Steven E. Buller

1
Managing Transformational Growth

• Steven E. Buller
• Chief Financial Officer

November 18, 2006
2
Forward-Looking Statement

• This presentation, and other statements that
  BlackRock may make, may contain forward-looking
  statements within the meaning of the Private
  Securities Litigation Reform Act, with respect to
  BlackRocks future financial or business
  performance, strategies or expectations.
  Forward-looking statements are typically
  identified by words or phrases such as trend,
  potential, opportunity, pipeline,
  believe, comfortable, expect, anticipate,
  current, intention, estimate, position,
  assume, outlook, continue, remain,
  maintain, sustain, seek, achieve, and
  similar expressions, or future or conditional
  verbs such as will, would, should, could,
  may or similar expressions.
• BlackRock cautions that forward-looking
  statements are subject to numerous assumptions,
  risks and uncertainties, which change over time.
  Forward-looking statements speak only as of the
  date they are made, and BlackRock assumes no duty
  to and does not undertake to update
  forward-looking statements. Actual results could
  differ materially from those anticipated in
  forward-looking statements and future results
  could differ materially from historical
  performance.
• In addition to factors previously disclosed in
  BlackRock's SEC reports and those identified
  elsewhere in this communication, the following
  factors, among others, could cause actual results
  to differ materially from forward-looking
  statements or historical performance (1) the
  introduction, withdrawal, success and timing of
  business initiatives and strategies (2) changes
  in political, economic or industry conditions,
  the interest rate environment or financial and
  capital markets, which could result in changes in
  demand for products or services or in the value
  of assets under management (3) the relative and
  absolute investment performance of BlackRock's
  investment products, including its separately
  managed accounts and the former Merrill Lynch
  Investment Managers (MLIM) business (4) the
  impact of increased competition (5) the impact
  of capital improvement projects (6) the impact
  of future acquisitions or divestitures (7) the
  unfavorable resolution of legal proceedings (8)
  the extent and timing of any share repurchases
  (9) the impact, extent and timing of
  technological changes and the adequacy of
  intellectual property protection (10) the impact
  of legislative and regulatory actions and reforms
  and regulatory, supervisory or enforcement
  actions of government agencies relating to
  BlackRock, Merrill Lynch or PNC (11) terrorist
  activities and international hostilities, which
  may adversely affect the general economy,
  domestic and local financial and capital markets,
  specific industries, and BlackRock (12) the
  ability to attract and retain highly talented
  professionals (13) fluctuations in foreign
  currency exchange rates, which may adversely
  affect the value of advisory fees earned by
  BlackRock (14) the impact of changes to tax
  legislation and, generally, the tax position of
  the Company (15) BlackRock's ability to
  successfully integrate the MLIM business with its
  existing business (16) the ability of BlackRock
  to effectively manage the former MLIM assets
  along with its historical assets under
  management and (17) BlackRock's success in
  maintaining the distribution of its products.
• BlackRock's Annual Reports on Form 10-K and
  BlackRock's subsequent filings with the SEC,
  accessible on the SEC's website at
  http//www.sec.gov and on BlackRocks website at
  http//www.blackrock.com, discuss these factors
  in more detail and identify additional factors
  that can affect forward-looking statements.

3
Introduction My Background

• BA Degree from Northwestern University in 1973
• Master of Management Degree from Northwestern
  University in 1975
  
• Partner and Co-Director of the Global Asset
  Management Services practice at Ernst Young LLP
  from 1975 2005
  
• Currently, Managing Director Chief Financial
  Officer of BlackRock, Inc. (NYSE BLK)
  

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Managing Transformational Growth

• Todays Discussion
• Introduction to BlackRock
• Globalization The Defining Trend in Investment
  Management
  
• Managing Transformational Growth
• Questions

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BlackRock A Historical Perspective
2006 Transformational Merger w/ MLIM
Assets Under Management ( Billions)
1995 Merged with PNC, offered common vision
1999 IPO (NYSE)
1988 Founded Blackstone Financial Management
2005 SSR acquisition
2000 BlackRock Solutions
1992 Changed name to BlackRock
Asset as of September 30, 2006
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BlackRock Transformational Change

• Merger with Merrill Lynch Investment Managers
  
  
• Announced agreement to acquire Merrill Lynch
  Investment Managers (MLIM) on February 15, 2006
  
• Closed September 29, 2006
• BlackRock issued 65 million shares to Merrill
  Lynch in exchange for MLIM (9.5 billion)
  
• Created one of the largest investment management
  firms in the world
  

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BlackRock has Achieved Strong Growth
675 growth in revenue from 01 06 (Pro-Forma)
Market Cap increased from 2 billion to 18 bill
ion thru 9/30/06
Revenue Market Cap Growth
2007 Revenues based on Annualized, 6/30/06,
Pro-Forma Revenues as shown in Form S-4, August
2006.
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But First, Lets Discuss Industry Trends
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Globalization The Defining Trend in Investment
Mgt.

• The World is Changing
• The world is big and getting bigger
• The world is flat and getting flatter
• Significantly impacting markets
• Influencing investment approaches

Globalization is the defining trend of our times
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Globalization The World is Getting Bigger
Global Financial Assets

• Explosive growth in the capital markets,
  particularly outside the United States

in trillions
Source McKinsey Global Institute
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Globalization Flatter Means More Interdependent

• Fundamental implications for markets and policies
  
  
• International reliance on the US consumer
• US reliance on foreign buyers of US bonds

2005 Account Balances
Oil Exporters 328b
China Emg Asia 140b 68b
Japan Euro 153b 24b
Rest of World 92b
US 805b
Source Lawrence Summers, Reflections on Global
Account Imbalances, Rest of world includes
statistical discrepancy
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Globalization We Have Benefited from
Dollarization

• But official institutions are now struggling to
  figure out what to do with their excess liquidity

Official Foreign Exchange Reserves
Source IMF
13
Globalization Dollarization Eventually Will End
Foreign Investment in US Debt (Rolling Six Month
Sum - in billions)
Sources Bloomberg National Bureau of
Statistics, China.
14
The time was right for change.
We had to adapt to the changing environment and
the opportunities.
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What We Did

• Brought together two great organizations
• Common culture of teamwork and excellence
• Singular focus on investment and risk management
• Enhanced ability to help clients solve problems
• Breadth and depth of capabilities that can set us
  apart
  
• Highly leveragable operating platform to
  facilitate information sharing, efficiency and
  integrity
  
• Truly global presence key to competing in a flat
  world

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What We Did
And it is a Perfect Fit of Complimentary
Strengths
Great Performance
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Why We Did It

• Our industry is changing
• Institutional investors want broader
  relationships with fewer managers
  
• Deep intellectual capital and creative solutions
  are essential
  
• Globalization is an imperative, not an option
• Operating and financial scale is increasingly
  critical

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What We Created - BlackRock Today

• Global provider of investment and risk management
  services
  
• Over USD 1 trillion in assets under management
• Among the 10 largest investment managers in the
  world
  
• The largest publicly traded asset manager in the
  United States
  

Assets Under Management By Product
Before 461.1 billion
After 1.075 trillion
6/30/06
9/30/06
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BlackRock Today

• A substantially Greater Global Presence
• Headquartered in New York City, offices in 18
  countries and 36 cities
  
• 4,700 employees Over one-third based outside
  the US
  
• 14 investment centers across the US, UK, Japan
  and Australia
  

Assets Under Management by Region
Before 461.1 billion
After 1.075 trillion
6/30/06
9/30/06
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A Truly Global Franchise
Employees
Investment Centers
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Managing Transformational Growth
Our World Got a Lot More Complicated
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The Process Starts Early

• Take good notes at Kellogg

What you learn is central to the process -
Finance always plays a central role

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Managing Transformational Growth
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Growth Opportunities (MA Analysis)

• Understand market factors and business trends
• Define strategy
• Analyze risks
• Identify candidates
• Prepare pro-forma models
• Consult with investment bankers and counsel
• Step back - look at entire picture make sure
  pieces fit together
  

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Managing Transformational Growth
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Leadership and Culture

• Build strong leadership encourage teamwork
• Establish and communicate culture values
• Understand your global environment adapt
  accordingly
  
• Tailor your organizational structure
• Focus on performance and clients

• There are no precise formulas to follow
• Find the right balance
• Develop tools to facilitate decentralization
• Share information and collaborate on behalf of
  clients
  
• Expect and reward excellence

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Managing Transformational Growth
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Infrastructure A Single Technology Platform
Global Network - 13 Data Centers. One Platform
is Essential.
Global Network
The sun never setsWe manage a 24x7 operation
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Infrastructure - A Single Technology Platform
Achieves
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Infrastructure A Single Platform Supports

• 70 million option adjusted calculations per
  week
  
• 3.5 million transactions annually
• 4,000 portfolios
• 4 trillion in assets on platform
• 800,000 investment positions
• 90 of the worlds largest investment
  organizations
  

Technology and risk management
supported by more than 1,000 professionals

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Managing Transformational Growth
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Financial Oversight Added Complexity
33
Financial Oversight Legal Entities Increased 6x
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Financial Oversight Global Challenges

• Revenue volatility recognition
• Regulatory capital compliance
• Staffing headcount
• Cash management
• General administrative expenses
• Unusual items (MA)
• Daily processes (payroll, payables, etc.)
• Global Sarbanes-Oxley compliance
• Financial reporting

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Financial Oversight Financial Reporting
Challenges
Foreign Currency Translation
COMPENSATION (Stock based, options, incentives)
convertible debt
Leases
Real Estate
Extinguishment of Liabilities
EPS/Other Comprehensive Income
Related Party Transactions
Servicing of Financial Assets
Purchase Price Allocation
IAS
DERIVATIVES
Embedded Derivatives
Partnership Accounting
Variable Interest Entities
Investment Company Accounting
SPEs
Software Costs
Revenue Recognition
SEC Reporting
Global, State Local Taxes
Hedging
Investments
CONTINGENCIES
DEFINED BENEFIT PENSION / DEFINED CONTRIBUTION
PLANS
hybrid instruments
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Financial Oversight Build Strong Controls

• Assess, document and enhance controls
• Automate controls and monitoring
• Utilize one General Ledger and consolidation
  process
  
• Leverage auditors/internal auditors
• Utilize functional and geographic oversight
• Hire smart, experienced leaders who know local
  markets
  
• No tolerance policy

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Financial Oversight People Processes Are Key

• Culture sets a standard and reinforces positive
  behavior
  
• Need uniform policies and procedures
• Regional / functional matrix is key
• Management reporting must support
  decentralization of day-to-day governance,
  together with clear accountability
  
• Systems and communications must support unified
  platform and team
  

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Financial Oversight Refine Management Metrics

• New revenue / at-risk revenue / opportunities
• Headcount and compensation
• Expenses by department and function
• Budget forecast variances
• Ratios (operating margin, compensation, sales)
• Cash flows
• MA costs and synergies, settlements

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Conclusion Managing Transformational Growth

• Key Points
• Adapt to your global environment
• Build strong leadership
• Establish and communicate culture values
• Develop a tailored and scaleable infrastructure
• Focus on performance and clients
• Build strong financial oversight
• Take good notes at Kellogg

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Managing Transformational Growth
Questions?