4
Interest expense		(40	)		(15	)		(38	)		(40	)

Total non-operating income (expense)		2			(179	)		15			2

Income before income taxes		656			92			813			656
Income tax expense		228			30			249			228

Net income		428			62			564			428
Less:
Net income (loss) attributable to nonredeemable non-controlling interests		5			(22	)		(4	)		5

Net income attributable to BlackRock, Inc.	$	423		$	84		$	568		$	423

Earnings per share attributable to BlackRock, Inc. common stockholders:
Basic	$	2.20		$	0.63		$	2.92		$	2.20
Diluted	$	2.17		$	0.62		$	2.89		$	2.17

Cash dividends declared and paid per share	$	1.00		$	0.78		$	1.375		$	1.00

Weighted-average common shares outstanding:
Basic		189,676,023			130,216,218			191,797,365			189,676,023
Diluted		192,152,251			131,797,189			194,296,504			192,152,251

See accompanying notes to condensed consolidated financial statements.

- 3 -

PART I—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 March 31,						Three Months Ended March 31,
	2010			2009			2011			2010
Net income	$	428		$	62		$	564		$	428
Other comprehensive income:
Change in net unrealized gains (losses) from available-for-sale investments, net of tax
Unrealized holding gains (losses), net of tax		3			(1	)		1			3
Less: reclassification adjustment included in net income		1			(8	)		(1	)		1

Net change from available-for-sale investments, net of tax⁽¹⁾		2			7			—			2
Minimum pension liability adjustment		(1	)		1			—			(1	)
Foreign currency translation adjustments		(70	)		(14	)		44			(70	)

Comprehensive income								608			359
Less: Comprehensive income (loss) attributable to non-controlling interests								(4	)		5

Comprehensive income attributable to BlackRock, Inc.	$	359		$	56		$	612		$	354

⁽¹⁾	The tax benefit (expense) on unrealized holding gains (losses) was ~~($1) million~~zero and ($3)1) million during the three months ended March 31, ~~2010~~2011 and ~~2009,~~2010, respectively.

See accompanying notes to condensed consolidated financial statements.

- 4 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Changes in Equity

(Dollar amounts in millions)

   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

(unaudited)


	Additional Paid-in Capital⁽¹⁾			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, 2010	$	22,504		$	3,723		$	75		($	96	)	($	1	)	($	111	)	$	26,094		$	189		$	45		$	26,328		$	6
Net income		—			568			—			—			—			—			568			11			(15	)		564			—
Allocation of losses of consolidated collateralized loan obligations		—			—			(17	)		—			—			—			(17	)		—			17			—			—
Dividends paid, net of dividend expense for unvested RSUs		—			(272	)		—			—			—			—			(272	)		—			—			(272	)		—
Stock-based compensation		137			—			—			—			—			—			137			—			—			137			—
Merrill Lynch capital contribution		8			—			—			—			—			—			8			—			—			8			—
Net issuance of common shares related to employee stock transactions		(205	)		—			—			—			—			109			(96	)		—			—			(96	)		—
Net tax benefit (shortfall) from stock-based compensation		13			—			—			—			—			—			13			—			—			13			—
Subscriptions/(redemptions/distributions) - non-controlling interest holders		—			—			—			—			—			—			—			(12	)		(2	)		(14	)		—
Net consolidations (deconsolidations) of sponsored investment funds		—			—			—			—			—			—			—			—			—			—			(2	)
Foreign currency translation adjustments		—			—			—			44			—			—			44			—			—			44			—

March 31, 2011	$	22,457		$	4,019		$	58		($	52	)	($	1	)	($	2	)	$	26,479		$	188		$	45		$	26,712		$	4

¹⁽¹⁾	Includes $1 million of common stock and $1 million of preferred stock at both March 31, ~~2010~~2011 and December 31, ~~2009.~~2010.

See accompanying notes to condensed consolidated financial statements.

- 5 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Changes in Equity

(Dollar amounts in millions)

   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

(unaudited)


	Additional Paid-in Capital⁽¹⁾			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, net of tax		(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 changes 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

¹⁽¹⁾	Includes $1 million of common stock and $1 million of preferred stock at both March 31, ~~2009~~2010 and ~~$1 of common stock at~~ December 31, ~~2008.~~2009.

See accompanying notes to condensed consolidated financial statements.

- 6 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Cash Flows

(Dollar amounts in millions)

(unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
	2010			2009			2011			2010
Cash flows from operating activities
Net income	$	428		$	62		$	564		$	428
Adjustments to reconcile net income to cash from operating activities:
Depreciation and amortization		78			57			73			78
Amortization of deferred mutual fund sales commissions		26			27
Amortization of deferred sales commissions								22			26
Stock-based compensation		108			82			137			108
Deferred income tax expense (benefit)		55			(44	)		48			55
Net (gains) losses on non-trading investments		(12	)		48			(22	)		(12	)
Purchases of investments within consolidated funds		(8	)		(21	)		(1	)		(8	)
Proceeds from sale and maturities of investments within consolidated funds		14			152
Proceeds from sales and maturities of investments within consolidated funds								9			14
Assets and liabilities of consolidated VIEs:
Change in cash and cash equivalents		(42	)		—			(40	)		(42	)
(Purchases)/sales of bank loans and other investments		36			—
Net (gains) losses within consolidated VIEs								15			—
Net (purchases)/proceeds within consolidated VIEs								42			36
(Earnings) losses from equity method investees		(35	)		114			(41	)		(35	)
Distributions of earnings from equity method investees		4			4			5			4
Other adjustments		(1	)		2			—			(1	)
Changes in operating assets and liabilities:
Accounts receivable		(157	)		(51	)		(130	)		(157	)
Due from related parties		11			163			—			11
Deferred mutual fund sales commissions		(23	)		(12	)
Deferred sales commissions								(16	)		(23	)
Investments, trading		(59	)		(74	)		(1	)		(59	)
Other assets		149			(13	)		(68	)		149
Accrued compensation and benefits		(863	)		(599	)		(982	)		(863	)
Accounts payable and accrued liabilities		203			(10	)		292			203
Due to related parties		(99	)		7			(31	)		(99	)
Other liabilities		23			(20	)		(31	)		23

Cash flows from operating activities		(164	)		(126	)		(156	)		(164	)

Cash flows from investing activities
Purchases of investments		(28	)		(9	)		(53	)		(28	)
Purchases of assets held for sale								—			(1	)
Proceeds from sales and maturities of investments		29			126			104			29
Purchases of assets held for sale		(1	)		(1	)
Distributions of capital from equity method investees		20			4			17			20
Net consolidations (deconsolidations) of sponsored investment funds		2			—			—			2
Acquisitions, net of cash acquired		(8	)		—			—			(8	)
Purchases of property and equipment		(44	)		(16	)		(83	)		(44	)

Cash flows from investing activities		(30	)		104			(15	)		(30	)

- 7 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Cash Flows (continued)

(Dollar amounts in millions)

(unaudited)


	Three Months Ended March 31,						Three Months Ended March 31,
	2010			2009			2011			2010
Cash flows from financing activities
Repayments of short-term borrowings		(1,354	)		—			(100	)		(1,354	)
Repayments of convertible debt		(148	)		—			(4	)		(148	)
Cash dividends paid		(196	)		(105	)		(272	)		(196	)
Proceeds from of stock options exercised		6			1
Proceeds from stock options exercised								9			6
Proceeds from issuance of common stock		1			1			1			1
Repurchases of common stock		(114	)		(39	)		(106	)		(114	)
Merrill Lynch capital contribution								8			—
Net (redemptions/distributions paid)/subscriptions received from non-controlling interests holders		9			(134	)		(14	)		9
Excess tax benefit from stock-based compensation		41			3			13			41
Net borrowings/(repayments of borrowings) by consolidated sponsored investment funds		—			72

Cash flows from financing activities		(1,755	)		(201	)		(465	)		(1,755	)

Effect of exchange rate changes on cash and cash equivalents		(56	)		(16	)		48			(56	)

Net decrease in cash and cash equivalents		(2,005	)		(239	)
Net increase (decrease) in cash and cash equivalents								(588	)		(2,005	)
Cash and cash equivalents, beginning of period		4,708			2,032			3,367			4,708

Cash and cash equivalents, end of period	$	2,703		$	1,793		$	2,779		$	2,703


Supplemental disclosure of cash flow information is as follows:
Cash paid for:
Interest	$	26		$	26		$	24		$	26
Interest on borrowings of consolidated VIEs	$	12		$	—		$	15		$	12
Income taxes	$	67		$	133		$	132		$	67

Supplemental schedule of non-cash financing transactions is as follows:
Supplemental schedule of non-cash investing and financing transactions is as follows:
Issuance of common stock	$	230		$	62		$	206		$	230
Increase in borrowings due to consolidation of VIEs	$	1,157		$	—
Increase (decrease) in borrowings due to consolidation of VIEs							$	—		$	1,157

See accompanying notes to condensed consolidated financial statements.

- 8 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

BlackRock, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Business Overview

BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) provides diversified investment management ~~and securities lending services~~ to institutional clients, intermediary and to individual investors through various investment vehicles. Investment management services primarily consist of the management of equity, fixed income, multi-asset class, alternative investment and cash management ~~and equity client accounts, the management~~products. BlackRock offers its investment products in a variety of ~~a number of~~vehicles, including open-end and closed-end mutual ~~fund families, exchange traded~~funds,iShares^® exchange-traded funds ~~and other non-U.S. equivalent retail products serving the institutional and retail markets, and the management of other~~(“ETFs”), collective investment ~~funds, including collective~~ trusts and ~~alternative funds, developed to serve various customer needs.~~separate accounts. 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.

On December 1, 2009, BlackRock completed its acquisition of Barclays Global Investors (“BGI”) from Barclays Bank PLC (“Barclays”) (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 3, Mergers and Acquisitions, for more details on this transaction.

On March 31, ~~2010,~~2011, equity ownership of BlackRock was as follows:


	Voting Common Stock		Capital Stock⁽¹⁾		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	%		25.1	%		20.2	%
Barclays	4.7	%	19.6	%
Barclays Bank PLC (“Barclays”)						2.3	%		19.5	%
Bank of America Corporation (“Bank of America”)/Merrill Lynch & Co., Inc.						—	%		7.1	%
Other	57.2	%	22.4	%		72.6	%		53.2	%

	100.0	%	100.0	%		100.0	%		100.0	%

⁽¹⁾	Includes outstanding common and non-voting preferred ~~stock only.~~stock.

- 9 -

PART I—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.

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, ~~2009,~~2010, which was filed with the Securities and Exchange Commission (“SEC”) on ~~March 10, 2010.~~February 28, 2011.

The interim financial information at March 31, ~~2010~~2011 and for the three months ended March 31, ~~2010~~2011 and ~~2009~~2010 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.

~~Business Combinations~~Reclassifications

Certain items previously reported have been reclassified to conform to the current period presentation.

Fair Value Measurements

~~In accordance with the requirements of~~ Accounting Standards Codification (“ASC”) ~~805,~~~~Business Combinations~~ (“ASC 805”), certain line items on the condensed consolidated statement of 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 the BGI purchase price allocation.

~~Fair Value Measurements~~

~~ASC~~ 820-10,Fair Value Measurements and Disclosures (“ASC 820-10”), requires among other things, ~~enhanced~~ disclosures about assets and liabilities that are measured and reported at fair value.

Hierarchy of Fair Value Inputs

The provisions of ASC 820-10 establish a hierarchy that prioritizes inputs to valuation techniques used to measure fair value and ~~requires~~require companies to disclose the fair value of their financial instruments according to athe 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~~additional 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~~class of assets and ~~liabilities.~~

~~- 10 -~~

~~PART I—FINANCIAL INFORMATION (continued)~~

~~Item 1.~~

~~Financial Statements (continued)~~

~~BlackRock, Inc.~~

~~Notes~~liabilities and new disclosures with regards to ~~Condensed Consolidated Financial Statements—(continued)~~

~~(unaudited)~~

significant transfers into and out of Levels 1 and 2. ~~Significant~~See Accounting Policies ~~(continued)~~Adopted in the Three Months Ended March 31, 2011 below for more information on additional fair value disclosure requirements adopted in 2011.

~~Basis of Presentation~~~~(continued)~~

~~Fair Value Measurements (continued)~~

~~Financial instruments~~Assets and liabilities 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 may include listed mutual funds (including those accounted for under the equity method of accounting as these mutual funds are investment companies that have publicly available net asset values (“NAVs”) which, in accordance with GAAP, are calculated under fair value measures and are equal to the earnings of such funds), ETFs, equities and certain derivatives.

- 10 -

PART I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

2. Significant Accounting Policies (continued)

Fair Value Measurements (continued)

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; quotes from pricing services or brokers, for which the Company can determine that orderly transactions took place at the quoted price or that the inputs used to arrive at the price were observable; and inputs other than quoted prices that are observable, such as models or other valuation methodologies. ~~Assets that generally are included~~As a practical expedient, the Company relies on the NAV (or its equivalents) of certain investments as their fair value.

Level 2 assets 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 equity method limited partnership interests in hedge funds ~~in which~~and mutual funds valued based on NAV where the ~~valuations for substantially all of~~Company has the ~~investments~~ability to redeem at the measurement date or within the ~~fund are based upon Level 1 or Level 2 inputs,~~near term without redemption restrictions, restricted public securities valued at a discount, as well as over the counter derivatives, including interest and inflation rate swaps and foreign currency exchange ~~currency~~ contracts that have inputs to the valuations that generally can be ~~generally~~ corroborated by observable market data.

Level 3 ~~Inputs –~~ Inputs:

Unobservable inputs for the valuation of the asset or 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~~Certain investments that are valued using a NAV and are subject to current redemption restrictions that will not be lifted in the near term are included in Level 3.

Level 3 assets 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.~~bank loans.

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, 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,~~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 as an input to value these investments.

Level 3 liabilities included in this category include borrowings of consolidated collateralized loan obligations valued based upon non-binding single broker quotes.

Significance of Inputs

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)~~

~~(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 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,~~ require temporary equity classification for instruments that are currently redeemable or convertible for cash or other assets at the option of the holder. At March 31, 2010 and December 31, 2009, the Company determined that $79 million and $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.

~~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,~~ 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 March 31, 2010, the Company held disposal group assets of $24 million and related liabilities of $22 million in other assets and other liabilities, respectively, on its condensed consolidated statement of financial condition. Disposal group liabilities include approximately $20 million of borrowings directly associated with the disposal group assets. During the three months ended March 31, 2009, the Company recorded ($1) million within non-operating income (expense) on its condensed consolidated statement of income related to the disposal group and did not record any adjustments in 2010.

~~Convertible Debt Instruments~~

~~In accordance with the provisions within ASC 470-20,~~~~Debt~~ (“ASC 470-20”), issuers of convertible debt instruments that may be settled in cash upon conversion, 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. At March 31, 2010, the Company had $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 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. As of March 31, 2010, the initial $18 million debt discount has been fully amortized.

~~- 12 -~~

~~PART I—FINANCIAL INFORMATION (continued)~~

~~Item 1.~~

~~Financial Statements (continued)~~

~~BlackRock, Inc.~~

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

~~(unaudited)~~

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

~~Accounting Policies Adopted in the Three Months Ended March 31, 2010~~

~~New Consolidation Guidance for Variable Interest Entities~~

~~In June 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2009-17,~~~~Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities~~ (“ASU 2009-17”), which amended the consolidation guidance for variable interest 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 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 be considered when evaluating each of the criteria for determining whether a 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) or other applicable consolidation guidance, including guidance for the consolidation of partnerships in ASC 810. The amendment does not defer the disclosure requirements in ASU 2009-17.

~~On January 1, 2010, upon adoption of the provisions of ASU 2009-17, the Company recorded a cumulative effect adjustment to 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 irrevocably elect fair value as the initial and subsequent accounting measurement attribute for certain financial assets and liabilities. ASC 825-10 permits entities to ~~choose~~elect to measure eligible financial assets and liabilities at fair ~~value.~~value on an ongoing basis. 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 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 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 mitigate accounting mismatches between the carrying value of the assets and liabilities and to achieve operational simplifications.

- 1311 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

2. Significant Accounting Policies (continued)

~~Accounting Policies Adopted~~Collateral Assets Held and Liabilities Under Securities Lending Agreements

The Company facilitates securities lending arrangements whereby securities held by separate account assets maintained by the life insurance companies are lent to third parties. In exchange, the Company receives collateral, principally cash and securities, with minimums generally ranging from approximately 102% to 112% of the value of the securities lent in order to reduce counterparty risk. Under the ~~Three Months Ended~~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 the Company to request the borrower to return the securities at any time; therefore these transactions are not reported as sales under ASC 860,Transfers and Servicing.

As a result of the Company’s ability to resell or re-pledge the collateral, the Company records on its condensed consolidated statements of financial condition the collateral received under these arrangements (both cash and non-cash), as its own asset in addition to an equal and offsetting collateral liability for the obligation to return the collateral. At March 31, 2011, the fair value of loaned securities held by separate account assets was approximately $15.9 billion and the collateral held under these securities lending agreements was approximately $17.2 billion. During the three months ended March 31, 2011 and 2010, ~~(continued)~~

the Company had not sold or repledged any of the collateral received under these arrangements.

Appropriated Retained Earnings

Upon adoption of ~~ASU~~Accounting Standards Update (“ASU”) 2009-17 on January 1, 2010, BlackRock consolidated three ~~CLOs~~collateralized loan obligations (“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~~has been recorded as net income (loss) attributable to nonredeemable non-controlling interests and as an adjustment to appropriated retained earnings.

~~Improving Disclosures about~~Comprehensive Income Attributable to BlackRock

Prior to the issuance of BlackRock’s third quarter 2010 Form 10-Q, the Company determined that pursuant to ASC 810,Consolidation, in the first quarter 2010 it should have presented the amount of comprehensive income attributable to non-controlling interests and comprehensive income attributable to BlackRock in its condensed consolidated statements of comprehensive income and it mislabeled total comprehensive income as being attributable to BlackRock. Therefore, the accompanying condensed consolidated statement of comprehensive income for the interim period ended March 31, 2010 has been corrected to include the required information.

- 12 -

PART I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

2. Significant Accounting Policies (continued)

Accounting Policies Adopted in the Three Months Ended March 31, 2011

Additional Level 3 Fair Value ~~Measurements~~Rollforward Disclosures

~~In January 2009, the FASB issued~~ ASU 2010-06,Fair Value Measurements and Disclosures~~(“ASU 2010-06”). ASU 2010-06 amends ASC 820-10 to require new disclosures with regards to significant transfers into and out of Levels 1 and 2 and~~, requires separate disclosures about purchases, sales, issuances and other settlements within the Level 3 fair value rollforward. ASU 2010-06 also clarifies existing fair value disclosures about the appropriate level of 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 existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the 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 on January 1, ~~2010~~2011 of the additional Level 3 rollforward 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.~~statement disclosures.

~~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:


	Carrying Value
(Dollar amounts in millions)	March 31, 2010		December 31, 2009		March 31, 2011		December 31, 2010
Available-for-sale investments	$	65	$	73	$	59	$	45
Held-to-maturity		40		29
Trading investments		237		167
Held-to-maturity investments						90		100
Trading investments:
Consolidated sponsored investment funds						76		60
Other equity securities						2		22
Deferred compensation plan mutual fund investments						52		49

Total trading investments						130		131
Other investments:
Consolidated sponsored investment funds		318		360		348		337
Equity method investments		393		376		528		556
Deferred compensation plan hedge fund equity method investments		28		29		25		27
Carried interest						13		13
Cost method investments		15		15		335		331

Total other investments		754		780		1,249		1,264


Total investments	$	1,096	$	1,049	$	1,528	$	1,540

At March 31, ~~2010,~~2011, the Company ~~had $493~~consolidated $424 million of ~~total~~ investments held by consolidated sponsored investment funds (non-VIEs) of which ~~$175~~$76 million and ~~$318~~$348 million were classified as trading investments and other investments, respectively.

At December 31, ~~2009,~~2010, the Company ~~had $463~~consolidated $397 million of ~~total~~ investments held by consolidated sponsored investment funds (non-VIEs) of which ~~$103~~$60 million and ~~$360~~$337 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.

- 1613 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

4.3. Investments (continued)

~~Available-for-sale~~Available-for-Sale Investments

A summary of the cost and carrying value of investments classified as available-for-sale is as follows:


(Dollar amounts in millions)
	Cost			Gross Unrealized						Carrying Value				Gross Unrealized					Carrying Value
March 31, 2010			Gains			Losses													Carrying Value
March 31, 2011												Cost		Gains		Losses			Carrying Value
Available-for-sale investments:																			Carrying Value
Equity securities:
Sponsored investment funds												$	48	$	3	($	1	)	$	50
Collateralized debt obligations (“CDOs”)													1		1		—			2
Debt securities:
Mortgage debt													4		1		—			5
Asset-backed debt													1		1		—			2

Total available-for-sale investments												$	54	$	6	($	1	)	$	59


														Gross Unrealized					Carrying Value
December 31, 2010												Cost		Gains		Losses			Carrying Value
Available-for-sale investments:	Cost									Carrying Value
Equity securities:
Sponsored investment funds	$	44		$	3		$	(2	)	$	45	$	33	$	4	($	1	)	$	36
Collateralized debt obligations		2			1			—			3		2		—		—			2
Debt securities:
Mortgage debt		5			1			—			6		4		2		—			6
Asset-backed debt		9			2			—			11		1		—		—			1

Total available-for-sale investments	$	60		$	7		$	(2	)	$	65	$	40	$	6	($	1	)	$	45


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

Total available-for-sale investments	$	71		$	3		$	(1	)	$	73

Available-for-sale investments include seed investments in BlackRock sponsored investment funds and debt securities received upon closure of ~~an enhanced cash fund,~~certain funds in lieu of the Company’s remaining investment in the ~~fund and securities purchased from another enhanced cash fund.~~funds.

~~During the three months ended March 31, 2010 and 2009, the~~The Company did not record any other-than-temporary impairments on available-for-sale debt ~~securities.~~

~~The Company has reviewed~~or equity securities during the ~~gross unrealized losses of $2 million as of~~three months ended March 31, ~~2010 related to available-for-sale equity securities, of which approximately $1 million had been in a loss position for greater than twelve months,~~2011 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.2010.

- 1714 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

4.3. Investments (continued)

Available-for-Sale Investments (continued)

The cost and fair value of debt securities classified as available-for-sale at March 31, 2011 and December 31, 2010 by maturity date were as follows:


*(Dollar amounts in millions)*	1 Year or less		After 1 Year through 5 Years		After 5 Years through 10 Years		After 10 Years		Total
March 31, 2011
Mortgage debt	$	—	$	—	$	1	$	3	$	4
Asset-backed debt		—		—		—		1		1

Cost	$	—	$	—	$	1	$	4	$	5

Fair value	$	—	$	—	$	1	$	6	$	7

December 31, 2010
Mortgage debt	$	—	$	—	$	1	$	3	$	4
Asset-backed debt		—		—		—		1		1

Cost	$	—	$	—	$	1	$	4	$	5

Fair value	$	—	$	—	$	1	$	6	$	7

Held-to-Maturity Investments

A summary of the carrying value of held-to-maturity investments is as follows:


	Carrying Value				Carrying Value
(Dollar amounts in millions)	March 31, 2010		December 31, 2009		March 31, 2011		December 31, 2010
Held-to-maturity investments:
Foreign government debt	$	39	$	28	$	90	$	100
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~~purposes. The amortized cost (the carrying ~~value~~value) of these investments approximates fair value.

The amortized cost and fair value of debt securities classified as held-to-maturity at March 31, 2011 and December 31, 2010 by maturity date were as follows:


*(Dollar amounts in millions)*	1 Year or less		After 1 Year through 5 Years		After 5 Years through 10 Years		After 10 Years		Total
March 31, 2011
Amortized cost	$	45	$	39	$	—	$	6	$	90

Fair value	$	45	$	39	$	—	$	6	$	90

December 31, 2010
Amortized cost	$	18	$	76	$	—	$	6	$	100

Fair value	$	18	$	76	$	—	$	6	$	100

- 15 -

PART I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

3. Investments (continued)

Trading ~~and Other~~ Investments

A summary of the cost and carrying value of trading ~~and other~~ investments is as follows:

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

Deferred compensation plan mutual fund investments
   $ 49    $ 43    $ 49    $ 42
Equity securities
   157    145    112    97
Debt securities:

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

Total trading investments
   $ 255    $ 237    $ 188    $ 167

Other investments:

Consolidated sponsored investment funds
   $ 330    $ 318    $ 380    $ 360
Equity method
   492    393    499    376
Deferred compensation plan hedge fund equity method investments
   25    28    28    29
Cost method investments
   15    15    15    15

Total other investments
   $ 862    $ 754    $ 922    $ 780


	March 31, 2011				December 31, 2010
*(Dollar amounts in millions)*	Cost		Carrying Value		Cost		Carrying Value
Trading investments:
Deferred compensation plan mutual fund investments	$	45	$	52	$	45	$	49
Equity securities		37		39		37		45
Debt securities:
Municipal debt		8		8		10		10
Corporate debt		31		31		25		27

Total trading investments	$	121	$	130	$	117	$	131

~~Trading~~At March 31, 2011, trading investments include $38 million of equity and $38 million of debt securities held by consolidated sponsored investment funds, $52 million of certain deferred compensation plan mutual fund investments ~~equity~~ and ~~debt securities within certain consolidated sponsored investment funds and~~$2 million of equity ~~and debt~~ securities held in separate investment accounts for the purpose of establishing an investment history in various investment strategies before being marketed to investors.

Other Investments

A summary of the cost and carrying value of other investments is as follows:


	March 31, 2011				December 31, 2010
*(Dollar amounts in millions)*	Cost		Carrying Value		Cost		Carrying Value
Other investments:
Consolidated sponsored investment funds	$	316	$	348	$	319	$	337
Equity method		515		528		569		556
Deferred compensation plan hedge fund equity method investments		17		25		20		27
Carried interest		—		13		—		13
Cost method investments:
Federal Reserve Bank stock		326		326		325		325
Other		9		9		6		6

Total cost method investments		335		335		331		331

Total other investments	$	1,183	$	1,249	$	1,239	$	1,264

Consolidated sponsored investment funds include investments in third party private equity funds, direct investments in private companies and third party hedge funds held by BlackRock sponsored investment funds.

Equity method investments include BlackRock’s direct investment in BlackRock sponsored investment products.

Carried interest represents allocations to BlackRock general partner capital accounts for certain funds. These balances are subject to change upon cash distributions, additional allocations, or reallocations back to limited partners within the respective funds.

- 1816 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

4.3. Investments (continued)

~~Cost Method~~Other Investments (continued)

Cost method investments include non-marketable securities, including ~~$10~~$326 million of ~~restricted~~ Federal Reserve Bank stock ~~that~~at March 31, 2011, which is held for regulatory ~~purposes.~~

purposes and is restricted from sale. As of March 31, ~~2010,~~2011, there were no indicators of impairments on these investments.

~~Maturity dates~~

~~The carrying value of debt securities, classified as available-for-sale, held-to-maturity and trading investments, by maturity at March 31, 2010 and December 31, 2009 is as follows:~~

(Dollar amounts in millions)
Maturity date
   March 31,
2010    December 31,
2009
<1 year
   $ 43    $ 28
>1-5 years
   7    5
>5-10 years
   17    9
> 10 years
   39    32

Total
   $ 106    $ 74

At 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.

~~- 19 -~~

~~PART I—FINANCIAL INFORMATION (continued)~~

~~Item 1.~~

~~Financial Statements (continued)~~

~~BlackRock, Inc.~~

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

~~(unaudited)~~

5.4. Consolidated Sponsored Investment Funds

The Company consolidates certain sponsored investment funds primarily because it is deemed to control such funds in accordance with GAAP. The investments that are owned by these consolidated sponsored investment funds are classified as other or trading investments. At March 31, ~~2010~~2011 and December 31, ~~2009,~~2010, the following table presents the balances related to these consolidated funds that were ~~consolidated in~~included on the condensed consolidated statements of financial ~~condition:~~condition as well as BlackRock’s net interest in these funds:


(Dollar amounts in millions)	March 31, 2010			December 31, 2009			March 31, 2011			December 31, 2010

Cash and cash equivalents	$	123		$	75		$	42		$	65
Investments		493			463
Other net assets (liabilities)		(24	)		(7	)
Investments:
Trading investments								76			60
Other investments								348			337
Other assets								11			3
Other liabilities								(26	)		(10	)
Non-controlling interests		(253	)		(273	)		(192	)		(195	)

Total net interests in consolidated investment funds	$	339		$	258
BlackRock’s net interests in consolidated investment funds							$	259		$	260

At March 31, 2011 and December 31, ~~2009, the above balances included, a~~2010, one other consolidated sponsored investment fund ~~that was also deemed a VIE. This VIE as well as~~and three consolidated CLOs, which are ~~also VIEs,~~deemed to be variable interest entities (“VIEs”), were excluded from the ~~March 31, 2010~~ balances ~~above.~~in the table above as the balances for these investment products are reported separately on the condensed consolidated statements of financial condition. See Note 7,6, Variable Interest Entities, for further ~~discussion.~~discussion on these consolidated products.

BlackRock’s total exposure to consolidated sponsored investment funds of ~~$339~~$259 million and ~~$258~~$260 million at March 31, ~~2010~~2011 and December 31, ~~2009,~~2010, 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 partially offset in net income (loss) attributable to non-controlling ~~interests.~~interests for the portion not attributable to BlackRock.

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.

- 2017 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

6.5. Fair Value Disclosures

Fair Value Hierarchy

~~Assets and liabilities~~Total assets measured at fair value on a recurring basis of $140,726 million at March 31, ~~2010~~2011 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

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 of consolidated VIEs
   3    1,250    35    —      1,288

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


	Assets measured at fair value
*(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, 2011
Assets:

Investments
Available-for-sale:
Equity securities (funds and CDOs)	$	50	$	—	$	2	$	—	$	52
Debt securities		—		7		—		—		7

Total available-for-sale		50		7		2		—		59
Held-to-maturity:
Debt securities		—		—		—		90		90
Trading:
Deferred compensation plan mutual fund investments		52		—		—		—		52
Equity securities		35		4		—		—		39
Debt securities		—		39		—		—		39

Total trading		87		43		—		—		130
Other investments:
Consolidated sponsored investment funds:
Hedge funds / Funds of funds		—		1		20		—		21
Private / public equity		22		—		305		—		327

Total consolidated sponsored investment funds		22		1		325		—		348
Equity method:
Hedge funds / Funds of hedge funds		—		45		227		42		314
Private equity investments		—		—		70		20		90
Real estate funds		—		12		41		13		66
Fixed income mutual funds		51		—		—		—		51
Equity / Multi-asset class mutual funds		7		—		—		—		7

Total equity method		58		57		338		75		528
Deferred compensation plan hedge fund equity method investments		—		25		—		—		25
Carried interest		—		—		—		13		13
Cost method investments		—		—		—		335		335

Total investments		217		133		665		513		1,528
Separate account assets:
Equity securities		79,539		3		41		—		79,583
Debt securities		—		36,872		108		—		36,980
Derivatives		21		1,570		—		—		1,591
Money market funds		3,035		—		—		—		3,035
Other		—		—		—		714		714

Total separate account assets		82,595		38,445		149		714		121,903
Collateral held under securities lending agreements:
Equity securities		12,578		—		—		—		12,578
Debt securities		—		4,658		—		—		4,658

Total collateral held under securities lending agreements		12,578		4,658		—		—		17,236
Other assets⁽²⁾		—		12		—		—		12
Assets of consolidated VIEs:
Bank loans		—		1,081		38		—		1,119
Bonds		—		116		—		—		116
Private / public equity		4		3		32		—		39

Total assets of consolidated VIEs		4		1,200		70		—		1,274

Total assets measured at fair value	$	95,394	$	44,448	$	884	$	1,227	$	141,953

⁽¹⁾

Comprised of investments held at cost, amortized cost, carried interest and 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.

- 2118 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

6.5. Fair Value Disclosures (continued)

Fair Value Hierarchy (continued)

~~Assets and liabilities~~Liabilities measured at fair value on a recurring basis at ~~December~~March 31, ~~2009~~2011 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)		March 31, 2011
Liabilities:
Borrowings of consolidated VIEs	$	—	$	—	$	1,297	$	1,297
Collateral liabilities under securities lending agreements		12,578		4,658		—		17,236
Other liabilities⁽¹⁾		—		3		—		3

Total liabilities measured at fair value	$	12,578	$	4,661	$	1,297	$	18,536

⁽¹⁾	Includes credit default swap (Pillars) recorded within other liabilities on the condensed consolidated statement of financial condition.

- 19 -

PART I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

5. Fair Value Disclosures (continued)

Fair Value Hierarchy (continued)

Total assets measured at fair value on a recurring basis of $140,460 million at December 31, 2010 were as follows:


	Assets measured at fair value
*(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, 2010
Assets:

Investments
Available-for-sale:
Equity securities (funds and CDOs)	$	36	$	—	$	2	$	—	$	38
Debt securities		—		7		—		—		7

Total available-for-sale		36		7		2		—		45
Held-to-maturity:
Debt securities		—		—		—		100		100
Trading:
Deferred compensation plan mutual funds investments		49		—		—		—		49
Equity securities		36		9		—		—		45
Debt securities		—		37		—		—		37

Total trading		85		46		—		—		131
Other investments:
Consolidated sponsored investment funds:
Hedge funds / Funds of funds		—		1		19		—		20
Private / public equity		18		—		299		—		317

Total consolidated sponsored investment funds		18		1		318		—		337
Equity method:
Hedge funds / Funds of hedge funds		—		44		226		34		304
Private equity investments		—		—		68		20		88
Real estate funds		—		8		36		10		54
Fixed income mutual funds		103		—		—		—		103
Equity / Multi-asset class mutual funds		7		—		—		—		7

Total equity method		110		52		330		64		556
Deferred compensation plan hedge fund equity method investments		—		27		—		—		27
Carried interest		—		—		—		13		13
Cost method investments		—		—		—		331		331

Total investments		249		133		650		508		1,540

Separate account assets:
Equity securities		79,727		3		4		—		79,734
Debt securities		—		36,415		170		—		36,585
Derivatives		1		1,598		—		—		1,599
Money market funds		2,549		—		—		—		2,549
Other		—		—		—		670		670

Total separate account assets		82,277		38,016		174		670		121,137
Collateral held under securities lending agreements:
Equity securities		15,237		—		—		—		15,237
Debt securities		—		2,401		—		—		2,401

Total collateral held under securities lending agreements		15,237		2,401		—		—		17,638
Other assets⁽²⁾		—		11		—		—		11
Assets of consolidated VIEs:
Bank loans		—		1,130		32		—		1,162
Bonds		—		113		—		—		113
Private / public equity		4		3		30		—		37

Total assets of consolidated VIEs		4		1,246		62		—		1,312

Total	$	97,767	$	41,807	$	886	$	1,178	$	141,638

⁽¹⁾

Comprised of investments held at cost, amortized cost, carried interest and 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;~~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.

- 2220 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

6.5. Fair Value Disclosures (continued)

Fair Value Hierarchy (continued)

Liabilities measured at fair value on a recurring basis at December 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)		December 31, 2010
Liabilities:
Borrowings of consolidated VIEs	$	—	$	—	$	1,278	$	1,278
Collateral liabilities under securities lending agreements		15,237		2,401		—		17,638
Other liabilities⁽¹⁾		—		3		—		3

Total liabilities measured at fair value	$	15,237	$	2,404	$	1,278	$	18,919

⁽¹⁾	Includes credit default swap (Pillars) recorded within other liabilities on the condensed consolidated statement of financial condition.

Separate Account Assets

BlackRock Pensions Limited and BlackRock Asset Management Pensions Limited, both wholly-owned subsidiaries of the Company, are registered life insurance companies in the United Kingdom that 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. The ~~changes in Level 3 assets in the three months ended March 31, 2009, primarily 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~~owners and are not reported ~~as non-operating income (expense)~~ on the Company’s condensed consolidated statements of income.

Money Market Funds within Cash and Cash Equivalents

At March 31, ~~2010~~2011 and December 31, ~~2009,~~2010, approximately ~~$0.3 billion~~$63 million and ~~$1.4 billion,~~$87 million, 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,~~$1.00, which generally 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, including capital accounts, received from internal as well as third party fund managers. Fair valuations atof 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.~~securities and equity securities which have unobservable inputs due to certain corporate actions.

Level 3 assets ~~recorded as investments~~ of consolidated VIEs include abank loans valued based on single broker non-binding quotes and direct private equity ~~fund~~investments and private equity funds valued based upon valuations received from internal as well as ~~well as~~ third party ~~funds managers.~~fund managers, which may be adjusted by using the returns of certain market indices.

Level 3 Liabilities

Level 3 liabilities recorded as borrowings of consolidated VIEs include CLO borrowings valued based upon single broker non-binding ~~broker~~ quotes.

- 2321 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

6.5. 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, 2011


*(Dollar amounts in millions)*	December 31, 2010		Realized and unrealized gains / (losses) in earnings and OCI			Purchases		Sales			Issuances and other settlements⁽¹⁾			Transfers into Level 3		Transfers out of Level 3			March 31, 2011		Total net gains (losses) included in earnings⁽²⁾
Assets:
Investments:
Available-for-sale:
Equity securities (funds and CDOs)	$	2	$	—		$	—	$	—		$	—		$	—	$	—		$	2	$	—
Consolidated sponsored investment funds:
Hedge funds / Funds of funds		19		3			—		(1	)		—			—		(1	)		20		3
Private equity		299		12			1		(7	)		—			—		—			305		12
Equity method:
Hedge funds / Funds of hedge funds		226		16			2		(1	)		(16	)		—		—			227		16
Private equity investments		68		1			1		—			—			—		—			70		1
Real estate funds		36		1			4		—			—			—		—			41		1

Total Level 3 investments		650		33			8		(9	)		(16	)		—		(1	)		665		33
Separate account assets:
Equity securities		4		(1	)		3		(3	)		—			38		—			41
Debt securities		170		(1	)		96		(70	)		—			—		(87	)		108

Total Level 3 separate account assets		174		(2	)		99		(73	)		—			38		(87	)		149		n/a	⁽³⁾

Assets of consolidated VIEs:
Bank loans		32		(2	)		5		(3	)		—			14		(8	)		38
Private equity		30		2			—		—			—			—		—			32

Total Level 3 assets of consolidated VIEs		62		—			5		(3	)		—			14		(8	)		70		n/a	⁽⁴⁾

Total Level 3 assets	$	886	$	31		$	112	($	85	)	($	16	)	$	52	($	96	)	$	884

Liabilities:
Borrowings of consolidated VIEs	$	1,278	($	19	)	$	—	$	—		$	—		$	—	$	—		$	1,297		n/a	⁽⁴⁾

n/a – not applicable

⁽¹⁾	Includes distributions from equity method investees.

⁽²⁾	Earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date.

⁽³⁾	The net investment income and net gains and losses attributable to separate account assets accrue directly to the contract owners and are not reported on the Company’s condensed consolidated statements of income.

⁽⁴⁾	The net gain (loss) on consolidated VIEs is solely attributable to non-controlling interests on the Company’s condensed consolidated statements of income.

- 22 -

PART I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

5. 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⁾			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
Consolidated sponsored investment funds:
Hedge funds / Funds of funds	$	26	$	—		$	(1	)	$	—		$	25	$	(1	)	$	26	$	—		($	1	)	$	—		$	25	($	1	)
Private equity		312		4			(36	)		—			280		5			312		4			(36	)		—			280		5
Equity method
Hedge funds / Funds of funds		247		13			(23	)		—			237		14
Private equity funds		51		—			7			—			58		1
Equity method:
Hedge funds / Funds of hedge funds																		247		13			(23	)		—			237		14
Private equity investments																		47		—			7			—			54		1
Real estate funds		36		(1	)		4			—			39		(1	)		36		(1	)		4			—			39		(1	)
Deferred compensation plan hedge funds		15		2			—			—			17		2			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 Level 3 investments																		683		18			(49	)		—			652		20
Separate account assets:
Equity securities																		5		—			(3	)		61			63
Debt securities																		1,287		34			185			(416	)		1,090

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

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
Total Level 3 assets																	$	2,021	$	42		$	156		($	355	)	$	1,864

Liabilities:

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

n/a – ~~Not~~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~~owners 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~~gain (loss) on consolidated VIEs ~~are~~is solely ~~allocated~~attributable to non-controlling interests on the Company’s condensed consolidated statements of income.

- 2423 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

6.5. 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 March 31, 2009~~

(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 )

⁽¹⁾	~~Earnings attributable to the change in unrealized gains or (losses) relating to assets still held at the reporting date.~~

Realized and ~~unrealized gains and losses~~Unrealized Gains / (Losses) for Level 3 ~~investments~~Assets and Liabilities

Realized and unrealized gains ~~and losses~~/ (losses) recorded for Level 3 ~~investments~~assets and liabilities 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 and all of the net income (loss) for consolidated VIEs is allocated to non-controlling interests to reflect net income (loss) not attributable to the Company.

Significant Transfers in and/or out of 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 / unobservable, or when the Company determines it has the ability, or no longer has the ability, to redeem in the near term certain investments that the Company values using a NAV (or a capital account), or when the book value of certain equity method investments no longer represents fair value as determined under fair value methodologies.

~~Upon a change in valuation sources, approximately $61~~Separate Account Assets

For the three months ended March 31, 2011 there were $87 million of ~~separate account assets transferred from Level 1 to Level 3 and $416 million from~~transfers out of Level 3 to Level 2.2 related to debt securities held within separate account assets. The transfers out of Level 3 primarily were due to availability of observable market inputs, including additional inputs from pricing vendors and brokers.

For the three months ended March 31, 2011 there were $38 million of transfers of equity securities held within separate account assets into Level 3 from Level 1. The transfers into Level 3 were primarily due to market inputs no longer being considered observable.

Significant Other Settlements in 2011 and 2010

For the three months ended March 31, 2011 there were $16 million of distributions from equity method investees.

As of January 1, 2010, upon the adoption of ASU 2009-17, there was a $35 million ~~reclass out~~reclassification of assets from Level 3 private equity investments to Level 3 private equity assets of consolidated ~~VIEs.~~VIEs, as well as the consolidation of $1,157 million of borrowings within the consolidated CLOs.

- 2524 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

6.5. 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~~tables 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):.

At March 31, 2011

(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

(Dollar amounts in millions)

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Trading:

Equity

(a)

—

Daily (100%)

none

Consolidated sponsored investment funds:

Private equity funds of funds

(b)

250

n/r

Other funds of hedge funds

(c)

—

Quarterly (100%)

30 – 90 days

Equity method:⁽¹⁾

Hedge funds/funds of hedge funds

(d)

273

Monthly (1%),
Quarterly (18%)
n/r (81%)

15 – 90 days

Private equity funds

(e)

n/r

Real estate funds

(f)

Quarterly (23%)
n/r (77%)

60 days

Deferred compensation plan hedge fund investments

(g)

—

Monthly (12%),
Quarterly (88%)

60 – 90 days

Consolidated VIE:

Private equity funds

(h)

n/r

Total

707

160

n/a—r – not ~~applicable~~redeemable

⁽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.

- 25 -

PART I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

5. Fair Value Disclosures (continued)

Investments in Certain Entities that Calculate Net Asset Value Per Share (continued)

At December 31, 2010

(Dollar amounts in millions)

Ref

Fair Value

Total
Unfunded
Commitments

Redemption
Frequency

Redemption
Notice Period

Trading:

Equity

(a)

—

Daily (100%)

none

Consolidated sponsored investment funds:

Private equity funds of funds

(b)

247

n/r

Other funds of hedge funds

(c)

—

Quarterly (84%)
Annual (16%)

30 – 90 days

Equity method:⁽¹⁾

Hedge funds/funds of hedge funds

(d)

269

Monthly (1%),
Quarterly (17%)
n/r (82%)

15 – 90 days

Private equity funds

(e)

n/r

Real estate funds

(f)

Quarterly (18%)
n/r (82%)

60 days

Deferred compensation plan hedge fund investments

(g)

—

Monthly (11%),
Quarterly (89%)

60 – 90 days

Consolidated VIE:

Private equity funds

(h)

n/r

Total

696

182

n/r – not redeemable

^(a)(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 master funds with 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 generally can ~~generally~~ be redeemed at any time, as long as there are no restrictions in place by the underlying master funds.

- 26 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

6.5. 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~~by 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~~will be liquidated over a ~~weighted average~~weighted-average period of approximately ~~9 years.~~

8 years at both March 31, 2011 and December 31, 2010. The total remaining unfunded commitments to other third party funds was $55 million and $62 million at March 31, 2011 and December 31, 2010, respectively. The Company is contractually obligated to fund only $40 million and $42 million at March 31, 2011 and December 31, 2010, respectively, to the consolidated funds, while the remaining unfunded balances in the tables above are required to be funded by capital contributions from non-controlling interest holders.

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 hedge 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 generally 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~~will be liquidated over a ~~weighted average~~weighted-average period of less than ~~8 years.~~

7 years at both March 31, 2011 and December 31, 2010.

^(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~~will be liquidated over a ~~weighted average~~weighted-average period of approximately ~~8 years.~~

5 years at both March 31, 2011 and December 31, 2010.

^(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 majority of the Company’s ~~investment~~investments in ~~each fund~~these funds 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~~will be liquidated over a ~~weighted average~~weighted-average period of approximately ~~14 years.~~

7 years at both March 31, 2011 and December 31, 2010.

^(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.

The investments in these funds will be liquidated upon settlement of certain deferred compensation liabilities.

- 27 -

PART I – FINANCIAL INFORMATION (continued)

^(h)Item 1.

Financial Statements (continued)

5. Fair Value Disclosures (continued)

Investments in Certain Entities that Calculate Net Asset Value Per Share (continued)

(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~~by 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~~will be liquidated over a ~~weighted average~~weighted-average period of approximately 4 years and 5 ~~years.~~years at March 31, 2011 and December 31, 2010, respectively. Total remaining unfunded commitments to other third party funds is $3$2 million at both March 31, 2011 and December 31, 2010, which ~~will~~are required to 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 the initial consolidation of three CLOs on January 1, 2010, the Company elected to adopt the fair value ~~accounting~~option provisions for eligible assets and liabilities, including bank loans and borrowings of the ~~CLOs.~~CLOs to mitigate accounting mismatches between the carrying value of the assets and liabilities and to achieve operational simplifications. 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 (loss) 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:~~accounting as of March 31, 2011 and December 31, 2010:


(Dollars amounts in millions)

*(Dollar amounts in millions)*			March 31, 2011		December 31, 2010
CLO Bank Loans:	March 31, 2010
Aggregate principal amounts outstanding			$	1,132	$	1,245
Fair value	$	1,154	$	1,119	$	1,162
Aggregate principal amounts outstanding	$	1,303
Aggregate unpaid principal balance in excess of fair value	$	149	$	13	$	83
Unpaid principal balance of loans more than 90 days past due	$	9	$	3	$	3
Aggregate fair value of loans more than 90 days past due	$	1	$	1	$	1
Aggregate unpaid principal balance in excess of fair value for loans more than 90 days past due	$	8	$	2	$	2

CLO Borrowings:
Aggregate principal amounts outstanding			$	1,425	$	1,430
Fair value	$	1,214	$	1,297	$	1,278
Aggregate principal amounts outstanding	$	1,433

~~The~~At March 31, 2011 the principal amounts outstanding of the borrowings issued by the CLOs mature between 2016 and 2019.

During the three months ended March 31, 2011 and 2010, the change in fair value of the bank loans, along with the bonds held at fair value, resulted in a $20 million gain and $67 million gain, respectively, which was offset by a $34 million loss and $67 million loss, respectively, in the fair value of the CLO ~~borrowings, which were~~borrowings. The net loss was recorded in ~~non-operating income (expense).~~net gain (loss) on consolidated VIEs on the condensed consolidated statement of income. The change in fair value of the assets and liabilities includes interest income and expense, respectively.

- 28 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

7.6. Variable Interest Entities

In the normal course of business, the Company is the manager of various types of sponsored investment vehicles, including ~~collateralized debt/loan obligations (“CDO” or “CLO”)~~CDOs/CLOs and sponsored investment funds, which may be considered VIEs. The Company receives advisory fees and/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.

The primary beneficiary (“PB”) of a VIE that is an investment fund that meets the conditions of ASU 2010-10,Amendments to Statement 167 for Certain Investment Funds (“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~~PB of a VIE, management must make significant estimates and assumptions of probable future cash flows 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.

Effective January 1, 2010, the PB of a CDO/CLO or other entity 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 that most significantly impact the entity’s economic performance and has the obligation to absorb losses or the right to receive benefits that potentially could be significant to the entity.

VIEs in which BlackRock is the ~~Primary Beneficiary~~PB

~~As of~~At March 31, ~~2010~~

~~As of March~~2011 and December 31, 2010, BlackRock was the ~~primary beneficiary~~PB 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.~~significant to the VIE. In addition, BlackRock was the ~~primary beneficiary~~PB of one sponsored private ~~sponsored~~equity investment fund in which it had a non-substantive investment, which absorbed the majority of the variability due to its de-facto third party relationships with other partners in the fund. The assets of these VIEs are not available to creditors of the Company. In addition, the investors in these VIEs have no recourse to the credit of the Company. At March 31, 2011 and December 31, 2010, the following balances related to these four VIEs were consolidated inon the Company’s condensed consolidated statements of financial condition:


(Dollar amounts in millions)	March 31, 2010			March 31, 2011			December 31, 2010
Assets of consolidated VIEs:
Cash and cash equivalents				$	133		$	93
Bank loans					1,119			1,162
Bonds					116			113
Other investments					39			37

Assets of consolidated VIEs
Cash and cash equivalents	$	90
Bank loans, bonds and other investments		1,288
Liabilities of consolidated VIEs
Total bank loans, bonds and other investments					1,274			1,312
Liabilities of consolidated VIEs:
Borrowings		(1,214	)		(1,297	)		(1,278	)
Other liabilities		(4	)		(7	)		(7	)
Appropriated retained earnings		(114	)		(58	)		(75	)
Non-controlling interests of consolidated VIEs		(46	)		(45	)		(45	)

Total net interests in consolidated VIEs	$	—		$	—		$	—

For the three months ended March 31, 2011 and 2010, the Company recorded non-operating ~~income~~gain (loss) of ($15) million and $1 million, respectively, offset by a ($15) million and a $1 million net gain (loss) attributable to nonredeemable non-controlling interests, respectively, 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, 2011 and December 31, 2010 ~~bank loans, bonds and other investments were $1,154 million, $93 million, and $41 million, respectively. The weighted average~~the weighted-average maturity of the bank loans and bonds was approximately 4.1 ~~years.~~years and 4.2 years, respectively.

- 29 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

7.6. 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 December 31, 2009, the Company recorded $54 million of net assets, primarily comprised of investments and cash and cash equivalents. These net assets were offset by $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.

VIEs in which the Company holds significant variable interests or is the sponsor that holds a variable interest but is not the ~~Primary Beneficiary~~PB of the VIE

At March 31, ~~2010~~2011 and December 31, ~~2009,~~2010, 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,~~PB, were as follows:

~~As of~~At March 31, ~~2010~~2011


	(Dollar amounts in millions)									*(Dollar amounts in millions)*
	Variable Interests on the Condensed Consolidated Statement of Financial Condition									Variable Interests on the Condensed Consolidated Statement of Financial Condition
	Investments		Advisory Fee Receivables		Other Net Assets (Liabilities)			Maximum Risk of Loss		Investments		Advisory Fee Receivables		Other Net Assets (Liabilities)			Maximum Risk of Loss
CDOs/CLOs	$	3	$	2	$	(3	)	$	22	$	2	$	3	($	3	)	$	22
Other sponsored investment funds		14		318		(—	)		332
Other sponsored investment funds:
Collective trusts											—		200		—			200
Private equity funds											13		—		—			13
Other											18		44		—			62

Total	$	17	$	320	$	(3	)	$	354	$	33	$	247	($	3	)	$	297

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, including collective trusts, were as follows:

CDOs/CLOs –- approximately ($6)3) billion, comprised of approximately $9$6 billion of assets at fair value and ~~$15~~$9 billion of liabilities, primarily comprised of unpaid principal debt obligations to CDO/CLO debt holders.

Other sponsored investments funds – approximately ~~$1.5~~$1.6 trillion to ~~$1.6~~$1.7 trillion of net assets

This amount includes approximately ~~$1.1~~$1.4 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 offset by liabilities primarily comprised of various accruals for the sponsored investment vehicles.

At March 31, ~~2010,~~2011, BlackRock’s maximum risk of loss associated with these VIEs primarily relates to: (i) BlackRock’s ~~equity~~ investments, (ii) advisory fee receivables and (iii) $17 million of credit protection sold by BlackRock to a third party in a synthetic CDO transaction.

- 30 -

PART I—I – FINANCIAL INFORMATION (continued)

Item 1.

Financial Statements (continued)

~~BlackRock, Inc.~~

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

~~(unaudited)~~

7.6. Variable Interest Entities (continued)

VIEs in which BlackRock holds significant variable interests or is the sponsor that holds a variable interest but is not the ~~Primary Beneficiary~~PB of the VIE (continued)

~~As of December 31, 2009~~

   (Dollar amounts in millions)
   Variable Interests on the Condensed
Consolidated Statement of Financial
Condition
   Investments    Advisory
Fee
Receivables    Other Net
Assets
(Liabilities) Maximum
Risk of
Loss
CDOs/CLOs
   $ 2    $ 2    $ (2 ) $ 21
Other sponsored investment funds
   14    254    (7 ) 268

Total
   $ 16    $ 256    $ (9 ) $ 289

At December 31, 2010
   (Dollar amounts in millions)
   Variable Interests on the Condensed
Consolidated Statement of Financial
Condition
   Investments    Advisory
Fee
Receivables    Other Net
Assets
(Liabilities) Maximum
Risk of Loss
CDOs/CLOs
   $ 2       $ 3       ($ 3 ) $ 22
Other sponsored investment funds:

Collective trusts
   —         188       —      188
Private equity funds
   14       —         (7 ) 14
Other
   14       52       —      66

Total
   $ 30       $ 243       ($ 10 ) $ 290

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, including collective trusts, were as follows:

CDOs/CLOs –- approximately ($8)4) billion, comprised of approximately ~~$10~~$7 billion of assets at fair value and ~~$18~~$11 billion of liabilities, primarily comprised of unpaid principal debt obligations to CDO/CLO debt holders.

Other sponsored investments funds – approximately ~~$1.5~~$1.6 trillion to ~~$1.6~~$1.7 trillion of net assets

This amount includes approximately ~~$1.1~~$1.2 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 offset by liabilities primarily comprised of various accruals for the sponsored investment vehicles.
At December 31, ~~2009,~~2010, BlackRock’s maximum risk of loss associated with these VIEs primarily relates to: (i) BlackRock’s ~~equity~~ investments, (ii) advisory fee receivables and (iii) $17 million of credit protection sold by BlackRock to a third party in a synthetic CDO transaction.

- 31 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~

8.7. Derivatives and Hedging
For the three months ended March 31, ~~2010~~2011 and ~~the year ended December 31, 2009,~~2010, the Company did not hold any derivatives designated in a formal hedge relationship under ASC 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 2007, the Company commenced~~maintains a program to enter into a series of total return swaps to economically hedge against market price exposures with respect to certain seed investments in sponsored investment products. At March 31, ~~2010,~~2011, the Company had ~~seven~~three outstanding total return swaps with two counterparties with an aggregate notional value of approximately ~~$24~~$7 million. At December 31, 2010, the Company had six outstanding total return swaps with two counterparties with an aggregate notional value of approximately $25 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. The Company’s management has performed an assessment of its variable interest in Pillars (a collateral management agreement and the credit default swap) under ASC 810-10 and has concluded the Company is not Pillars’ PB. 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 of the Company’s registered life insurance companies that maintain separate accounts representing segregated funds held for the purpose of funding individual and group pension contracts, the Company invests in various derivative instruments, ~~including~~which may include futures and forward foreign currency exchange contracts and interest rate and inflation rate swaps. Net realized and unrealized gains and losses attributable to derivatives held by separate account assets and liabilities accrue directly to the contract owners and are not reported in the Company’s condensed consolidated statements of income.
The Company consolidates certain sponsored investment funds, which may utilize derivative instruments as a part of the fund’s investment strategy. The change in fair value of such derivatives, which is recorded in non-operating income (expense) is, was not material to the Company’s condensed consolidated financial statements.

- 32 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~

8.7. Derivatives and Hedging (continued)

The following ~~table presents~~tables present the fair value ~~as of~~at March 31, 2011 and December 31, 2010 of derivative instruments not designated as hedging instruments:
March 31, 2011

   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.~~
   Assets    Liabilities
(Dollar amounts in millions)    Balance Sheet
Location    Fair Value    Balance Sheet
Location    Fair Value
Credit default swap (Pillars)
   Other assets       $ —         Other liabilities       $ 3
Separate account derivatives

Separate account
assets
      1,591
Separate account
liabilities
      1,591

Total
      $ 1,591          $ 1,594

December 31, 2010
   Assets    Liabilities
(Dollar amounts in millions)    Balance Sheet
Location    Fair Value    Balance Sheet
Location    Fair Value
Credit default swap (Pillars)
   Other assets       $ —         Other liabilities       $ 3
Separate account derivatives

Separate account
assets
      1,599
Separate account
liabilities
      1,599

Total
      $ 1,599          $ 1,602

The following table presents ~~the fair value as of December 31, 2009 of~~gains (losses) recognized in income on derivative instruments ~~not designated as hedging instruments:~~for the three months ended March 31, 2011 and 2010:

   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.~~
      Three months ended
March 31,
(Dollar amounts in millions)
Income Statement Location
   2011 2010
Foreign currency exchange contracts
   General and administration expenses    $ —      ($ 4 )
Total return swaps
   Non-operating income (expense)    (1 ) (1 )
Credit default swap (Pillars)
   Non-operating income (expense)    —      —

Total
      ($ 1 ) ($ 5 )


- 33 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~

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 derivatives held by separate account assets and liabilities accrue directly to the contract owner and are not reported as non-operating income (expense) in the Company’s condensed consolidated statements of income.
9. Goodwill
Goodwill at March 31, ~~2010~~2011 and changes during the three months ended March 31, ~~2010~~2011 were as follows:

(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 three months ended March 31, 2010, goodwill increased by $71 million. The increase relates primarily to purchase price allocation adjustments related to the BGI Transaction, the purchase of substantially all of the net assets of Helix Financial Group, LLC, offset by a decline related to tax benefits realized from tax-deductible goodwill in excess of book goodwill.
(Dollar amounts in millions)
December 31, 2010
   $ 12,805
Impact of excess tax basis amortization
   (5 )
Other additions
   4

March 31, 2011
   $ 12,804

At March 31, ~~2010,~~2011, the balance of the Quellos tax-deductible goodwill in excess of book goodwill was approximately ~~$364~~$348 million. Goodwill related to the acquisition of the fund of funds business of Quellos ~~Transaction~~Group, LLC (“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.~~
~~- 34 -~~
~~PART I—FINANCIAL INFORMATION (continued)~~
~~Item 1.~~ ~~Financial Statements (continued)~~
goodwill from the Quellos Transaction.
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~
~~10.~~9. Intangible Assets
The carrying amounts of identifiable intangible assets are summarized as follows:

(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

(Dollar amounts in millions)    Indefinite-lived
intangible assets    Finite-lived
intangible assets Total
intangible assets
December 31, 2010
   $ 16,597       $ 915    $ 17,512
Amortization expense
   —         (40 ) (40 )

March 31, 2011
   $ 16,597       $ 875    $ 17,472

~~In 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 BGI acquisition date.~~ During the three months ended March 31, ~~2010,~~2011, intangible assets decreased ~~$22~~$40 million related to amortization ~~partially offset by BGI purchase price allocation adjustments.~~expense of finite-lived intangibles.
- 34 -
PART I – FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
~~11.~~10. Borrowings
Short-Term Borrowings
2007 Revolving Credit Facility
In August 2007, the Company entered into a five-year $2.5 billion unsecured revolving credit facility (the “2007 facility”), which ~~permits~~permitted the Company to request an additional $500 million of borrowing capacity, subject to lender credit approval, up to a maximum of $3.0 billion. At December 31, 2010 the Company had $100 million outstanding under the 2007 facility. On February 28, 2011, the $100 million was repaid and the 2007 facility was terminated in March 2011.
2011 Revolving Credit Facility
In March 2011, the Company entered into a five-year $3.5 billion unsecured revolving credit facility (the “2011 facility”), which replaced the 2007 facility. The ~~2007~~2011 facility permits the Company to request an additional $1.0 billion of borrowing capacity, subject to lender credit approval, up to a maximum of $4.5 billion. The 2011 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 March 31, ~~2010.~~2011.
The ~~2007~~2011 facility provides back-up liquidity, funds ongoing working capital for general corporate purposes and funds various investment opportunities. At March 31, ~~2010,~~2011, the Company ~~had $100 million~~did not have any borrowings outstanding under the ~~2007 facility with an interest rate~~2011 facility. During May 2011, the Company borrowed $100 million from this facility.
Bank of ~~0.43%~~America and Barclays each have a ~~maturity date during May 2010.~~
~~Lehman Commercial Paper Inc. has a $140~~$255 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 Corporation (“Bank of America”), a related party, has a $140 million participation under the 20072011 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.~~Barclays Global Investors (“BGI”) acquisition from Barclays (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 iswas supported by the 2007 revolving credit facility and will be supported by the 2011 credit facility.
~~The Company began issuance of CP Notes under the CP Program on November 4, 2009.~~ As of March 31, 2011 and December 31, 2010, ~~BlackRock had approximately $780 million of~~the Company did not have any 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.Notes.
- 35 -
PART I – FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
10. Borrowings (continued)
Short-Term Borrowings (continued)
Japan Commitment-line
In ~~June 2009,~~September 2010, BlackRock Japan Co., Ltd., a ~~wholly owned~~wholly-owned subsidiary of the Company, renewed a five billion Japanese yen commitment-line agreement with a banking institution (the “Japan Commitment-line”)~~. The~~ for a term of ~~the Japan Commitment-line was~~ one ~~year and interest accrued~~year. Interest on borrowings outstanding will accrue 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 March 31, 2011 and December 31, 2010, the Company had no borrowings outstanding onunder the Japan Commitment-line.
Convertible Debentures
The carrying value of the 2.625% convertible debentures due in 2035 included the following:

(Dollar amounts in millions)    March 31,
2010    December 31,
2009
Maturity amount
   $ 95    $ 243
Unamortized discount
   —      —

Carrying value
   $ 95    $ 243

(Dollar amounts in millions)    March 31,
2011    December 31,
2010
Maturity amount / Carrying value
   $ 63       $ 67
Fair Value
   $ 128       $ 128
The ~~Company recognized $1~~effective borrowing rate for nonconvertible debt at the time of issuance was estimated to be 4.3%, which resulted in $18 million and $3 million for the three months ended March 31, 2010 and 2009, respectively of interest expense, comprised of $1 million and $2 million related to the coupon and less than $1 million and $1 million related to amortization of the ~~discount for~~$250 million initial aggregate principal amount of the ~~three months ended March 31, 2010 and 2009, respectively. At~~convertible debentures issued, or $12 million after tax, being attributable to equity. As of March 31, 2010, the ~~estimated fair value of the convertible debentures~~initial $18 million debt discount was ~~$204 million, which was estimated using a market price at March 31, 2010.~~fully amortized.
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.~~maturity and on February 20, 2010 the convertible debentures became callable by the Company. During the three months ended March 31, 2011 and 2010, holders of $4 million and $148 million, respectively, of debentures converted their holdings into cash and shares. ~~In addition, through May 6, 2010, holders~~
On April 20, 2011, the Company issued a notice of ~~an additional $24 million~~redemption for the remaining outstanding convertible debentures of ~~debentures elected to convert their holdings into cash and shares.~~approximately $60 million.

- 36 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~

~~11.~~10. Borrowings (continued)

Long-Term Borrowings
~~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.
~~2012, 2014 and 2019 Notes~~
In December 2009, the Company 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 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 each year beginning June 10, 2010, or approximately $96 million per year. These 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. These notes were issued collectively at a discount of $5 million that is being amortized over the term of the notes. The Company incurred approximately $13 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 terms of the these notes.
~~Carrying Value and Fair Value of Long-Term Borrowings~~
The carrying value and fair value of long-term borrowings estimated using ~~an applicable bond index~~market prices at March 31, 2011 included the following:
(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 ) (2 ) (8 )

Carrying value
   $ 499    $ 999    $ 696    $ 998    $ 3,192

Fair value
   $ 510    $ 1,043    $ 800    $ 1,058    $ 3,411
The carrying value and fair value of long-term borrowings estimated using market prices at December 31, 2010 included the following:

(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    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       $ 500    $ 1,000    $ 700    $ 1,000    $ 3,200
Unamortized discount
   (1 ) (1 ) (4 ) (3 ) (9 )    (1 ) (1 ) (4 ) (2 ) (8 )

Carrying value
   $ 499    $ 999    $ 696    $ 997    $ 3,191       $ 499    $ 999    $ 696    $ 998    $ 3,192

Fair value
   $ 504    $ 1,010    $ 768    $ 1,001    $ 3,283       $ 511    $ 1,040    $ 789    $ 1,041    $ 3,381

- 37 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~

11. ~~Borrowings (continued)~~
~~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 following:~~

(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.~~ Commitments and Contingencies
Investment Commitments
At March 31, ~~2010~~2011, the Company had ~~approximately $301~~$223 million of various capital commitments to fund sponsored investment ~~commitments relating primarily to~~funds, including funds of private equity funds, real estate funds and ~~hedge~~distressed credit 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. Generally, the timing of the funding of these commitments is unknown and the commitments are callable on demand at any time prior to the expiration of the commitment. These unfunded commitments are not recorded on the Company’s condensed consolidated statements of financial condition. These commitments do not include potential future commitments approved by the Company’s Capital Committee, but which are not yet legally binding. The Company intends to make additional capital commitments from time to time to fund additional investment products for, and with, its clients.
Legal Proceedings
From time to time, BlackRock receives subpoenas or other requests for information from various U.S. federal, state governmental and domestic and international 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,~~Merrill Lynch Investment Managers (“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)various items including certain specified tax covenants.
- 38 -
PART I – FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
11. Commitments and Contingencies (continued)
Indemnifications (continued)
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 the MLIM ~~Transaction and~~transaction or the 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.
Other Contingent Payments ~~Related to Business Acquisitions~~
~~On October 1, 2007,~~The Company acts as the portfolio manager in a series of credit default swap transactions and has a maximum potential exposure of $17 million under a credit default swap between the Company ~~acquired the fund of funds business of Quellos. As part~~and Citibank. See Note 7, Derivatives and Hedging, for further discussion 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 2009 and the ~~second contingent payment, of up to $595 million is payable in cash in 2011.~~
During 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 based on a price of $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 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.~~
~~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.commitment.

- 39 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~

~~13.~~12. Stock-Based Compensation
The components of the Company’s stock-based compensation expense are comprised of the following:

   Three Months Ended
March 31,
(Dollar amounts in millions)    2010    2009    Three Months Ended
March 31,
(Dollar amounts in millions) 2011    2010

Restricted stock and restricted stock units (“RSUs”)
   $ 90    $ 64    $ 120       $ 90
Long-term incentive plans funded by PNC
   15    15    14       15
Stock options
   3    3    3       3

Total stock-based compensation
   $ 108    $ 82    $ 137       $ 108

RSUs and Restricted Stock
RSU and ~~RSUs~~
~~Restricted~~restricted stock ~~and RSU activity~~(collectively “RSUs”) outstanding at March 31, ~~2010~~2011 and changes during the three months ended March 31, ~~2010 were as follows:~~2011 is summarized below:

Outstanding at
   Unvested
Restricted
Stock and
Units Weighted
Average
Grant Date
Fair Value    Restricted
Stock and
Units Weighted-
Average
Grant Date
Fair Value
December 31, 2009
   5,360,463    $ 154.75
December 31, 2010
   6,742,469    $ 187.24
Granted
   2,796,005    $ 239.47    2,238,335    $ 196.59
Converted
   (1,279,522 ) $ 154.72    (1,265,469 ) $ 174.51
Forfeited
   (161,023 ) $ 161.92    (82,068 ) $ 222.44

March 31, 2010
   6,715,923    $ 189.86
March 31, 2011⁽¹⁾
   7,633,267    $ 191.71

⁽¹⁾
At March 31, 2011, 24,725 awards have vested but have not been converted.
The Company values ~~restricted stock and~~ RSUs at their grant-date fair value as measured by BlackRock’s common stock price.
In January ~~2010,~~2011, the Company granted the following awards under the BlackRock, Inc. 1999 Stock Award and Incentive Plan:

~~846,884~~1,594,259 RSUs to employees as part of annual incentive compensation that vest ratably over three years from the date of ~~grant.~~grant, and

~~256,311~~609,733 RSUs to employees that cliff vest 100% 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.2014.
~~- 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~~As 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 March 31, ~~2010,~~2011, there was ~~$826~~$803 million in total unrecognized stock-based compensation ~~cost~~expense related to unvested ~~restricted stock and~~ RSUs. The unrecognized compensation cost is expected to be recognized over the remaining weighted-average period of ~~2.0~~1.9 years.
- 40 -
PART I – FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
12. Stock-Based Compensation (continued)
Long-Term Incentive Plans Funded by PNC
Under a share surrender agreement, PNC committed to provide up to ~~4,000,000~~4 million shares of BlackRock stock, held by PNC, to fund certain BlackRock long-term incentive plans (“LTIP”). ~~In February 2009, the~~The current share surrender agreement ~~was amended for~~commits PNC to provide BlackRock series C non-voting participating preferred stock to fund the remaining committed shares.
~~The BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan (the “2002 LTIP Awards”) permitted the grant of up to $240~~During 2007 through 2010 approximately 1.1 million ~~in deferred compensation awards,~~shares have been surrendered. In addition, approximately 1.6 million shares have been granted of which the ~~Company previously granted approximately $233 million. Approximately $208 million~~maximum value of ~~the 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~~awards that may be funded by PNC, ~~and distributed~~prior to ~~plan participants. During~~ the ~~three months ended March 31, 2010,~~earlier of September 30, 2011 or the date the performance criteria are met, is approximately ~~$6 million of previously issued 2002 LTIP Awards resulted in~~$271 million. Subsequent to September 29, 2011, the ~~settlement of cash and BlackRock~~remaining shares ~~held~~committed by PNC, ~~at a conversion price approximating the market price on the settlement date. On the payment date, the Company recorded a capital contribution from PNC for the amount~~ of ~~shares funded by PNC.~~approximately 1.3 million, would be available to fund future long-term incentive awards.
Stock Options
Options outstanding at March 31, ~~2010~~2011 and changes during the three months ended March 31, ~~2010~~2011 were as follows:

Outstanding at
   Shares
Under
Option Weighted
Average
Exercise
Price    Shares
Under
Option Weighted-
Average
Exercise
Price
December 31, 2009
   2,641,836    $ 98.59
December 31, 2010
   2,344,734    $ 105.60
Exercised
   (202,310 ) $ 38.49    (75,523 ) $ 115.10

March 31, 2010
   2,439,526    $ 103.57
March 31, 2011
   2,269,211    $ 105.28

The aggregate intrinsic value of options exercised during the three months ended March 31, ~~2010~~2011 was ~~$35~~$7 million.
AtAs of March 31, ~~2010,~~2011, the Company had ~~$18~~$6 million 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 ~~1.5 years.~~six months.

- 41 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(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 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.~~13. 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~~partially maintained by retaining cash and cash equivalent investments in those subsidiaries or 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~~transfers of cash between international jurisdictions, including repatriation to the United States, may have adverse tax consequences that could discourage such transfers.
~~Banking Regulatory~~Capital Requirements as of March 31, 2011
At March 31, 2011, the Company was required to maintain approximately $1,157 million in net capital in certain regulated subsidiaries, including BlackRock Institutional Trust Company, N.A. ~~(“BTC”), a wholly-owned subsidiary of the Company, is~~(a chartered ~~as a~~ national bank whose powers are limited to trust ~~activities. BTC~~activities and is subject to various regulatory capital requirements administered by the Federal banking ~~agencies. Failure to meet minimum capital requirements can initiate certain mandatory~~agencies), entities regulated by the Financial Services Authority in the United Kingdom 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~~broker-dealers. As of March 31, ~~2010~~
~~At March 31, 2010,~~2011, 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.
14. Capital Stock
Non-voting Participating Preferred Stock
The Company’s preferred shares authorized, issued and outstanding consisted of the following:
   March 31,
2011    December 31,
2010
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
   57,108,553       57,108,553
Shares outstanding
   57,108,553       57,108,553
Series C

Shares authorized, $0.01 par value
   6,000,000       6,000,000
Shares issued
   2,866,439       2,866,439
Shares outstanding
   2,866,439       2,866,439
Series D

Shares authorized, $0.01 par value
   20,000,000       20,000,000
Shares issued
   —         —
Shares outstanding
   —         —

- 42 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~

~~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.~~15. Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (“EPS”) for the three months ended March 31, ~~2010~~2011 and ~~2009:~~2010:

   Three Months Ended
March 31,
   2010    2009
   Basic    Diluted    Basic    Diluted
Net income attributable to BlackRock, Inc. allocated to:

Common shares
   $ 417    $ 417    $ 82    $ 82
Participating RSUs
   6    6    2    2

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

Weighted-average common shares outstanding
   189,676,023    189,676,023    130,216,218    130,216,218
Dilutive effect of stock options and non-participating restricted stock units
      1,723,512       845,382
Dilutive effect of convertible debt
      752,716       379,270
Dilutive effect of acquisition-related contingent stock payments
      —         356,319

Total weighted-average shares outstanding
      192,152,251       131,797,189

Earnings per share attributable to BlackRock, Inc., common stockholders:
   $ 2.20    $ 2.17    $ 0.63    $ 0.62
(Dollar amounts in millions, except per share data)    Three Months Ended
March 31,
   2011 2010
   Basic Diluted Basic Diluted
Net income attributable to BlackRock
   $ 568    $ 568    $ 423    $ 423
Less:

Dividends distributed to common shares
   269    269    194    194
Dividends distributed to participating RSUs
   3    3    2    2

Undistributed net income attributable to BlackRock
   296    296    227    227
Percentage of undistributed net income allocated to common shares^(a)
   98.8 % 98.8 % 98.4 % 98.4 %

Undistributed net income allocated to common shares
   292    292    223    223
Plus:

Common share dividends
   269    269    194    194

Net income attributable to common shares
   $ 561    $ 561    $ 417    $ 417

Weighted-average shares outstanding
   191,797,365    191,797,365    189,676,023    189,676,023
Dilutive effect of:

Non-participating RSUs
   1,469,069    815,750
Stock options
   796,585    907,762
Convertible debt
   233,485    752,716

Total diluted weighted-average shares outstanding
   194,296,504    192,152,251

Earnings per share attributable to BlackRock, common stockholders:
   $ 2.92    $ 2.89    $ 2.20    $ 2.17
^(a)
Allocation to common shareholders is based on the total of common and participating security shareholders (which represent unvested RSUs that contain nonforfeitable rights to dividends). At March 31, 2011 and 2010, outstanding participating securities were 2.4 million and 3.0 million, respectively.
Basic EPS is calculated pursuant to the two-class method to determine income attributable to common shareholders. Basic EPS is calculated by dividing net distributed and undistributed earnings allocated to common shareholders by the weighted-average number of common shares outstanding. Diluted EPS includes the determinants of basic EPS and in addition, reflects the impact of other potentially dilutive shares, including RSU awards that do not contain nonforfeitable rights to dividends, unexercised stock options and convertible debentures. The dilutive effect of participating securities is calculated under the more dilutive of either the treasury method or the two-class method.
Due to the similarities in terms between BlackRock series A, B, C and D non-voting participating preferred stock and the Company’s common stock, the Company considers the series A, B, C and D non-voting participating preferred stock to be a common stock equivalent for purposes of ~~earnings per share~~EPS calculations. As such, the Company has included the outstanding series A, B, C and D non-voting participating preferred stock and dividends paid for these series in the calculation of average basic and diluted shares outstanding for the three months ended March 31, ~~2010~~2011 and ~~2009.~~2010.
For the three months ended March 31 2010, 743,869 RSUs were excluded from the calculation of diluted ~~earnings per share~~EPS because to include them would have an anti-dilutive effect. There were no anti-dilutive securities for the three months ended March 31, 2011.
- 43 -
PART I – FINANCIAL INFORMATION (continued)
Item 1. Financial Statements (continued)
15. Earnings Per Share (continued)
Shares issued in Quellos Transaction
On October 1, 2007, the Company acquired the fund of funds business of ~~Quellos Group (“Quellos”).~~Quellos. The Company issued 1,191,785 shares of BlackRock common stock that were placed into an escrow account. In ~~2008 and 2009, a~~ total, ~~of 322,845~~1,188,182 common shares were released to Quellos ~~in accordance with the Quellos asset purchase agreement, which resulted in an adjustment~~between April 2008 and October 2010 and became dilutive subsequent to the ~~recognized purchase price.~~respective release dates. The remaining ~~868,940~~3,603 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.
~~- 44 -~~
~~PART I—FINANCIAL INFORMATION (continued)~~
~~Item 1.~~ ~~Financial Statements (continued)~~
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~
~~18.~~16. Segment 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.
The following table illustrates investment advisory, administration fees, securities lending revenue and performance fees,BlackRock Solutions^® and advisory, distribution fees and other revenue for the three months ended March 31, 2011 and 2010, ~~and 2009.~~respectively.

   Three Months Ended
   March 31,    Three Months Ended
March 31,
(Dollar amounts in millions)    2010    2009    2011    2010
Equity
   $ 955    $ 242    $ 1,115       $ 955
Fixed income
   363    200    394       363
Multi-asset
   167    99
Alternative investment products
   186    95
Multi-asset class
   221       167
Alternatives
   221       186
Cash management
   132    175    116       132

Total investment advisory, administration fees, securities lending revenue and performance fees
   1,803    811    2,067       1,803
BlackRock Solutionsand advisory    113    135    128       113
Distribution fees
   28    25    28       28
Other revenue
   51    16    59       51

Total revenue
   $ 1,995    $ 987    $ 2,282       $ 1,995

The following table illustrates the Company’s total revenue for the three months ended March 31, 2011 and 2010, ~~and 2009~~respectively, by geographic region. These amounts are aggregated on a legal entity basis and do not necessarily reflect where the customer ~~is sourced.~~resides.

(Dollar amounts in millions)    Three Months Ended March 31,    Three Months Ended
March 31,
      % of    % of
Revenues
   2010    total 2009    total
Revenue
   2011    % of
total 2010    % of
total
Americas
   $ 1,364    68 % $ 767    78 %    $ 1,554       68 % $ 1,364       68 %
Europe
   511    26 % 191    19 %    590       26 % 511       26 %
Asia-Pacific
   120    6 % 29    3 %    138       6 % 120       6 %

Total revenues
   $ 1,995    100 % $ 987    100 %
Total revenue
   $ 2,282       100 % $ 1,995       100 %


- 4544 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)
~~BlackRock, Inc.~~
~~Notes to Condensed Consolidated Financial Statements—(continued)~~
~~(unaudited)~~

~~18.~~16. Segment Information (continued)

The following table ~~shows~~illustrates the Company’s long-lived assets, including goodwill and property and equipment at March 31, ~~2010~~2011 and December 31, ~~2009~~2010 by geographic region. These amounts are aggregated on a legal entity basis and ~~does~~do not necessarily reflect where the asset is physically located.

(Dollar amounts in millions)
Long-Lived Assets
   March 31,
2010 December 31,
2009
(Dollar amounts in millions)
Long-lived Assets
   March 31,
2011 December 31,
2010
Americas
   $ 12,969    99 % $ 12,961    99 %    $ 13,134       98 % $ 13,092       99 %
Europe
   52    —   % 46    —   %    73       1 % 42       —   %
Asia-Pacific
   70    1 % 74    1 %    76       1 % 99       1 %

Total long-lived assets
   $ 13,091    100 % $ 13,081    100 %    $ 13,283       100 % $ 13,233       100 %

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.
~~19.~~17. Subsequent Events
Tax Legislation in New Jersey
In April 2011, New Jersey enacted legislation that changes the calculation of taxes in the state, with the change to be phased in over three years starting in 2012. The legislation will result in a revaluation of certain deferred income tax assets and liabilities which will result in an income tax benefit in second quarter 2011. At this time, the Company is still evaluating the matter and its impact on the consolidated financial statements.
Additional Subsequent Event Review
In addition to the subsequent events included in the notes to the condensed consolidated financial statements, the Company conducted a review for additional subsequent events and determined that no additional subsequent events had occurred that would require accrual or additional disclosures.

- 4645 -
PART I—I – FINANCIAL INFORMATION (continued)

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 and information security protection; (10) the impact of legislative and regulatory actions and reforms, including the Dodd-Frank Wall Street Reform and Consumer Protection Act, 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 and natural disasters, 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) the impact of changes to tax legislation and, generally, the tax position of the Company; (15) BlackRock’s success in maintaining the distribution of its products; (16) the impact of BlackRock electing to provide support to its products from time to time; (17) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions; and (18) the ability of BlackRock to ~~integrate~~complete the integration of the operations of Barclays Global Investors.

- 4746 -
PART I—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 the largest publicly traded investment management firm. As of March 31, ~~2010,~~2011, the Company managed ~~$3.364~~$3.648 trillion of assets under management (“AUM”) on behalf of institutional and individual investors worldwide. The ~~Company’s~~Company provides a wide array of products ~~include~~including passively and actively managed products including equities, fixed income, multi-asset class, ~~alternatives~~alternative investment and cash management ~~and offer~~products. BlackRock offers clients diversified access to global markets through separate accounts, collective ~~trust funds,~~investment trusts, open-end and closed-end mutual funds, ~~exchange traded~~exchange-traded funds, hedge funds and ~~closed-end~~funds of 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 December 1, 2009, BlackRock acquired from Barclays Bank PLC (“Barclays”) all~~As 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 $6.65 billion in cash.
At March 31, ~~2010,~~2011, equity ownership of BlackRock was as follows:

   Voting
Common
Stock Capital Stock⁽¹⁾    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 %    25.1 % 20.2 %
Barclays
   4.7 % 19.6 %
Barclays Bank PLC (“Barclays”)
   2.3 % 19.5 %
Bank of America Corporation (“Bank of America”)/Merrill Lynch & Co., Inc.
   —   % 7.1 %
Other
   57.2 % 22.4 %    72.6 % 53.2 %

   100.0 % 100.0 %    100.0 % 100.0 %


⁽¹⁾
Includes outstanding common and non-voting preferred ~~stock only.~~stock.

- 4847 -
PART I—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 March 31, ~~2010,~~2011, December 31, ~~2009~~2010 and March 31, ~~2009.~~2010.

   Three Months Ended Variance vs. Three Months Ended Three months ended Variance vs. three months ended
   March 31, December 31, March 31, 2009 December 31, 2009 March 31, December 31, March 31, 2010 December 31, 2010
   2010 2009 2009 Amount % Change Amount % Change 2011 2010 2010 Amount %
Change Amount %
Change
GAAP basis:
Total revenue
   $ 1,995    $ 987    $ 1,544    $ 1,008    102 % $ 451    29 % $ 2,282    $ 1,995    $ 2,493    $ 287    14 % ($ 211 ) (8 %)
Total expenses
   $ 1,341    $ 716    $ 1,155    $ 625    87 % $ 186    16 % $ 1,484    $ 1,341    $ 1,553    $ 143    11 % ($ 69 ) (4 %)
Operating income
   $ 654    $ 271    $ 389    $ 383    141 % $ 265    68 % $ 798    $ 654    $ 940    $ 144    22 % ($ 142 ) (15 %)
Operating margin
   32.8 % 27.5 % 25.2 % 5.3 % 19 % 7.6 % 30 % 35.0 % 32.8 % 37.7 % 2.2 % 7 % (2.7 %) (7 %)
Non-operating income (expense), less net income (loss) attributable to non-controlling interests¹
   $ (3 ) $ (157 ) $ 17    $ 154    98 % $ (20 ) NM
Non-operating income (expense), less net income (loss) attributable to non-controlling interests
$ 19    ($ 3 ) $ 26    $ 22    *    ($ 7 ) (27 %)
Net income attributable to BlackRock, Inc.
   $ 423    $ 84    $ 256    $ 339    404 % $ 167    65 % $ 568    $ 423    $ 657    $ 145    34 % ($ 89 ) (14 %)
Diluted earnings per common share^(e)
   $ 2.17    $ 0.62    $ 1.62    $ 1.55    250 % $ 0.55    34 % $ 2.89    $ 2.17    $ 3.35    $ 0.72    33 % ($ 0.46 ) (14 %)
Effective tax rate
30.5 % 35.0 % 32.0 % (4.5 %) (13 %) (1.5 %) (5 %)
As adjusted:
Operating income^(a)
   $ 727    $ 307    $ 561    $ 420    137 % $ 166    30 % $ 819    $ 727    $ 962    $ 92    13 % ($ 143 ) (15 %)
Operating margin^(a)
   38.9 % 37.2 % 39.7 % 1.7 % 5 % (0.8 )% (2 )% 39.1 % 38.9 % 40.7 % 0.2 % 1 % (1.6 %) (4 %)
Non-operating income (expense), less net income (loss) attributable to non-controlling interests^1,^(b)
   $ (6 ) $ (153 ) $ 13    $ 147    96 % $ (19 ) NM
Non-operating income (expense), less net income (loss) attributable to non-controlling interests^(b)
$ 14    ($ 6 ) $ 20    $ 20    *    ($ 6 ) (30 %)
Net income attributable to BlackRock, Inc.^(c),(d)
   $ 469    $ 110    $ 379    $ 359    326 % $ 90    24 % $ 582    $ 469    $ 670    $ 113    24 % ($ 88 ) (13 %)
Diluted earnings per common share^(c),d),(e)
   $ 2.40    $ 0.81    $ 2.39    $ 1.59    196 % $ 0.01    —   %
Diluted earnings per common share^{(c), (d), (e)}
$ 2.96    $ 2.40    $ 3.42    $ 0.56    23 % ($ 0.46 ) (13 %)
Effective tax rate
30.1 % 35.0 % 31.8 % (4.9 %) (14 %) (1.7 %) (5 %)
Other:
Assets under management (end of period)
$ 3,648,445    $ 3,363,898    $ 3,560,968    $ 284,547    8 % $ 87,477    2 %
Diluted weighted-average common shares outstanding^(e)
   192,152,251    131,797,189    155,040,242    60,355,062    46 % 37,112,009    24 % 194,296,504    192,152,251    193,478,460    2,144,253    1 % 818,044    —   %
Assets under management
   $ 3,363,898    $ 1,283,355    $ 3,346,256    $ 2,080,543    162 % $ 17,642    1 %
Shares outstanding (end of period)
192,243,415    190,847,770    191,191,553    1,395,645    1 % 1,051,862    1 %
Book value per share**
$ 137.44    $ 128.55    $ 136.09    $ 8.89    7 % $ 1.35    1 %
Cash dividends declared and paid per share
$ 1.375    $ 1.00    $ 1.00    $ 0.375    37.5 % $ 0.375    37.5 %

~~NM – Not Meaningful~~
¹*
~~Includes net income (loss) attributable to non-controlling interests (redeemable~~-   Not applicable or the percentage is in excess of +/- 1,000%.
** -   Total BlackRock stockholders’ equity, excluding appropriated retained earnings, divided by total common and ~~nonredeemable) related to investment activities.~~
preferred shares outstanding.

- 4948 -
PART I—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
(continued)

BlackRock reports its financial results 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
   March 31, December 31,
(Dollar amounts in millions)    Three Months Ended    2011 2010 2010
   March 31, December 31,
   2010 2009 2009
Operating income, GAAP basis
   $ 654    $ 271    $ 389       $ 798    $ 654    $ 940
Non-GAAP adjustments:

BGI transaction/integration costs

Non-GAAP expense adjustments:

BGI integration costs

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

Total BGI transaction/integration costs
   52    —      152
Total BGI integration costs
   —      52    —
PNC LTIP funding obligation
   15    15    14       14    15    14
Merrill Lynch compensation contribution
   3    3    2       2    3    2
Restructuring charges
   —      22    —
Compensation expense related to appreciation (depreciation) on deferred compensation plans
   3    (4 ) 4
Compensation expense related to appreciation/ (depreciation) on deferred compensation plans
   5    3    6

Operating income, as adjusted
   727    307    561       819    727    962
Closed-end fund launch costs
   —      2    —         19    —      —
Closed-end fund launch commissions
   —      1    —         2    —      —

Operating income used for operating margin measurement
   $ 727    $ 310    $ 561       $ 840    $ 727    $ 962

Revenue, GAAP basis
   $ 1,995    $ 987    $ 1,544       $ 2,282    $ 1,995    $ 2,493
Non-GAAP adjustments:

Distribution and servicing costs
   (100 ) (127 ) (106 )    (109 ) (100 ) (106 )
Amortization of deferred mutual fund sales commissions
   (26 ) (27 ) (24 )
Amortization of deferred sales commissions
   (22 ) (26 ) (23 )

Revenue used for operating margin measurement
   $ 1,869    $ 833    $ 1,414       $ 2,151    $ 1,869    $ 2,364

Operating margin, GAAP basis
   32.8 % 27.5 % 25.2 %    35.0 % 32.8 % 37.7 %

Operating margin, as adjusted
   38.9 % 37.2 % 39.7 %    39.1 % 38.9 % 40.7 %


- 5049 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
~~Overview (continued)~~

~~BlackRock, Inc.~~Overview (continued)
Financial Highlights
(continued)
(a) (continued)

Management believes that operating income, as adjusted, and operating margin, as adjusted, are effective indicators of BlackRock’s financial 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~~Barclays Global Investors (“BGI”) integration costs, ~~occupancy costs and professional fees. BGI transaction/integration costs~~which are not expected to recur, recorded in 2010 ~~and 2009~~ consist principally of ~~certain advisory payments,~~ compensation expense, legal fees, marketing and promotional, occupancy and consulting expenses incurred in conjunction with the BGI ~~transaction.~~acquisition from Barclays (the “BGI Transaction”). The expenses associated with ~~restructuring and~~ BGI ~~transaction and~~ integration costs ~~have been deemed non-recurring by management and~~ have been excluded from operating income, as adjusted, to help enhance the comparability of this information to ~~prior~~the current reporting periods. 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 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. The expense related to the Merrill Lynch cash compensation contribution ceases at the end of the third quarter 2011.
Compensation expense associated with ~~appreciation~~ appreciation/(depreciation) on ~~assets~~investments 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.~~income (expense).
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 paid to certain employees as compensation 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 in evaluating the financial performance ~~for~~of BlackRock. The non-GAAP measure by itself may pose limitations because it does not include all of the Company’s revenues and expenses.
Revenue used for operating margin, as adjusted, excludes distribution and servicing costs paid to related parties and other third parties. Management believes that excluding such costs is useful to BlackRock because it creates consistency in the treatment for certain contracts for similar services, which due to the terms of the contracts, are accounted 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. 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.

- 5150 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
~~Overview (continued)~~

~~BlackRock, Inc.~~Overview (continued)
Financial 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 NCI, GAAP basis, adjusted for compensation expense associated with (appreciation)/ depreciation ~~(appreciation)~~ on ~~assets~~investments 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 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
   March 31, December 31,
(Dollar amounts in millions)    Three Months Ended    2011 2010 2010
March 31, December 31,
2010 2009 2009
Non-operating income (expense), GAAP basis
   $ 2    $ (179 ) $ 18       $ 15    $ 2    $ 18
Less: Net income (loss) attributable to NCI, GAAP basis
   5    (22 ) 1
Less: Net income (loss) attributable to NCI
   (4 ) 5    (8 )

Non-operating income (expense)⁽¹⁾
   (3 ) (157 ) 17       19    (3 ) 26
Compensation expense related to (appreciation) depreciation on deferred compensation plans
   (3 ) 4    (4 )
Compensation expense related to (appreciation)/depreciation on deferred compensation plans
   (5 ) (3 ) (6 )

Non-operating income (expense), less net income (loss) attributable to NCI, as adjusted⁽¹⁾
   $ (6 ) $ (153 ) $ 13       $ 14    ($ 6 ) $ 20


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

- 5251 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
~~Overview (continued)~~

~~BlackRock, Inc.~~Overview (continued)
Financial Highlights
(continued)

(c) Net income attributable to BlackRock, Inc., as adjusted:
Management believes that net income attributable to BlackRock, Inc., as adjusted, and diluted 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.~~value or benefits that do not impact cash flow.

(Dollar amounts in millions)    Three Months Ended
March 31,    December 31,
2010    2009    2009
   Three months ended
   March 31,    December 31,
(Dollar amounts in millions, except per share data)    2011    2010    2010
Net income attributable to BlackRock, Inc., GAAP basis
   $ 423    $ 84    $ 256       $ 568       $ 423       $ 657
Non-GAAP adjustments, net of tax:^(d)

BGI transaction/integration costs
   34    —      108
BGI integration costs
   —         34       —
PNC LTIP funding obligation
   10    10    12       9       10       11
Merrill Lynch compensation contribution
   2    2    3       2       2       2
Restructuring charges
   —      14    —
Income tax law changes
   3       —         —

Net income attributable to BlackRock, Inc., as adjusted
   $ 469    $ 110    $ 379       $ 582       $ 469       $ 670


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

Common shares^(e)
   $ 462    $ 107    $ 371       $ 575       $ 462       $ 661
Participating RSUs
   7    3    8
Participating restricted stock units
   7       7       9

Net income attributable to BlackRock, Inc., as adjusted
   $ 469    $ 110    $ 379       $ 582       $ 469       $ 670


Diluted weighted average common shares outstanding^(e)
   192,152,251    131,797,189    155,040,242
Diluted weighted-average common shares outstanding^(e)
   194,296,504       192,152,251       193,478,460

Diluted earnings per common share, GAAP basis^(e)
   $ 2.17    $ 0.62    $ 1.62       $ 2.89       $ 2.17       $ 3.35

Diluted earnings per common share, as adjusted^(e)
   $ 2.40    $ 0.81    $ 2.39       $ 2.96       $ 2.40       $ 3.42

The ~~restructuring charges and~~ BGI ~~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 enhance the comparability of this information to ~~prior~~ reporting periods.
The portion of the compensation expense associated with certain 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, has been excluded from net income attributable to BlackRock, Inc., as adjusted, because these charges ultimately do not impact BlackRock’s book value.
During first quarter 2011, certain state income tax laws changed due to enacted legislation, which resulted in the re-measurement of certain net deferred income tax liabilities, primarily related to acquired intangible assets. The resulting increase in income taxes has been excluded from net income attributable to BlackRock, Inc., as adjusted, as this enacted tax legislation change will not have a cash flow impact and to ensure comparability of this information to reporting periods.

- 5352 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
~~Overview (continued)~~

~~BlackRock, Inc.~~Overview (continued)
Financial Highlights
(continued)

(d) For the quarters ended March 31, ~~2010,~~2011, March 31, ~~2009~~2010 and December 31, ~~2009~~2010, non-GAAP adjustments were tax effected at ~~35%~~33%, 35% and ~~26.8%~~32%, respectively, which ~~reflect the~~reflects a blended rate applicable to the adjustments. BlackRock’s tax rate in fourth quarter ~~2009 includes~~2010 included the impact of changes in the fourth quarter to the ~~respective~~ full year blended ~~rate~~rates applicable to the adjustments.
(e) Series A, B, C and D 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 Accounting Standards Codification (“ASC”) 260-10,Earnings per Share(“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.

- 5453 -
PART I—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 Germany. The Company provides a wide array of ~~taxable~~products including passively and ~~tax-exempt~~actively managed equities, fixed income, ~~equity and~~ multi-asset class, ~~investment~~cash management and alternatives. BlackRock offers clients diversified access to global markets through separate accounts, collective trusts, open-end and closed-end mutual funds, ~~including exchange traded~~exchange-traded funds, hedge funds, and ~~mutual~~ funds ~~and separate accounts, as well as a wide assortment~~ of ~~index-based equity and alternative investment products for a~~funds to its diverse global clientele. BlackRock provides global advisory services for investment funds and other non-U.S. retail products. The Company’s non-U.S. investment funds are based in a number of domiciles and cover a range of asset classes, including equities, fixed income, cash management and alternatives.
In the United States, the primary retail offerings include various open-end and closed-end funds, includingiShares^®, the global product leader in exchange-traded funds for institutional, retail and high net worth investors. There are 465iShares globally across equities, fixed income and ~~equities.~~commodities, which trade like common stocks on 19 exchanges worldwide. 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~~supranational authorities and other government ~~entities;~~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 Corporation’s~~America’s acquisition of Merrill Lynch, runs ~~through~~until 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,~~assets under management (“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~~translation 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, purchases and redemptions of investment fund 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. Foreign exchange translation reflects the impact of converting non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
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~~or securities, with minimums generally ranging from approximately 102% to ~~108%~~112% of the value of the loaned securities. The ~~net income~~revenue 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~~funds 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 and 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 generally exceeds the first three calendar quarters in a year due to the ~~higher~~greater number of products with performance measurement periods that end on December 31.

- 5554 -
PART I—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. Approximately $10 trillion of positions are processed on ourAladdin^® operating platform, which serves as the investment / risk solutions system for BlackRock and other institutional investors. Fees earned forBlackRock Solutions and 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.
BlackRock also builds upon its leadership position to meet the growing need for investment and risk management solutions. Through its scale and diversity of products, it is able to provide its clients with customized solutions including fiduciary outsourcing for liability-driven investments and overlay strategies for pension plan sponsors, balance sheet management and related services for insurance companies and target date and target return funds, as well as asset allocation portfolios, for retail investors. BlackRock is also able to service these clients via itsAladdin platform to provide risk management and other outsourcing services for institutional investors and custom and tailored solutions to address complex risk exposures.
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, 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~~includes salaries, commissions, temporary help, severance, deferred and incentive compensation, employer payroll taxes and related benefit costs.

Distribution and servicing costs include payments made to Merrill Lynch-affiliated entities under a global distribution agreement, ~~and~~ to PNC-affiliated entities and Barclays, as well as other third parties, primarily associated with obtaining and retaining client investments in certain BlackRock products.

Direct fund expenses primarily 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.
General and administration expenses includes marketing and promotional, occupancy and office related costs, portfolio services (including clearing expenses related to transition management services), technology, professional services, communications, closed-end fund launch costs and other general and administration expenses.
Non-operating income (expense) includes the effect of changes in the valuations on investments (excluding available-for-sale investments) and earnings on equity method investments, as well as interest and dividend income and interest expense. Other comprehensive income includes changes in valuations related to available-for-sale investments. BlackRock primarily holds investments ~~primarily~~ in sponsored investment products that invest in a variety of asset classes, including private equity, distressed credit/mortgage debt securities, hedge funds and real estate. Investments generally are made for co-investment purposes, to establish a performance track record, to hedge exposure to certain deferred compensation plans, or for regulatory ~~purposes. Non-operating income (expense) and~~purposes, including Federal Reserve Bank stock. BlackRock does not engage in proprietary trading or other ~~comprehensive income for available-for-sale investments includes~~investment activities that could conflict with the ~~impact~~interests 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.~~its clients.
In addition, non-operating income (expense) includes the impact of changes in the valuations of consolidated sponsored investment funds and consolidated collateralized loan obligations. The portion of non-operating income (expense) not attributable to BlackRock is allocated to non-controlling ~~interests.~~interests on the condensed consolidated statements of income.

- 5655 -
PART I—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
Byby Asset Class

      Variance vs.
(Dollar amounts in millions)    March 31,
2010    December 31,
2009    March 31,
2009    December 31,
2009 March 31,
2009       Variance vs.
Equity

Index
   $ 1,229,253    $ 1,183,005    $ 50,065    4 % NM
   March 31,
2011    December 31,
2010    March 31,
2010⁽¹⁾    December 31,
2010 March 31,
2010
Equity:

Active
   353,269    353,050    141,447    —   % 150 %    $ 343,389       $ 334,532       $ 347,659       3 % (1 %)
Fixed income

Index
   470,589    459,744    3,075    2 % NM
Institutional index
   945,226       911,775       846,471       4 % 12 %
iShares / Exchange-traded products
   474,966       448,160       388,392       6 % 22 %
Fixed income:

Active
   588,594    595,883    469,581    (1 )% 25 %    595,314       592,303       588,198       1 % 1 %
Institutional index
   436,084       425,930       361,568       2 % 21 %
iShares / Exchange-traded products
   126,791       123,091       109,417       3 % 16 %
Multi-asset class
   154,750    142,029    73,972    9 % 109 %    207,982       185,587       154,750       12 % 34 %
Alternative
   101,886    102,101    53,592    —   % 90 %
Alternatives
   115,253       109,738       101,886       5 % 13 %

Long-term
   2,898,341    2,835,812    791,732    2 % 266 %    3,245,005       3,131,116       2,898,341       4 % 12 %
Cash management
   306,536    349,277    322,478    (12 )% (5 )%    256,694       279,175       306,536       (8 %) (16 %)

Sub-total
   3,204,877    3,185,089    1,114,210    1 % 188 %    3,501,699       3,410,291       3,204,877       3 % 9 %
Advisory²
   159,021    161,167    169,145    (1 )% (6 )%
Advisory⁽²⁾
   146,746       150,677       159,021       (3 %) (8 %)

Total
   $ 3,363,898    $ 3,346,256    $ 1,283,355    1 % 162 %    $ 3,648,445       $ 3,560,968       $ 3,363,898       2 % 8 %


~~NM—Not Meaningful~~
¹⁽¹⁾
Data reflects the reclassification of prior period AUM into the current period presentation.
²⁽²⁾
Advisory AUM represents long-term portfolio liquidation assignments.

- 5756 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Assets Under Management (continued)

~~BlackRock, Inc.~~
~~Mix of Assets Under Management~~
~~By Asset Class~~¹

   March 31,
2010 December 31,
2009 March 31,
2009
Equity

Index
   37 % 35 % 4 %
Active
   10 % 11 % 11 %
Fixed income

Index
   14 % 14 % —   %
Active
   17 % 18 % 37 %
Multi-asset class
   5 % 4 % 6 %
Alternative
   3 % 3 % 4 %

Long-term
   86 % 85 % 62 %
Cash management
   9 % 10 % 25 %

Sub-total
   95 % 95 % 87 %
Advisory²
   5 % 5 % 13 %

Total
   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 March 31, ~~2010.~~2011.

(Dollar amounts in millions)
   December 31,    Net
subscriptions Market
appreciation Foreign March 31,    December 31,
2010    Net
subscriptions
(redemptions)⁽¹⁾ BGI merger-
related
outflows⁽²⁾ Market
appreciation/
(depreciation) Foreign
exchange⁽³⁾    March 31,
2011
   2009    (redemptions)² (depreciation) exchange³ 2010
Equity

Index
   $ 1,183,005    $ 4,560    $ 51,662    $ (9,974 ) $ 1,229,253
Equity:

Active
   353,050    (7,929 ) 11,833    (3,685 ) 353,269    $ 334,532       $ 2,230    ($ 6,943 ) $ 11,053    $ 2,517       $ 343,389
Fixed income

Index
   459,744    13,608    7,412    (10,175 ) 470,589
Institutional index
   911,775       1,063    (10,730 ) 38,327    4,791       945,226
iShares/ETPs⁽⁴⁾
   448,160       7,198    —      16,888    2,720       474,966
Fixed income:

Active
   595,883    (14,350 ) 11,305    (4,244 ) 588,594    592,303       (2,676 ) (413 ) 3,378    2,722       595,314
Institutional index
   425,930       8,860    (113 ) (2,557 ) 3,964       436,084
iShares/ETPs
   123,091       2,339    —      (5 ) 1,366       126,791
Multi-asset class
   142,029    10,559    4,346    (2,184 ) 154,750    185,587       14,940    —      4,953    2,502       207,982
Alternative
   102,101    2,465    (1,686 ) (994 ) 101,886
Alternatives
   109,738       777    (152 ) 4,589    301       115,253

Long-term
   2,835,812    8,913    84,872    (31,256 ) 2,898,341    3,131,116       34,731    (18,351 ) 76,626    20,883       3,245,005
Cash management
   349,277    (39,599 ) 77    (3,219 ) 306,536    279,175       (24,441 ) —      322    1,638       256,694

Sub-total
   3,185,089    (30,686 ) 84,949    (34,475 ) 3,204,877    3,410,291       10,290    (18,351 ) 76,948    22,521       3,501,699
Advisory⁴
   161,167    (2,864 ) (177 ) 895    159,021
Advisory⁽⁵⁾
   150,677       (4,508 ) —      (85 ) 662       146,746

Total
   $ 3,346,256    $ (33,550 ) $ 84,772    $ (33,580 ) $ 3,363,898    $ 3,560,968       $ 5,782    ($ 18,351 ) $ 76,863    $ 23,183       $ 3,648,445


⁽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.
⁽²⁾
Includes outflows due to manager concentration considerations and scientific active equity performance.
⁽³⁾
Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
⁽⁴⁾
Exchange-traded products (“ETPs”).
⁽⁵⁾
Advisory AUM represents long-term portfolio liquidation assignments.
AUM increased approximately ~~$18~~$87.5 billion, or 1%2%, to ~~$3.364~~$3.648 trillion at March 31, ~~2010,~~2011, compared to ~~$3.346~~$3.561 trillion at December 31, ~~2009.~~2010. The ~~growth~~increase in AUM was ~~primarily~~ attributable to ~~$85~~$35 billion of net subscriptions in long-term products excluding outflows due to manager concentration considerations and scientific active equity performance (“merger-related outflows”), $77 billion in net market appreciation and $9a $23 billion ~~in net subscriptions in long-term mandates,~~increase due to foreign exchange movements, partially offset by ~~$34 billion in net foreign exchange movements, $40~~$24 billion of net outflows in cash management products, ~~and $3~~$5 billion of net client distributions in advisory ~~assignments.~~ assignments and $18 billion of BGI merger-related outflows.
Net market appreciation of ~~$85~~$77 billion included ~~$63 billion of~~ net appreciation of $66 billion in equity products due to an increase in global equity markets, ~~$19~~$5 billion in multi-asset class products, $5 billion in alternative investments and $1 billion in fixed income ~~products due to current income and changes in interest rate spreads and $4 billion in multi-asset class~~ products.
The ~~$34~~$23 billion net ~~decrease~~increase in AUM from foreign exchange movements was due to the ~~strengthening~~weakening of the U.S. dollar, primarily against the ~~Pound Sterling,~~euro, pound sterling and Canadian dollar, partially offset by the strengthening of the U.S. dollar against the Japanese yen, which resulted in a ~~decrease~~net increase in AUM from converting non-U.S. dollar denominated AUM into U.S. dollars.
Total Net Subscriptions/(Redemptions)
Combined net subscriptions of $5.8 billion and BGI merger-related outflows of $18.4 billion for the three months ended March 31, 2011, included net subscriptions of $10.8 billion from retail and high net worth clients and $10.5 billion fromiShares clients, which were offset by net redemptions of $33.9 billion from institutional clients.

- 5957 -
PART I—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)~~Assets Under Management (continued)
Long-term 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.~~Subscriptions/(Redemptions) excluding merger-related outflows
Net subscriptions in long-term mandates of $9$35 billion were ~~primarily~~ the result of ~~$11 billion~~ net subscriptions of: (a) $15 billion in multi-asset class products, ~~related to $8~~led by strength in fiduciary, target-date funds (includingLifePath^® portfolios) and global allocation products, (b) $9 billion in ~~asset allocation products and $3 billion in target date/risk and other products, $14 billion in~~institutional index fixed income products, ~~concentrated~~which were primarily related to local currency, sector-specific and target duration strategies partially offset by outflows in global bond mandates, (c) $7 billion iniSharesequity products, which were primarily related to U.S. equity, sector and global funds, (d) approximately $7 billion in combined flows from institutional index and active equity, fixed incomeiSharesand alternatives, partially offset by net redemptions of: (a) $3 billion in active fixed income primarily related to outflows in U.S core and global fixed income strategies partially offset by inflows in U.S. target duration and ~~U.S. sector-specialty strategies, $5~~local currency mandates.
Total iShares AUM grew $34.2 billion to $624.4 billion. The growth in AUM included net subscriptions driven by $7.2 billion in ~~index~~ equity, ~~products and $2~~$2.3 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~~$0.9 billion in ~~net redemptions in active equity products concentrated in U.S. equity and regional/country quantitative funds.~~alternatives.
Cash Management 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.~~ Subscriptions/(Redemptions)
Cash management net outflows ~~included $34~~of $24 billion were substantially all from institutional clients across all strategies, concentrated in government and ~~$6 billion from U.S.~~prime products. The net withdrawals largely reflected institutional ~~and retail/high net worth clients, respectively. Advisory AUM outflows included $3 billion of net distributions from long-term liquidation portfolios.~~reaction to the continued low interest rate environment.
The following table presents the component changes in BlackRock’s AUM¹ for the twelve months ended March 31, ~~2010.~~2011.

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

(Dollar amounts in millions)    March 31,
2010⁽¹⁾    Net
subscriptions
(redemptions)⁽²⁾ BGI
merger-
related
outflows⁽³⁾ Acquisition/
reclassifications⁽⁴⁾ Market
appreciation/
(depreciation)    Foreign
exchange⁽⁵⁾    March 31,
2011
Equity:

Active
   $ 347,659       $ 3,579    ($ 51,136 ) ($ 3,920 ) $ 39,985       $ 7,222       $ 343,389
Institutional index
   846,471       30,483    (49,000 ) (4,389 ) 101,643       20,018       945,226
iShares/ETPs⁽⁶⁾
   388,392       31,930    —      —      51,797       2,847       474,966
Fixed income:

Active
   588,198       (14,309 ) (5,967 ) (3,923 ) 24,024       7,291       595,314
Institutional index
   361,568       40,714    (9,865 ) 7,374    12,064       24,229       436,084
iShares/ETPs
   109,417       14,297    —      —      1,371       1,706       126,791
Multi-asset class
   154,750       30,653    (137 ) 3,550    14,524       4,642       207,982
Alternatives
   101,886       (1,858 ) (608 ) —      13,445       2,388       115,253

Long-term
   2,898,341       135,489    (116,713 ) (1,308 ) 258,853       70,343       3,245,005
Cash management
   306,536       (46,755 ) (574 ) (4,852 ) 209       2,130       256,694

Sub-total
   3,204,877       88,734    (117,287 ) (6,160 ) 259,062       72,473       3,501,699
Advisory⁽⁷⁾
   159,021       (13,664 ) (10 ) —      13       1,386       146,746

Total
   $ 3,363,898       $ 75,070    ($ 117,297 ) ($ 6,160 ) $ 259,075       $ 73,859       $ 3,648,445


¹⁽¹⁾
Data reflects the reclassification of prior period AUM into the current period presentation.
²⁽²⁾
Includes distributions representing return of capital and return on investment to investors.
³⁽³⁾
Includes outflows due to manager concentration considerations and scientific active equity performance.
⁽⁴⁾
Includes acquisition adjustments and reclasses of AUM acquired from Barclays in December 2009 and ~~R3 Capital Management, LLC in April 2009 and acquisition adjustments~~other reclassifications to conform to current period combined AUM policy.
⁴⁽⁵⁾
Foreign exchange reflects the impact of converting non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
⁵⁽⁶⁾
Exchange-traded products (“ETPs”).
⁽⁷⁾
Advisory AUM represents long-term portfolio liquidation assignments.

- 6058 -
PART I—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~~$285 billion, or 8%, to $3.648 trillion ~~or 162%,~~at March 31, 2011, compared to $3.364 trillion at March 31, ~~2010, compared to $1.283 trillion at March 31, 2009.~~2010. The ~~growth~~increase in AUM primarily was ~~primarily~~ attributable to ~~$1.849 trillion acquired in the BGI Transaction, $1 billion acquired from R3 Capital Management, LLC, $251~~$259 billion in ~~net~~ market appreciation, ~~$94~~$135 billion of net subscriptions in long-term ~~mandates,~~products excluding merger-related outflows, and a $74 billion increase due to foreign exchange movements, partially offset by ~~$73~~$117 billion of total BGI merger-related outflows, $47 billion of cash management net outflows ~~in cash management products, $26~~and $14 billion ~~in foreign exchange movements~~of advisory distributions and ~~$16 billion in advisory assignments.~~ outflows.
Net market appreciation of ~~$251~~$259 billion included ~~$182~~$193 billion ~~of net appreciation~~ in equity products, due to an increase in global equity markets, ~~$47~~$37 billion in fixed income products, ~~due to current income and changes in interest rate spreads and $23~~$15 billion in multi-asset class products and $13 billion in alternative products.
The ~~$26~~$74 billion net ~~decrease~~increase in AUM from foreign exchange movements was ~~across long-term products, partially offset by a foreign exchange~~due to the weakening of the U.S. dollar, primarily against the Japanese yen, pound sterling and euro, which resulted in an increase in ~~advisory long-term portfolio liquidation assignments.~~AUM from converting non-U.S. dollar denominated AUM into U.S. dollars.
Net Subscriptions/(Redemptions)
~~Net~~Combined net subscriptions of $5$75 billion and BGI merger-related outflows of $117 billion for the twelve months ended March 31, ~~2010~~2011 included ~~$16~~net redemptions of $105 billion from ~~investors in~~ institutional clients, partially offset by net subscriptions of $49 billion fromiSharesclients and $14 billion from retail and high net worth ~~clients, partially offset by $25~~clients.
Long-term Net Subscriptions/(Redemptions) excluding merger-related outflows
Net subscriptions in long-term mandates of $135 billion were the result of net ~~redemptions from institutional clients.~~
~~Net~~ subscriptions ~~were attributable to net new business of $33~~of: (a) $41 billion in ~~index equity products spread across U.S. equity and regional/country strategies, $2 billion in active equity products, $20 billion in~~institutional index fixed income products ~~including~~related to local currency and U.S. ~~sector,~~core and targeted duration strategies, (b) $32 billion iniShares/ETPs equity products, which were primarily related to regional/country and ~~local currency~~U.S. equity strategies, ~~$21~~(c) $31 billion in multi-asset class products, including global asset allocation and target-date funds (includingLifePath portfolios), (d) $30 billion in equity institutional index products in global strategies and (e) $14 billion iniShares/ETPs fixed income products, which were primarily related to ~~asset allocation strategies, $17 billion in active fixed income products including $20 billion of inflows in~~ local currency, ~~$11 billion in~~ U.S. ~~sector~~target duration products ~~$6 billion in~~and U.S. ~~core strategies and $4 billion in U.S. municipals~~sector-specialty products, partially offset by net redemptions of $14 billion across various active U.S. fixed income strategies.
Cash Management Net Subscriptions/(Redemptions) excluding merger-related outflows
Cash management net outflows of $47 billion included $30 billion, $16 billion ~~in active targeted duration~~ and $8$1 billion ~~in global strategies. Cash management products had $73 billion of~~from institutional clients, retail/high net ~~outflows primarily~~worth clients andiShares clients, respectively, across all strategies, concentrated 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 products as interest rates remained at historic lows. Advisory AUM outflows included $16 billion of net distributions from long-term liquidation portfolios.products.

- 6159 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009.~~2010
~~The~~Operating Income and Operating Margin Overview
GAAP
   Three months ended
   March 31, Variance
(Dollar amounts in millions)    2011 2010 Amount % Change
Revenue
   $ 2,282    $ 1,995    $ 287    14 %
Expenses
   1,484    1,341    143    11 %

Operating income
   $ 798    $ 654    $ 144    22 %

Operating margin
   35.0 % 32.8 % 2.2 % 7 %
Operating income
Operating income totaled $798 million for the three months ended March 31, ~~2010 reflects~~2011, an increase of $144 million compared with operating income for 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
   March 31,    Variance
(Dollar amounts in millions)    2010    2009    Amount % Change
Investment advisory, administration fees and securities lending revenue:

Equity

Index
   $ 489    $ 5    $ 484    NM
Active
   461    232    229    99 %
Fixed income

Index
   96    1    95    NM
Active
   254    196    58    30 %
Multi-asset class
   166    98    68    69 %
Alternative
   155    93    62    67 %
Cash management
   132    175    (43 ) (25 )%

Total
   1,753    800    953    119 %
Investment advisory performance fees

Equity
   5    5    —      —   %
Fixed income
   13    3    10    333 %
Multi-asset class
   1    1    —      —   %
Alternative
   31    2    29    NM

Total
   50    11    39    355 %
BlackRock Solutionsand advisory
   113    135    (22 ) (16 )%
Distribution fees
   28    25    3    12 %
Other revenue
   51    16    35    219 %

Total revenue
   $ 1,995    $ 987    $ 1,008    102 %

~~NM—Not Meaningful~~
~~Total revenue~~three months ended March 31, 2010. Operating income for the three months ended March 31, 2010 ~~increased $1,008~~included $52 million ~~or 102%, to $1,995 million,~~of BGI integration costs as compared with ~~$987 million~~no BGI integration costs in 2011. The integration expenses are not part of BlackRock’s on-going business and were principally comprised of compensation expense, legal fees, occupancy costs, marketing and promotional and consulting expenses.
The increase in operating income for the three months ended March 31, ~~2009. Total~~2011 is attributable to the $287 million increase in revenue primarily related to an increase in base fees associated with the growth in long-term AUM, which included market appreciation and net new business, and higher performance fees, partially offset by a $143 million net increase in operating expenses related to increases in employee compensation and benefits, general and administration expenses, direct fund expenses and distribution and servicing costs.
Operating margin
The Company’s operating margin was 35.0% for the three months ended March 31, ~~2010 reflects~~2011, compared with 32.8% for the ~~full quarter effect~~three months ended March 31, 2010.
The increase in operating margin for three months ended March 31, 2011 included the positive effects of the $287 million growth in total revenue correlated to the $347 billion growth in long-term AUM driven by market appreciation and net new business and a $52 million decrease in BGI ~~acquisition. The $1,008 million increase was the result of~~integration costs, which more than offset decreases to operating margin related to: (i) a ~~$953~~$57 million increase in ~~total investment advisory, administration fees~~employee compensation and ~~securities lending revenue,~~benefits, (ii) a ~~$39~~$20 million change in foreign currency remeasurement costs/benefits, (iii) a $19 million increase ~~in performance fees, a $35 million increase in other revenue~~of closed-end fund launch costs (excluding compensation costs) associated with the March 2011 launch of the BlackRock Resources and ~~a $3 million increase in distribution fees, partially offset by a $22 million decrease in~~~~BlackRock Solutions~~Commodities Strategy Trust, as well as (iv) increased investments (including marketing and ~~advisory revenue.~~promotional costs) to grow the business.

- 6260 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009.~~
~~Revenue~~2010 (continued)

Operating Income and Operating Margin Overview (continued)
As Adjusted

   Three months ended
   March 31, Variance
(Dollar amounts in millions)    2011 2010 Amount % Change
Revenue
   $ 2,282    $ 1,995    $ 287    14 %
Expenses
   1,463    1,268    195    15 %

Operating income⁽¹⁾
   $ 819    $ 727    $ 92    13 %

Operating margin⁽¹⁾
   39.1 % 38.9 % 0.2 % 1 %
⁽¹⁾
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.
Operating income
Operating income, as adjusted, totaled $819 million for the three months ended March 31, 2011, which was an increase of $92 million compared to operating income for the three months ended March 31, 2010.
The increase in operating income, as adjusted, for the three months ended March 31, 2011 is attributable to the $287 million increase in revenue, primarily related to an increase in base and performance fees associated with the growth in long-term AUM, which included market appreciation and net new business, partially offset by a $195 million net increase in operating expenses primarily related to increases in general and administration expenses, employee compensation and benefits, direct fund expenses and distribution and servicing costs.
Operating margin
The Company’s operating margin, as adjusted, was 39.1% for the three months ended March 31, 2011, compared with 38.9% for the three months ended March 31, 2010.
The increase in operating margin for three months ended March 31, 2011 included the positive effects of the $287 million growth in total revenue correlated to the $347 billion growth in long-term AUM driven by market appreciation and net new business and, which offset decreases to operating margin related to (i) a $75 million increase in employee compensation and benefits, (ii) a $20 million change in foreign currency remeasurement costs/benefits, as well as (iii) increased investments (including marketing and promotional costs) to grow the business.
- 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 March 31, 2011, as compared with the three months ended March 31, 2010 (continued)
Revenue
   Three months ended
   March 31,    Variance
(Dollar amounts in millions)    2011    2010⁽¹⁾    Amount % Change
Investment advisory, administration fees and securities lending revenue:

Equity:

Active
   $ 511       $ 461       $ 50    11 %
Institutional index
   111       98       13    13 %
iShares / Exchange-traded products
   463       391       72    18 %
Fixed income:

Active
   269       254       15    6 %
Institutional index
   53       37       16    43 %
iShares / Exchange-traded products
   71       59       12    20 %
Multi-asset class
   218       166       52    31 %
Alternatives
   172       155       17    11 %

Long-term
   1,868       1,621       247    15 %
Cash management
   116       132       (16 ) (12 %)

Total
   1,984       1,753       231    13 %
Investment advisory performance fees:

Equity
   30       5       25    500 %
Fixed income
   1       13       (12 ) (92 %)
Multi-asset class
   3       1       2    200 %
Alternatives
   49       31       18    58 %

Total
   83       50       33    66 %
BlackRock Solutionsand advisory
   128       113       15    13 %
Distribution fees
   28       28       —      —   %
Other revenue
   59       51       8    16 %

Total revenue
   $ 2,282       $ 1,995       $ 287    14 %

⁽¹⁾
Certain prior period information has been reclassified to conform to current period presentation.
Total revenue for the three months ended March 31, 2011 increased $287 million, or 14%, to $2,282 million, compared with $1,995 million for the three months ended March 31, 2010. The $287 million increase was the result of a $231 million increase in total investment advisory, administration fees and securities lending revenue, a $33 million increase in performance fees, a $15 million increase inBlackRock Solutions and advisory revenue and an $8 million increase in other 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, 2011, as compared with the three months ended March 31, 2010 (continued)
Revenue (continued)
Investment Advisory, Administration Fees and Securities Lending Revenue
Investment advisory, administration fees and securities lending revenues increased $231 million to $1,984 million for the three months ended March 31, 2011, compared to $1,753 million for the three months ended March 31, 2010 primarily related to growth in long-term AUM due to market appreciation and net new business.
The $231 million net increase in investment advisory, administration fees and securities lending revenues consisted of ~~$953~~$72 million in equity iShares / Exchange-traded products, $52 million in multi-asset class products, $50 million in active equity products, $17 million in alternatives investment products including commodity iShares, $16 million in institutional index fixed income products, $15 million in active fixed income products, $13 million in institutional index equity products and $12 million in fixed income iShares / exchange-traded products, partially offset by a $16 million decrease in cash management products, due to lower average AUM.
“Base Fee” / AUM Mix Analysis
The below table lists the asset type mix of investment advisory, administration fees and securities lending revenue (collectively “base fees”) and mix of AUM by asset class:
   Mix of Base Fees Mix of AUM by Asset Class
   Three months ended
March 31, March 31, December 31, March 31,
   2011 2010 2011 2010 2010
Equity:

Active
   25 % 27 % 9 % 9 % 10 %
Institutional index
   6 % 6 % 27 % 26 % 25 %
iShares / ETPs
   22 % 22 % 13 % 13 % 12 %
Fixed income:

Active
   14 % 14 % 16 % 17 % 17 %
Institutional index
   3 % 2 % 12 % 12 % 11 %
iShares / ETPs
   4 % 3 % 3 % 3 % 3 %
Multi-asset class
   11 % 9 % 6 % 5 % 5 %
Alternatives
   9 % 9 % 3 % 3 % 3 %

Long-term
   94 % 92 % 89 % 88 % 86 %
Cash management
   6 % 8 % 7 % 8 % 9 %

Sub-total
   100 % 100 % 96 % 96 % 95 %

Advisory
   4 % 4 % 5 %

Total
   100 % 100 % 100 %

Active equity base fees represented 25% of total base fees for the three months ended March 31, 2011 and represented 9% of total AUM at March 31, 2011.
Institutional equity index base fees represented 6% of total base fees for the three months ended March 31, 2011 and represented 27% of total AUM at March 31, 2011.
Active fixed income base fees represented 14% of total base fees for the three months ended March 31, 2011 and represented 16% of total AUM at March 31, 2011.
Institutional fixed income index base fees represented 3% of total base fees for the three months ended March 31, 2011 and represented 12% of total AUM at March 31, 2011.
Multi-asset class base fees represented 11% of total base fees for the three months ended March 31, 2011 and represented 6% of total AUM at March 31, 2011.
Alternative investments base fees represented 9% of total base fees for the three months ended March 31, 2011 and represented 3% of total AUM at March 31, 2011.
- 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, 2011, as compared with the three months ended March 31, 2010 (continued)
Revenue (continued)
Performance Fees
Investment advisory performance fees increased $33 million, or 66%, to $83 million for the three months ended March 31, ~~2010,~~2011, as compared with 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 March 31, 2010, ~~as compared to $11 million for the three months ended March 31, 2009,~~ primarily due to an increase in performance fees inearned upon exceeding absolute investment or relative investment return thresholds on regional/country and global equity strategies, fund of hedge funds and single strategy equity hedge funds, ~~and~~partially offset by decreases in fixed income ~~products.~~strategies.
BlackRock Solutions and Advisory
BlackRock Solutions and advisory revenue for the three months ended March 31, ~~2010 decreased $22~~2011 increased $15 million, or ~~16%~~13%, compared with the three months ended March 31, ~~2009.~~2010. The ~~decrease~~increase inBlackRock Solutions and advisory revenue was primarily due to ~~fewer~~additionalAladdin mandates and an increase in advisory ~~assignments, including portfolio liquidation assignments, which have AUM based fees, partially offset by additional Aladdin~~^® ~~mandates.~~assignments. 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.
Other Revenue

   Three Months Ended
   March 31,    Variance    Three months ended
March 31,    Variance
(Dollar amounts in millions)    2010    2009    Amount    % Change    2011    2010    Amount % Change
Other revenue:

Transition management service fees
   $ 18    $ 6    $ 12    200 %    $ 19       $ 18       $ 1    6 %
Commissions revenue
   9    5    4    80 %    11       9       2    22 %
iPath marketing fees⁽¹⁾
   8       6       2    33 %
Equity method investment earnings⁽¹⁾⁽²⁾
   6    1    5    500 %    7       6       1    17 %
iPath^® marketing fees⁽²⁾
   6    —      6    NM
Custody fees
   3       4       (1 ) (25 %)
Other miscellaneous revenue(3)
   12    4    8    200 %    11       8       3    37 %

Total other revenue
   $ 51    $ 16    $ 35    219 %    $ 59       $ 51       $ 8    16 %


~~NM – Not Meaningful~~
⁽¹⁾
Related to exchange-traded notes issued by Barclays.
⁽²⁾
Related to operating ~~and~~ advisory company investments.
⁽²⁾⁽³⁾
~~Related to exchange traded notes issued by Barclays.~~Includes 529 program fees, fund accounting, and other miscellaneous revenues.
Other revenue of $59 million for the three months ended March 31, 2011 increased $8 million, or 16%, compared with $51 million for the three months ended March 31, ~~2010 increased $35 million, or 219%, compared with the three months ended March 31, 2009.~~2010. The increase in other revenue was ~~primarily~~ the result of a ~~$12~~$3 million increase in ~~fees earned for transition management services,~~other miscellaneous revenue (which includes 529 program fees), a $6$2 million increase in marketing fees earned from Barclays for ~~the~~services to distribute Barclays iPath^® products, ~~(exchange traded notes issued by Barclays),~~ a $5$2 million increase in ~~BlackRock’s share~~commissions revenue earned from sales of ~~underlying earnings from certain operating~~unit trust and ~~advisory company investments~~class A open-end mutual funds and a $4$1 million net increase in ~~sales commissions as a result of the BGI acquisition.~~other revenues.

- 6364 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009.~~2010 (continued)

Expenses

   Three Months ended
   March 31, Variance
(Dollar amounts in millions)    2010    2009 Amount %
Expenses:

Employee compensation and benefits
   $ 773    $ 351    $ 422    120 %
Distribution and servicing costs
   100    127    (27 ) (21 )%
Amortization of deferred mutual fund sales commissions
   26    27    (1 ) (4 )%
Direct fund expenses
   113    13    100    NM
General and administration
   289    140    149    106 %
Restructuring charges
   —      22    (22 ) (100 )%
Amortization of intangible assets
   40    36    4    11 %

Total expenses, GAAP
   $ 1,341    $ 716    $ 625    87 %

Total expenses, GAAP
   $ 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    15    —      —   %
Merrill Lynch compensation contribution
   3    3    —      —   %
Restructuring charges
   —      22    (22 ) (100 )%
Compensation expense related to appreciation (depreciation) on deferred compensation plans
   3    (4 ) 7    NM

Total non-GAAP adjustments
   73    36    37    103 %

Total expenses, as adjusted
   $ 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.
   Three months ended
March 31,    Variance
(Dollar amounts in millions)    2011    2010    Amount % Change
Expenses:

Employee compensation and benefits
   $ 830       $ 773       $ 57    7 %
Distribution and servicing costs
   109       100       9    9 %
Amortization of deferred sales commissions
   22       26       (4 ) (15 %)
Direct fund expenses
   143       113       30    27 %
General and administration
   340       289       51    18 %
Amortization of intangible assets
   40       40       —      —   %

Total expenses, GAAP
   $ 1,484       $ 1,341       $ 143    11 %

Total expenses, GAAP
   $ 1,484       $ 1,341       $ 143    11 %
Less non-GAAP expense adjustments:

BGI integration costs

Employee compensation and benefits
   —         18       (18 ) (100 %)
General and administration
   —         34       (34 ) (100 %)

Total BGI integration costs
   —         52       (52 ) (100 %)
PNC LTIP funding obligation
   14       15       (1 ) (7 %)
Merrill Lynch compensation contribution
   2       3       (1 ) (33 %)
Compensation expense related to appreciation/(depreciation) on deferred compensation plans
   5       3       2    67 %

Total non-GAAP expense adjustments
   21       73       (52 ) (71 %)

Total expenses, as adjusted
   $ 1,463       $ 1,268       $ 195    15 %

Total GAAP expenses increased ~~$625~~$143 million, or ~~87%~~11%, to $1,484 million for the three months ended March 31, 2011, compared to $1,341 million for the three months ended March 31, ~~2010, compared to $716 million for the three months ended March 31, 2009.~~2010. Excluding certain items deemed non-recurring by management or transactions that ultimately will not affect the Company’s book value, total expenses, as adjusted, increased ~~$588~~$195 million, or ~~86%~~15%. The increase in total expenses, as adjusted, is primarily attributable to increases in general and administration expenses, employee compensation and benefits, direct fund expenses ~~general~~ and ~~administration expenses,~~distribution and servicing costs, partially offset by a reduction in amortization of ~~distribution and servicing costs.~~deferred sales commissions.

- 6465 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009 (continued)~~
~~Expenses~~2010 (continued)

Expenses (continued)
Employee Compensation and Benefits

   Three months ended
March 31,    Variance
(Dollar amounts in millions)    2011    2010    Amount % Change
Employee compensation and benefits, GAAP expenses:
   $ 830       $ 773       $ 57    7 %
Less non-GAAP expense adjustments:

BGI integration costs
   —         18       (18 ) (100 %)
PNC LTIP funding obligation
   14       15       (1 ) (7 %)
Merrill Lynch compensation contribution
   2       3       (1 ) (33 %)
Compensation expense related to appreciation/ (depreciation) on deferred compensation plans
   5       3       2    67 %

Total non-GAAP expense adjustments
   21       39       (18 ) (46 %)

Employee compensation and benefits, as adjusted
   $ 809       $ 734       $ 75    10 %

Employee compensation and benefits expense increased ~~$422~~$57 million, or ~~120%~~7%, to $830 million, for the three months ended March 31, 2011, compared to $773 million for the three months ended March 31, ~~2010,~~2010. Employees at March 31, 2011 totaled approximately 9,300 as compared to ~~$351~~approximately 8,600 at March 31, 2010.
Employee compensation and benefits, as adjusted, increased by $75 million after excluding the decrease of $18 million of non-GAAP adjustments primarily related to a decrease in BGI integration costs. The $75 million increase was attributable to an increase in base salaries due to an increase in the number of employees and an increase in incentive compensation primarily associated with an increase in stock-based compensation expense related to the effect of additional grants at the end of January 2011, as well as the effect of higher operating income and advisory fees and an $11 million increase in other compensation, including commissions and payroll taxes.
Distribution and Servicing Costs
Distribution and servicing costs increased $9 million to $109 million for the three months ended March 31, ~~2009.~~
The increase in employee compensation and benefits expense, after excluding $18 million of BGI integration costs, was attributable to a $166 million increase in salaries, benefits and commissions, a $198 million increase in incentive compensation associated with the increase in operating income, a $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, which is primarily offset by an increase in non-operating income related to appreciation on assets associated with certain deferred compensation plans. 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 March 31, 2010 totaled approximately 8,400 as2011, compared ~~to 5,200 at March 31, 2009.~~
~~Distribution and Servicing Costs~~
~~Distribution and servicing costs decreased $27 million~~ to $100 million for the three months ended March 31, ~~2010, compared to $127 million for the three months ended March 31, 2009.~~2010. These costs include payments to Bank of ~~America Corporation (“Bank of America”)/~~America/Merrill Lynch under a global distribution agreement, PNC and ~~payments to PNC~~Barclays, as well as other third parties, primarily associated with the distribution and servicing of client investments in certain BlackRock products. The ~~$27~~$9 million ~~decrease~~increase primarily related to ~~lower~~increased levels of distribution payments due to increases in average AUM for open-end and closed-end funds, partially offset by a decrease in cash management costs due to lower average cash management ~~AUM serviced by Merrill Lynch and an increase in waivers within certain cash management funds, resulting in lower distribution payments.~~AUM.
Distribution and servicing costs for the three months ended March 31, ~~2010~~2011 included ~~$59~~$62 million of costs attributable to Bank of America/Merrill Lynch and affiliates, and $5$1 million of costs attributable to PNC and affiliates as compared to ~~$98~~$59 million and $5 million, respectively, in the three months ended March 31, ~~2009.~~2010. Distribution and servicing costs related to other third parties, including Barclays, increased ~~$12~~$10 million to $46 million for the three months ended March 31, 2011, as compared to $36 million for the three months ended March 31, 2010 ~~as compared~~due to ~~$24~~an expansion of distribution platforms and higher long-term AUM.
Amortization of Deferred Sales Commissions
Amortization of deferred sales commissions decreased $4 million to $22 million for the three months ended March 31, ~~2009 due~~2011, as compared to ~~an expansion~~$26 million for the three months ended March 31, 2010. The decrease in amortization of ~~distribution platforms.~~
~~Direct Fund Expenses~~
~~Direct fund expenses increased $100 million~~deferred sales commissions was primarily ~~related to~~ the ~~addition~~result of ~~BGI funds subject to these arrangements, under which BlackRock pays~~lower sales in certain ~~fund expenses.~~share classes of U.S. open-end mutual funds.

- 6566 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009 (continued)~~
~~Expenses~~2010 (continued)

Expenses (continued)
Direct Fund Expenses
Direct fund expenses increased $30 million primarily related an increase in average AUM for the funds (includingiShares) subject to these arrangements under which BlackRock pays certain fund expenses.
General and Administration Expenses

   Three months ended
   March 31,    Variance    Three months ended
March 31,    Variance
(Dollar amounts in millions)    2010    2009    Amount % Change    2011    2010    Amount % Change
General and administration expenses:

General and administration expenses⁽¹⁾, GAAP:

Marketing and promotional
   $ 70    $ 14    $ 56    400 %    $ 82       $ 70       $ 12    17 %
Occupancy
   68    35    33    94 %
Occupancy and office related
   75       75       —      —   %
Portfolio services
   41    23    18    78 %    45       41       4    10 %
Technology
   39    25    14    56 %    36       39       (3 ) (8 %)
Professional services
   32    12    20    167 %    29       32       (3 ) (9 %)
Communications
   10       13       (3 ) (23 %)
Regulatory, filing and license fees
   4       2       2    100 %
Closed-end fund launch costs
   —      2    (2 ) (100 )%    19       —         19    *
Other general and administration
   39    29    10    34 %    40       17       23    135 %

Total general and administration expenses
   $ 289    $ 140    $ 149    106 %
Total general and administration expenses, GAAP
   $ 340       $ 289       $ 51    18 %

Total general and administration expenses, as adjusted⁽¹⁾
   $ 255    $ 140    $ 115    82 %
Less BGI integration costs:

Marketing and promotional
   $ —         $ 16       ($ 16 ) (100 %)
Occupancy and office related
   —         4       (4 ) (100 %)
Technology
   —         2       (2 ) (100 %)
Professional services
   —         9       (9 ) (100 %)
Other general and administration
   —         3       (3 ) (100 %)

Total BGI integration costs
   $ —         $ 34       ($ 34 ) (100 %)

General and administration expenses, as adjusted:

Marketing and promotional
   $ 82       $ 54       $ 28    52 %
Occupancy and office related
   75       71       4    6 %
Portfolio services
   45       41       4    10 %
Technology
   36       37       (1 ) (3 %)
Professional services
   29       23       6    26 %
Communications
   10       13       (3 ) (23 %)
Regulatory, filing and license fees
   4       2       2    100 %
Closed-end fund launch costs
   19       —         19    *
Other general and administration
   40       14       26    186 %

Total general and administration expenses, as adjusted
   $ 340       $ 255       $ 85    33 %


* – Not applicable or the percentage is in excess of +/- 1,000%.
⁽¹⁾
~~Adjusted for $34 million of BGI integration costs in~~Prior period data reflects certain reclassifications to conform to the ~~three months ended March 31, 2010.~~current period presentation.
~~General and administration expenses increased $149 million, or 106%, for the three months ended March 31, 2010 compared with the three months ended March 31, 2009.~~
The three months ended March 31, 2010 included $16 million, $9 million, $4 million, $2 million and $3 million of marketing, professional services, occupancy, technology, and other general and administration expenses, respectively, related to the integration of BGI. Excluding these expenses, general and administration expenses increased $115 million, or 82%, for the three months ended March 31, 2010 compared to the three months ended March 31, 2009.
Marketing and promotional expenses increased $56 million, or 400%, primarily due to increase in travel, promotional and rebranding and advertising expenses. Occupancy increased $33 million primarily related to the BGI Transaction. Portfolio service costs increased $18 million, or 78%, to $41 million, due to an increase in market data and research expenses. Professional services increased $20 million, or 167%, to $32 million compared to $12 million for the three months ended March 31, 2009 primarily related to consulting and legal costs incurred in connection with the BGI Transaction. Other general and administration expenses increased $10 million, or 34%, to $39 million compared to $29 million for the three months ended March 31, 2009, primarily related to increases in communication and other non-income taxes, partially offset by a $10 million increase in foreign currency remeasurement benefits and an $11 million decrease as a result of an expense recorded in first quarter 2009 for a potentially uncollectible fee.

- 6667 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009~~2010 (continued)
Expenses (continued)

General and Administration Expenses (continued)

~~Restructuring Charges~~General and Administration Expenses, GAAP
~~For~~General and administration expenses increased $51 million, or 18%, to $340 million, 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 accelerated amortization of certain previously granted stock awards associated2011 compared with ~~a reduction in work force and reengineering efforts.~~
~~Amortization of Intangible Assets~~
~~Amortization of intangible assets increased $4 million to $40~~$289 million for the three months ended March 31, 2010, primarily due to $19 million of closed-end fund launch costs (excluding compensation costs) associated with the March 2011 launch of the BlackRock Resources and Commodities Strategy Trust, a $20 million increase in foreign currency measurement costs and a $12 million increase in costs for global marketing and exchange-traded fund marketing.
BGI Integration Costs
There were no BGI integration costs for the three months ended March 31, 2011 as compared ~~to $36~~with $34 million for the three months ended March 31, ~~2009.~~2010. The BGI integration costs consist primarily of marketing and promotional costs incurred for the three months ended March 31, 2010.
General and Administration Expenses, as Adjusted
Excluding the BGI integration expenses, general and administration expenses, as adjusted, of $340 million, increased $85 million, or 33%, for the three months ended March 31, 2011 compared with $255 million for the three months ended March 31, 2010. The $85 million increase was primarily related to a $28 million increase in ~~amortization~~costs for global marketing and exchange-traded fund marketing, $19 million of ~~intangible assets reflects amortization~~closed-end fund launch costs (excluding compensation costs) associated with the March 2011 launch of ~~finite-lived management contracts acquired~~the BlackRock Resources and Commodities Strategy Trust, a $20 million increase in ~~the BGI Transaction.~~foreign currency measurement costs, a $6 million increase in professional services related to higher consulting costs and a $12 million net increase in other expenses, including occupancy, portfolio services and recruiting costs.

- 6768 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009~~2010
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 March 31, ~~2010~~2011 and ~~2009~~2010 was as follows:

   Three months ended
   March 31, Variance
(Dollar amounts in millions)    2010 2009 Amount %
Non-operating income (expense), GAAP basis
   $ 2    $ (179 ) $ 181    NM
Less: Net income (loss) attributable to NCI, GAAP basis
   5    (22 ) (27 ) NM

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

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

   Three months ended
March 31, Variance
(Dollar amounts in millions)    2011 2010 Amount % Change
Non-operating income (expense), GAAP basis
   $ 15    $ 2    $ 13    650 %
Less: Net income (loss) attributable to NCI⁽¹⁾
   (4 ) 5    (9 ) *

Non-operating income (expense)⁽²⁾
   19    (3 ) 22    *
Compensation expense related to (appreciation)/depreciation on deferred compensation plans
   (5 ) (3 ) (2 ) (67 %)

Non-operating income (expense), as adjusted⁽²⁾
   $ 14    ($ 6 ) $ 20    *


~~NM—Not Meaningful~~
* – Not applicable or the percentage is in excess of +/- 1,000%.
¹⁽¹⁾
Includes a $15 million loss and a $1 million gain attributable to consolidated variable interest entities for the three months ended March 31, 2011 and 2010, respectively.
⁽²⁾
Net of net income (loss) attributable to non-controlling ~~interests (redeemable and nonredeemable) related to investment activities.~~interests.
The components of non-operating income (expense), less net income (loss) attributable to non-controlling interests, for the three months ended March 31, ~~2010~~2011 and ~~2009~~2010 were as follows:

   Three months ended
   March 31, Variance    Three months ended
March 31, Variance
(Dollar amounts in millions)    2010 2009 Amount %    2011 2010 Amount % Change
Net gain (loss) on investments¹

Net gain (loss) on investments⁽¹⁾

Private equity
   $ 8    $ (20 ) $ 28    NM       $ 8    $ 8    $ —      —   %
Real estate
   (1 ) (93 ) 92    99 %    1    (1 ) 2    *
Distressed credit/mortgage funds
   20    (12 ) 32    NM       27    20    7    35 %
Hedge funds/funds of hedge funds
   6    (6 ) 12    NM       4    6    (2 ) (33 %)
Other investments²
   (3 ) (15 ) 12    80 %
Other investments⁽²⁾
   3    (3 ) 6    *

Sub-total
   30    (146 ) 176    NM       43    30    13    43 %
Investments related to deferred compensation plans
   3    (4 ) 7    NM       5    3    2    67 %

Total net gain (loss) on investments¹
   33    (150 ) 183    NM
Total net gain (loss) on investments
   48    33    15    45 %
Interest and dividend income
   4    8    (4 ) (50 )%    9    4    5    125 %
Interest expense
   (40 ) (15 ) (25 ) 167 %    (38 ) (40 ) 2    (5 %)

Net interest expense
   (36 ) (7 ) (29 ) 414 %    (29 ) (36 ) 7    19 %

Total non-operating income (expense)¹
   (3 ) (157 ) 154    98 %
Compensation expense related to depreciation (appreciation) on deferred compensation plans
   (3 ) 4    (7 ) NM
Total non-operating income (expense)⁽¹⁾
   19    (3 ) 22    *
Compensation expense related to (appreciation)/depreciation on deferred compensation plans
   (5 ) (3 ) (2 ) (67 %)

Non-operating income (expense), as adjusted¹
   $ (6 ) $ (153 ) $ 147    96 %
Non-operating income (expense), as adjusted⁽¹⁾
   $ 14    ($ 6 ) $ 20    *


~~NM—Not Meaningful~~
* – Not applicable or the percentage is in excess of +/- 1,000%.
¹⁽¹⁾
~~Includes~~Net of net income (loss) attributable to non-controlling ~~interests (redeemable and nonredeemable) related to investment activities.~~interests.
²⁽²⁾
Includes net gains / (losses) related to equity and fixed income investments and BlackRock’s seed capital hedging program.

- 6869 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009~~2010 (continued)

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

Non-operating ~~expense,~~income, less net income (loss) attributable to non-controlling interests, ~~decreased $154~~increased $22 million to $3$19 million for the three months ended March 31, ~~2010,~~2011, as compared to ~~$157~~$3 million net non-operating expense for the three months ended March 31, ~~2009.~~2010. The $3$19 million non-operating ~~expense,~~income, net of non-controlling interests, for the three months ended March 31, 2011 was comprised of ~~$33~~$43 million of net gains on co-investments and seed investments ~~which was more than~~and $5 million of positive marks related to hedges of deferred compensation, partially offset by ~~$36~~$29 million of net interest expense.
The ~~$33~~$43 million net gain on investments, less non-controlling interests, related to the Company’s ~~co-investment~~co-investments and seed investments, included net gains in ~~private equity products of $8 million,~~ distressed credit/mortgage funds of ~~$20~~$27 million, private equity investments of $8 million, hedge funds/funds of hedge funds of $6$4 million, ~~and deferred compensation plans of $3 million, partially offset by a $3 million and a $1 million decrease in valuations from other investments and~~ real estate equity/debt products ~~respectively.~~of $1 million and other investments of $3 million.
Net ~~interest expense was $36~~gains on co-investments and seed investments increased $13 million ~~an increase of $29 million~~from the three months ended March 31, 2010 primarily due to an increase in gains on distressed credit/mortgage funds and other investments.
Net interest expense ~~related~~was $29 million, a decrease of $7 million as compared to ~~the December 2009 issuances of $2.5 billion of long-term notes.~~
~~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 March 31, 2010 and 2009:

(Dollar amounts in millions)    March 31,    March 31,    Variance
   2010    2009    Amount % Change
Private equity
   $ 239    $ 212    $ 27    13 %
Real estate
   47    64    (17 ) (27 )%
Distressed credit/mortgage funds
   200    160    40    25 %
Hedge funds/funds of hedge funds
   125    112    13    12 %
Other investments
   236    137    99    72 %

Total net “economic” investment exposure
   847    685    162    24 %
Deferred compensation investments
   71    54    17    31 %
Hedged investments
   24    44    (20 ) (45 )%

Total net “economic” investments
   $ 942    $ 783    $ 159    20 %

~~Income Tax Expense~~
~~Income tax expense was $228 million and $30~~$36 million for the three months ended March 31, ~~2010~~2010. The decrease is due to higher interest and ~~2009, respectively. The effective~~dividend income.
Income Tax Expense
   Three months ended
March 31, Three months ended
March 31,
   2011 2010 2011 2010
(Dollar amounts in millions)    GAAP GAAP %
Change As
adjusted As
adjusted %
Change
Income before income taxes⁽¹⁾
   $ 817    $ 651    25 % $ 833    $ 721    16 %
Income tax expense
   $ 249    $ 228    9 % $ 251    $ 252    —   %
Effective tax rate
   30.5 % 35.0 % 30.1 % 35.0 %
⁽¹⁾
Net of net income (loss) attributable to non-controlling interests.
Income tax ~~rate~~expense increased $21 million for the three months ended March 31, ~~2010 was 35.0%,~~2011 as compared to ~~26.3%~~the three months ended March 31, 2010. The effective income tax rates for the three months ended March 31, ~~2009. Excluding a $10 million tax benefit related to a decrease in unrecognized tax benefits related to the final resolution of an outstanding tax matter in the~~2011 and 2010 were 30.5% and 35.0%, respectively.
The three months ended March 31, ~~2009, the~~2011 GAAP effective ~~income~~ tax rate ~~for this period~~included a $24 million benefit related to the resolution of certain outstanding tax positions partially offset by a $3 million increase due to enacted state tax legislation.
The three months ended March 31, 2011 as adjusted effective tax rate included a $24 million benefit related to the resolution of certain outstanding tax positions and excluded a $3 million tax increase due to enacted state tax legislation that will not have a cash flow impact. Excluding the $24 million tax benefit, the as adjusted effective tax rate was ~~approximately 35%~~33%.

- 6970 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009~~2010 (continued)

~~Operating Income and Operating Margin~~
~~GAAP~~
Operating income totaled $654 million for the three months ended March 31, 2010, which was an increase of $383 million compared to the three months ended 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 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 March 31, 2010 included the effect of a $953 million increase in investment advisory, administration fees and securities lending revenue associated with the acquired BGI AUM and growth in long-term AUM related to net market appreciation and net subscriptions, a $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~~BlackRock Solutions~~ and advisory revenue. The increase in total revenue is partially offset by a $625 million net increase in operating expenses due to increases in employee compensation and benefits, direct fund expenses, general and administration expenses and amortization of intangible assets, partially offset by decreases in distribution and servicing costs and restructuring expenses.
The Company’s operating margin was 32.8% for the three months ended March 31, 2010, compared to 27.5% for the three months ended March 31, 2009. The increase in operating margin for three months ended March 31, 2010 as compared to the three months ended March 31, 2009 included the effect of the BGI Transaction, an $11 million decrease in expenses as a result of an expense recorded in first quarter 2009 for a potentially uncollectible fee and an increase in foreign currency remeasurement 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.
~~As Adjusted~~
Operating income, as adjusted, totaled $727 million for the three months ended March 31, 2010, which was an increase of $420 million compared to the three months ended March 31, 2009. The increase in operating income, as adjusted, for the three months ended March 31, 2010 as compared to the three months ended March 31, 2009 is related to the effect of the $1,008 million increase in total revenue, partially offset by a $588 million increase in operating expenses due to increases in employee compensation and benefits, general and administration expenses, direct fund expenses and amortization of intangible assets, partially offset by a decrease in distribution and servicing costs.
Operating margin, as adjusted, was 38.9% and 37.2% for the three months ended 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 an increase in foreign currency remeasurement 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 an increase in stock-based compensation related to RSU grants in January 2010 and 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.
~~- 70 -~~
~~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 March 31, ~~2010~~2011 and ~~2009~~2010 are as follows:

   Three months ended
March 31, Three months ended
March 31,
   2010 2009 2010 2009
(Dollar amounts in millions, except
per share data)
   GAAP GAAP % Change As adjusted As adjusted % Change
Operating income
   $ 654    $ 271    141 % $ 727    $ 307    137 %
Non-operating (expense)¹
   (3 ) (157 ) 98 % (6 ) (153 ) 96 %
Income tax expense
   (228 ) (30 ) NM    (252 ) (44 ) 473 %

Net income attributable to BlackRock, Inc.
   $ 423    $ 84    404 % $ 469    $ 110    326 %

Allocation of net income attributable to BlackRock, Inc.:

Common shares
   $ 417    $ 82    409 % $ 462    $ 107    332 %
Participating RSUs
   6    2    200 % 7    3    133 %

Net income attributable to BlackRock, Inc.
   $ 423    $ 84    404 % $ 469    $ 110    326 %

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 %
Three months ended
March 31, Three months ended
March 31,
2011 2010 2011 2010
(Dollar amounts in millions, except per share data) GAAP GAAP %
Change As adjusted As adjusted %
Change
Operating income
$ 798    $ 654    22 % $ 819    $ 727    13 %
Non-operating income (expense)⁽¹⁾
19    (3 ) *    14    (6 ) *
Income tax expense
(249 ) (228 ) 9 % (251 ) (252 ) —   %

Net income attributable to BlackRock, Inc.
$ 568    $ 423    34 % $ 582    $ 469    24 %

% attributable to common shares
98.8 % 98.4 % 98.8 % 98.4 %
Net income attributable to common shares
$ 561    $ 417    35 % $ 575    $ 462    24 %

Diluted weighted-average common shares
outstanding⁽²⁾
194,296,504    192,152,251    1 % 194,296,504    192,152,251    1 %
Diluted EPS components:

Operating income
$ 2.72    $ 2.18    25 % $ 2.79    $ 2.42    15 %
Non-operating income (expense)⁽¹⁾
0.06    (0.01 ) *    0.05    (0.02 ) *
Net income tax benefit
0.11    —      *    0.12    —      *

Diluted earnings per common share
$ 2.89    $ 2.17    33 % $ 2.96    $ 2.40    23 %

* – Not applicable or the percentage is in excess of +/- 1,000%.
¹⁽¹⁾
~~Includes~~Net of net income (loss) attributable to non-controlling interests (redeemable and nonredeemable) ~~related to investment activities.~~.
²⁽²⁾
~~Series A,~~Unvested RSUs that contain non-forfeitable rights to dividends are not included as they are deemed participating securities in accordance with GAAP. Upon vesting of the participating RSUs the shares are added to the weighted-average shares outstanding which results in an increase to the percentage of net income attributable to common shares. In addition, series B, C, and D 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 ASC 260-10~~.
GAAP
Net income attributable to BlackRock, Inc. for the three months ended March 31, ~~2010~~2011 includes operating income of ~~$654~~$798 million, or ~~$2.18~~$2.72 per diluted common share, ~~and~~ non-operating ~~expenses,~~income, less net income attributable to non-controlling interests, of $3$19 million, or ~~$0.01~~$0.06 per diluted common ~~share.~~share, and $21 million, or $0.11 per diluted common share, net income tax benefit, which included a $24 million benefit related to the resolution of certain outstanding tax positions, partially offset by a $3 million increase due to enacted state tax legislation. Net income attributable to BlackRock, Inc. totaled ~~$423~~$568 million, or ~~$2.17~~$2.89 per diluted common share, for the three months ended March 31, ~~2010,~~2011, which was an increase of ~~$339~~$145 million, or ~~$1.55~~$0.72 per diluted common share, compared to the three months ended March 31, ~~2009.~~2010.

- 71 -
PART I—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,~~2011, as compared with the three months ended March 31, ~~2009~~2010 (continued)
Net Income Attributable to BlackRock, Inc. (continued)

Net income attributable to BlackRock, Inc. ~~for the three months ended March 31, 2010 included the after-tax effect~~ of the BGI integration costs of $34 million, the after-tax effect of the portion of 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.
~~Net income attributable to BlackRock, Inc. of $84~~$568 million for the three months ended March 31, ~~2009~~2011 included 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, restructuring charges of $14~~$9 million and an expected contribution by Merrill Lynch of $2 million to fund certain compensation of former MLIM employees, a portion of which was received by BlackRock in ~~third quarter 2009.~~the three months ended March 31, 2011. Net income for the three months ended March 31, 2011 included a $24 million tax benefit related to the resolution of certain outstanding tax positions offset by a $3 million increase due to enacted state tax legislation.
Net income attributable to BlackRock, Inc. of $423 million for the three months ended March 31, 2010 included the after-tax effect of 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 certain compensation of former MLIM employees of $2 million to be funded through a cash contribution by Merrill Lynch, a portion of which was received by BlackRock in 2010.
As Adjusted
Exclusive of the items discussed above, diluted earnings per common share, as adjusted, of ~~$2.40~~$2.96 for the three months ended March 31, ~~2010~~2011 increased ~~$1.59,~~$0.56, or ~~196%~~23%, compared to the three months ended March 31, ~~2009.~~2010.
Net income attributable to BlackRock, Inc., as adjusted, for the three months ended March 31, 2011 included operating income of $819 million, or $2.79 per diluted common share, non-operating income, less net income attributable to non-controlling interests, of $14 million, or $0.05 per diluted common share and $21 million, or $0.12 per diluted common share, net income tax benefit, which included a $24 million benefit related to the resolution of certain outstanding tax positions.
Net income of $469 million or $2.40 per diluted common share attributable to BlackRock, Inc., as adjusted, for the three months ended March 31, 2010 ~~includes~~included operating income of $727 million, or $2.42 per diluted common share and non-operating ~~expenses,~~expense, 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.
- 72 -
PART I – FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Balance Sheet Overview
The following table presents a reconciliation of the Company’s condensed consolidated statement of financial condition presented on a GAAP basis to the Company’s condensed consolidated statement of financial condition, excluding the impact of consolidated variable interest entities (“VIEs”), consolidated sponsored investment funds, separate account assets and collateral held under securities lending agreements and separate account liabilities and collateral liabilities under securities lending agreements:
   March 31, 2011
(Dollar amounts in millions)    GAAP
Basis    Separate
Account
Assets/
Collateral    Consolidated
VIEs    Consolidated
Sponsored
Investment
Funds    As
Adjusted
Assets

Cash and cash equivalents
   $ 2,779       $ —         $ —         $ 42       $ 2,737
Accounts receivable
   2,223       —         —         —         2,223
Investments
   1,528       —         —         165       1,363
Assets of consolidated variable interest entities
   1,407       —         1,407       —         —
Separate account assets and collateral held under securities lending agreements
   139,139       139,139       —         —         —
Other assets⁽¹⁾
   1,070       —         —         11       1,059

Sub-total
   148,146       139,139       1,407       218       7,382
Goodwill and intangible assets, net
   30,276       —         —         —         30,276

Total assets
   $ 178,422       $ 139,139       $ 1,407       $ 218       $ 37,658

Liabilities

Accrued compensation and benefits
   $ 538       $ —         $ —         $ —         $ 538
Accounts payable and accrued liabilities
   1,366       —         —         —         1,366
Borrowings⁽²⁾
   3,255       —         —         —         3,255
Liabilities of consolidated variable interest entities
   1,304       —         1,304       —         —
Separate account liabilities and collateral liabilities under securities lending agreements
   139,139       139,139       —         —         —
Deferred income tax liabilities
   5,526       —         —         —         5,526
Other liabilities⁽³⁾
   578       —         —         26       552

Total liabilities
   151,706       139,139       1,304       26       11,237

Equity

Total stockholders’ equity
   26,479       —         58       —         26,421
Non-controlling interests
   237       —         45       192       —

Total equity
   26,716       —         103       192       26,421

Total liabilities and equity
   $ 178,422       $ 139,139       $ 1,407       $ 218       $ 37,658

⁽¹⁾
Includes due from related parties, deferred sales commissions, property and equipment and other assets.
⁽²⁾
Includes short-term borrowings, convertible debentures and long-term borrowings.
⁽³⁾
Includes due to related parties and other liabilities.
Management reviews its as adjusted balance sheet, a non-GAAP financial measure, for the reasons described below. BlackRock’s management does not advocate that investors consider such non-GAAP financial measure in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company presents the as adjusted balance sheet to enable investors to eliminate gross presentation of certain assets that have equal and offsetting liabilities and ultimately do not have an impact on stockholders’ equity (excluding appropriated retained earnings related to consolidated collateralized loan obligations (“CLOs”)) or cash flows. The recognition of the as adjusted assets and liabilities generally results in net income (loss) attributable to BlackRock, Inc.
- 73 -
PART I – FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Balance Sheet Overview (continued)
The following table presents selected significant components of BlackRock’s GAAP condensed consolidated statements of financial condition at March 31, 2011 and December 31, 2010:
   March 31,    December 31,    Variance
(Dollar amounts in millions)    2011    2010    Amount % Change
Cash and cash equivalents
   $ 2,779       $ 3,367       ($ 588 ) (17 %)
Accounts receivable
   2,223       2,095       128    6 %
Investments
   1,528       1,540       (12 ) (1 %)
Goodwill and intangible assets, net
   30,276       30,317       (41 ) —   %
Other assets⁽¹⁾
   1,070       960       110    11 %
Accrued compensation and benefits
   538       1,520       (982 ) (65 %)
Accounts payable and accrued liabilities
   1,366       1,068       298    28 %
Borrowings⁽²⁾
   3,255       3,359       (104 ) (3 %)
Deferred income tax liabilities
   5,526       5,477       49    1 %
Other liabilities⁽³⁾
   578       641       (63 ) (10 %)
Stockholders’ equity
   26,479       26,094       385    1 %
⁽¹⁾
Includes due from related parties, deferred sales commissions, property and equipment and other assets.
⁽²⁾
Includes short-term borrowings, convertible debentures and long-term borrowings.
⁽³⁾
Includes due to related parties and other liabilities.
The following discussion summarizes the significant changes in assets and liabilities. These changes do not include assets and liabilities that are equal and offsetting and have no impact on BlackRock’s stockholders’ equity or cash flows.
- 74 -
PART I – FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Balance Sheet Overview (continued)
Cash and Cash Equivalents
Cash and cash equivalents at March 31, 2011 and December 31, 2010 included $42 million and $65 million of cash held by consolidated sponsored investment funds, respectively. See Liquidity and Capital Resources for further details on the change in cash and cash equivalents for the three months ended March 31, 2011.
Accounts Receivable
Accounts receivable at March 31, 2011 increased $128 million from December 31, 2010, resulting from increases in unit trust receivables, (substantially offset by the increase in unit trust payables) and higher base fees related to AUM growth offset by the collection of higher performance fees related to revenue earned in the fourth quarter 2010.
Investments
The Company presents total net “economic” investments to enable investors to understand the portion of its investments that are owned by the Company, net of non-controlling interests, as a gauge to measure the impact of changes in net non-operating gain (loss) on investments to net income (loss) attributable to BlackRock, Inc.
   March 31, December 31, Variance
(Dollar amounts in millions)    2011 2010 Amount % Change
Total investments, GAAP
   $ 1,528    $ 1,540    ($ 12 ) (1 %)
Investments held by consolidated sponsored investment funds⁽¹⁾
   (424 ) (397 ) (27 ) (7 %)
Net exposure to consolidated investment funds
   259    260    (1 ) —   %

Total net “economic” investments
   $ 1,363    $ 1,403    ($ 40 ) (3 %)

⁽¹⁾
At March 31, 2011 and December 31, 2010, approximately $424 million and $397 million, respectively, 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.
- 75 -
PART I – FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Balance Sheet Overview (continued)
Investments (continued)
The Company further presents the total net “economic” investment exposure, net of deferred compensation investments and hedged investments, to reflect another gauge for investors as the economic impact of investments held pursuant to deferred compensation arrangements is substantially offset by a change in compensation expense and the impact of hedged investments is substantially mitigated by total return swap hedges. Carried interest is excluded as generally there is no impact to BlackRock’s stockholders’ equity as the balance fluctuates. Finally, the Company’s regulatory investment in Federal Reserve Bank stock, which is not subject to market or interest rate risk, is excluded from the Company’s net economic investment exposure.
The following table represents the carrying value of investments, by asset type, at March 31, 2011 and December 31, 2010:
   March 31,    December 31,    Variance
(Dollar amounts in millions)    2011    2010    Amount % Change
Private equity
   $ 284       $ 277       $ 7    3 %
Real estate
   65       54       11    20 %
Distressed credit/mortgage funds
   275       267       8    3 %
Hedge funds/funds of hedge funds
   90       97       (7 ) (7 %)
Other investments⁽¹⁾
   226       269       (43 ) (16 %)

Total net “economic” investment exposure
   940       964       (24 ) (2 %)
Federal Reserve Bank stock
   326       325       1    —   %
Carried interest
   13       13       —      —   %
Deferred compensation investments
   77       76       1    1 %
Hedged investments
   7       25       (18 ) (72 %)

Total net “economic” investments
   $ 1,363       $ 1,403       ($ 40 ) (3 %)

⁽¹⁾
Other investments primarily include seed investments in fixed income and equity funds/strategies as well as U.K. government securities held for regulatory purposes.
Total net “economic” investments at March 31, 2011 decreased $40 million from December 31, 2010, resulting from changes in the investment portfolio due to $60 million of purchases/capital contributions, $123 million of sales/maturities and $28 million of distributions representing return of capital and return on investments, as well as $51 million for market valuations, earnings from equity method investments and other adjustments.
BlackRock reports its investments on a GAAP basis, which includes investments that are owned by sponsored investment funds that are deemed to be controlled by BlackRock in accordance with GAAP and therefore consolidated even though BlackRock may not own the majority of any 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.
- 76 -
PART I – FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Balance Sheet Overview (continued)
Investments (continued)
The following table represents investments measured at fair value on a recurring basis at March 31, 2011:
(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⁽¹⁾    Investments at
March 31,
2011
Total investments, GAAP
   $ 217    $ 133    $ 665    $ 513       $ 1,528
Net assets for which the Company does not bear “economic” exposure⁽²⁾
   (9 ) (17 ) (139 ) —         (165 )

Net “economic” investments⁽³⁾
   $ 208    $ 116    $ 526    $ 513       $ 1,363

⁽¹⁾
Comprised of investments held at cost, amortized cost, carried interest and 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⁾
Consists of net assets attributable to non-controlling investors of consolidated non-VIE sponsored investment funds.
⁽³⁾
Includes BlackRock’s portion of cash and cash equivalents, other assets, accounts payable and accrued liabilities, and other liabilities that are consolidated from non-VIE sponsored investment funds.
Goodwill and Intangible Assets
Goodwill and intangible assets at March 31, 2011 decreased $41 million from December 31, 2010, primarily resulting from $40 million of amortization expense related to finite-lived intangibles.
Other Assets
Other assets at March 31, 2011 increased $110 million from December 31, 2010, resulting from a $51 million increase in property and equipment due to additional leasehold improvements and construction in progress, including costs related to Drapers Gardens, and increases in other assets, including tax receivables, prepaid assets and strategic advisory investments.
Accrued Compensation and Benefits
Accrued compensation and benefits at March 31, 2011 decreased $982 million from December 31, 2010, primarily related to 2010 incentive compensation cash payments, partially offset by the effect of 2011 year-end incentive compensation accruals.
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities at March 31, 2011 increased $298 million from December 31, 2010, resulting from increases in unit trust payables, current income taxes payable, retrocessions, interest accruals, payables to certain investment products and other accruals.
Borrowings
Borrowings at March 31, 2011 decreased $104 million from December 31, 2010, resulting from repayments of $100 million of short-term borrowings and conversions of $4 million of convertible debt.
- 77 -
PART I – FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Balance Sheet Overview (continued)
Deferred Income Tax Liabilities
Deferred income tax liabilities at March 31, 2011 increased $49 million from December 31, 2010, primarily related to the effects of temporary differences associated with deferred stock compensation and investment income. The increase included revaluation of certain deferred income tax liabilities due to state tax legislation enacted in 2011.
Other Liabilities
Other liabilities at March 31, 2011 decreased $63 million from December 31, 2010, primarily resulting from repayments to Barclays of approximately $31 million to settle certain non-interest bearing notes assumed in the BGI Transaction, a payment related to a U.K. regulatory assessment and a decrease related to the resolution of certain outstanding tax positions, partially offset by increases in various other liabilities.
Stockholders’ Equity
Total stockholders’ equity at March 31, 2011 increased $385 from December 31, 2010, principally resulting from $568 million of net income attributable to BlackRock, $137 million of stock-based compensation expense, $44 million of foreign currency translation adjustments and $13 million excess tax benefits from vested stock-based compensation, partially offset by $272 million of payments for cash dividends, and $96 million of net issuances of common shares related to employee stock transactions.
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”)~~CLOs are consolidated into the financial statements of BlackRock, notwithstanding the fact that BlackRock may only have a minority ~~equity~~ interest, if any, in these funds or CLOs. As a result, BlackRock’s condensed consolidated statements of cash flows include the cash flows of consolidated sponsored investment 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~~its 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~~flows presented in accordance with GAAP.

- 7278 -
PART I—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 and consolidated VIEs:

(Dollar amounts in millions)    Three Months Ended
March 31, 2010    Three months ended March 31, 2011
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
   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 and cash equivalents, beginning of period
   $ 3,367    $ 65    $ —      $ 3,302
Cash flows from operating activities
   $ (164 ) $ 37    $ (5 ) $ (196 )    (156 ) (8 ) 2    (150 )
Cash flows from investing activities
   (30 ) (2 ) —      (28 )    (15 ) (3 ) —      (12 )
Cash flows from financing activities
   (1,755 ) 13    (4 ) (1,764 )    (465 ) (12 ) (2 ) (451 )
Effect of exchange rate changes on cash and cash equivalents
   (56 ) —      —      (56 )    48    —      —      48

Net change in cash and cash equivalents
   (2,005 ) 48    (9 ) (2,044 )    (588 ) (23 ) —      (565 )
Cash and cash equivalents, beginning of period
   4,708    75    9    4,624

Cash and cash equivalents, end of period
   $ 2,703    $ 123    $ —      $ 2,580       $ 2,779    $ 42    $ —      $ 2,737

Cash and cash equivalents, excluding cash held by consolidated sponsored investment funds and VIEs at March 31, ~~2010~~2011 decreased ~~$2,044~~$565 million from December 31, ~~2009, primarily~~2010, resulting from ~~$196~~$451 million of cash outflows from financing activities, $150 million of cash outflows from operating activities, ~~$1,764 million of cash outflows from financing activities, $28~~and $12 million of cash outflows from investing activities ~~and~~partially offset by a ~~$56~~$48 million ~~decrease~~increase due to the effect of foreign exchange rate changes.

- 7379 -
PART I—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, administration fees and securities lending revenue, performance fees, revenues fromBlackRock Solutions and advisory products and services, other revenue and ~~mutual fund~~ distribution fees. BlackRock uses its cash to pay compensation and benefits, distribution and servicing costs, direct fund expenses, general and administration expenses, interest and principal on the Company’s borrowings, income taxes, ~~and~~ dividends on BlackRock’s capital stock, capital expenditures and to purchase co-investments and seed ~~investments, and pay for capital expenditures.~~investments.
~~Net cash outflows~~Cash flows from operating activities, excluding the impact of consolidated sponsored investment funds and VIEs, ~~for the three months ended 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~~Net cash outflows for the three months ended March 31, ~~2010~~2011 included the effect of cash payments related to ~~year end~~2010 year-end incentive ~~compensation, including the payments for BGI employee compensation accruals assumed in the BGI Transaction.~~compensation.
Investing Activities
Cash outflows from investing activities, excluding the impact of consolidated sponsored investment funds and VIEs, for the three months ended March 31, ~~2010~~2011 were ~~$28~~$12 million and primarily included ~~$28~~$53 million of purchases of investments and ~~$44~~$83 million of purchases of property and equipment, partially offset by ~~$29~~$104 million of net proceeds from sales and maturities of investments and ~~$20~~$17 million of return of capital from equity method investees.
Financing Activities
Cash outflows from financing activities, excluding the impact of consolidated sponsored investment funds and VIEs, for the three months ended March 31, ~~2010 primarily~~2011 were $451 million, which included repayments of short-term borrowings and convertible debt of ~~$1,354~~$104 million, ~~and $148 million, respectively, $196~~$272 million of payments for cash dividends and ~~$114~~$106 million related to repurchases of common stock to satisfy tax withholding obligations of employees related to vesting of certain restricted stock awards. Cash outflows from financing activities were partially offset by cash inflows related to $13 million of excess tax benefits from vested stock-based compensation.

- 7480 -
PART I—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 March 31, ~~2010~~2011 and December 31, ~~2009~~2010 were as follows:

   March 31, December 31, Variance    March 31, December 31, Variance
(Dollar amounts in millions)    2010 2009 Amount %    2011 2010 Amount % Change
Cash and cash equivalents
   $ 2,703    $ 4,708    $ (2,005 ) (43 )%    $ 2,779    $ 3,367    ($ 588 ) (17 %)
Cash and cash equivalents held by consolidated sponsored investment funds¹
   (123 ) (75 ) (48 ) (64 )%
Cash and cash equivalents held by consolidated sponsored investment funds⁽¹⁾
   (42 ) (65 ) 23    35 %

Subtotal
   2,580    4,633    (2,053 ) (44 )%    2,737    3,302    (565 ) (17 %)
2007 credit facility—undrawn²
   2,266    2,171    95    4 %
Commercial paper³
   (780 ) (2,034 ) 1,254    62 %
2011 credit facility – undrawn
   3,500    —      3,500    *
2007 credit facility – undrawn⁽²⁾
   —      2,266    (2,266 ) (100 %)

Total liquidity
   $ 4,066    $ 4,770    $ (704 ) (15 )%    $ 6,237    $ 5,568    $ 669    12 %

Required regulatory capital⁴
   $ 818    $ 857    $ (39 ) (5 )%
Required regulatory capital⁽³⁾
   $ 1,157    $ 897    $ 260    29 %

* – Not applicable or the percentage is in excess of +/- 1,000%.
¹⁽¹⁾
The Company may not be able to access such cash to use in its operating activities.
²⁽²⁾
Excludes $134 million ~~and $129 million~~ of undrawn amounts at ~~March~~December 31, 2010 ~~and December 31, 2009, respectively~~ related to Lehman Commercial Paper, Inc. The 2007 credit facility terminated in March 2011.
⁽³
~~The outstanding commercial paper notes that are supported by the 2007 credit facility reduce the availability of the facility.~~
⁴⁾
A portion of the required regulatory capital is partially met with cash and cash equivalents.
The ~~$704~~$669 million ~~decline~~increase in total liquidity during the three months ended March 31, 2011 included the effects on liquidity of the following: the increase in the size of the new credit facility, positive operating cash flows which were partially offset by cash payments of 2010 ~~is predominantly~~year end incentive awards, and $104 million of repayments related to short-term borrowings and convertible debt.
During the ~~payments of cash bonuses~~three months ended March 31, 2011, the Company’s net capital requirements increased $260 million due to increases related to ~~2009 year end awards.~~certain European and Asia-Pacific regulated legal entities.
~~In addition, a~~A significant portion of the Company’s ~~$942~~$1,363 million of net economic investments are illiquid in nature and, as such, may not be readily convertible to cash.
- 81 -
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)
~~Investment/Loan~~Investment Commitments
At March 31, ~~2010,~~2011, the Company had ~~$301~~$223 million of various capital commitments to fund sponsored investment funds, including funds of private equity funds, real estate funds and distressed credit funds. 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. Generally, the timing of the funding of these commitments is ~~unknown. Therefore, amounts~~unknown and the commitments are ~~shown to be paid upon the expiration date of the commitment. Actual payments could be made~~callable on demand at any time prior to ~~such~~the expiration ~~date and, if~~of the commitment. These unfunded commitments are not ~~called by that date, such commitments would expire. These commitments have not been~~ recorded on the Company’s condensed consolidated statements of financial ~~condition at March 31, 2010.~~condition. The above amount does not include potential future commitments approved by the Company’s Capital Committee, but which are not yet legally binding. The Company intends to make additional capital commitments from time to time to fund additional investment products for, and with, its clients.
~~Prior to March 31, 2010,~~Carried Interest Claw-back
As a general partner in certain investment funds, including private equity partnerships and certain hedge funds, the Company ~~was committed~~may receive certain carried interest cash distributions from the partnerships in accordance with distribution provisions of the partnership agreements. The Company may, from time to ~~provide financing~~time, be required to return all or a portion of upsuch distributions to ~~$60 million to Anthracite Capital, Inc. (“Anthracite”),~~the limited partners in the event the limited partners do not achieve 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~~certain return as specified in ~~a real estate debt investment fund, which is also managed by a subsidiary of BlackRock.~~the various partnership agreements. At March 31, ~~2010, $33.5~~2011, the Company has received less than $20 million ~~of financing~~in cash that was ~~outstanding~~not recorded as revenue 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~~subject to ~~be $10 million, which resulted in a $2.5 million reduction in due from related parties on~~claw-back.
Short-term Borrowings:
The following describes the Company’s ~~condensed consolidated statement of financial condition and an equal amount recorded in general and administrative expense in~~short-term borrowing arrangements, which the ~~three months ended March 31, 2010. The~~ Company has ~~no obligation~~access 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 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.
~~- 75 -~~
~~PART I—FINANCIAL INFORMATION (continued)~~
~~Item 2.~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)~~
utilize.
~~Liquidity and Capital Resources (continued)~~
~~Short-term Borrowings~~
2007 Credit Facility
In August 2007, the Company entered into a five-year, $2.5 billion unsecured revolving credit facility (the “2007 facility”). to provide back-up liquidity, fund ongoing working capital for general corporate purposes and to fund investment opportunities. At December 31, 2010, the Company had $100 million outstanding under the 2007 facility. On February 28, 2011, the $100 million was repaid and the 2007 facility was terminated in March 2011. The Company had a daily average of $66 million outstanding during the three months ended March 31, 2011.
2011 Revolving Credit Facility
In March 2011, the Company entered into a five-year $3.5 billion unsecured revolving credit facility (the “2011 facility”), which replaced the 2007 credit facility. The 2011 facility permits the Company to request an additional $1.0 billion of borrowing capacity, subject to lender credit approval, up to a maximum of $4.5 billion. Interest on borrowings outstanding will accrue at a rate based on the applicable London Interbank Offered Rate plus a spread. The 2011 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 March 31, ~~2010.~~2011.
The 2011 facility provides back-up liquidity, funds ongoing working capital for general corporate purposes and funds various investment opportunities. At March 31, ~~2010,~~2011, the Company ~~had $100 million~~did not have any borrowings outstanding under the ~~2007~~2011 facility. During May 2011, the Company borrowed $100 million from this facility with an interest rate of ~~0.43%~~1.21% and a maturity ~~date~~ during ~~May 2010. Lehman Commercial Paper, Inc. has~~June 2011.
Bank of America and Barclays each have a ~~$140~~$255 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 20072011 facility.
- 82 -
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)
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 initial proceeds of the commercial paper issuances were used to finance a portion of the BGI Transaction. Subsidiaries of Bank of America and Barclays, ~~both related parties,~~ as well as other third parties, act as dealers under the CP Program. At March 31, ~~2010~~2011 the CP Program was supported by the ~~2007~~2011 facility.
~~The Company began to issue CP Notes under the CP Program on November 4, 2009.~~ As of March 31, 2011 and December 31, 2010, BlackRock ~~had approximately $780 million of~~did not have any 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 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.Notes.
Japan Commitment-line
In ~~June 2009,~~September 2010, BlackRock Japan Co., Ltd., a ~~wholly owned~~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 March 31, 2011 and December 31, 2010, the Company had no borrowings outstanding under the Japan Commitment-line.
Convertible Debentures
In February 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 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,~~2011, holders of ~~$148~~$4 million of debentures converted their holdings into cash and shares. At March 31, ~~2010, $95~~2011, $63 million in convertible debentures were outstanding.
AsIn addition, on April 20, 2011, the Company issued a notice of redemption for the remaining outstanding convertible debentures of approximately $60 million.
Long-term Borrowings
At March 31, ~~2010, debt service~~2011, the principal amount of long-term borrowings was $3.2 billion. During the three months ended March 31, 2011, the Company paid approximately $22 million related to interest on long-term borrowings. Principal repayments and ~~repayment~~interest requirements ~~assuming the convertible debentures~~ are ~~fully repaid in 2010, are $96 million for the remainder of 2010.~~as follows:
~~In addition, through May 6, 2010, holders of an additional $24 million of debentures elected to convert their holdings into cash and shares.~~
(Dollar amounts in millions)          Total
Year
   Principal    Interest    Payments
Remainder of 2011
   $ —         $ 118       $ 118
2012
   500       140       640
2013
   —         129       129
2014
   1,000       129       1,129
2015
   —         94       94
2016
   —         94       94
Thereafter
   1,700       194       1,894

Total
   $ 3,200       $ 898       $ 4,098


- 7683 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Liquidity and Capital Resources (continued)
~~Contingent Payments Related to Quellos Transaction~~
In connection with the Quellos Transaction, Quellos is entitled to receive two contingent payments, subject to achieving certain investment advisory base and performance fee measures through December 31, 2010, totaling up to an additional $969 million in a combination of cash and stock.
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 based on a price of $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 investment advisory base fee measures are met through 2010 as the value of the first contingent payment was less than $374 million. A portion of the 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 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 of additional Federal Reserve Bank stock during the second quarter of 2010 pursuant to its regulatory requirements.
~~- 77 -~~
~~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 Certain Securities Lending Related Cash Funds
Barclays has provided capital support agreements to support certain securities lending related cash management products acquired by BlackRock in the BGI Transaction. Pursuant to the terms of the capital support agreements, Barclays agreed to cover losses on covered securities within the products in the aggregate of up to $2.2 billion from December 1, 2009 through December 1, ~~2013.~~2013 or until certain criteria are met. BlackRock and Barclays have procedures in place to determine loss events on covered securities within the products and to ensure support payments from Barclays. At March ~~2010,~~31, 2011, Barclays’ remaining maximum potential obligation in the aggregate under the capital support agreements was ~~$2.2~~$1.7 billion. At March 31, ~~2010,~~2011, BlackRock concluded that although these funds were variable interest entities, it was not the primary beneficiary (“PB”) of 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~~partially maintained by retaining cash and cash equivalents 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, transfers of cash between international jurisdictions, including repatriation to the United States, may have adverse tax consequences that could discourage such transfers.
~~BTC~~BlackRock Institutional Trust Company, N.A. (“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 March 31, ~~2010,~~2011, the Company was required to maintain approximately ~~$818~~$1,157 million in net capital in certain regulated subsidiaries, including BTC, and iswas in compliance with all applicable regulatory minimum net capital requirements.

- 7884 -
PART I—I – FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (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 Consolidation of VIEs, Fair Value Measurements and Performance Fees / Carried Interest discussed below, see Note 2, Significant Accounting Policies, toin the Company’s condensed consolidated financial statements contained in Part I, Item 1 of this ~~filing.~~filing and the Company’s Significant Accounting Policies in Management’s Discussion and Analysis of Financial Condition and Results of Operations in BlackRock’s 2010 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 28, 2011 for details on Significant Accounting Policies.
~~Fair Value Measurements~~Consolidation of Variable Interest Entities
In June 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-17,Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities(“ASU 2009-17”), which became effective for BlackRock ~~reports its investments~~ on January 1, 2010. In February 2010 the FASB issued ASU 2010-10,Amendments to Statement 167 for Certain Investment Funds(“ASU 2010-10”).This ASU deferred the application of Statement of Financial Accounting Standards (“SFAS”) No. 167,Amendments to FASB Interpretation No. 46(R), for a ~~GAAP basis, which includes~~reporting enterprise’s interest in an entity if certain conditions are met. In the normal course of business, the Company is the manager of various types of sponsored investment ~~balances, which are owned by~~vehicles, including collateralized debt obligations (“CDOs”) or CLOs and sponsored investment funds, ~~that are deemed to~~which may be ~~controlled by~~considered VIEs. At March 31, 2011, the Company was the PB of four VIEs, including three CLOs and one sponsored private equity fund, which resulted in consolidation.
CLOs
As of March 31, 2011, BlackRock was the manager of over 20 CLOs/CDOs and other securitization entities, including three CLOs in which BlackRock, in accordance with ~~GAAP~~ASU 2009-17, was determined to be the PB, which resulted in consolidation of these VIEs in the Company’s condensed consolidated financial statements. BlackRock was deemed to be the PB because it has the power to direct the activities of the CLO that most significantly impact the entity’s economic performance and ~~therefore are~~has the right to receive benefits that potentially could be significant to the VIE. At March 31, 2011, the Company had $1,362 million, $1,304 million and $58 million in assets, liabilities and appropriated retained earnings, respectively, on its condensed consolidated ~~even though~~statement of financial condition related to these consolidated CLOs. The changes in the assets and liabilities of these CLOs have no impact on net income attributable to BlackRock, ~~may not own~~Inc. or its cash flows. Excluding outstanding management fee receivables, the Company has no risk of loss with its involvement with these VIE’s.
Sponsored Private Equity Fund of Funds
As of March 31, 2011, BlackRock was determined to be the PB of one sponsored private equity investment fund of funds, in which it had a non-substantive investment and was deemed to absorb the majority of ~~such funds. As a result, management reviews~~the variability due to its ~~investments on an “economic” basis,~~de-facto third party relationships with other partners in the fund, which ~~eliminates~~limited the ~~portion~~ability of ~~investments that do not impact~~the partners to transfer or sell their interests without BlackRock’s ~~book value. BlackRock’s management does not advocate that investors consider such non-GAAP financial measures in isolation from, or~~consent 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~~the general partner of the fund. At March 31, ~~2010:~~2011, the Company had recorded $9 million, $36 million and $45 million in cash and cash equivalents, investments and nonredeemable non-controlling interests of consolidated VIEs, respectively, on its condensed consolidated statement of financial condition related to this VIE. The changes in the assets and liabilities of this VIE have no impact on net income attributable to BlackRock, Inc. Excluding outstanding management fee receivables, the Company has no risk of loss with its involvement with this VIE.

(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
March 31,
2010
Total investments, GAAP
   $ 235    $ 101    $ 656    $ 104    $ 1,096
Net assets for which the Company does not bear “economic” exposure⁽¹⁾
   (46 ) 21    (129 ) —      (154 )

Net “economic” investments⁽²⁾
   $ 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.

- 7985 -
PART I—I – FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Critical Accounting Policies (continued)
Fair Value Measurements
BlackRock adopted the applicable provisions of ASC 820-10,Fair Value Measurements and Disclosures (“ASC 820-10”), as of January 1, 2008, which require, among other things, 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 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 class of assets and liabilities.
Level 3 inputs include the most currently available information, including capital account balances for its partnership interests in various alternative investments and returns of certain market indices. Certain investments that are valued using net asset values and are subject to current redemption restrictions that will not be lifted in the near term are included in Level 3. BlackRock’s $665 million of Level 3 investments, or 44% of total GAAP investments at March 31, 2011 primarily include co-investments in private equity fund of funds and private equity funds, funds of hedge funds as well as alternative hedge funds that invest in distressed credit and mortgage securities and real estate equity products. Many of these investees are investment companies, which record their underlying investments at fair value based on fair value policies established by management of the underlying fund, which could include BlackRock employees. Fair value policies at the underlying fund generally 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. See Note 2, Significant Accounting Policies, in the Company’s condensed consolidated financial statements contained in Part I, Item 1 of this filing for further information regarding fair value measurements.
- 86 -
PART I – FINANCIAL INFORMATION (continued)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
Critical Accounting Policies (continued)
Performance Fees / Carried Interest
The Company receives performance fees or an incentive allocation from certain actively managed investment funds and certain separately managed accounts which are primarily alternative, equity or multi-asset class products. These performance fees generally are earned upon exceeding specified relative or absolute investment return thresholds. Such fees are recorded upon completion of the measurement periods, which vary by product or account and could be monthly, quarterly, annually or longer.
In addition, the Company may receive carried interest in the form of an investment capital allocation or cash from certain alternative investment funds upon exceeding performance thresholds. However, BlackRock may be required to return all, or part, of such carried interest depending upon performance of these investment products in future periods. Therefore, BlackRock records carried interest subject to such claw-back provisions in investments or cash to the extent that it is distributed, on its condensed consolidated statements of financial condition. Carried interest is realized upon the earlier of the termination of the alternative investment fund or when the likelihood of claw-back is mathematically improbable. The Company records realized carried interest as performance fees on its condensed consolidated statements of income. The Company records a deferred carried interest liability to the extent it receives cash or capital allocations prior to meeting the revenue recognition criteria.
For the three months ended March 31, 2011 and 2010, performance fee revenue totaled $83 million and $50 million, respectively. At March 31, 2011 and December 31, 2010, the Company had $24 million and $23 million, respectively, of deferred carried interest recorded in other liabilities on the condensed consolidated statements of financial condition.
- 87 -
PART I – FINANCIAL INFORMATION (continued)
Item 3. Quantitative and Qualitative Disclosures About Market Risk
AUM Market Price Risk
BlackRock’s investment ~~management revenues~~advisory and administration fees 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 March 31, ~~2010,~~2011, 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.
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, to hedge exposure to certain deferred compensation plans or for regulatory purposes. Currently, the Company has a seed capital hedging program in which it enters into total return swaps to hedge market exposure to certain equity investments. At March 31, ~~2010,~~2011, the outstanding total return swaps had an aggregate notional value of approximately ~~$24~~$7 million.

- 8088 -
PART I—I – FINANCIAL INFORMATION (continued)

Item 3. Quantitative and Qualitative Disclosures About Market Risk (continued)

Corporate Investments Portfolio Risks (continued)

At March 31, ~~2010,~~2011, approximately ~~$493~~$424 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 the Federal Reserve Bank stock, carried interest, 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)
   March 31,
2010 December 31,
2009 Variance
   March 31,
2011 December 31,
2010 Variance
(Dollar amounts in millions)
March 31,
2010 December 31,
2009 Amount %    Amount % Change
   $ 47    4 %    $ 1,528    $ 1,540    ($ 12 ) (1 %)
Investments held by consolidated sponsored investment funds
   (493 ) (463 ) (30 ) (6 )%    (424 ) (397 ) (27 ) (7 %)
Net exposure to consolidated investment funds
   339    258    81    31 %    259    260    (1 ) —   %

Total net “economic” investments
   942    844    98    12 %    1,363    1,403    (40 ) (3 %)
Federal Reserve Bank stock
   (326 ) (325 ) (1 ) —   %
Carried interest
   (13 ) (13 ) —      —   %
Deferred compensation investments
   (71 ) (71 ) —      —   %    (77 ) (76 ) (1 ) (1 %)
Hedged investments
   (24 ) (36 ) 12    33 %    (7 ) (25 ) 18    72 %

Total net “economic” investment exposure
   $ 847    $ 737    $ 110    15 %    $ 940    $ 964    ($ 24 ) (2 %)

The net “economic” investment exposure of the portfolio is presented in either the equity market price or the interest rate/credit spread risk disclosures below:
Equity Market Price Risk
At March 31, ~~2010,~~2011, the Company’s net exposure to market price risk in its investment portfolio was approximately ~~$466~~$610 million of the Company’s net economic investment exposure. Investments that are subject to market price risk include ~~public~~private equity and real estate investments, hedge funds and fund of funds, as well as ~~certain hedge~~mutual funds. The Company estimates that a 10% adverse change in market prices would result in a decrease of approximately ~~$46.6~~$61 million in the carrying value of such investments.
Interest Rate/Credit Spread Risk
At March 31, ~~2010,~~2011, the Company was exposed to interest-rate risk and credit spread risk as a result of approximately ~~$381~~$330 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 $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,~~ pound sterling ~~South Korean won~~ and ~~Australian dollars,~~euro was ~~$78~~$127 million. A 10% adverse change in foreign exchange rates would result in approximately ~~an $8~~a $12.7 million decline in the carrying value of such investments.

- 8189 -
PART I—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—~~15d - 15(e) under the Exchange Act) at March 31, ~~2010.~~2011. 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 March 31, ~~2010.~~2011.
Internal Control over Financial Reporting
~~Other than the integration of certain information technology systems and processes of the acquired BGI business to those of BlackRock, there~~There have been no changes in internal control over financial reporting during the quarter ended March 31, ~~2010~~2011 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.~~

- 8290 -
PART ~~II—~~II – OTHER INFORMATION

Item 1. Legal Proceedings
See Note ~~12,~~11, 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 March 31, ~~2010,~~2011, 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
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

   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 Programs⁽¹⁾
January 1, 2011 through January 31, 2011
   412,223 ⁽²⁾ $ 194.23       —         4,203,898
February 1, 2011 through February 28, 2011
   113,418 ⁽²⁾ $ 194.36       —         4,203,898
March 1, 2011 through March 31, 2011
   14,042 ⁽²⁾ $ 201.46       —         4,203,898

Total
   539,683    $ 194.44       —         4,203,898


⁽¹⁾
~~On August 2, 2006,~~In July 2010 the Company announced a ~~2.1~~5.1 million share repurchase program with no stated expiration date.
⁽²⁾
~~Reflects~~Includes 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.
³
~~Includes 18,886 shares repurchased by the Company from employees in February 2010 pursuant to a put feature available in connection with the payment of certain 2002 LTIP awards.~~

- 8391 -
PART ~~II—~~II – OTHER INFORMATION (continued)

Item 6. Exhibits

Exhibit
No.

Description
~~10.1(1)~~
  10.1 ~~Lease~~Letter Agreement, dated ~~as of February 17,~~December 23, 2010, ~~among~~between Blake Grossman and 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.Inc.+
  10.2(1)
Five-Year Revolving Credit Agreement, dated as of March 10, 2011, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender and L/C agent, Sumitomo Mitsui Banking Corporation, as Japanese Yen lender, a group of lenders, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Citibank, N.A., as syndication agent and Bank of America, N.A., Barclays Bank PLC, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc., as documentation agents.
12.1
Computation of Ratio of Earnings to Fixed Charges
31.1
Section 302 Certification of Chief Executive Officer
31.2
Section 302 Certification of Chief Financial Officer
32.1
Section 906 Certification of Chief Executive Officer and Chief Financial 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~~Current Report on Form ~~10-K for the year ended December 31, 2009.~~8-K filed on March 11, 2011.
+ Denotes compensatory plans or arrangements

- 8492 -
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/s/    ANN MARIE PETACH
Date: May 9, 2011 Ann Marie Petach

Managing Director &
Chief Financial Officer
~~Date: May 10, 2010~~

- 8593 -
EXHIBIT INDEX

Exhibit
No.

Description
~~10.1(1)~~
  10.1 ~~Lease~~Letter Agreement, dated ~~as of February 17,~~December 23, 2010, ~~among~~between Blake Grossman and 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.Inc.+
  10.2(1)
Five-Year Revolving Credit Agreement, dated as of March 10, 2011, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender and L/C agent, Sumitomo Mitsui Banking Corporation, as Japanese Yen lender, a group of lenders, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Citibank, N.A., as syndication agent and Bank of America, N.A., Barclays Bank PLC, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc., as documentation agents.
12.1
Computation of Ratio of Earnings to Fixed Charges
31.1
Section 302 Certification of Chief Executive Officer
31.2
Section 302 Certification of Chief Financial Officer
32.1
Section 906 Certification of Chief Executive Officer and Chief Financial 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~~Current Report on Form ~~10-K for the year ended December 31, 2009.~~8-K filed on March 11, 2011.
+ Denotes compensatory plans or arrangements


	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


(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


(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	)


(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


		Three months ended March 31,
*(Dollar amounts in millions)*	Income Statement Location	2011			2010
Foreign currency exchange contracts	General and administration expenses	$	—		($	4	)
Total return swaps	Non-operating income (expense)		(1	)		(1	)
Credit default swap (Pillars)	Non-operating income (expense)		—			—

Total		($	1	)	($	5	)


(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	)


(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


(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


*(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	)		(2	)		(8	)

Carrying value	$	499		$	999		$	696		$	998		$	3,192

Fair value	$	510		$	1,043		$	800		$	1,058		$	3,411


Outstanding at	Unvested Restricted Stock and Units		Weighted Average Grant Date Fair Value		Restricted Stock and Units			Weighted- Average Grant Date Fair Value
December 31, 2009	5,360,463		$	154.75
December 31, 2010						6,742,469		$	187.24
Granted	2,796,005		$	239.47		2,238,335		$	196.59
Converted	(1,279,522	)	$	154.72		(1,265,469	)	$	174.51
Forfeited	(161,023	)	$	161.92		(82,068	)	$	222.44

March 31, 2010	6,715,923		$	189.86
March 31, 2011⁽¹⁾						7,633,267		$	191.71


Outstanding at	Shares Under Option		Weighted Average Exercise Price		Shares Under Option			Weighted- Average Exercise Price
December 31, 2009	2,641,836		$	98.59
December 31, 2010						2,344,734		$	105.60
Exercised	(202,310	)	$	38.49		(75,523	)	$	115.10

March 31, 2010	2,439,526		$	103.57
March 31, 2011						2,269,211		$	105.28


	March 31, 2011		December 31, 2010
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		57,108,553		57,108,553
Shares outstanding		57,108,553		57,108,553
Series C
Shares authorized, $0.01 par value		6,000,000		6,000,000
Shares issued		2,866,439		2,866,439
Shares outstanding		2,866,439		2,866,439
Series D
Shares authorized, $0.01 par value		20,000,000		20,000,000
Shares issued		—		—
Shares outstanding		—		—


*(Dollar amounts in millions, except per share data)*	Three Months Ended March 31,
	2011						2010
	Basic			Diluted			Basic			Diluted
Net income attributable to BlackRock	$	568		$	568		$	423		$	423
Less:
Dividends distributed to common shares		269			269			194			194
Dividends distributed to participating RSUs		3			3			2			2

Undistributed net income attributable to BlackRock		296			296			227			227
Percentage of undistributed net income allocated to common shares^(a)		98.8	%		98.8	%		98.4	%		98.4	%

Undistributed net income allocated to common shares		292			292			223			223
Plus:
Common share dividends		269			269			194			194

Net income attributable to common shares	$	561		$	561		$	417		$	417

Weighted-average shares outstanding		191,797,365			191,797,365			189,676,023			189,676,023
Dilutive effect of:
Non-participating RSUs					1,469,069						815,750
Stock options					796,585						907,762
Convertible debt					233,485						752,716

Total diluted weighted-average shares outstanding					194,296,504						192,152,251

Earnings per share attributable to BlackRock, common stockholders:	$	2.92		$	2.89		$	2.20		$	2.17


	Three Months Ended
	March 31,				Three Months Ended March 31,
(Dollar amounts in millions)	2010		2009		2011		2010
Equity	$	955	$	242	$	1,115	$	955
Fixed income		363		200		394		363
Multi-asset		167		99
Alternative investment products		186		95
Multi-asset class						221		167
Alternatives						221		186
Cash management		132		175		116		132

Total investment advisory, administration fees, securities lending revenue and performance fees		1,803		811		2,067		1,803
BlackRock Solutionsand advisory		113		135		128		113
Distribution fees		28		25		28		28
Other revenue		51		16		59		51

Total revenue	$	1,995	$	987	$	2,282	$	1,995


(Dollar amounts in millions)	Three Months Ended March 31,								Three Months Ended March 31,
			% of				% of
Revenues	2010		total		2009		total
Revenue									2011		% of total			2010		% of total
Americas	$	1,364	68	%	$	767	78	%	$	1,554		68	%	$	1,364		68	%
Europe		511	26	%		191	19	%		590		26	%		511		26	%
Asia-Pacific		120	6	%		29	3	%		138		6	%		120		6	%

Total revenues	$	1,995	100	%	$	987	100	%
Total revenue									$	2,282		100	%	$	1,995		100	%


(Dollar amounts in millions) Long-Lived Assets	March 31, 2010				December 31, 2009
*(Dollar amounts in millions)* Long-lived Assets									March 31, 2011				December 31, 2010
Americas	$	12,969	99	%	$	12,961	99	%	$	13,134	98	%	$	13,092	99	%
Europe		52	—	%		46	—	%		73	1	%		42	—	%
Asia-Pacific		70	1	%		74	1	%		76	1	%		99	1	%

Total long-lived assets	$	13,091	100	%	$	13,081	100	%	$	13,283	100	%	$	13,233	100	%


	Voting Common Stock		Capital Stock⁽¹⁾		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	%		25.1	%		20.2	%
Barclays	4.7	%	19.6	%
Barclays Bank PLC (“Barclays”)						2.3	%		19.5	%
Bank of America Corporation (“Bank of America”)/Merrill Lynch & Co., Inc.						—	%		7.1	%
Other	57.2	%	22.4	%		72.6	%		53.2	%

	100.0	%	100.0	%		100.0	%		100.0	%


	Three Months Ended									Variance vs. Three Months Ended										Three months ended									Variance vs. three months ended
	March 31,						December 31,			March 31, 2009					December 31, 2009					March 31,						December 31,			March 31, 2010						December 31, 2010
	2010			2009			2009			Amount			% Change		Amount			% Change		2011			2010			2010			Amount			% Change			Amount			% Change
GAAP basis:
Total revenue	$	1,995		$	987		$	1,544		$	1,008		102	%	$	451		29	%	$	2,282		$	1,995		$	2,493		$	287			14	%	($	211	)		(8	%)
Total expenses	$	1,341		$	716		$	1,155		$	625		87	%	$	186		16	%	$	1,484		$	1,341		$	1,553		$	143			11	%	($	69	)		(4	%)
Operating income	$	654		$	271		$	389		$	383		141	%	$	265		68	%	$	798		$	654		$	940		$	144			22	%	($	142	)		(15	%)
Operating margin		32.8	%		27.5	%		25.2	%		5.3	%	19	%		7.6	%	30	%		35.0	%		32.8	%		37.7	%		2.2	%		7	%		(2.7	%)		(7	%)
Non-operating income (expense), less net income (loss) attributable to non-controlling interests¹	$	(3	)	$	(157	)	$	17		$	154		98	%	$	(20	)	NM
Non-operating income (expense), less net income (loss) attributable to non-controlling interests																				$	19		($	3	)	$	26		$	22			*		($	7	)		(27	%)
Net income attributable to BlackRock, Inc.	$	423		$	84		$	256		$	339		404	%	$	167		65	%	$	568		$	423		$	657		$	145			34	%	($	89	)		(14	%)
Diluted earnings per common share^(e)	$	2.17		$	0.62		$	1.62		$	1.55		250	%	$	0.55		34	%	$	2.89		$	2.17		$	3.35		$	0.72			33	%	($	0.46	)		(14	%)
Effective tax rate																					30.5	%		35.0	%		32.0	%		(4.5	%)		(13	%)		(1.5	%)		(5	%)

As adjusted:
Operating income^(a)	$	727		$	307		$	561		$	420		137	%	$	166		30	%	$	819		$	727		$	962		$	92			13	%	($	143	)		(15	%)
Operating margin^(a)		38.9	%		37.2	%		39.7	%		1.7	%	5	%		(0.8	)%	(2	)%		39.1	%		38.9	%		40.7	%		0.2	%		1	%		(1.6	%)		(4	%)
Non-operating income (expense), less net income (loss) attributable to non-controlling interests^1,^(b)	$	(6	)	$	(153	)	$	13		$	147		96	%	$	(19	)	NM
Non-operating income (expense), less net income (loss) attributable to non-controlling interests^(b)																				$	14		($	6	)	$	20		$	20			*		($	6	)		(30	%)
Net income attributable to BlackRock, Inc.^(c),(d)	$	469		$	110		$	379		$	359		326	%	$	90		24	%	$	582		$	469		$	670		$	113			24	%	($	88	)		(13	%)
Diluted earnings per common share^(c),d),(e)	$	2.40		$	0.81		$	2.39		$	1.59		196	%	$	0.01		—	%
Diluted earnings per common share^{(c), (d), (e)}																				$	2.96		$	2.40		$	3.42		$	0.56			23	%	($	0.46	)		(13	%)
Effective tax rate																					30.1	%		35.0	%		31.8	%		(4.9	%)		(14	%)		(1.7	%)		(5	%)

Other:
Assets under management (end of period)																				$	3,648,445		$	3,363,898		$	3,560,968		$	284,547			8	%	$	87,477			2	%
Diluted weighted-average common shares outstanding^(e)		192,152,251			131,797,189			155,040,242			60,355,062		46	%		37,112,009		24	%		194,296,504			192,152,251			193,478,460			2,144,253			1	%		818,044			—	%
Assets under management	$	3,363,898		$	1,283,355		$	3,346,256		$	2,080,543		162	%	$	17,642		1	%
Shares outstanding (end of period)																					192,243,415			190,847,770			191,191,553			1,395,645			1	%		1,051,862			1	%
Book value per share**																				$	137.44		$	128.55		$	136.09		$	8.89			7	%	$	1.35			1	%
Cash dividends declared and paid per share																				$	1.375		$	1.00		$	1.00		$	0.375			37.5	%	$	0.375			37.5	%


							Variance vs.
(Dollar amounts in millions)	March 31, 2010		December 31, 2009		March 31, 2009		December 31, 2009		March 31, 2009								Variance vs.
Equity
Index	$	1,229,253	$	1,183,005	$	50,065	4	%	NM
											March 31, 2011		December 31, 2010		March 31, 2010⁽¹⁾		December 31, 2010			March 31, 2010
Equity:
Active		353,269		353,050		141,447	—	%	150	%	$	343,389	$	334,532	$	347,659		3	%		(1	%)
Fixed income
Index		470,589		459,744		3,075	2	%	NM
Institutional index												945,226		911,775		846,471		4	%		12	%
iShares / Exchange-traded products												474,966		448,160		388,392		6	%		22	%
Fixed income:
Active		588,594		595,883		469,581	(1	)%	25	%		595,314		592,303		588,198		1	%		1	%
Institutional index												436,084		425,930		361,568		2	%		21	%
iShares / Exchange-traded products												126,791		123,091		109,417		3	%		16	%
Multi-asset class		154,750		142,029		73,972	9	%	109	%		207,982		185,587		154,750		12	%		34	%
Alternative		101,886		102,101		53,592	—	%	90	%
Alternatives												115,253		109,738		101,886		5	%		13	%

Long-term		2,898,341		2,835,812		791,732	2	%	266	%		3,245,005		3,131,116		2,898,341		4	%		12	%
Cash management		306,536		349,277		322,478	(12	)%	(5	)%		256,694		279,175		306,536		(8	%)		(16	%)

Sub-total		3,204,877		3,185,089		1,114,210	1	%	188	%		3,501,699		3,410,291		3,204,877		3	%		9	%
Advisory²		159,021		161,167		169,145	(1	)%	(6	)%
Advisory⁽²⁾												146,746		150,677		159,021		(3	%)		(8	%)

Total	$	3,363,898	$	3,346,256	$	1,283,355	1	%	162	%	$	3,648,445	$	3,560,968	$	3,363,898		2	%		8	%


(Dollar amounts in millions)	December 31,		Net subscriptions			Market appreciation			Foreign			March 31,		December 31, 2010		Net subscriptions (redemptions)⁽¹⁾			BGI merger- related outflows⁽²⁾			Market appreciation/ (depreciation)			Foreign exchange⁽³⁾		March 31, 2011
	2009		(redemptions)²			(depreciation)			exchange³			2010
Equity
Index	$	1,183,005	$	4,560		$	51,662		$	(9,974	)	$	1,229,253
Equity:
Active		353,050		(7,929	)		11,833			(3,685	)		353,269	$	334,532	$	2,230		($	6,943	)	$	11,053		$	2,517	$	343,389
Fixed income
Index		459,744		13,608			7,412			(10,175	)		470,589
Institutional index															911,775		1,063			(10,730	)		38,327			4,791		945,226
iShares/ETPs⁽⁴⁾															448,160		7,198			—			16,888			2,720		474,966
Fixed income:
Active		595,883		(14,350	)		11,305			(4,244	)		588,594		592,303		(2,676	)		(413	)		3,378			2,722		595,314
Institutional index															425,930		8,860			(113	)		(2,557	)		3,964		436,084
iShares/ETPs															123,091		2,339			—			(5	)		1,366		126,791
Multi-asset class		142,029		10,559			4,346			(2,184	)		154,750		185,587		14,940			—			4,953			2,502		207,982
Alternative		102,101		2,465			(1,686	)		(994	)		101,886
Alternatives															109,738		777			(152	)		4,589			301		115,253

Long-term		2,835,812		8,913			84,872			(31,256	)		2,898,341		3,131,116		34,731			(18,351	)		76,626			20,883		3,245,005
Cash management		349,277		(39,599	)		77			(3,219	)		306,536		279,175		(24,441	)		—			322			1,638		256,694

Sub-total		3,185,089		(30,686	)		84,949			(34,475	)		3,204,877		3,410,291		10,290			(18,351	)		76,948			22,521		3,501,699
Advisory⁴		161,167		(2,864	)		(177	)		895			159,021
Advisory⁽⁵⁾															150,677		(4,508	)		—			(85	)		662		146,746

Total	$	3,346,256	$	(33,550	)	$	84,772		$	(33,580	)	$	3,363,898	$	3,560,968	$	5,782		($	18,351	)	$	76,863		$	23,183	$	3,648,445


*(Dollar amounts in millions)*	March 31, 2010⁽¹⁾		Net subscriptions (redemptions)⁽²⁾			BGI merger- related outflows⁽³⁾			Acquisition/ reclassifications⁽⁴⁾			Market appreciation/ (depreciation)		Foreign exchange⁽⁵⁾		March 31, 2011
Equity:
Active	$	347,659	$	3,579		($	51,136	)	($	3,920	)	$	39,985	$	7,222	$	343,389
Institutional index		846,471		30,483			(49,000	)		(4,389	)		101,643		20,018		945,226
iShares/ETPs⁽⁶⁾		388,392		31,930			—			—			51,797		2,847		474,966
Fixed income:
Active		588,198		(14,309	)		(5,967	)		(3,923	)		24,024		7,291		595,314
Institutional index		361,568		40,714			(9,865	)		7,374			12,064		24,229		436,084
iShares/ETPs		109,417		14,297			—			—			1,371		1,706		126,791
Multi-asset class		154,750		30,653			(137	)		3,550			14,524		4,642		207,982
Alternatives		101,886		(1,858	)		(608	)		—			13,445		2,388		115,253

Long-term		2,898,341		135,489			(116,713	)		(1,308	)		258,853		70,343		3,245,005
Cash management		306,536		(46,755	)		(574	)		(4,852	)		209		2,130		256,694

Sub-total		3,204,877		88,734			(117,287	)		(6,160	)		259,062		72,473		3,501,699
Advisory⁽⁷⁾		159,021		(13,664	)		(10	)		—			13		1,386		146,746

Total	$	3,363,898	$	75,070		($	117,297	)	($	6,160	)	$	259,075	$	73,859	$	3,648,445


	Three months ended
	March 31,						Variance
*(Dollar amounts in millions)*	2011			2010			Amount			% Change
Revenue	$	2,282		$	1,995		$	287			14	%
Expenses		1,484			1,341			143			11	%

Operating income	$	798		$	654		$	144			22	%

Operating margin		35.0	%		32.8	%		2.2	%		7	%


	Mix of Base Fees						Mix of AUM by Asset Class
	Three months ended March 31,						March 31,			December 31,			March 31,
	2011			2010			2011			2010			2010
Equity:
Active		25	%		27	%		9	%		9	%		10	%
Institutional index		6	%		6	%		27	%		26	%		25	%
iShares / ETPs		22	%		22	%		13	%		13	%		12	%
Fixed income:
Active		14	%		14	%		16	%		17	%		17	%
Institutional index		3	%		2	%		12	%		12	%		11	%
iShares / ETPs		4	%		3	%		3	%		3	%		3	%
Multi-asset class		11	%		9	%		6	%		5	%		5	%
Alternatives		9	%		9	%		3	%		3	%		3	%

Long-term		94	%		92	%		89	%		88	%		86	%
Cash management		6	%		8	%		7	%		8	%		9	%

Sub-total		100	%		100	%		96	%		96	%		95	%

Advisory								4	%		4	%		5	%

Total								100	%		100	%		100	%


	March 31, 2011
*(Dollar amounts in millions)*	GAAP Basis		Separate Account Assets/ Collateral		Consolidated VIEs		Consolidated Sponsored Investment Funds		As Adjusted
Assets
Cash and cash equivalents	$	2,779	$	—	$	—	$	42	$	2,737
Accounts receivable		2,223		—		—		—		2,223
Investments		1,528		—		—		165		1,363
Assets of consolidated variable interest entities		1,407		—		1,407		—		—
Separate account assets and collateral held under securities lending agreements		139,139		139,139		—		—		—
Other assets⁽¹⁾		1,070		—		—		11		1,059

Sub-total		148,146		139,139		1,407		218		7,382
Goodwill and intangible assets, net		30,276		—		—		—		30,276

Total assets	$	178,422	$	139,139	$	1,407	$	218	$	37,658

Liabilities
Accrued compensation and benefits	$	538	$	—	$	—	$	—	$	538
Accounts payable and accrued liabilities		1,366		—		—		—		1,366
Borrowings⁽²⁾		3,255		—		—		—		3,255
Liabilities of consolidated variable interest entities		1,304		—		1,304		—		—
Separate account liabilities and collateral liabilities under securities lending agreements		139,139		139,139		—		—		—
Deferred income tax liabilities		5,526		—		—		—		5,526
Other liabilities⁽³⁾		578		—		—		26		552

Total liabilities		151,706		139,139		1,304		26		11,237

Equity
Total stockholders’ equity		26,479		—		58		—		26,421
Non-controlling interests		237		—		45		192		—

Total equity		26,716		—		103		192		26,421

Total liabilities and equity	$	178,422	$	139,139	$	1,407	$	218	$	37,658


(Dollar amounts in millions)	Three Months Ended March 31, 2010												Three months ended March 31, 2011
(Dollar amounts in millions)	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
													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 and cash equivalents, beginning of period													$	3,367		$	65		$	—		$	3,302
Cash flows from operating activities	$	(164	)	$	37		$	(5	)	$	(196	)		(156	)		(8	)		2			(150	)
Cash flows from investing activities		(30	)		(2	)		—			(28	)		(15	)		(3	)		—			(12	)
Cash flows from financing activities		(1,755	)		13			(4	)		(1,764	)		(465	)		(12	)		(2	)		(451	)
Effect of exchange rate changes on cash and cash equivalents		(56	)		—			—			(56	)		48			—			—			48

Net change in cash and cash equivalents		(2,005	)		48			(9	)		(2,044	)		(588	)		(23	)		—			(565	)
Cash and cash equivalents, beginning of period		4,708			75			9			4,624

Cash and cash equivalents, end of period	$	2,703		$	123		$	—		$	2,580		$	2,779		$	42		$	—		$	2,737


(Dollar amounts in millions)					Total
Year	Principal		Interest		Payments
Remainder of 2011	$	—	$	118	$	118
2012		500		140		640
2013		—		129		129
2014		1,000		129		1,129
2015		—		94		94
2016		—		94		94
Thereafter		1,700		194		1,894

Total	$	3,200	$	898	$	4,098


	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


Exhibit No.		Description

~~10.1(1)~~ 10.1		~~Lease~~Letter Agreement, dated ~~as of February 17,~~December 23, 2010, ~~among~~between Blake Grossman and 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.Inc.+

10.2(1)		Five-Year Revolving Credit Agreement, dated as of March 10, 2011, by and among BlackRock, Inc., certain of its subsidiaries, Wells Fargo Bank, National Association, as administrative agent, swingline lender, issuing lender and L/C agent, Sumitomo Mitsui Banking Corporation, as Japanese Yen lender, a group of lenders, Wells Fargo Securities, LLC, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital, J.P. Morgan Securities LLC and Morgan Stanley Senior Funding, Inc., as joint lead arrangers and joint bookrunners, Citibank, N.A., as syndication agent and Bank of America, N.A., Barclays Bank PLC, JPMorgan Chase Bank, N.A. and Morgan Stanley Senior Funding, Inc., as documentation agents.

12.1		Computation of Ratio of Earnings to Fixed Charges

31.1		Section 302 Certification of Chief Executive Officer

31.2		Section 302 Certification of Chief Financial Officer

32.1		Section 906 Certification of Chief Executive Officer and Chief Financial 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


	BLACKROCK, INC.
	(Registrant)

	By:	/S/s/ ANN MARIE PETACH
Date: May 9, 2011		Ann Marie Petach
		Managing Director & Chief Financial Officer