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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, 2004

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) 810-5300

(Registrant’s telephone number, including area code)

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

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

None

Indicate by check mark 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  ¨

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June 30, 2004 was approximately $906 million. There is no non-voting common stock of the registrant outstanding.

As of January 31, 2005, there were 19,766,637 shares of the registrant’s class A common stock issued and outstanding and 44,692,843 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 2005 annual meeting of stockholders to be held on April 27, 2005 (“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 $342 billion of assets under management at year-end 2004. We manage fixed income, cash management, equity and alternative investment products on behalf of institutional and individual investors worldwide. We also offer investment tools, outsourcing and advisory services to institutional investors under the BlackRock Solutions^® brand name.

BlackRock is a majority owned indirect subsidiary of The PNC Financial Services Group, Inc. (“PNC”). As of December 31, 2004, PNC indirectly owned approximately 71% of BlackRock. BlackRock is headquartered in New York City and has offices in Boston, Edinburgh, Hong Kong, Morristown, San Francisco, Singapore, Sydney, Tokyo and Wilmington.

In 2004, BlackRock’s total assets under management increased by approximately $32.4 billion, or 10%, from year-end 2003 levels. Over the past five years, assets under management have grown by over $177.2 billion, which represents a compound annual growth rate of 16%. Approximately 74% of growth in assets under management has been derived from net new business, as opposed to market appreciation. At December 31, 2004, fixed income products represented 71%, cash management products represented 23%, equity products represented 4% and alternative investment products represented 2% of BlackRock’s total assets under management. Approximately 73% of the assets are managed in separate accounts and 27% are managed in mutual funds, including our open-end fund families, BlackRock Funds and BlackRock Liquidity Funds.

Assets Under Management

By Asset Class

CAGR = Compound Annual Growth Rate

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

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Overview (continued)

BlackRock’s business results largely reflect our position as a leading provider of fixed income asset management services to institutional clients. Of the $240.7 billion of fixed income assets we managed at December 31, 2004, approximately $216.9 billion, or 90%, were from institutional clients, with the remaining $23.8 billion managed in our open-end and closed-end fixed income mutual funds. We also are among the largest managers of institutional money market funds and other cash management services. We have made significant investments to expand our product offerings to include equity and alternative investment products, and to enhance our ability to serve the needs of individual investors. In addition, we continue to invest in our BlackRock Solutions effort, which achieved revenue growth of 37% in 2004.

We have generated substantial increases in assets under management, which has supported strong revenue and earnings growth over time. Our financial condition remains strong, as evidenced by sizable increases in corporate liquidity (cash and investments) and stockholders’ equity.

In January 2005, the Company closed its acquisition of SSRM Holdings, Inc. (SSR) from MetLife, Inc. for consideration of approximately $274 million, consisting of $237 million in cash and 550,000 restricted shares of our class A common stock with the cash portion financed through the issuance of $250 million in convertible debentures. The debentures bear interest at a rate of 2.625% per annum and are convertible at an initial conversion rate of 9.7282 shares per $1,000 principal amount, representing a 32.5% premium from our last reported sale price on February 16, 2005.

Operating income as adjusted, reflects the exclusion of Long-Term Retention and Incentive Plan (LTIP) expense to be funded by PNC ($85.1 million) and appreciation of Rabbi trust assets ($4.5 million). Net income and diluted earnings per share, as adjusted, reflect the exclusion of the PNC LTIP funding obligation ($53.7 million and $0.81, respectively) and professional fees associated with the acquisition of SSR ($0.6 million and $0.01, respectively). These items were partially offset by New York State and City tax benefits ($18.1 million and $0.27, respectively and the sale of our interest in Trepp LLC ($1.6 million and $0.02, respectively).

Management believes that adjusted operating income, net income and earnings per diluted share are effective indicators of the Company’s profitability and financial performance over time. PNC’s LTIP funding obligation has been excluded because, exclusive of the impact related to LTIP participants’ put options, these non-cash charges will not impact BlackRock’s book value. Appreciation on Rabbi trust assets associated with our deferred compensation plans has been excluded because investment performance of these assets has a nominal impact on all of these indicators. The remaining items disclosed above, which have been deemed non-recurring by management, have been excluded to help ensure the comparability of this information to prior reporting periods.

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Overview (continued)

While we 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 over time:

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Products

BlackRock offers a wide variety of fixed income, cash management, 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

BlackRock’s fixed income business continued to expand in 2004, as assets under management increased 12% to $240.7 billion at December 31, 2004. We offer investors a broad range of products that span global bond markets and sectors, as well as various maturities along the yield curve. All portfolios are managed by BlackRock’s fixed income team, which is comprised of sector specialists who help formulate broad investment strategy and implement sector-specific themes in accordance with each portfolio’s investment objectives and guidelines. Our investment professionals are supported by extensive analytical tools and a shared research database that includes reports from both equity and credit analysts throughout the firm. Investment operations are facilitated by BlackRock’s proprietary portfolio management system, Aladdin^®, and by our experienced team of operations, administration and compliance professionals.

BlackRock’s fixed income portfolio management team has achieved competitive investment performance by consistently employing a disciplined process designed to add incremental returns in excess of our benchmarks. Eighty-eight percent or more of our institutional composites outperformed their benchmarks and 89% or more of taxable bond fund assets ranked in the top half of their Lipper peer groups for the 1, 3, 5, 7 and 10-year periods ended December 31, 2004.*

Net new business in 2004 totaled $23.3 billion before giving effect to $7.7 billion of outflows resulting from client mergers and corporate events. New assignments spanned our product base, resulting in greater diversification within fixed income. Core bond mandates, for example, have grown at a compound annual rate of 19% over the past five years to $94.5 billion at December 31, 2004. Over the same period, targeted duration and global bond assets have grown at an even faster pace, albeit from smaller bases. As a result, the proportion of fixed income assets invested in targeted duration portfolios increased from 24% to 30% since 1999, and global bond mandates expanded from less than 1% to 8% of total fixed income assets over the same period.

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Products (continued)

Fixed Income (continued)

During the year, we also further diversified our client base geographically. Non-U.S. investors sought additional exposure to the U.S. and global bond markets. These clients awarded BlackRock net new business of $11.6 billion, which represented nearly three-quarters of total net inflows in fixed income during the year. U.S. investors also contributed to our asset growth during the year, although asset allocation initiatives were focused more heavily on absolute return and other alternative investment strategies.

In 2004, we achieved greater diversification across client segments as well. Rebalancing by pension plan sponsors abated and net inflows from tax-exempt investors totaled $8.6 billion at December 31, 2004. Insurance companies and other financial institutions continued to pursue outsourcing options, awarding BlackRock $6.4 billion of net new business. Finally, we received $653 million of net inflows from private client and mutual fund investors.

Equity

During 2004, BlackRock’s equity assets under management rose 8% to $14.8 billion. Our equity products, which span the risk spectrum, employ either an active quantitative approach or an active fundamental approach, both of which seek to add value principally through stock selection. The former utilizes quantitative models to assess company data and predict expected returns on individual stocks, and a portfolio construction process that targets “best ideas,” while carefully controlling risks taken relative to the benchmark. The latter uses company research conducted by BlackRock’s equity analysts to develop views on individual stocks, and a portfolio construction process that targets “best ideas” across all sectors, with less emphasis on deviations from the benchmark other than the applicable capitalization range. Portfolios are managed by dedicated teams that benefit from shared information and a common trading, systems, operations, administration and compliance platform.

International equity assets declined 8% during the year to $8.0 billion. Our Edinburgh-based team manages the bulk of these assets in a variety of broad and regional mandates. Net outflows in these products, which totaled $2.1 billion, occurred largely during the first half of the year following a period of weak performance. By mid-year, performance had stabilized and outflows abated. For the year, half of our institutional composites were ranked in the top half of their peer groups.* In addition, the BlackRock Funds BlackRock International Equity Portfolio, the only fund the team managed for U.S. investors, ranked in the top quartile of its peer universe for 2004.*

Domestic equity assets, which include large, mid and small cap core, value, growth and opportunities portfolios, grew 35% in 2004 to $6.8 billion. Net new business of $1.1 billion fueled asset growth for each of our U.S.-based portfolio management teams. Seventy percent of our institutional composites ranked in the top half of their peer groups and all of our active quantitative equity composites outperformed their benchmarks in 2004.* In addition, 74% of our mutual fund assets ranked in the top half of their peer groups, and the BlackRock Funds Investment Trust Portfolio (formerly, the BlackRock Funds Select Equity Portfolio) ranked as one of the five best performing large cap core equity funds for 2004.*

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Products (continued)

Equity (continued)

In August 2004, we announced the acquisition of SSR, which we closed in January 2005. In part, this acquisition was motivated by the opportunity to expand our equity capabilities and broaden the range of products we offer. The acquisition enables us to expand resources available to investors in our small and mid cap growth, value and opportunities products and to add active fundamental large cap growth and asset allocation strategies. In addition, SSR’s energy team joined BlackRock and, before closing the SSR acquisition, we jointly raised $635 million in a closed-end fund in December 2004. In total, twenty equity investment professionals from SSR joined BlackRock, increasing breadth and depth in our equity business.

Cash Management

BlackRock provides cash management services to institutional and individual investors through a variety of money market funds and customized portfolios. At year-end 2004, assets managed in these strategies totaled $78.1 billion, up 5% from year-end 2003. Net new business totaled $3.7 billion during the year, although flows varied widely across products. Improved coordination between our cash management sales and investment professionals led to enhanced competitiveness of our portfolios and the introduction of selected new products tailored to meet institutional investor needs. Although average assets declined slightly from the prior year, the decline was less than that experienced by key competitors and our market share in institutional funds increased for the first time in years.

Money market funds represented 79% of our total cash management assets at December 31, 2004. Asset flows in these products can be quite volatile, particularly in response to prevailing monetary policy. Typically, when the Federal Reserve raises rates, as they did five times in 2004, yields on direct investments reflect the increase immediately (if not in anticipation), while money market fund yields reflect the increase more slowly. Institutional investors exploit this short-term yield differential by shifting assets out of money market funds and into direct investments. As expected, asset flows were volatile throughout 2004. We ended the year with net subscriptions of $3.7 billion across our institutional and retail funds.

U.S. money market funds are highly regulated to ensure that the fund shares maintain a constant dollar net asset value. These funds offer exceptional liquidity to investors, but are constrained in their ability to meet broader investment objectives. Investors seeking yield enhancement have limited choices such as taking additional credit risk or investing in longer-term securities. We work directly with clients to consider these options relative to their objectives and to offer appropriate investment alternatives. Inflows in customized portfolios (other than securities lending) totaled $3.0 billion in 2004.

PFPC Trust Company, a subsidiary of PNC, offers securities lending agent services to its mutual fund and other custody clients as well as a limited number of third party lending agent clients. As an accommodation and for minimal fees, BlackRock manages the cash collateral generated when these clients lend the securities in their portfolios. These services are most often used by equity mutual funds. Accordingly, flows in these portfolios are highly sensitive to, among other things, equity market conditions. In 2004, securities lending assets declined by $3.0 billion, almost fully reversing the $3.5 billion increase we experienced in 2003.

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Products (continued)

Cash Management (continued)

The outlook for BlackRock’s cash management business is heavily influenced by the rate environment. The Federal Reserve raised the discount rate again in February 2005, and further tightening is expected. Several factors, however, are expected to counterbalance the effect of rising rates. For example, the American Jobs Creation Act of 2004 provides incentives for multinational companies to repatriate earnings of non-U.S. subsidiaries, which is leading to increased demand for cash management products. In addition, European institutions are capitalizing on opportunities to utilize Sterling and Euro-denominated cash management funds.

Alternative Investment Products

Alternative investment products typically seek to achieve attractive absolute returns and/or return profiles minimally correlated with the broader markets. BlackRock offers a variety of alternatives that capitalize on established expertise throughout the firm. In 2004, assets managed in these products increased 18% to $8.2 billion, largely due to new product offerings which enabled us to achieve net inflows of $1.9 billion in 2004, exclusive of a $0.7 billion downward adjustment to reflect of the equity rather than the assets of Anthracite Capital, Inc., a BlackRock-managed REIT.

Our fixed income team manages a number of alternative investment strategies using the same investment process that supports $240.7 billion in traditional bond portfolios at December 31, 2004. In 2004, we introduced a credit-oriented hedge fund and an opportunistic fixed income product. The latter is a “best ideas” strategy with broad latitude to invest across the yield curve, credit curve and sectors of the global bond markets. These investment strategies were well-received by our clients, and together with our existing fixed income hedge funds, attracted $1.3 billion of net new business during the year, including assets reallocated from other portfolios managed by BlackRock.

Fixed income sector specialists manage $3.0 billion of assets in collateralized debt obligations (CDOs), including $400 million raised in a new vehicle offered during 2004. CDOs are structured products that typically invest in portfolios leveraged with a mix of high yield debt and bank loans. BlackRock invests its CDO portfolios in high yield securities and bank loans and manages the assets relative to the liabilities to maintain the integrity of the structure and the credit ratings on the debt. In January 2005, a team of specialists that manages asset-backed CDOs joined BlackRock through the SSR acquisition, expanding our CDO assets under management and adding a new dimension to our structured product offerings.

Another of our fixed income sector teams supports real estate debt investments, including several alternative investment products. During 2004, we raised $311 million of capital commitments for our second real estate mezzanine debt fund, including additional allocations from investors in our first fund.

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Products (continued)

Alternative Investment Products (continued)

Our alternative investment products also include the hedge fund of funds business we acquired in April 2003. During the year, we expanded the staff and enhanced the investment process supporting these products. Assets have grown 251% since the acquisition, both as a result of strong performance and net new business. The team’s original product, BlackRock HPB Multi-Manager Partners, L.L.C. reached its five-year anniversary at year-end, outperforming the HFRI Fund of Funds Composite index for the 1, 3 and 5-year periods ended December 31, 2004.

BlackRock Solutions

Since its formation, BlackRock has developed and maintained proprietary investment analytics and operating systems to support our business. These capabilities and the intellectual capital that manages them constitute a distinct product line, BlackRock Solutions, consisting of products and services that help institutions understand and manage the risks inherent in their financial activities. In 2004, we increased revenues from systems, risk management and investment accounting services by 37% from $63.3 million to $86.5 million, as we added twelve net new assignments and completed two system implementations. In addition, our Advisory Services Group was retained on two strategic advisory engagements in its first year of operations.

BlackRock Solutions core products consist of tools that support the investment process. These include Aladdin^®, our enterprise investment system, which integrates risk analytics and information processing capabilities to support efficient workflow. A number of large institutions, including corporations, pension plans and financial institutions, have selected Aladdin as their investment operating system. Clients that do not require all of the functionality of our enterprise system can choose ANSER^®, our Web-based analytics calculator, or our Green Package^® risk reporting service. We also offer our proprietary interest rate and prepayment models, typically in combination with our other tools. All of these products are offered on a service bureau basis; we do not sell our software.

Outsourcing services enable clients, including insurance companies, financial institutions and investment managers, to take advantage of the scale of our platform. These services include non-discretionary hedge management, generally offered as an add-on to risk management advice and executed in concert with our investment professionals. We also provide investment accounting outsourcing, typically bundled with asset management services. In addition, select BlackRock Solutions clients have extended their relationships to include ancillary outsourcing services, such as performance measurement and middle and back office trade support.

Advisory services are available to help clients address a variety of financial challenges arising from performance concerns, regulatory or accounting considerations, changing risk/return objectives, or shifting strategic priorities. Clients have engaged BlackRock to provide a wide range of strategic advisory services, including consulting on balance sheet management strategies, portfolio restructuring and business divestitures. In addition, we have been retained to provide best practices business reviews, generally pertaining to risk management processes. We also provide advice with respect to development of hedging programs, typically in conjunction with Green Package reporting and often supplemented with hedge management outsourcing.

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Products (continued)

BlackRock Solutions (continued)

Investors worldwide continue to focus on a variety of risk management issues and, accordingly, interest in our services remains high. In addition to serving a growing list of clients in the U.S., we were retained on our first international assignment for a Japanese client in 2004.

Clients

BlackRock serves a diverse base of institutional and individual investors globally. We offer our products both directly and through financial intermediaries. BlackRock seeks to distinguish itself by going beyond the traditional asset manager or financial system vendor relationship – we work with our clients to help them solve problems. These problems can be relatively straightforward, such as wanting to add or change exposure to a segment of the capital markets, or more complex, such as reengineering workflow processes or evaluating strategic financial management alternatives.

In 2004, clients turned to BlackRock for a variety of services. In investment management, we were awarded $27.3 billion of net new business before giving effect to $7.7 billion of outflows resulting from client mergers and corporate events. Approximately 230 clients have retained BlackRock for multiple assignments. During the year, we also were retained on fourteen net new investment system, advisory and outsourcing assignments. While certain of these mandates were expansions of existing relationships, the majority of these mandates were from new clients.

Growing Global Presence

BlackRock continues to benefit from increasing global recognition of our capabilities and expanded resources internationally. During the year, we were awarded $10 billion of net new business from 153 clients in 34 countries, bringing total assets managed for non-U.S. clients to $73.3 billion at December 31, 2004. Net new business in non-U.S. clients included growth in assets managed for clients based in North America (ex U.S.), Asia, Europe, as well as the Middle East totaling $5.8 million, $2.3 billion, $1.2 billion and $0.7 billion, respectively, and our strategic alliances in Japan and Australia continued to expand. Non-U.S. clients are served through our offices in New York, Edinburgh, Hong Kong and Tokyo, as well as offices in Singapore and Sydney, which we opened late last year to enhance client service and to expand new business efforts in those regions.

We also continue to build our asset base for U.S. investors. In 2004, net new business from U.S. clients totaled $9.6 billion across a wide range of products, increasing total assets managed for domestic investors to $268.4 billion at year-end. New business efforts encompass direct calling on institutional investors and their consultants, as well as wholesale distribution of our open-end and closed-end mutual funds through broker-dealers and other financial intermediaries. The professionals serving these clients are based throughout the country, as well as in our New York, Boston, Morristown, San Francisco and Wilmington offices.

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Clients (continued)

Diverse Clientele Worldwide

During the year, we had positive net new business in each of our client channels. Assets managed for tax-exempt institutions, including defined benefit and defined contribution pension plans, foundations, endowments and other non-profit organizations, increased 13% to $127.5 billion at December 31, 2004. For the year, net inflows from these investors totaled $7.0 billion, with growth in both directly managed accounts and sub-advisory relationships. We have long worked with pension plan sponsors and their consultants to address changing asset allocation strategies and to consider appropriate investment opportunities. These clients increasingly demonstrate a preference for more services from fewer managers, and we believe BlackRock can benefit from this trend.

Assets under management for taxable institutions worldwide increased 13% during 2004 to $107.0 billion at year-end 2004. Our insurance asset management services, which include, risk management and accounting services capabilities, are well positioned to help these clients address industry-related issues and meet company-specific objectives. These capabilities are equally applicable to other financial institutions, which have begun seeking advice and outsourcing as a means of solving their investment challenges in a period of weak loan demand, lower yields and a flatter yield curve. Net new business during the year included $1.0 billion of bank balance sheet assets. In aggregate, net inflows from taxable institutions totaled $15.3 billion, before giving effect to the corporate event and merger-related outflows referenced earlier. In addition, three of our financial institutions clients retained BlackRock to provide risk reporting and/or investment accounting solutions.

Flows from institutional cash management investors were volatile throughout the year, largely as a result of the Federal Reserve’s raising of interest rates. At year-end, assets in our institutional cash management products were $75.1 billion, up 8% from December 31, 2003. Our new business effort benefited from improved coordination between sales and portfolio management, resulting in $8.6 billion of net inflows in all products other than securities lending portfolios, which experienced $3.0 billion of net outflows. We constantly seek ways to provide innovative cash management solutions to our clients. In 2004, these efforts focused on helping clients identify opportunities to more profitably invest in a low rate environment, while assuming little additional risk.

Our private client business works closely with financial intermediaries and advisors to offer our open-end mutual fund family, BlackRock Funds, and to develop closed-end funds that enable individual investors to capitalize on market opportunities. During the year, our efforts led to $2.2 billion of net subscriptions through third party distributors, including $1.5 billion in closed-end funds, bringing private client assets to $32.1 billion at year-end. In December we raised $635 million in a closed-end equity fund offered jointly with SSR. Expanding the scale and scope of our mutual fund activities was one of the key strategies for pursuing our acquisition of SSR. In January 2005, we merged SSR’s open-end funds into BlackRock Funds, creating a broader product line-up and more than doubling our distribution and shareholder servicing resources. Increasing regulatory costs are driving the need for greater scale in mutual funds.

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Clients (continued)

Diverse Clientele Worldwide

During the year, we had positive net new business in each of our client channels. Assets managed for tax-exempt institutions, including defined benefit and defined contribution pension plans, foundations, endowments and other non-profit organizations, increased 13% to $127.5 billion at December 31, 2004. For the year, net inflows from these investors totaled $7.0 billion, with strong growth in both directly managed accounts and sub-advisory relationships. We have long worked with pension plan sponsors and their consultants to address changing asset allocation strategies and to consider appropriate investment opportunities. These clients increasingly demonstrate a preference for more services from fewer managers, and we have positioned BlackRock to benefit from that trend. In addition, a more robust mutual fund family should be of interest to defined contribution plans and smaller institutional investors, while our expanded alternative investment offerings are likely to have appeal to foundations and endowments. These areas represent potential sources of future growth.

Assets under management for taxable institutions worldwide increased 13% during 2004 to $107.0 billion at year-end. We continued to benefit from our leadership position in insurance asset management, an outgrowth of our unique ability to bundle investment management, risk management and accounting services to help clients address industry-related issues and meet company-specific objectives. These capabilities are equally applicable to other financial institutions, which have begun seeking advice and outsourcing as a means of solving their investment challenges in a period of weak loan demand, lower yields and a flatter yield curve. Net new business during the year included $1.0 billion of bank balance sheet assets, a relatively small amount, but evidence of what we expect to be a growing trend. In aggregate, inflows from taxable institutions totaled $15.3 billion, before giving effect to the corporate event and merger-related outflows referenced earlier. In addition, four of our financial institutions clients retained BlackRock to provide risk reporting and/or investment accounting solutions.

Flows from institutional cash management investors were volatile throughout the year, largely as a result of the Federal Reserve’s tightening stance. At year-end, assets in our institutional cash management products were $75.1 billion, up 8% from December 31, 2003. Our new business effort benefited from improved coordination between sales and portfolio management, resulting in $8.6 billion of net inflows in all products other than securities lending portfolios, which experienced $3.0 billion of net outflows. We constantly seek ways to provide innovative cash management solutions to our clients. In 2004, these efforts focused on helping clients identify opportunities to more profitably invest in a low rate environment, while assuming little additional risk. We also are frequently commended for our flexible and responsive client service, which is conducted through our call center and online account management tools. We believe that these efforts, together with competitive yields on our products, will enable us to better withstand volatility in asset flows, continue to build our client base and increase our market share over time.

Our private client business works closely with financial intermediaries and advisors to offer our open-end mutual fund family, BlackRock Funds, and to develop closed-end funds that enable individual investors to efficiently capitalize on market opportunities. During the year, our efforts led to $2.2 billion of net subscriptions through third party distributors, including $1.5 billion in new closed-end funds, bringing private client assets to $32.1 billion at year-end. Notably, in December we raised $635 million in a closed-end equity fund offered jointly with State Street Research (SSR). Expanding the scale and scope of our mutual fund activities was one of the key motivations for pursuing our acquisition of SSR. In January 2005, we merged SSR’s open-end funds into BlackRock Funds, creating a broader product line-up and [more than doubling] our distribution and shareholder servicing resources. Increasing regulatory costs are driving the need for greater scale in mutual funds. With the SSR acquisition, we believe we are better positioned than ever before to work with a broader universe of financial intermediaries and advisors to achieve meaningful organic growth in products designed to meet the needs of individual investors.

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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 identifying, measuring, monitoring, managing and analyzing market and operating risks, including investments in personnel and technology.

Risks Related to Our Business

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, in some cases, 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 because of lower investment management fees 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

Our ability to attract and retain quality personnel has contributed significantly to our growth and success and is important to attracting and retaining clients. The market for qualified fund managers, investment analysts, financial advisers and other professionals is competitive. There can be no assurance that we will be successful in our efforts to recruit and retain the required personnel. We have encouraged the continued retention of our 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 our chairman and chief executive officer, an employment agreement. However, there can be no assurance that we will be successful in retaining all of our key personnel. Loss of a significant number of key personnel could have an adverse effect on us.

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Risks Related to Our Business (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 Securities and Exchange Commission (SEC) and other governmental agencies have been investigating the mutual fund industry. The SEC has adopted and proposed various rules, and legislation has been passed 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 us. 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 SEC under the Investment Advisers Act of 1940, as amended (the Investment Advisers Act), and our mutual funds are registered with the SEC under the Investment Company Act of 1940, as amended (the Investment Company Act). The Investment Advisers Act imposes numerous obligations and fiduciary duties on registered investment advisers including record-keeping, operating and marketing requirements, disclosure obligations and prohibitions on fraudulent activities. The Investment Company Act imposes similar obligations, as well as additional detailed operational requirements, on investment advisers to registered investment companies. The failure of 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 or harm to our reputation, any of which could cause our earnings or stock price to decline.

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 providing the sophisticated risk analytics incorporated into our operating systems that support our investment advisory and BlackRock Solutions clients. Moreover, our technological advantage is dependent on a number of third parties who provide various types of data to us. The failure of these third parties to provide such data could result in operational difficulties and adversely impact our ability to provide services to our BlackRock Solutions clients. 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 480 separate account clients on December 31, 2004, of which the ten largest (excluding alternative investme