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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FOR ANNUAL AND TRANSITION REPORTS

PURSUANT TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2003

or

For the transition period from                      to                     .

Commission File No. 001-15305

BlackRock, Inc.

(Exact name of registrant as specified in its charter)

40 East 52^nd Street, New York, NY 10022

(Address of principal executive offices)

(212) 754-5300

(Registrant’s telephone number, including area code)

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

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

None

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)

Yes x No ¨

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The aggregate market value of the voting common stock held by non-affiliates of the Registrant as of June 30, 2003, is approximately $700.6 million. There is no non-voting common stock of the Registrant outstanding.

As of February 27, 2004, there were 18,341,170 shares of the Registrant’s class A common stock issued and outstanding and 45,284,013 shares of the Registrant’s class B common stock issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference herein:

Portions of the definitive Proxy Statement of BlackRock, Inc. filed pursuant to Regulation 14A of the general rules and regulations under the Securities Exchange Act of 1934, as amended, for the 2004 annual meeting of stockholders to be held on May 11, 2004 (“Proxy Statement”) are incorporated by reference into Part III of this Form 10-K. The incorporation by reference herein of portions of the Proxy Statement shall not be deemed to specifically incorporate by reference the information referred to in Item 402(a) (8) and (9) and Item 306(c) and (d) of Regulation S-K.

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BlackRock Inc.

Index to Form 10-K

TABLE OF CONTENTS

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Part I

Overview

BlackRock, Inc., a Delaware corporation formed in 1998 (together, with its subsidiaries, “BlackRock” or the “Company”), is one of the largest investment management firms in the United States, with approximately $309 billion of assets under management at year-end 2003 for institutional and individual investors worldwide. Our products span a broad spectrum of fixed income, liquidity, equity and alternative investment separate accounts and mutual funds, including our BlackRock Funds and BlackRock Liquidity Funds (formerly known as BlackRock Provident Institutional Funds.) We also offer risk management, investment analytics and investment system services to institutional investors through our BlackRock Solutions product line.

BlackRock is a majority owned indirect subsidiary of The PNC Financial Services Group, Inc. (“PNC”), one of the largest diversified financial services companies in the United States. As of December 31, 2003, PNC indirectly owned approximately 70% of BlackRock. BlackRock is headquartered in New York City and has offices in Edinburgh, Scotland; Hong Kong; Tokyo, Japan; Wilmington, Delaware; San Francisco, California; and Boston, Massachusetts.

In 2003, BlackRock’s total assets under management increased by approximately $37 billion, or 13%, from year-end 2002 levels. Over the past five years, assets under management have grown by over $179 billion, which represents a compound annual growth rate of 19%. Approximately 81% of growth in assets under management has been derived from new business activity, as opposed to market appreciation. At December 31, 2003, fixed income products represented 69%, money market or liquidity products represented 24%, equity products represented 4% and alternative investment products represented 2% of BlackRock’s total assets under management. Approximately 72% of the assets are managed in separate accounts and 28% are managed in mutual funds.

Assets Under Management

By Asset Class

CAGR = Compound Annual Growth Rate

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Our ability to generate growth in assets under management is the primary factor driving increases in revenue and earnings and ultimately stockholder value. Our strategies to deliver growth in assets under management begin with our focus on achieving client investment performance objectives while maintaining stringent risk controls and providing “best in class” client service. Accordingly, we dedicate significant resources to attracting and retaining talented professionals, which we believe is the most critical component to maintaining a dynamic growth-oriented firm, and to the ongoing enhancement of our investment technology and operating capabilities.

BlackRock’s business results largely reflect our position as a leading provider of fixed income and liquidity asset management services to institutional clients. Of the $309 billion of assets we managed at December 31, 2003, approximately $276 billion, or 89%, were from institutional clients with the remaining $33 billion reflecting institutional and individual client investments in our open-end and closed-end mutual fund families. While we direct substantial resources to our fixed income and liquidity products, we also incur significant expense and have made additional investments over the last two years to establish a menu of competitive equity products suitable for both institutional and individual investors. Additionally, BlackRock Solutions continued to grow in 2003, achieving sales in excess of our initial expectations since its inception in 2000. During 2003, BlackRock Solutions revenue increased by 18%.

We have generated substantial increases in assets under management, which has resulted in strong revenue and earnings growth since our formation in 1998. Our financial condition has also been enhanced with the retirement of all long-term debt in 1999 and sizable increases in corporate liquidity (cash and investments) and stockholders’ equity.

NM=Not Meaningful

While we continue to operate in a global marketplace characterized by market volatility and economic uncertainty, we believe the following factors position us well to produce solid relative returns for stockholders:

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Products

BlackRock offers a wide variety of fixed income, liquidity, equity and alternative investment products. Revenue from these products consists of advisory fees typically structured as a percentage of assets managed and, in some instances, performance fees expressed as a percentage of returns realized in excess of agreed-upon targets.

Fixed Income

Fixed income remains the cornerstone of BlackRock’s business, representing 69% of total assets under management at year-end 2003. During the year, fixed income assets grew 22% to $214.4 billion. Net new business exceeded $28.4 billion, with inflows in all product categories and from all client channels. We expanded our capabilities across sectors, adding depth to our high yield, corporate credit, international and insurance teams. We also established a portfolio risk management group to enhance our focus on, and use of, risk management capabilities in our investment management activities. We believe that these initiatives will strengthen our efforts and enable us to further expand and diversify our fixed income product mix over time.

Growth in our global bond products more than doubled to $12.0 billion during 2003. This success was complemented by net new business of $11.9 billion in targeted duration accounts, including insurance, defined contribution and mutual fund portfolios, $8.1 billion in core bond products and $2.5 billion in sector-specific strategies, such as mortgage, municipal, high yield and Treasury Inflation-Protected Security mandates. Diversification was also achieved across client channels, with $9.4 billion of net inflows from international investors, $8.0 billion from U.S. taxable investors, $7.3 billion from U.S. tax-exempt investors and $3.8 billion from individual and institutional mutual fund investors.

We believe that investment performance is, and always will be, the most important barometer of future business growth. For the one, three and five years ended December 31, 2003, 75% or more of our fixed income composites outperformed their benchmarks and 80% or more of our taxable bond funds achieved returns in excess of their Lipper peer group medians.* These results reflect our intense focus on achieving strong investment performance consistent with our investment process and risk management discipline.

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Products (continued)

Fixed Income (continued)

Numerous industry trends are favorable for BlackRock. Pension plan rebalancing out of bonds into stocks, which led to more than $19 billion of outflows over the past three years, abated and began to reverse as global stock markets recovered. Defined benefit plan sponsors are funding shortfalls and allocating a portion of contributions to fixed income. Defined contribution plan sponsors are adding investment options, increasingly unbundling asset management and plan administration services. Insurance companies continue to actively outsource investment management, a trend we expect to extend to other financial institutions as well.

Our ongoing success in fixed income is, in part, a direct reflection of our team effort. Professionals across the firm, including portfolio management, account management, operations, administration, compliance and BlackRock Solutions, work together to provide unparalleled service to our clients. Our collective efforts have enabled us to achieve compound annual growth of 27% over the past five years. We believe that we are well positioned to build upon our past accomplishments and to capitalize on new opportunities to expand and diversify our fixed income business in 2004.

Liquidity

BlackRock is a leader in liquidity management with $74.3 billion under management at December 31, 2003, representing 24% of BlackRock’s total assets under management. Although year-end assets declined 5% from 2002 levels, average assets were down only 2% and BlackRock maintained its position as the eighth largest institutional money market fund manager in the nation. During the year, we added resources in liquidity sales and marketing and enhanced cross-selling efforts, which we believe will enable us to expand market share in 2004.

Net outflows of $6.6 billion in institutional money market funds partially reversed the $14.3 billion of inflows that followed the Federal Reserve’s rate cut in November 2002. Additional outflows of $1.4 billion in retail money market funds reflected asset reallocations during a period of historically low yields. In contrast to these adverse flows, improved cross-selling efforts helped generate $327 million of net new business in separate accounts, and favorable stock market conditions led to $3.5 billion of net inflows in securities lending portfolios.

Investment performance remained competitive, with all liquidity funds ranked in the top two Lipper quartiles, and 90% or more of all institutional funds ranked in the top Lipper quartile for the one, three and five years ended December 31, 2003.* Importantly, these results were achieved without compromising our conservative investment philosophy, which emphasizes credit quality and liquidity over yield. Our investment process brings together highly experienced professionals, sophisticated risk analytics customized for the needs of the liquidity business and broad global credit research capabilities.

Consistently competitive performance has allowed us to maintain an impressive roster of clients, including corporate and municipal treasurers, banks and bank trust departments, broker dealers and insurance companies. As part of our ongoing effort to better serve our clients, we provide a variety of proprietary tools to make investing in BlackRock Liquidity Funds easy and efficient. In addition to the client call center, which handled approximately half of all trade orders in 2003, we offer MutualADVANTAGE, which gives clients real-time access to their accounts via the Internet. We also have developed interfaces that provide access to our funds through several institutional investment portals, and CashManager, a PC-based cash sweep program for banks that offer cash management services.

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Products (continued)

Liquidity (continued)

BlackRock’s liquidity flows in 2003 reflected the prevailing rate environment. Outflows materialized, as expected, when yields on money market funds and direct investments came back into line during the first quarter. Throughout the year, however, the Federal Reserve maintained its accommodative stance while waiting for clear evidence of inflationary pressures. We believe any shift in the Federal Reserve’s policy in 2004 will likely cause significant outflows in institutional money market funds in favor of direct investments. Accordingly, we remain cautious about the volatility of liquidity flows in the coming year.

Equity

Global equity markets rallied sharply in 2003 following three years of negative returns. Performance within the markets was mixed, however, with smaller capitalization, higher risk stocks performing best worldwide. The skewed nature of the market recovery impacted our results for the year, as small cap portfolios outperformed large cap products. For the year, BlackRock’s equity assets increased $257 million to $13.7 billion at year-end. Most importantly, we ended the year with strong momentum in our domestic equity effort and signs of improvement in our international equity products.

Domestic equity assets grew $1.0 billion to $5.0 billion at December 31, 2003. During the year, net new business raised from institutional investors and through external distributors totaled $712 million, which was overwhelmed by $748 million of outflows from PNC-related clients. Importantly, the positive new business efforts spanned our client base, including institutional separate account and fund investors as well as the successful offering of our first equity closed-end fund.

Significantly, strong investment results are supporting new business momentum. All of our domestic small cap equity composites outperformed their benchmarks, and all of the corresponding funds ranked in the top half of their Lipper peer groups in 2003.* In addition, our quantitative equity team, which joined the firm in February 2003, quickly implemented their models and rigorous investment process in the management of our domestic large cap portfolios. Their efforts enabled our large cap core equity fund, BlackRock Funds Select Equity Portfolio, to achieve top quartile performance within its Lipper peer group for the year.*

Our global opportunities team achieved strong performance for the year in international small cap products, attracting net inflows from a variety of institutional investors worldwide. The market environment was difficult, however, for our large cap international equity portfolios. These products performed poorly on a relative basis and, as a result, redemptions outpaced market gains. International equity assets ended the year down $760 million to $8.7 billion. We remain convinced, however, that as markets return to more normal conditions, these large cap portfolios will improve, benefiting from the consistency of the style and process that have enabled our Edinburgh-based team to produce an exceptional long-term track record.

Going into 2004, performance in our large cap international equity products appears to have stabilized and we have strong momentum in our domestic equity business, including a robust pipeline of new business opportunities. Further, as each of the newer teams gain more seasoning on BlackRock’s platform and demonstrates their ability to deliver strong performance, we will be able to more effectively introduce their products to a larger universe of prospective investors and pursue greater cross-selling opportunities.

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Products (continued)

Alternative Investment Products

During 2003, we continued to expand our alternative investment platform, adding resources and diversifying our product mix. At year-end, alternative investments included hedge funds, fund of funds, high yield and real estate debt products. During the year, assets increased 31% to $6.9 billion. We continue to believe that managing alternative investments alongside long-only portfolios is beneficial and, accordingly, we will pursue opportunities to expand these offerings over time.

Hedge fund assets increased 21% to $1.9 billion at year-end. Our global fixed income hedge fund realized positive returns in 2003, and is expected to overtake its high water mark during 2004. In early 2003, we introduced a municipal hedge fund that seeks to achieve attractive after-tax returns. During the year, we raised $142 million principally from high net worth investors. We continue to experience strong investor demand for this strategy, and we are optimistic that we will achieve further growth in this product in 2004.

In April 2003, BlackRock acquired HPB Management, founded by hedge fund veteran, Howard Berkowitz, who joined BlackRock to lead our hedge fund of funds business. Since the acquisition, we have doubled assets under management to over $300 million. Investment strategy for these products leverages the firm’s capital markets expertise, risk management platform and extensive network of contacts in the financial community to source managers, conduct research, construct portfolios and manage risk. Performance was strong in 2003 and new business momentum continues to build.

Our high yield alternative investments consist of six collateralized debt obligations (CDOs) totaling $2.9 billion, including $342 million raised in 2003. During the year, we strengthened our resources in this area, adding global credit and high yield investment professionals to the fixed income team to further support our management of these products, other high yield accounts and holdings in our broader fixed income portfolios. Additional CDOs will be offered from time to time to target opportunities in the high yield debt and bank loan markets.

Assets managed in real estate debt products increased $696 million to $1.8 billion at December 31, 2003. The growth in these assets resulted principally from additional investments in our mezzanine portfolios and the restructuring of the real estate investment trust that we manage. To enhance investment strategy implementation and better leverage our capital markets and risk management expertise, we have integrated our real estate and fixed income portfolio management teams and are expanding their resources. In 2004, we expect to offer a second real estate mezzanine fund and are considering other business development opportunities.

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Products (continued)

BlackRock Solutions

BlackRock Solutions continues to expand, as institutional investors heighten their focus on investment and operational risk management. In 2003, we added 14 new assignments and increased revenues 18% to $58.7 million. New business included two system outsourcing contracts and 12 risk management assignments. Importantly, BlackRock Solutions’ revenue mix improved substantially in 2003, as a number of short-term assignments that we completed in 2002 were replaced by longer-term recurring revenue relationships.

Investment system outsourcing continues to be an important driver of BlackRock Solutions’ growth. Our investment system, Aladdin, is a fully integrated portfolio management system that facilitates front, middle and back office efficiency. Developed to support BlackRock’s asset management business, Aladdin is now used by leading institutions, including pension plans, insurance companies, asset managers, corporations and foundations, to support their direct investment activities. The depth of our analytical capabilities, breadth of security coverage, range of processing tools and automated compliance controls differentiate our system. Clients choose BlackRock Solutions for these features, as well as the significant efficiencies gained from the work process reengineering associated with an Aladdin implementation. We completed two additional system implementations in 2003 and have another in progress.

Our risk management services include risk reporting, advice and hedge execution. These services leverage the analytical capabilities embedded in Aladdin, as well as industry and capital markets expertise throughout the firm. We have a strong presence among mortgage banks, reflecting our unique ability to help these clients address the complex risks associated with origination and servicing. We also provide risk management services to a growing number of commercial banks, pension plans and insurance companies, and are witnessing increased interest from both domestic and international institutions who want to enhance their ability to monitor and manage their investment risks. Newer offerings include our Web-based pre-trade analytics tool, AnSer and investment accounting services which, when combined with investment and risk management, comprise a comprehensive solution for insurance companies.

In January 2004, we significantly expanded our balance sheet advisory capabilities with the addition of former under secretary of the U.S. Treasury Peter Fisher. Mr. Fisher will lead a new Advisory Services Group, which will leverage his broad public sector asset/liability management expertise with our capital markets and BlackRock Solutions capabilities to help clients address a variety of financial challenges.

BlackRock continues to rely on BlackRock Solutions’ systems and analytical capabilities to support our asset management business. As the regulatory environment evolves, institutions worldwide are increasingly focused on sound risk management practices and the ability to satisfy the demand for greater transparency. We have benefited from these developments and we expect interest in BlackRock Solutions’ products and related services to continue to grow in the coming years.

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Distribution

BlackRock’s marketing and client service efforts continue to differentiate the firm. In 2003, net new business of $22.5 billion fueled a 13% increase in assets under management to $309.4 billion. Over the past five years, net new business has accounted for 80% of the total increase in assets managed. At year-end, we managed $222.6 billion, or 72% of total assets under management, on behalf of 455 separate account clients in 34 countries. Institutions and individuals invested in our fund families – BlackRock Funds, BlackRock Closed-end funds, BlackRock Liquidity Funds and BlackRock Global Series – account for the remaining $86.8 billion, or 28%, of assets under management.

Our culture of teamwork and excellence focuses all employees on serving our clients. We pride ourselves on the quality and longevity of our relationships, and we are extraordinarily gratified to have celebrated our tenth anniversary with 27 clients. Sixty-one clients have entrusted us with assets in excess of $1 billion, and more than 225 clients have multiple investment and/or risk management assignments with BlackRock. We expect cross-selling to expand further as we continue to realize benefits from our 2002 consolidation of all marketing and client service on a unified platform.

Assets managed for U.S. clients increased 11% year-over-year to $250.9 billion at December 31, 2003. Net new business in long-dated portfolios totaled $19.0 billion, which was partially offset by a $3.9 billion decline in liquidity products. Institutional investors choose BlackRock for a wide variety of separate accounts and, increasingly, for the liquidity and diversification available in our institutional funds offerings. Private clients utilize our open-end and closed-end funds as well as, when applicable, our wealth management services and alternative investment offerings. Over the past five years, our domestic business has grown at a 15% compound annual rate, and we believe we will be able to continue to expand market share across a broad universe of domestic investors.

Our global presence continues to expand, as evidenced by the 27% year-over-year increase in assets managed for clients domiciled outside the United States. At December 31, 2003, assets managed for international investors totaled $58.5 billion, representing 19% of BlackRock’s assets under management. Professionals based in New York, Tokyo, Hong Kong and Edinburgh are responsible for international business development and client service. Their efforts, together with those of our strategic partners in Japan and Australia, helped us realize net new business of $7.3 billion during 2003 from 67 international investors in 26 countries. These clients, which include pension plans, insurance companies, banks, central banks and others, choose BlackRock for a wide variety of global and other fixed income portfolios, offshore liquidity funds, equity accounts and alternative investments. Over the past five years, our international business has grown at a 52% compound annual rate, and we believe we will continue to expand as we add resources and enhance our name recognition throughout the world.

Tax-exempt clients represent our largest client segment worldwide with $112.3 billion under management at year-end 2003, or 36% of BlackRock’s total assets under management. Assets managed for tax-exempt investors, including pension plans, foundations, endowments and other non-profit organizations, grew 19% during the year. BlackRock has benefited from a number of trends among tax-exempt institutions. Defined benefit plan sponsors continue to consolidate their fixed income investments with fewer managers. Plan contributions are being allocated in part to fixed income and the three-year long rebalancing trend out of bonds into stocks has abated and is beginning to reverse. Defined contribution plans represent a growing opportunity, as sponsors increasingly unbundle asset management and plan administration and participants seek greater investment choice. Finally, as our product line expands, we are better able to serve foundations, endowments and others that focus heavily on equity and alternative investments.

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Distribution (continued)

At December 31, 2003, BlackRock managed $95.3 billion of separate account assets for taxable clients, including insurance companies, corporations, banks and high net worth individuals. Assets managed for insurance companies represented 62% of this total, with $12.5 billion of net new business in 2003 driving a 34% increase in insurance assets to $59.2 billion, or 19% of BlackRock’s total assets under management. Insurance companies often turn to BlackRock for a range of services that combine investment management with BlackRock Solutions’ risk management and investment accounting capabilities. Services are tailored to take into consideration a wide variety of asset/liability management issues, including accounting, tax, regulatory and rating agency considerations. Our clientele includes reinsurance companies and life, health and property and casualty insurers, who are increasingly outsourcing all or a portion of their investment management. We expect this trend to continue and to extend to other financial institutions as well, and we believe BlackRock is well positioned to capitalize on these opportunities.

Institutional money market fund assets, which are managed on behalf of both taxable and tax-exempt investors, declined $6.6 billion, or 11%, to $53.7 billion at year-end 2003. These outflows, which were anticipated industry-wide following the Federal Reserve’s discount rate cut in November 2002, were mitigated somewhat by net inflows of $327 million in separate accounts and $3.5 billion in security lending portfolios. BlackRock retained its position as the eighth largest institutional money market fund manager in the nation, and our expanded liquidity team is focused on building market share over time.

Private clients are served through 40 open-end funds with assets of $18.4 billion and 49 closed-end funds with assets of $14.0 billion at year-end. Net new business totaled $2.0 billion during 2003, with $4.0 billion raised from institutions and through third party intermediaries offset in part by $2.0 billion of net outflows from PNC-related clients. During 2003, we raised six new closed-end funds totaling $2.6 billion in assets, including our first equity closed-end fund. We have made substantial investments in our fund sales effort, which includes 41 wholesalers, and have increased resources to support direct sales of our institutional funds products. The Company began to realize the benefits of these investments in 2003 and we expect to be able to build momentum in fund sales in the coming years.

Assets Under Management

By Client

CAGR = Compound Annual Growth Rate

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Risks

As a leading investment management firm, risk is an inherent part of BlackRock’s business. Global markets, by their nature, are prone to uncertainty and subject participants to a variety of risks. As previously discussed in this report, risk management is considered to be of paramount importance to BlackRock’s day-to-day operations. Consequently, BlackRock devotes significant resources across all its operations to the identification, measurement, monitoring, management and analysis of market and operating risk, including investments in personnel and technology.

Change in the securities markets could lead to a decline in our revenues

Our investment management revenues are comprised of fees based on a percentage of the value of assets under management and performance fees expressed as a percentage of the returns realized on assets under management. A decline in the prices of stocks or bonds could cause our revenues to decline by:

Poor investment performance could lead to loss of our clients and a decline in our revenues

We believe that investment performance is one of the most important factors for the growth of our assets under management. Poor investment performance relative to the portfolio benchmarks and to our competitors could impair our revenues and growth because:

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

BlackRock’s ability to attract and retain quality personnel has contributed significantly to its growth and success and is important to attracting and retaining clients. The market for qualified fund managers, investment analysts, financial advisers and other professionals is extremely competitive. There can be no assurance that BlackRock will be successful in its efforts to recruit and retain the required personnel. BlackRock has encouraged the continued retention of its executives and other key personnel through measures such as providing deferred compensation and competitive annual and long-term compensation arrangements, and in the case of BlackRock’s Chairman and Chief Executive Officer, an employment agreement. However, there can be no assurance that BlackRock will be successful in retaining all of its key personnel. Loss of a significant number of key personnel could have an adverse effect on BlackRock.

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Risks (continued)

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

A key element to our continued success is our ability to maintain our technological advantage both in terms of operational efficiency and in supporting the sophisticated risk analytics incorporated into our operating systems. There can be no assurance that we will be able to maintain this technological advantage or be able to effectively protect and enforce our intellectual property rights in these systems and processes.

Loss of significant separate accounts would decrease our revenues

We had approximately 455 separate account clients on December 31, 2003, of which the ten largest (excluding alternative investment products and BlackRock Solutions clients) generated approximately 8% of our total revenues during 2003. Our clients may terminate investment management contracts or withdraw funds on short notice. A change in control of BlackRock or PNC may also require re-approval by registered investment companies of their investment management contracts with us. Loss of any of these accounts would reduce our revenues. We have, from time to time, lost separate accounts because of corporate mergers and restructuring, and in the future we could lose accounts under these or other circumstances, such as adverse market conditions or poor performance.

Concentration of PNC-related assets in total assets under management could result in loss of revenue if the PNC-related assets are withdrawn by PNC or PNC-related accounts

Approximately 10% ($32 billion at December 31, 2003) of assets under management for BlackRock are assets related to PNC. PNC or PNC-related accounts generated $72.1 million, or 12%, of BlackRock’s total revenue in 2003. PNC or PNC-related accounts may withdraw these assets at any time and we may not be able to replace them. In addition, we may not be successful in increasing sales through PNC channels and PNC may determine not to continue using or making available our products. During 2003, BlackRock incurred $27.0 million of fund administration and servicing costs paid to PNC (7% of total expense) on PNC-related assets.

Competitive fee pressures could reduce our revenues and our profit margins

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

Performance fees may increase earnings volatility, which could decrease our stock price

A portion of our revenues are derived from performance fees on some investment and risk management advisory assignments. In most cases, performance fees are based on investment returns, although in some cases they are based on achieving specific service standards. Generally, we are entitled to performance fees only if the returns on the related portfolios exceed agreed-upon periodic or cumulative return targets. If we do not exceed these targets, we will not generate performance fees for that period and, if targets are based on cumulative returns, we may not earn performance fees in future periods. Performance fees will vary from period to period in relation to volatility in investment returns, causing our earnings to be more volatile than if we did not manage assets on a performance fee basis. The volatility in our earnings may decrease our stock price. Performance fees represented 1% of our total revenue in 2003.

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Risks (continued)

Our corporate or acquisition strategies may decrease our earnings and harm our competitive position

We employ a variety of strategies intended to enhance our earnings and expand our product offerings to improve our profit margins. These strategies have included smaller-sized lift-outs of investment teams and acquisitions of investment management businesses. In general, our strategies may not be effective and failure to successfully develop and implement our strategies may decrease our earnings and harm our competitive position in the investment management industry. In the event we pursue meaningful acquisitions, we may not be able to find suitable businesses to acquire at acceptable prices and we may not be able to successfully integrate or realize the intended benefits from these acquisitions.

Failure to develop effective business resiliency plans could disrupt operations and cause financial losses, which could decrease our stock price

We are dependent on the availability of our office facilities and the proper functioning of our computer and telecommunications systems. A disaster, such as water damage, an explosion or a prolonged loss of electrical power, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, breach of client contracts, reputational harm or legal liability, which, in turn, could cause a decline in our stock price.

Failure to implement effective information security policies, procedures and capabilities could disrupt operations and cause financial losses which could result in a decrease in our earnings or stock price

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

Failure to comply with client contractual requirements and/or guidelines could result in damage awards against us and loss of revenues due to client terminations, both of which could cause our earnings or stock price to decline

When clients retain us to manage assets or provide BlackRock Solutions products or services on their behalf, they specify guidelines or contractual requirements that we are required to observe in the provision of our services. A failure to comply with these guidelines or contractual requirements could result in losses that the client could seek to recover from us and the client withdrawing its assets from our management, both of which could cause our earnings or stock price to decline.

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Risks (continued)

Failure to comply with government regulations could result in fines or temporary or permanent prohibitions on our activities, which could cause our earnings or stock price to decline

Our business is subject to extensive regulation in the United States and certain of our activities are subject to the laws of non-U.S. jurisdictions and non-U.S. regulatory agencies or bodies. Recently, the SEC and other governmental agencies have been investigating the mutual fund industry. The SEC has adopted and proposed various rules, and legislation has been introduced in Congress, the effect of which will further regulate the mutual fund industry and impose additional compliance obligations, and costs for fulfilling such obligations, on BlackRock. Violation of applicable laws or regulations could result in fines, temporary or permanent prohibition of our engagement in certain activities, reputational harm, suspensions of our personnel or revocation of their licenses, suspension or termination of our investment adviser or broker-dealer registrations, or other sanctions, which could cause our earnings or stock price to decline.

Certain of our subsidiaries are registered with the Securities and Exchange Commission (SEC) under the Investment Advisers Act, and BlackRock’s mutual funds are registered with the SEC under the Investment Company Act of 1940. The Investment Advisers Act imposes numerous obligations on registered investment advisers including record-keeping, operating and marketing requirements, disclosure obligations and prohibitions on fraudulent activities. The Investment Company Act imposes similar obligations, as well as additional detailed operational requirements, on investment advisers to registered investment companies. The failure of one of our subsidiaries to comply with the Investment Advisers Act or the Investment Company Act could cause the SEC to institute proceedings and impose sanctions for violations of either of these acts, including censure, termination of an investment adviser’s registration, or prohibition to serve as adviser to SEC-registered funds and could lead to litigation by investors in those funds, any of which could cause our earnings or stock price to decline.

Failure to comply with ERISA regulations could result in penalties against us and cause our earnings or stock price to decline

Our asset management subsidiaries are subject to the Employee Retirement Income Security Act of 1974, or ERISA, and to regulations promulgated thereunder, insofar as they act as a “fiduciary” under ERISA with respect to benefit plan clients. ERISA and applicable provisions of the Internal Revenue Code impose duties on persons who are fiduciaries under ERISA, prohibit specified transactions involving ERISA plan clients and provide monetary penalties for violations of these prohibitions. The failure of any of our subsidiaries to comply with these requirements could result in significant penalties against us that could reduce our earnings or cause our stock price to decline.

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Risks (continued)

Our largest stockholder, PNC, controls a majority of the outstanding voting power of our common stock, and our other stockholders will be unable to affect the outcome of stockholder voting while PNC remains the majority stockholder.

Four of our eleven directors are directors and/or executive officers of PNC and, as of December 31, 2003, PNC indirectly owned approximately 70% of our outstanding common stock, representing approximately 83% of the combined voting power of all classes of voting stock of BlackRock. As long as PNC owns a majority of the voting power of our common stock, PNC will be able to elect our entire board of directors and to remove any director, with or without cause, and generally to determine the outcome of all corporate actions requiring stockholder approval. Additionally, our bylaws provide that, subject to applicable law and rules of the New York Stock Exchange (NYSE), prior to the date on which PNC or another person beneficially owns less than a majority of the voting power of BlackRock common stock, a majority of all directors on the committees of our board of directors will be designated by PNC or such other person. As a result, subject to the power of executive management to manage the day-to-day operations of BlackRock, PNC will be in a position to continue to control all matters affecting BlackRock, including:

Banking regulation of PNC and BlackRock limits our activities and the types of businesses in which we may engage

Because PNC is a bank holding company and BlackRock is a subsidiary of PNC and PNC Bank, National Association, its national bank subsidiary (PNC Bank), we are subject to general bank regulations that limit our activities and the types of businesses in which we may engage. Banking regulations may cause us to be at a competitive disadvantage because most of our competitors are not subject to these limitations. As a PNC Bank subsidiary, BlackRock is subject to the supervision, regulation, and examination of the Office of the Comptroller of Currency (OCC). BlackRock is also subject to the broad enforcement authority of the OCC, including the OCC’s power to prohibit BlackRock from engaging in any activity that, in the OCC’s opinion, constitutes an unsafe or unsound practice in conducting its business. The OCC may also impose substantial fines and other penalties for violations of banking regulations applicable to BlackRock. Some of our subsidiaries that engage in activities outside the United States are subject to regulation and supervision by the Board of Governors of the Federal Reserve System (FRB). In addition, your shares will not be insured by the Federal Deposit Insurance Corporation (FDIC) or guaranteed by any bank.

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Risks (continued)

We could lose existing executive and senior management and investment contracts if there is a change in control of PNC or BlackRock

Upon a change in control of PNC or BlackRock, PNC, BlackRock or any successor may be required to offer to purchase all of our capital stock held by BlackRock’s employee stockholders and by public stockholders. Upon a change in control of PNC or BlackRock, our existing management may leave and new management could be appointed. In addition, in the event of such a change in control of PNC or BlackRock, the boards of registered investment companies will have to approve our investment management contracts. Moreover, our advisory clients must consent to such change of control or terminate their agreements with us.

The foregoing risks are not exhaustive and new risks may emerge that affect BlackRock’s businesses. It is impossible for management to predict such future risks, and therefore, forward-looking statements should not be relied upon as a prediction of actual future results.

Competition

BlackRock competes with investment management firms, mutual fund complexes, insurance companies, banks, brokerage firms and other financial institutions that offer products that are similar to, or alternatives to, those offered by BlackRock. In order to grow our business, BlackRock must be able to compete effectively for assets under management. Key competitive factors include investment performance track records, investment style and discipline, client service and brand name recognition. We have historically competed principally on the basis of our long-term investment performance track record, our investment process, our risk management and analytic capabilities and the quality of our client service. We have succeeded in growing aggregate assets under management, and we believe that we will continue to be able to do so by focusing on strong investment performance and client service and by developing new products and new distribution capabilities. Many of our competitors, however, have greater financial or marketing resources and better brand name recognition than BlackRock. These factors may place BlackRock at a competitive disadvantage, and there can be no assurance that our strategies and efforts to maintain our existing assets and attract new business will be successful.

Employees

At December 31, 2003, BlackRock had 973 full-time employees, including 205 professionals in the portfolio management group, 274 professionals in BlackRock Solutions, 233 professionals in the separate account and funds marketing and client service areas and 261 professionals in executive, administrative and support functions.

Regulation

Virtually all aspects of BlackRock’s business are subject to various federal and state laws and regulations, some of which are summarized below. These laws and regulations are primarily intended to protect investment advisory clients, stockholders of registered investment companies, PNC’s bank subsidiaries and bank customers of PNC Bank. Under these laws and regulations, agencies that regulate investment advisers and banks and their subsidiaries, such as BlackRock and its subsidiaries, have broad administrative powers, including the power to limit, restrict or prohibit the regulated entity from carrying on business if it fails to comply with such laws and regulations. Possible sanctions for significant compliance failures include the suspension of individual employees, limitations on engaging in certain lines of business for specified periods of time, revocation of investment adviser and other registrations, censures and fines.

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Regulation (continued)

BlackRock’s subsidiaries are subject to regulation, primarily at the federal level, by the SEC, the Department of Labor, the OCC, the Board of Governors of the Federal Reserve System (FRB), the Commodity Futures Trading Commission (CFTC) and other regulatory bodies.

The Investment Advisers Act of 1940, as amended, imposes numerous obligations on registered investment advisers such as BlackRock, including recordkeeping requirements, operational requirements, marketing requirements, disclosure obligations and prohibitions on fraudulent activities. The Investment Company Act of 1940, as amended, imposes similar obligations, as well as detailed operational requirements, on investment advisers, such as BlackRock, to registered investment companies and other managed accounts. The SEC is authorized to institute proceedings and impose sanctions for violations of the Investment Advisers Act and the Investment Company Act, ranging from fines and censure to termination of an investment adviser’s registration. Investment advisers also are subject to certain state securities laws and regulations.

BlackRock’s subsidiaries also are subject to ERISA and to regulations promulgated thereunder, insofar as they act as a “fiduciary” under ERISA with respect to benefit plan clients. ERISA and applicable provisions of the Internal Revenue Code impose certain duties on persons who are fiduciaries under ERISA, prohibit certain transactions involving ERISA plan clients, and provide monetary penalties for violations of these prohibitions.

One of BlackRock’s subsidiaries is registered as a commodity pool operator and commodity trading advisor with the CFTC and the National Futures Association (NFA). The CFTC and NFA administer a comparable regulatory system covering futures contracts and various other financial instruments in which BlackRock clients may invest. Another subsidiary is registered with the SEC as a broker-dealer and is a member of the National Association of Securities Dealers (NASD). Although this entity’s NASD membership agreement limits its permitted activities to the sale of investment company securities and annuities and certain private placement and financial consulting activities, it is subject to the customer dealing, reporting and other requirements of the NASD, as well as the net capital and other requirements of the SEC.

BlackRock’s international operations are also subject to the laws of non-U.S. jurisdictions and non-U.S. regulatory agencies or bodies. As BlackRock has expanded its international business, various of its subsidiaries and international operations have become subject to regulatory systems comparable to those affecting its operations in the United States. BlackRock’s international subsidiaries are subject to periodic examination by these regulatory agencies and have developed comprehensive compliance systems in order to satisfy applicable regulatory requirements.

The failure of BlackRock’s internal operations to comply with the applicable regulatory frameworks could have a material adverse effect on BlackRock.

PNC is a bank holding company and, as discussed below, is also a “financial holding company” regulated by the FRB. PNC Bank, the indirect parent of BlackRock, is a national bank subsidiary of PNC. As an operating subsidiary of PNC Bank, BlackRock is subject to most banking laws, regulations, and orders that are applicable to PNC Bank, and therefore to the supervision, regulation, and examination of the OCC, as well as the SEC. The OCC and the FDIC also have broad enforcement authority over PNC Bank and its subsidiaries, including the power to prohibit PNC Bank or any subsidiary from engaging in any activity that, in the OCC’s opinion, constitutes an unsafe or unsound practice in conducting its business, to appoint the FDIC as conservator or receiver of PNC Bank if any of a number of conditions are met, and to impose substantial fines and other penalties. Supervision and regulation of PNC Bank and its subsidiaries are intended primarily for the protection of depositors, the deposit insurance funds of the FDIC, and the banking system as a whole, not for the protection of stockholders or creditors of national banks or their subsidiaries. The FRB has regulatory and supervisory authority with respect to PNC’s non-U.S. activities and investments, including non-U.S. activities and investments of BlackRock, as well as with respect to PNC’s non-bank subsidiaries.

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Regulation (continued)

Because BlackRock is a subsidiary of PNC, a regulated financial services firm, PNC’s relationships and good standing with its regulators are important to the conduct of our business. The FRB, OCC, SEC, and other domestic and foreign regulators have broad enforcement powers, and powers to approve, deny, or refuse to act upon applications or notices of PNC or its subsidiaries to conduct new activities, acquire or divest businesses or assets or reconfigure existing operations. In addition, PNC and its bank subsidiaries are subject to examination by various regulators, which results in examination reports and ratings (which are not publicly available) that can impact the conduct and growth of our businesses. These examinations consider not only compliance with applicable laws and regulations, but also capital levels, asset quality and risk, management ability and performance, earnings, liabilities, and various other factors. An examination downgrade by any of the federal bank regulators of PNC or its subsidiaries potentially can result in the imposition of limitations on certain of our activities and on our growth.

Because BlackRock is a consolidated subsidiary of PNC Bank, federal restrictions on the payment of dividends by PNC Bank might be applied to BlackRock. Under federal law, OCC approval is needed before PNC Bank may pay dividends in any year in which the total of all dividends paid would exceed the total of PNC Bank’s net profits for that year combined with its retained net profits from the prior two years. PNC Bank also may not pay dividends exceeding its capital surplus.

As an operating subsidiary of a national bank, BlackRock may not conduct new activities, establish a subsidiary, or acquire the stock or assets of another company unless it provides notice to and/or obtains the approval of the OCC or, with respect to most non-U.S. activities or investments, the FRB. The OCC will generally approve only those activities and investments that are legally permissible for a national bank and consistent with prudent banking principles and regulatory policy. The FRB will approve only those activities that are usual in connection with the transaction of the business of banking or other financial operations outside of the United States. Investment management firms with which BlackRock competes commonly invest in investment companies and private investment funds to which they provide services. Pursuant to OCC authorization, BlackRock may invest in investment companies and private investment funds to which it provides advisory, administrative or other services, to the extent consistent with applicable law and regulatory interpretations, including applicable banking laws. BlackRock’s current domestic and overseas activities are, with the limited exception of the activities of BlackRock’s financial subsidiaries discussed below, permissible for a national bank.

Pursuant to the Gramm-Leach-Bliley Act (the GLB Act), a qualifying bank holding company may become a financial holding company and engage in a broad range of financial activities. A bank holding company may elect to become a financial holding company if each of its subsidiary banks is “well capitalized,” is “well managed,” and has at least a satisfactory rating under the Community Reinvestment Act. PNC became a financial holding company as of March 13, 2000.

The GLB Act also permits a national bank, such as PNC Bank, to engage through the formation of a “financial subsidiary” in expanded activities, including securities underwriting and dealing.

In order to qualify to establish or acquire a financial subsidiary, a national bank and each of its depository institution affiliates must maintain “well capitalized” capital ratios, examination ratings of “1” or “2” (on a scale of “1” to “5”), and certain other criteria that are incorporated into the definition of “well managed” in the OCC’s rules, and may not have a less than satisfactory Community Reinvestment Act rating. In addition, the total assets of all financial subsidiaries of a national bank may not exceed the lesser of 45% of the parent bank’s total assets or $50 billion. A national bank that is one of the largest 50 insured banks in the United States, such as PNC Bank, must also have issued debt with certain minimum ratings. In addition to calculating its risk-based capital on a generally accepted accounting principles (GAAP) basis, a national bank with one or more financial subsidiaries must also be “well capitalized” after excluding from its equity all equity investments, including retained earnings, in a financial subsidiary, and excluding from its consolidated assets the assets of the financial subsidiary. Any published financial statement for a national bank with a financial subsidiary must provide risk based capital information both in accordance with GAAP and as described above. The bank must also have policies and procedures to assess financial subsidiary risks and potential liabilities and protect the bank from such risks and potential liabilities.

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Regulation (continued)

Pursuant to the GLB Act, PNC Bank has filed a “financial subsidiary certification” with the OCC. In accordance with the financial subsidiary provisions, BlackRock, while remaining an operating subsidiary of a national bank, may establish financial subsidiaries that engage in a broader range of activities than would be permissible for an operating subsidiary of a national bank. BlackRock has utilized this authority and established two financial subsidiaries that engage in the activities of providing initial funding to mutual funds and holding certain equity interests permissible for a financial subsidiary.

Under the GLB Act and the OCC’s proposed regulations, if a national bank that has one or more financial subsidiaries, or any depository institution affiliate of such national bank, subsequently fails to meet the “well capitalized” or “well managed” and related criteria the national bank must enter into an agreement with the OCC to correct the condition. The OCC has the authority to limit the activities of such a national bank. If the condition is not corrected within six months or within any additional time granted by the OCC, the national bank could be required to conform the activities of its financial subsidiaries to activities in which a national bank could engage directly. In addition, if the bank or any insured depository institution affiliate receives a less than satisfactory Community Reinvestment Act examination rating, the national bank would not be permitted to engage in any new activities, or to make new investments, in reliance upon the financial subsidiary authority.

The FRB is the “umbrella” supervisor for financial holding companies. In addition, the financial holding company’s operating entities, such as its subsidiary broker-dealers, investment managers, investment companies, banks and other regulated institutions, are also subject to the jurisdiction of various state and federal “functional” regulators.

On July 18, 2002, PNC announced that it had entered into a written agreement with the Federal Reserve Bank of Cleveland (Federal Reserve) and that its principal subsidiary, PNC Bank, had entered into a written agreement with the OCC. These agreements addressed such issues as risk, management and financial controls. On September 15, 2003 and September 29, 2003, respectively, the Federal Reserve lifted its formal written agreement with PNC and the OCC lifted its formal written agreement with PNC Bank. These actions brought to a conclusion the agreements into which PNC had entered with bank regulatory agencies in July 2002.

Under federal law, PNC Bank and its subsidiaries, including BlackRock, generally may not engage in transactions with PNC or its non-bank subsidiaries, except on terms and under circumstances that are substantially the same as those prevailing for comparable transactions involving nonaffiliated companies, or, in the absence of comparable transactions, that in good faith would be offered to or would apply to nonaffiliated companies. In addition, certain transactions, including loans and other extensions of credit, guarantees, investments, and asset purchases between PNC Bank and its subsidiaries, including BlackRock, on the one hand, and PNC and its nonbank subsidiaries, on the other hand, are limited to 10% of PNC Bank’s capital and loan loss reserve allowance for transactions with a single company and to 20% of PNC Bank’s capital and loan loss reserve allowance for aggregate transactions with PNC and all its nonbank subsidiaries and other affiliates. In certain circumstances, federal regulatory authorities may impose more restrictive limitations. Such extensions of credit, with limited exceptions, must be fully collateralized. These affiliate transaction restrictions also apply in some cases to loans or other transactions between PNC Bank or BlackRock, on the one hand, and financial subsidiaries of PNC Bank or BlackRock or investment funds advised by BlackRock, on the other.

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Regulation (continued)

The FDIC could be appointed as conservator or receiver of PNC Bank if the bank were to become insolvent or if other conditions or events were to occur. As conservator or receiver, the FDIC could exercise all rights of PNC Bank as a stockholder of BlackRock. The FDIC would also have the authority to repudiate contracts by PNC Bank, including servicing or other contracts with BlackRock, at any time within 180 days of its appointment as conservator or receiver, and would be obligated to pay BlackRock only “actual direct compensatory damages,” not including damages for lost profits or opportunity, as of the date of conservatorship or receivership as a result of such repudiation. The FDIC could also disregard, without paying damages, any contract that tended to diminish or defeat the FDIC’s interest in any PNC Bank asset if the contract were not:

In addition, the FDIC could obtain a stay of up to 90 days of any judicial action or proceeding involving PNC Bank, and could require BlackRock to exhaust its remedies under FDIC claims procedures before pursuing any available judicial remedy.

PNC’s bank subsidiaries are subject to “cross-guarantee” provisions under federal law, which provide that if one of these banks or thrifts fails or requires FDIC assistance, the FDIC may assess a “commonly controlled” bank or thrift, such as PNC Bank, for the estimated losses suffered by the FDIC. The FDIC’s claim is superior to the claims of affiliates, such as BlackRock, and of stockholders of the banks. At December 31, 2003, both of PNC’s bank subsidiaries exceeded the required ratios for classification as “well capitalized” under statutory and regulatory standards.

BlackRock is subject to the USA PATRIOT Act of 2001, which contains the International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. That Act contains anti-money laundering measures affecting insured depository institutions, broker-dealers and certain financial institutions. The Act requires U.S. financial institutions to adopt new policies and procedures to combat money laundering and grants the Secretary of the Treasury broad authority to establish regulations and to impose requirements and restrictions on financial institutions’ operations. BlackRock has established policies and procedures designed to ensure compliance with the Act and the related regulations.

PNC currently holds its ownership interest in BlackRock through a subsidiary of PNC Bank. As such, BlackRock currently is not subject to regulation under the nonbanking provisions of the Bank Holding Company Act. If PNC were instead to hold its ownership interest in BlackRock at the holding company level, BlackRock would no longer be subject to OCC supervision and regulation as a subsidiary of a national bank, but would instead become subject to FRB supervision and regulation as a nonbank subsidiary of a financial holding company. A nonbank subsidiary of a financial holding company may engage in insurance underwriting, insurance investment, and merchant banking activities, as well as the activities permissible for a financial subsidiary of a national bank.

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Regulation (continued)

Additional legislation, changes in rules promulgated by the SEC, other federal and state regulatory authorities and self-regulatory organizations, or changes in the interpretation or enforcement of existing laws and rules may directly affect the method of operation and profitability of BlackRock and its subsidiaries. The profitability of BlackRock and its subsidiaries could also be affected by rules and regulations that impact the business and financial communities in general, including changes to the laws governing taxation, antitrust regulation and electronic commerce. In addition, the SEC and other governmental agencies have recently been investigating the mutual fund industry. The SEC has adopted and proposed various rules, and legislation has been introduced in Congress, the effect of which will further regulate the mutual fund industry and impose additional compliance obligations, and costs for fulfilling such obligations, on BlackRock.

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

Available Information

BlackRock files annual, quarterly and current reports, proxy statements and all amendments to these reports and other information with the SEC. BlackRock makes available free of charge on or through its website at http://www.blackrock.com BlackRock’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K (and all amendments to those reports) as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC, and also makes available on its website the charters for the Audit, Compensation, and Nominating Committees of the Board of Directors, its Code of Business Conduct and Ethics, its Code of Ethics for Chief Executive and Senior Financial Officers and its Corporate Governance Guidelines. Further, BlackRock will provide, without charge upon written request, a copy of BlackRock’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports as well as the committee charters, its Code Business Conduct and Ethics, its Code of Ethics for Chief Executive and Senior Financial Officers and its Corporate Governance Guidelines. Requests for copies should be addressed to Joseph Feliciani, Managing Director, BlackRock, Inc., 40 East 52^nd Street, New York, New York 10022. You may also read and copy any document BlackRock files at the SEC’s Public Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549. Please call 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Reports, proxy statements and other information regarding issuers that file electronically with the SEC, including BlackRock’s filings, are also available to the public from the SEC’s website at http://www.sec.gov.

BlackRock’s principal office, which is leased, is located at 40 East 52nd Street, New York, New York. BlackRock also leases office space in New York City at 345 Park Avenue and in Edinburgh, Scotland; San Francisco, California; Kingwood, Texas; White Plains, New York; Hong Kong; Tokyo, Japan and Boston, Massachusetts and owns an 84,500 square foot office building in Wilmington, Delaware.

As previously disclosed, BlackRock has received subpoenas from various federal and state governmental and regulatory authorities and various information requests from the Securities and Exchange Commission in connection with industry-wide investigations of mutual fund matters. BlackRock is continuing to cooperate fully in these matters. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commercial Commitments.”

BlackRock and persons to whom BlackRock may have indemnification obligations, in the normal course of business, are subject to various pending and threatened lawsuits in which claims for monetary damages are asserted. Management, after consultation with legal counsel, does not at the present time anticipate that the ultimate aggregate liability, if any, arising out of such lawsuits will have a material adverse effect on BlackRock’s financial position, although at the present time, management is not in a position to determine whether any such pending or threatened litigation will have a material adverse effect on BlackRock’s results of operations in any future reporting period.

No matters were submitted to a vote of BlackRock’s security holders during the fourth quarter of the year ended December 31, 2003.

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Part II

BlackRock’s class A common stock is listed on the NYSE and is traded under the symbol “BLK.” BlackRock’s class B common stock is not included for listing or quotation on any established market. At the close of business on February 18, 2004, there were 495 class A common stockholders of record and 32 class B common stockholders of record.

The following table sets forth for the periods indicated the high and low reported sale prices and dividends paid per share for the class A common stock as reported on the NYSE:

On February 26, 2004, BlackRock’s Board of Directors approved a 25% increase in BlackRock’s quarterly dividend to $0.25 per share.

Dividends

The declaration and payment of dividends by BlackRock are subject to the discretion of our board of directors. BlackRock is a holding company and, as such, our ability to pay dividends is subject to the ability of our subsidiaries to provide cash to us. The board of directors will determine future dividend policy based on our results of operations, financial condition, capital requirements and other circumstances. In addition, because we are a consolidated subsidiary of PNC Bank, federal banking restrictions on payments of dividends by PNC Bank may apply to us (see “Business-Regulation” in Item 1 above).

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The selected financial data presented below has been derived in part from, and should be read in conjunction with, the consolidated financial statements of BlackRock and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this filing. The data reflects certain reclassifications to conform with the current year’s presentation.

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N/A – Not applicable

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BlackRock, Inc., a Delaware corporation (together, with its subsidiaries, “BlackRock” or the “Company”), is one of the largest publicly traded investment management firms in the United States with approximately $309.4 billion of assets under management at December 31, 2003. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, liquidity and alternative investment separate accounts and mutual funds, including BlackRock Funds and BlackRock Liquidity Funds (formerly BlackRock Provident Institutional Funds). In addition, BlackRock provides risk management, investment analytics and enterprise investment system services and products to institutional investors under the BlackRock Solutions name. BlackRock is a majority-owned indirect subsidiary of The PNC Financial Services Group, Inc. (PNC), one of the largest diversified financial services organizations providing regional community banking; wholesale banking, including corporate banking; real estate finance and asset-based lending; wealth management; asset management and global fund services. As of December 31, 2003, PNC indirectly owned approximately 70% of BlackRock.

The following table summarizes BlackRock’s operating performance for the years ended December 31, 2003, 2002 and 2001:

BlackRock, Inc.

Financial Highlights

(Dollar amounts in thousands, except share data or otherwise stated)

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Note to table