Contact: Paul Audet 212-409-3555 [email protected] BlackRock, Inc. Reports 56% Increase in Net Income for the First Quarter to $55.2 Million, Diluted Earnings per Share of $0.84 and Assets Under Management of $321 Billion New York, April 20, 2004 – BlackRock, Inc. (NYSE:BLK) today reported net income for the first quarter ended March 31, 2004 of $55.2 million, a 56% increase compared with $35.3 million earned in the first quarter of 2003 and a 33% increase compared with $41.4 million earned in the fourth quarter of 2003. Diluted earnings per share for the first quarter were $0.84, a 56% increase compared with $0.54 for the first quarter of 2003 and a 33% increase compared with $0.63 for the fourth quarter of 2003. As disclosed previously, BlackRock realized a net income benefit of approximately $8.7 million, or $0.13 per share, associated with the resolution of an audit performed by New York State on the Company’s state income tax returns filed from 1998 through 2001. Excluding this benefit, net income for the first quarter approximated $46.5 million, an increase of $11.2 million or 32% compared to the first quarter of 2003 and a $5.2 million or 13% increase compared to the fourth quarter of 2003. Diluted earnings per share for the first quarter, excluding the benefit, were $0.71, representing increases of 31% and 13% from the first and fourth quarters of 2003, respectively. Operating income of $69.8 million for the first quarter of 2004 increased $15.7 million, or 29%, compared to the first quarter of 2003 and $8.0 million, or 13%, compared to the fourth quarter of 2003. Operating results for the first quarter were characterized by strong growth in recurring revenue and a significant rise in performance fees which was mitigated by a continuing high level of legal and accounting related expenditures and the recognition of an impairment charge on intangible assets associated with closing the long-short equity hedge fund. Assets under management (“AUM”) increased $11.3 billion or 4% during the quarter and $47.1 billion or 17% year-over-year to $320.7 billion at March 31, 2004. During the quarter, net new business totaled $7.8 billion in all products other than securities lending, which remained volatile and ended the quarter down $1.4 billion. Distribution efforts were strong globally, with $4.8 billion of net new business from U.S. clients and $1.6 billion from international investors. For the twelve-month period ended March 31, 2004, net new business totaled $29.6 billion, including inflows in all client channels and in all products other than international equities. In addition, we continued to capitalize on increased demand for risk management and advisory services, adding seven new BlackRock Solutions® assignments during the quarter and sixteen new mandates over the past year for a variety of insurance companies, mortgage banks and other financial institutions. “BlackRock’s operating results for the first quarter were exceptional, with strong contributions from most of our asset management and BlackRock Solutions activities,” commented Laurence D. Fink, Chairman and CEO of BlackRock. “Our portfolio managers have generally done a good job navigating choppy markets to achieve competitive performance which, of course, is key for our future new business efforts.” Mr. Fink continued, “With signs of strong economic growth and rising interest rates, many assume bond managers will falter as net asset values decline. Despite the short term effect on assets, I believe that BlackRock’s opportunities have never been greater. Our pipeline is stronger and more diversified than ever, and we are well positioned to benefit from pension plan rebalancing into bonds that typically occurs as rates rise. Most importantly, our employees are working extraordinarily hard to serve our clients and to enhance and expand BlackRock’s platform.” BlackRock, Inc. First Quarter 2004 Earnings Release First Quarter Highlights Fixed income AUM increased $12.4 billion to $226.8 billion at March 31, 2004, led by continued strong growth across products, including $5.4 billion in targeted duration accounts and $2.1 billion in global bond mandates. Net new business totaled $7.7 billion, with $3.7 billion of fundings from pension plans and other tax-exempt investors, $3.6 billion from insurance companies and other taxable institutions, and $453 million from private client/fund investors. Investment performance reflected the market’s lack of conviction regarding the strength of the economy, Fed direction and geopolitical risk. For example, our core bond fund underperformed its benchmark for the quarter, but outperformed substantially through mid April (see performance notes). Liquidity assets were $73.8 billion at quarter-end, down less than 1% versus year-end levels. Securities lending outflows of $1.4 billion overshadowed $866 million of inflows in money market funds and other liquidity separate accounts. During the quarter, we continued to benefit from enhanced cross-selling efforts and increased our market share among institutional money market fund managers. Performance on our money market funds remained competitive; however, we remain cautious on liquidity flows in this market environment. Equity assets were $13.8 billion at March 31, 2004. During the quarter, domestic equity AUM increased $710 million, which was almost fully offset by a decline of $668 million in international equity accounts. New business in domestic equities included $533 million of net inflows in small/mid cap value and growth portfolios and in a new closed-end fund managed by our quantitative equity team. Equity performance was very strong, with ten of our eleven domestic equity funds and three of our five international equity funds ranked in the top Lipper quartile for the quarter ended March 31, 2004 (see performance notes). Alternative investment products ended the quarter at $6.3 billion under management, with $411 million of net inflows in our fixed income hedge funds and fund of fund products overwhelmed by two items. Specifically, asset flows reflected a downward adjustment of $704 million to reflect equity, rather than total assets, held in Anthracite, a real estate investment trust managed by BlackRock. In addition, the liquidation of the Cyllenius funds resulted in $163 million of outflows. Notwithstanding these two items, we have strong momentum in our fixed income, municipal, high yield, real estate and fund of fund strategies. BlackRock Solutions continued to capitalize on increased demand for a variety of risk management and outsourcing services. During the quarter, we added seven new assignments from existing and new clients. In addition, we have two system implementations in process and several potential mandates under discussion. Revenue on these products was up more than 30% versus the first quarter of 2003. Our potential new business pipeline remains exceptionally robust, with, as of quarter end, $6.0 billion of wins to be funded and over 400 searches in process for a variety of fixed income and equity products. In addition, pension plan rebalancing into bonds, which led to over $350 million of net inflows during the first quarter, is likely to gain momentum if interest rates continue to rise. In the past, these practices have contributed to significant outflows in periods of falling interest rates and considerable inflows during periods of rising rates. - 2 - BlackRock, Inc. First Quarter 2004 Earnings Release Total revenue for the quarter ended March 31, 2004 increased $39.1 million, or 27%, to $181.8 million compared to $142.8 million for the quarter ended March 31, 2003. Separate account revenue increased by $26.2 million, or 34%, mutual funds revenue increased by $7.7 million, or 16%, and other income increased by $5.1 million, or 31%, compared with the quarter ended March 31, 2003. The increase in separate account revenue consisted of a $13.6 million, or 18%, increase in separate account base fees driven by a $37.6 billion, or 19%, increase in AUM, concentrated in fixed income mandates, and an increase in performance fees of $12.7 million to $15.8 million compared to $3.1 million earned during the first quarter of 2003. The increase in performance fees was primarily related to fees earned from a collateralized debt obligation (“CDO”), the Company’s long-short equity hedge fund and several separate accounts. The CDO performance fee, which totaled $7.9 million, represents a portion of returns realized by its investors since the CDO’s inception in January 2001. Mutual fund revenue increased primarily due to $2.5 billion of new closed-end fund assets raised since March 31, 2003, and a $2.6 million increase in BlackRock Fund fees driven by a $1.3 billion increase in average assets and a $1.5 billion favorable shift in the asset mix from liquidity to fixed income. Other income increased primarily due to strong sales in BlackRock Solutions products and services. Three months ended Variance vs. March 31, December 31, March 31, 2003 December 31, 2003 2004 2003 2003 Amount % Amount % (Dollar amounts in thousands) Mutual funds revenue BlackRock Funds $18,782 $16,187 $18,865 $2,595 16.0% ($83) (0.4%) Closed-end Funds 1 6,789 11, 312 15,804 5, 477 48.4 985 6.2 BlackRock Liquidity Funds 20, 612 20, 999 21,486 (387) (1.8) (874) (4.1) STIF 263 242 263 21 8.7 - 0.0 Total mutual funds revenue 5 6,446 48, 740 56,418 7, 706 15.8 28 0.0 Separate accounts revenue Separate accounts base fees 88, 066 74, 514 83,059 13, 552 18.2 5 ,007 6.0 Separate accounts performance fees 15, 806 3, 111 1,800 12, 695 408.1 14, 006 778.1 Total separate accounts revenue 103,872 77, 625 84,859 26, 247 33.8 19, 013 22.4 Total investment advisory and administration fees 160,318 126,365 141, 277 33, 953 26.9 19, 041 13.5 Other income 21, 505 16, 386 19,934 5, 119 31.2 1 ,571 7.9 Total revenue $181,823 $142,751 $161,211 $39,072 27.4% $20,612 12.8% - 3 - BlackRock, Inc.