Table	of	Contents

# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

(Mark	One)

# ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

# For	the	fiscal	year	ended	December	31,	2011

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

BlackRock,	Inc.

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	or	Other	Jurisdiction	of Incorporation	or	Organization)

(Address	of	Principal	Executive	Offices)

(Registrant's	telephone	number,	including	area	code)

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

Title	of	each	class

Common	Stock,	$.01	par	value

Name	of	each	exchange	on	which	registered

New	York	Stock	Exchange

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

Indicate	by	check	mark	if	the	registrant	is	a	well-known,	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.				Yes		x				No		¨

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.				Yes		¨				No		x

Indicate	by	check	mark	whether	the	registrant	(1)	has	filed	all	reports	required	to	be	filed	by	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934	during	the	preceding	12	months (or	for	such	shorter	period	that	the	registrant	was	required	to	file	such	reports),	and	(2)	has	been	subject	to	such	filing	requirements	for	the	past	90	days.				Yes		x				No		¨

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Web	site,	if	any,	every	Interactive	Data	File	required	to	be	submitted	and	posted pursuant	to	Rule	405	of	Regulation	S-T	(§	232.405	of	this	chapter)	during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	and	post	such files).				Yes		x				No		¨

Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	(§	229.405	of	this	chapter)	is	not	contained	herein,	and	will	not	be	contained,	to	the best	of	the	registrant's	knowledge,	in	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	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company.	See	the	definitions	of	"large accelerated	filer,"	"accelerated	filer"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act.	(Check	one)

Large	accelerated	filer 	 x

Non-accelerated	filer 	 ¨		(Do	not	check	if	a	smaller	reporting	company)

		 Accelerated	filer

		 Smaller	reporting	company 	 ¨

Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Exchange	Act).				Yes		¨				No		x

The	aggregate	market	value	of	the	voting	common	stock	and	non-voting	common	stock	equivalents	held	by	non-affiliates	of	the	registrant	as	of	June	30,	2011	was	approximately	$33.7 billion.

DOCUMENTS	INCORPORATED	BY	REFERENCE

The	following	documents	are	incorporated	by	reference	herein:

Portions	of	the	definitive	Proxy	Statement	of	BlackRock,	Inc.	to	be	filed	pursuant	to	Regulation	14A	of	the	general	rules	and	regulations	under	the	Securities	Exchange	Act	of	1934,	as amended,	for	the	2012	annual	meeting	of	stockholders	to	be	held	on	May	24,	2012	("Proxy	Statement")	are	incorporated	by	reference	into	Part	III	of	this	Form	10-K.

# Index	to	Form	10-K

# Part	I

# Item	1. BUSINESS

# Overview

BlackRock,	Inc.	(NYSE:	BLK;	"BlackRock"	or	the	"Company")	is	the	world's	largest	publicly-traded	investment	management	firm	with	employees	in	27	countries	that	serve	clients in	over	100	countries	across	the	globe.	We	provide	a	broad	range	of	investment	and	risk	management	services	and	had	$3.513	trillion	of	assets	under	management	("AUM")	at December	31,	2011.	Our	clients	include	taxable,	tax-exempt	and	official	institutions	(including	pension	funds,	endowments,	insurance	companies,	corporations,	financial	institutions, central	banks	and	sovereign	wealth	funds)	as	well	as	retail	investors	and	high	net	worth	individuals.	The	Company	is	highly	regulated,	serves	its	clients	as	a	fiduciary	and	derives	all	of its	revenues	from	client	business.	We	do	not	engage	in	proprietary	trading	or	other	activities	that	could	conflict	with	the	interests	of	our	clients.

The	December	2009	combination	of	BlackRock	and	Barclays	Global	Investors	("BGI")	created	a	firm	with	unsurpassed	breadth	of	investment	expertise	and	risk	management capabilities	across	the	global	capital	markets.	Our	unique	platform	enables	us	to	offer	active	(alpha)	investments	with	index	(beta)	products	and	risk	management	to	develop	tailored solutions	for	clients.	Our	product	range	includes	single-	and	multi-asset	class	portfolios	investing	in	equities,	fixed	income,	alternatives	and/or	money	market	instruments.	We	offer	our products	directly	and	through	intermediaries	in	a	variety	of	vehicles,	including	open-end	and	closed-end	mutual	funds,	iShares ®	exchange-traded	funds	("ETFs")	and	other	exchange- traded	products	(together	with	ETFs,	"ETPs"),	collective	investment	funds	and	separate	accounts.	We	also	offer	our	BlackRock	Solutions ®	("BRS")	investment	systems,	risk management	and	advisory	services	to	institutional	investors.

BlackRock	is	an	independent,	publicly	traded	company,	with	no	single	majority	shareholder	and	a	majority	of	independent	directors	on	its	Board.	At	December	31,	2011	The	PNC Financial	Services	Group,	Inc.	("PNC")	owned	approximately	24.0%	of	BlackRock's	voting	common	shares	outstanding	and	approximately	21.0%	of	total	capital	stock	while	Barclays Bank	PLC	("Barclays")	held	approximately	2.2%	of	BlackRock's	voting	common	shares	and	approximately	19.7%	of	total	capital	stock.

Management	seeks	to	achieve	attractive	returns	for	stockholders	over	time	by,	among	other	things,	capitalizing	on	the	following	factors:

•the	Company's	diversified	product	offerings,	which	enhance	its	ability	to	offer	a	variety	of	traditional	and	alternative	investment	products	across	the	risk	spectrum	and	to tailor	single-	and	multi-	asset	class	investment	solutions	to	address	specific	client	needs;

•the	Company's	longstanding	commitment	to	risk	management	and	the	continued	development	of,	and	increased	interest	in,	BRS	products	and	services;

•the	Company's	global	presence	and	commitment	to	best	practices	around	the	world,	with	approximately	43%	of	employees	outside	the	U.S.	supporting	local	investment capabilities	and	serving	clients,	and	approximately	44%	of	total	AUM	managed	for	clients	domiciled	outside	the	United	States;

•the	strength	of	the	Company's	collaborative	culture	and	unified	technology	platform	that	allows	professionals	to	share	and	compare	information	across	teams	and	time zones,	translating	local	insight	in	one	part	of	the	world	into	action	in	another;	and

•the	growing	recognition	of	the	global	BlackRock	brand,	and	the	depth	and	breadth	of	the	Company's	intellectual	capital.

BlackRock	operates	in	a	global	marketplace	characterized	by	a	high	degree	of	market	volatility	and	economic	uncertainty,	factors	that	can	significantly	affect	earnings	and	stockholder returns	in	any	given	period.

The	Company's	ability	to	increase	revenue,	earnings	and	stockholder	value	over	time	is	predicated	on	its	ability	to	generate	new	business,	including	business	in	BRS	products	and services.	New	business	efforts	are	dependent	on	BlackRock's	ability	to	achieve	clients'	investment	objectives	in	a	manner	consistent	with	their	risk	preferences	and	to	deliver	excellent client	service.	All	of	these	efforts	require	the	commitment	and	contributions	of	BlackRock	employees.	Accordingly,	the	ability	to	attract,	develop	and	retain	talented	professionals	is critical	to	the	Company's	long-term	success.

# Item	1. BUSINESS	(continued)

# Overview	(continued)

Selected	financial	results	for	the	last	six	years	are	shown	below:

|  |  |  |  |  |  |  | 5	Year |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions,\texcept\tper\tshare\tamounts) | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | CAGR |
| Total\trevenue | $9,081 | $8,612 | $4,700 | $5,064 | $4,845 | $2,098 | 34% |
| Operating\tincome | $3,249 | $2,998 | $1,278 | $1,593 | $1,294 | $472 | 47% |
| Operating\tmargin | 35.8% | 34.8% | 27.2% | 31.5% | 26.7% | 22.5% | 10% |
| Non-operating\tincome\t(expense)^(1) | $(116) | $36 | $(28) | $(422) | $162 | $37 | \t(226%) |
| Net\tincome\tattributable\tto\tBlackRock,\tInc. | $2,337 | $2,063 | $875 | $784 | $993 | $321 | 49% |
| Diluted\tearnings\tper\tcommon\tshare | $12.37 | $10.55 | $6.11 | $5.78 | $7.37 | $3.83 | 26% |

# Selected	Non-GAAP	Financial	Results

|  |  |  |  |  |  |  | 5	Year |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions,\texcept\tper\tshare\tamounts) | (2)\n2011 | (2)\n2010 | (2)\n2009 | 2008 | 2007 | 2006 | CAGR |
| As\tadjusted: |  |  |  |  |  |  |  |
| Operating\tincome | $3,392 | $3,167 | $1,570 | $1,662 | $1,518 | $674 | 38% |
| Operating\tmargin | 39.7% | 39.3% | 38.2% | 38.7% | 37.4% | 36.7% | 2% |
| Non-operating\tincome\t(expense)^(1) | $(113) | $25 | $(46) | $(384) | $150 | $29 | \t(231%) |
| Net\tincome\tattributable\tto\tBlackRock,\tInc. | $2,239 | $2,139 | $1,021 | $856 | $1,077 | $443 | 38% |
| Diluted\tearnings\tper\tcommon\tshare | $11.85 | $10.94 | $7.13 | $6.30 | $7.99 | $5.29 | 18% |

Net	of	net	income	(loss)	attributable	to	non-controlling	interests. (1)

See	reconciliation	to	GAAP	measures	in	Item	7,	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	—	Overview. (2)

See	additional	information	in	Item	6,	Selected	Financial	Data.

BlackRock	reports	its	financial	results	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	of	America	("GAAP");	however,	management	believes	that evaluating	the	Company's	ongoing	operating	results	may	be	enhanced	by	also	evaluating	additional	non-GAAP	basis	financial	measures.	Management	reviews	non-GAAP	financial measures	to	assess	ongoing	operations	and,	for	the	reasons	described	below,	considers	them	to	be	effective	indicators,	for	both	management	and	investors,	of	BlackRock's	financial performance	over	time.	BlackRock's	management	does	not	advocate	that	investors	consider	such	non-GAAP	financial	measures	in	isolation	from,	or	as	a	substitute	for,	financial information	prepared	in	accordance	with	GAAP.

Operating	Income,	as	Adjusted.	GAAP	reported	operating	income	includes	certain	significant	items,	the	after-tax	impact	of	which	management	considers	non-recurring	or	transactions that	ultimately	will	not	impact	BlackRock's	book	value	and,	therefore,	are	excluded	in	calculating	operating	income,	as	adjusted.

Operating	income,	as	adjusted	(a	non-GAAP	measure),	excludes	certain	expenses	incurred	related	to	the	integration	of	the	acquisitions	of	Merrill	Lynch	Investment	Managers ("MLIM"),	the	fund	of	funds	business	of	Quellos	Group,	LLC	("Quellos")	and	BGI,	as	well	as	advisory	fees,	legal	fees	and	consulting	transaction	expenses	related	to	the	acquisition	of BGI	from	Barclays	on	December	1,	2009	(the	"BGI	Transaction"),	a	2007	termination	fee	for	closed-end	fund	administration	and	servicing	arrangements	with	Merrill	Lynch,	2011	UK lease	exit	costs,	2008,	2009	and	2011	restructuring	charges	and	compensation	expense	associated	with	appreciation	(depreciation)	on	assets	related	to	certain	BlackRock	deferred compensation	plans.	These	expenses	have	been	excluded	from	operating	income,	as	adjusted,	because	they	have	been	deemed	non-recurring	by	management	and	to	help	enhance	the comparability	of	this	information	to	prior	periods.

The	portion	of	compensation	expense	associated	with	certain	of	BlackRock's	long-term	incentive	plan	("LTIP")	awards	that	has	been	or	will	be	funded	through	distributions	to participants	of	shares	of	BlackRock	stock	held	by	PNC	and	a	Merrill	Lynch	cash	compensation	contribution,	a	portion	of	which	has	been	received,	has	been	excluded	because, exclusive	of	the	impact	related	to	the	exercise	of	LTIP	participants'	put	options,	primarily	in	the	three	months	ended	March	31,	2007,	these	charges	do	not	impact	BlackRock's	book value.	The	expense	related	to	the	Merrill	Lynch	cash	compensation	contribution	ceased	at	the	end	of	the	third	quarter	2011.	A	detailed	discussion	of	the	LTIP	funded	by	PNC	is included	in	Note	13,	Stock-Based	Compensation,	to	the	consolidated	financial	statements	beginning	on	page	F-1	of	this	Form	10-K.

Operating	Income,	as	Adjusted	(continued).	Compensation	expense	associated	with	appreciation	(depreciation)	on	investments	related	to	certain	BlackRock	deferred	compensation plans	has	been	excluded	as	returns	on	investments	set	aside	for	these	plans,	which	substantially	offset	this	expense,	are	reported	in	non-operating	income	(expense).

Management	believes	that	operating	income	exclusive	of	these	costs	is	a	useful	measure	in	evaluating	BlackRock's	operating	performance	and	helps	enhance	the	comparability	of	this information	for	the	reporting	periods	presented.

Operating	Margin,	as	Adjusted.	Operating	income	used	for	measuring	operating	margin,	as	adjusted,	is	equal	to	operating	income,	as	adjusted,	excluding	the	impact	of	closed-end	fund launch	costs	and	commissions.	Management	believes	that	excluding	such	costs	and	commissions	is	useful	because	these	costs	can	fluctuate	considerably	and	revenues	associated	with the	expenditure	of	these	costs	will	not	fully	impact	the	Company's	results	until	future	periods.

Operating	margin,	as	adjusted,	allows	the	Company	to	compare	performance	from	period-to-period	by	adjusting	for	items	that	may	not	recur,	recur	infrequently	or	may	fluctuate	based on	market	movements,	such	as	restructuring	charges,	transaction/integration	costs,	UK	lease	exit	costs,	closed-end	fund	launch	costs	and	fluctuations	in	compensation	expense	based	on mark-to-market	movements	in	investments	held	to	fund	certain	compensation	plans.	The	Company	also	uses	operating	margin,	as	adjusted,	to	monitor	corporate	performance	and efficiency	and	as	a	benchmark	to	compare	its	performance	with	other	companies.	Management	uses	both	the	GAAP	and	non-GAAP	financial	measures	in	evaluating	the	financial performance	of	BlackRock.	The	non-GAAP	measure	by	itself	may	pose	limitations	because	it	does	not	include	all	the	Company's	revenues	and	expenses.

Revenue	used	for	operating	margin,	as	adjusted,	excludes	distribution	and	servicing	costs	paid	to	related	parties	and	to	other	third	parties.	Management	believes	the	exclusion	of	such costs	is	useful	to	BlackRock	because	it	creates	consistency	in	the	treatment	for	certain	contracts	for	similar	services,	which	due	to	the	terms	of	the	contracts,	are	accounted	for	under GAAP	on	a	net	basis	within	investment	advisory,	administration	fees	and	securities	lending	revenue.	Amortization	of	deferred	sales	commissions	is	excluded	from	revenue	used	for operating	margin	measurement,	as	adjusted,	because	such	costs,	over	time,	substantially	offset	distribution	fee	revenue	earned	by	the	Company.	Reimbursable	property	management compensation	represented	compensation	and	benefits	paid	to	personnel	of	Metric	Property	Management,	Inc.	("Metric"),	a	subsidiary	of	BlackRock	Realty	Advisors,	Inc.	("Realty"). Prior	to	the	transfer	in	2008	to	a	third	party,	these	employees	were	retained	on	Metric's	payroll	when	certain	properties	were	acquired	by	Realty's	clients.	The	related	compensation	and benefits	were	fully	reimbursed	by	Realty's	clients	and	have	been	excluded	from	revenue	used	for	operating	margin,	as	adjusted,	because	they	did	not	bear	an	economic	cost	to BlackRock.	BlackRock	excludes	from	revenue	used	for	operating	margin,	as	adjusted,	the	costs	related	to	each	of	these	items	as	a	proxy	for	such	offsetting	revenues.

Non-Operating	Income	(Expense),	Less	Net	Income	(Loss)	Attributable	to	Non-controlling	Interests,	as	adjusted.	Non-operating	income	(expense),	less	net	income	(loss)	attributable	to non-controlling	interests	("NCI"),	as	adjusted,	equals	non-operating	income	(expense),	GAAP	basis,	less	net	income	(loss)	attributable	to	NCI,	GAAP	basis,	adjusted	for	compensation expense	associated	with	(appreciation)	depreciation	on	investments	related	to	certain	deferred	compensation	plans.	The	compensation	expense	offset	is	recorded	in	operating	income. This	compensation	expense	has	been	included	in	non-operating	income	(expense),	less	net	income	(loss)	attributable	to	NCI,	as	adjusted,	to	offset	returns	on	investments	set	aside	for these	plans,	which	are	reported	in	non-operating	income	(expense),	GAAP	basis.

Management	believes	that	non-operating	income	(expense),	less	net	income	(loss)	attributable	to	NCI,	as	adjusted,	provides	for	comparability	of	this	information	to	reporting	periods and	is	an	effective	measure	for	reviewing	BlackRock's	non-operating	contribution	to	its	results.	As	compensation	expense	associated	with	(appreciation)	depreciation	on	investments related	to	certain	BlackRock	deferred	compensation	plans,	which	is	included	in	operating	income,	offsets	the	gain	(loss)	on	the	investments	set	aside	for	these	plans,	management believes	non-operating	income	(expense),	less	net	income	(loss)	attributable	to	NCI,	as	adjusted,	provides	a	useful	measure,	for	both	management	and	investors,	of	BlackRock's	non- operating	results	that	impact	book	value.

Net	Income	Attributable	to	BlackRock,	Inc.,	as	adjusted.	Management	believes	net	income	attributable	to	BlackRock,	Inc.,	as	adjusted,	and	diluted	earnings	per	common	share,	as adjusted,	are	useful	measures	of	BlackRock's	profitability	and	financial	performance.	Net	income	attributable	to	BlackRock,	Inc.,	as	adjusted,	equals	net	income	attributable	to BlackRock,	Inc.,	GAAP	basis,	adjusted	for	significant	non-recurring	items,	charges	that	ultimately	will	not	impact	BlackRock's	book	value	or	certain	tax	items	that	do	not	impact	cash flow.

Net	income	attributable	to	BlackRock,	Inc.,	as	adjusted,	and	diluted	earnings	per	common	share,	as	adjusted	(non-GAAP	measures),	exclude	the	after-tax	impact	of	the	2008,	2009	and 2011	restructuring	charges,	UK	lease	exit	costs,	the	2007	termination	of	closed-end	fund	administration	and	servicing	arrangements	with	Merrill	Lynch,	LTIP	expense	to	be	funded	by PNC	and	by	a	Merrill	Lynch	cash	compensation	contribution,	a	portion	of	which	has	been	received,	the	MLIM,	Quellos	and	BGI	integration	costs,	BGI	transaction	costs,	the	effect	on deferred	income	tax	expense	attributable	to	changes	in	corporate	income	tax	rates	as	a	result	of	legislation	and	a	state	tax	election.

See	Item	7,	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations,	for	a	detailed	reconciliation	of	GAAP	reported	operating	income,	non-operating income	(expense)	less	net	income	(loss)	attributable	to	non-controlling	interests,	net	income	attributable	to	BlackRock,	Inc.	and	diluted	earnings	per	common	share	to	adjusted	non- GAAP	operating	income,	non-operating	income	(expense)	less	net	income	(loss)	attributable	to	non-controlling	interests,	net	income	attributable	to	BlackRock,	Inc.	and	diluted earnings	per	common	share.

# AUM	by	Asset	Class

# Component	Changes	in	AUM	by	Asset	Class

Amounts	include	acquisition	adjustments	and	reclassification	of	certain	AUM	acquired	from	Barclays	in	December	2009,	other	reclassifications	to	conform	to	current	period combined	AUM	policy	and	presentation,	BGI	merger-related	outflows	due	to	manager	concentration	considerations	prior	to	third	quarter	2011	and	outflows	from	scientific active	equity	performance	prior	to	second	quarter	2011. (1)

Percentage	represents	compounded	annual	growth	rate. (2)

AUM	represents	the	broad	ranges	of	financial	assets	we	manage	for	clients	on	a	discretionary	basis	pursuant	to	investment	management	agreements	that	are	expected	to	continue	for	at least	12	months.	In	general,	reported	AUM	reflects	the	valuation	methodology	that	corresponds	to	the	basis	used	for	billing	(for	example,	net	asset	value).	Reported	AUM	does	not include	assets	for	which	we	provide	risk	management	or	other	forms	of	non-discretionary	advice,	or	assets	that	we	are	retained	to	manage	on	a	short-term,	temporary	basis	(for example,	in	a	transition	mandate,	as	described	below).

Investment	management	fees	are	typically	expressed	as	a	percentage	of	net	asset	value.	We	also	earn	performance	fees	on	certain	portfolios	relative	to	an	agreed-upon	benchmark	or return	hurdle.	On	some	products,	we	also	may	earn	securities	lending	fees.	In	addition,	BlackRock	offers	its	proprietary	Aladdin ®	investment	system	as	well	as	risk	management, outsourcing	and	advisory	services,	to	institutional	investors	under	the	BRS	name.	Revenue	for	these	services	may	be	based	on	several	criteria	including	value	of	positions,	number	of users,	accomplishment	of	specific	deliverables	or	other	objectives.

At	December	31,	2011,	total	AUM	was	$3.513	trillion,	representing	a	compound	annual	growth	rate	of	26%	over	the	last	five	years.	AUM	growth	during	the	period	was	achieved through	the	combination	of	net	market	valuation	gains,	net	new	business	and	mergers,	including	the	acquisitions	of	the	fund-of-funds	business	of	Quellos,	which	added	approximately $21.9	billion	of	assets	in	2007	and	BGI,	which	added	approximately	$1.844	trillion	of	assets	in	December	2009.	These	acquisitions	significantly	changed	our	AUM	mix,	from predominantly	active	fixed	income	and	equity	in	2005	to	a	broadly	diversified	product	range,	as	described	below.

# Products*

# Asset	Classes

|  |  |  | merger- | merger- | Market	/ |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Net\tNew | related |  | FX\tApp |  |
| (Dollar\tamounts\tin\tmillions) | 12/31/2010 | Business | outflows | (1) | (Dep) | 12/31/2011 |
| Equity | $1,694,467 | $24,139 | $(27,573) | $(27,573) | $(130,927) | $1,560,106 |
| Fixed\tincome | \t 1,141,324 | 4,326 | (526) | (526) | 102,598 | \t 1,247,722 |
| Multi-asset\tclass | 185,587 | 42,654 | — | — | (3,071) | 225,170 |
| Alternatives | 109,738 | (3,770) | (152) | (152) | (868) | 104,948 |
| Long-term | \t 3,131,116 | 67,349 | (28,251) | (28,251) | (32,268) | \t 3,137,946 |
| Cash\tmanagement | 279,175 | (22,899) | — | — | (1,611) | 254,665 |
| Advisory | 150,677 | (29,903) | — | — | (704) | 120,070 |
| Total | $3,560,968 | $14,547 | $(28,251) | $(28,251) | $(34,583) | $3,512,681 |

Amounts	include	BGI	merger-related	outflows	due	to	manager	concentration	considerations	prior	to	third	quarter	2011	and	outflows	from	scientific	active	equity	performance prior	to	second	quarter	2011. (1)

At	year-end	2011,	long-term	assets	totaled	$3.138	trillion,	or	89%	of	total	AUM,	with	50%	in	equities,	40%	in	fixed	income,	7%	in	multi-asset	class	and	3%	in	alternative	investments. The	remaining	$374.7	billion	of	AUM	represented	cash	management	and	long-term	liquidation	advisory	mandates.	In	2011,	we	generated	$67.3	billion	of	net	new	business	in	long- term	products	before	$28.3	billion	of	BGI	merger-related	outflows	(see	below).	Net	inflows	in	long-term	products	were	partially	offset	by	$22.9	billion	of	net	outflows	in	cash management,	largely	reflecting	institutional	reaction	to	the	continued	low	rate	environment	and	$29.9	billion	of	planned	net	distributions	from	advisory	portfolios.

Unless	stated	otherwise,	net	new	business	figures	are	before	giving	effect	to	BGI	merger-related	outflows.	Total	merger-related	outflows	since	the	BGI	Transaction	represented	less than	9%	of	the	acquired	AUM.

* See	Product	Performance	Notes	below.

# Products	(continued)

Equity	and	Fixed	Income.	Total	equity	and	fixed	income	AUM	reflects	the	diversity	of	our	model	and	includes	a	wide	range	of	both	active	and	passive	strategies	(including	our institutional	index	and	iShares	products).	Year-end	2011	equity	AUM	of	$1.560	trillion	decreased	$134.4	billion	or	8%	from	the	end	of	2010,	largely	reflecting	the	effect	of	lower market	valuations.	Net	new	business	of	$24.1	billion	was	more	than	offset	by	$130.9	billion	of	market	valuation	and	foreign	exchange	losses.	Passive	strategies	represented	82%	of equity	AUM	with	the	remaining	18%	managed	in	active	mandates.	Fixed	income	AUM	ended	2011	at	$1.248	trillion,	rising	$106.4	billion,	or	9%,	relative	to	December	31,	2010, reflecting	$4.3	billion	of	net	new	business	and	$102.6	billion	of	market	valuation	and	foreign	exchange	gains.	Fixed	income	AUM	was	almost	evenly	split	between	passive	and	active mandates	with	51%	and	49%,	respectively.	BGI	merger-related	outflows	totaled	$27.6	billion	and	$0.5	billion	in	equities	and	fixed	income,	respectively,	primarily	reflecting	the	effect of	manager	concentration	considerations	combined	with	outflows	in	scientific	active	equities	("SAE")	due	to	past	performance.	(See	additional	discussion	under	"AUM	by	Investment Style,"	below.)

Investment	advisory	and	administration	fees	for	the	majority	of	our	investment	products	are	calculated	using	daily	or	monthly	average	AUM.	During	periods	of	significant	market volatility,	quarterly	average	AUM	may	differ	from	actual	average	AUM	used	for	billing	purposes.	For	example,	for	the	fourth	quarter	of	2011,	equity	market	volatility	caused	the quarterly	and	monthly	averages	to	differ	by	more	than	2%	for	equities.	Specifically,	quarterly	average	AUM	for	active,	index	and	iShares	equities	was	$271	billion,	$828	billion	and $402	billion,	while	monthly	average	AUM	was	$280	billion,	$851	billion	and	$415	billion,	respectively.

In	addition,	BlackRock's	effective	fee	rates	fluctuate	due	to	changes	in	AUM	mix.	Approximately	50%	of	BlackRock's	equity	AUM	is	tied	to	international	markets,	including emerging	markets,	which	tend	to	have	higher	fee	rates	than	similar	U.S.	equity	strategies.	Accordingly,	fluctuations	in	international	equity	markets,	which	do	not	consistently	move	in tandem	with	U.S.	markets,	may	have	a	greater	impact	on	BlackRock's	effective	equity	fee	rates	and	revenues.

# Multi-Asset	Class

# Component	Changes	in	Multi-Asset	Class	AUM

|  |  | Net	New | FX	App |  |
| :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 12/31/2010 | Business | (Dep) | 12/31/2011 |
| Asset\tallocation | $115,106 | $16,960 | $(5,999) | $126,067 |
| Fiduciary | 28,566 | \t 18,352 | 3,122 | 50,040 |
| Target\tdate/risk | 41,915 | 7,342 | (194) | 49,063 |
| Multi-asset\tclass | $185,587 | $42,654 | $(3,071) | $225,170 |

Multi-asset	class	AUM	totaled	$225.2	billion	at	year-end	2011,	up	21%	or	$39.6	billion.	During	the	year,	we	were	awarded	$42.7	billion	of	net	new	business,	while	portfolio	values declined	by	$3.1	billion.	BlackRock's	multi-asset	class	team	manages	a	variety	of	bespoke	mandates	for	a	diversified	client	base	that	leverage	our	broad	investment	expertise	in	global equities,	currencies,	bonds	and	commodities,	and	our	extensive	risk	management	capabilities.	Investment	solutions	might	include	a	combination	of	long-only	portfolios	and	alternative investments	as	well	as	tactical	asset	allocation	overlays.

At	December	31,	2011,	institutional	investors	represented	63%	of	multi-asset	class	AUM,	while	retail	and	high	net	worth	investors	accounted	for	37%.	At	year-end	2011,	55%	of multi-asset	class	AUM	was	managed	for	clients	based	in	the	Americas,	38%	in	Europe,	the	Middle	East	and	Africa	("EMEA")	and	7%	in	Asia-Pacific.	Flows	reflected	ongoing institutional	demand	for	our	advice	in	an	increasingly	challenging	investment	environment	with	$35.7	billion	or	84%	of	net	new	inflows	from	institutional	clients	and	$6.7	billion	or 16%	from	retail	investors.	During	the	year,	clients	in	the	Americas	and	EMEA	awarded	BlackRock	net	new	business	of	$44.2	billion,	which	was	partially	offset	by	net	outflows	of	$1.5 billion	from	clients	in	Asia-Pacific.

•Asset	allocation	and	balanced	products	represented	56%,	or	$126.1	billion	of	multi-asset	class	AUM	at	year-end,	up	$11.0	billion	as	strong	net	new	business	of	$17.0 billion	was	partially	offset	by	market	valuation	losses	of	$6.0	billion.	These	strategies	combine	equity,	fixed	income	and	alternative	components	for	institutional investors	seeking	a	tailored	solution	relative	to	a	specific	benchmark	and	within	a	risk	budget.	In	certain	cases,	these	strategies	seek	to	minimize	downside	risk	through diversification,	derivatives	strategies	and	tactical	asset	allocation	decisions.	Our	industry-leading	global	allocation	funds	garnered	over	$7.5	billion	in	net	inflows	for	the year,	finishing	2011	with	over	$70	billion	in	AUM.

•Fiduciary	management	services	accounted	for	22%,	or	$50.0	billion,	of	multi-asset	class	AUM	at	December	31,	2011	and	increased	$21.5	billion	during	the	year	or	75%, driven	by	net	inflows	of	$18.4	billion.	These	are	complex	mandates	in	which	pension	plan	sponsors	retain	BlackRock	to	assume	responsibility	for	some	or	all	aspects	of plan	management.	These	customized	services	require	strong	partnership	with	the	client's	investment	staff	and	trustees	in	order	to	tailor	investment	strategies	to	meet client-specific	risk	budgets	and	return	objectives.

•Target	date	and	target	risk	funds	ended	the	year	at	$49.1	billion,	representing	22%	of	total	multi-asset	class	AUM,	an	increase	of	17%	from	year-end	2010.	The	increase was	driven	by	net	inflows	of	$7.3	billion,	a	year-over-year	organic	growth	rate	of	18%.	These	products	include	our	LifePath	and	LifePath	Retirement	Income ®	offerings, which	are	qualified	default	investment	options	under	the	Pension	Protection	Act	of	2006.	These	products	utilize	a	proprietary	asset	allocation	model	that	seeks	to	balance risk	and	return	over	an	investment	horizon	based	on	the	investor's	expected	retirement	timing.

Market	volatility,	particularly	in	the	latter	half	of	2011,	presented	challenges	for	asset	allocation	strategies.	Our	multi-asset	class	performance	has	been	mixed,	with	65%	of	AUM	above benchmark	or	peer	medians	for	the	one-year	period,	while	26%	of	AUM	performed	above	benchmark	or	peer	medians	for	the	three-year	time	period	and	91%	of	AUM	outperformed benchmark	or	peer	medians	for	the	five	years	ended	December	31,	2011.

# Alternatives

# Component	Changes	in	Alternatives	AUM

|  |  |  | merger- | merger- | Market	/ |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Net\tNew | related | related | FX\tApp |  |
| (Dollar\tamounts\tin\tmillions) | 12/31/2010 | Business | outflows | (1) | (Dep) | 12/31/2011 |
| Core | $63,603 | $48 | $(152) | $(152) | $148 | $63,647 |
| Currency\tand\tcommodities | 46,135 | (3,818) | — | — | (1,016) | 41,301 |
| Alternatives | $109,738 | $(3,770) | $(152) | $(152) | $(868) | $104,948 |

Amounts	include	BGI	merger-related	outflows	due	to	manager	concentration	considerations	prior	to	third	quarter	2011. (1)

Alternatives	totaled	$104.9	billion	at	year-end	2011,	down	$4.8	billion,	largely	due	to	net	outflows	of	$3.8	billion.	Net	inflows	of	$2.4	billion	into	single-strategy	hedge	funds	were largely	offset	by	outflows	from	other	core	alternatives	products.	Commodities	net	inflows	of	$1.8	billion	were	offset	by	net	outflows	of	$5.6	billion	from	active	and	passive	currency strategies.	Net	market	valuation	declines	of	$0.9	billion	also	dampened	results.	We	continued	to	make	significant	investments	in	our	alternatives	platform	in	2011,	including	the addition	of	three	new	hedge	funds,	a	suite	of	new	alternatives	mutual	funds	and	direct	private	equity	as	well	as	the	formation	of	a	strategic	relationship	with	NTR	plc	to	launch renewable	power	products.	We	believe	that	as	alternatives	become	more	mainstream	and	investors	adapt	their	asset	allocation	strategies	to	best	meet	their	investment	objectives,	they will	further	increase	their	use	of	alternative	investments	to	complement	core	holdings.	With	highly-regarded	alternative	investment	experts	armed	with	industry-leading	access	to information,	insights	and	deal	flow	and	a	multi-faceted	risk	management	process,	BlackRock	is	well	positioned	to	capitalize	on	this	trend	and	has	been	recognized	for	achievements	in the	alternatives	space.

Institutional	investors	represented	73%,	or	$76.5	billion,	of	alternatives	AUM	with	retail	and	high	net	worth	investors	comprising	an	additional	9%,	or	$9.1	billion,	at	December	31, 2011.	iShares	commodities	products	represented	the	remaining	$19.3	billion,	or	18%,	of	AUM	at	year	end.	The	geographic	mix	was	well	diversified,	with	56%	of	AUM	managed	for clients	in	the	Americas,	22%	for	clients	in	EMEA	and	22%	for	clients	in	Asia-Pacific.

The	BlackRock	Alternative	Investors	("BAI")	group	coordinates	our	alternative	investment	efforts,	including	product	management,	business	development	and	client	service.	Our alternatives	products	fall	into	two	main	categories	–	core,	which	includes	hedge	funds,	funds	of	funds	and	real	estate	offerings,	and	currency	and	commodities.	The	products	offered under	the	BAI	umbrella	are	described	below.

Core:

•Hedge	Funds	ended	the	year	with	$28.0	billion	of	AUM,	up	$1.3	billion	as	$2.0	billion	of	net	inflows	into	multi-strategy	and	global	macro	hedge	funds	were	partially offset	by	market	valuation	declines	of	$0.5	billion.	Hedge	fund	AUM	includes	a	variety	of	single-strategy,	multi-strategy	and	global	macro	hedge	funds	as	well	as portable	alpha,	distressed	and	opportunistic	offerings.	Products	include	both	open-end	hedge	funds	and	similar	products,	and	closed-end	funds	created	to	take	advantage of	specific	opportunities	over	a	defined,	often	longer-term	investment	horizon.

•Funds	of	Funds	AUM	decreased	$1.2	billion,	or	5%,	to	$22.8	billion	at	December	31,	2011,	including	$17.6	billion	in	funds	of	hedge	funds	and	hybrid	vehicles	and	$5.2 billion	in	private	equity	funds	of	funds.	Declines	were	driven	by	net	outflows	of	$1.7	billion,	partially	offset	by	$0.5	billion	of	market	valuation	gains.	Performance	was strong	and	a	growing	number	of	institutional	clients	worldwide	sought	our	expertise	in	customized	accounts	and	commingled	vehicles.

•Real	Estate	AUM	totaled	$12.8	billion	in	a	variety	of	real	estate	debt	and	equity	products.	AUM	decreased	$0.1	billion	as	$0.3	billion	of	net	outflows	were	largely	offset by	$0.2	billion	of	market	valuation	gains.	Market	performance	was	positive	overall	with	gains	for	U.S.	funds	and	separate	accounts	only	partly	offset	by	valuation declines	in	U.K.	funds	and	international	separate	accounts.	Offerings	include	high	yield	debt	and	core,	value-added	and	opportunistic	equity	portfolios.

# Currency	and	Commodities:

AUM	in	currency	and	commodities	strategies	totaled	$41.3	billion	at	year-end	2011,	down	$4.8	billion	during	the	year,	reflecting	$3.8	billion	of	net	outflows,	primarily	in	active currency	and	currency	overlays,	and	$1.0	billion	of	market	valuation	declines.	These	products	include	a	range	of	active	and	passive	products	primarily	managed	through	institutional separate	accounts.	Our	iShares	commodities	products	represented	$19.2	billion	of	AUM	and	are	not	eligible	for	performance	fees.

Cash	Management	and	Securities	Lending.	Cash	management	AUM	totaled	$254.7	billion	at	December	31,	2011,	down	$24.5	billion,	or	9%,	from	year-end	2010.	Cash	management products	include	taxable	and	tax-exempt	money	market	funds	and	customized	separate	accounts.	Portfolios	may	be	denominated	in	U.S.	dollar,	Euro	or	British	pound.

At	year-end	2011,	84%	of	cash	AUM	was	managed	for	institutions	and	16%	for	retail	and	high	net	worth	investors.	The	investor	base	was	also	predominantly	domestic,	with	70%	of AUM	managed	for	investors	in	the	Americas	and	30%	for	clients	in	other	regions,	mostly	EMEA-based.	We	suffered	net	outflows	during	the	year,	as	investors	sought	higher	yields	in bank	deposits,	direct	money	market	investments	and	longer-term	assets.	Among	institutional	investors,	we	saw	the	movement	of	unprecedented	levels	of	cash	to	U.S.	domiciled	bank accounts,	partially	due	to	the	unlimited	guarantee	from	the	Federal	Deposit	Insurance	Corporation	("FDIC")	on	bank	deposits.	Additionally,	retail	investors	looked	to	different	asset classes	in	search	of	higher	yields	as	cash	rates	remained	low.	We	expect	flows	in	cash	management	to	remain	volatile	due	to	continued	global	market	uncertainty,	persistent	low	interest rates	and	potential	regulatory	changes.

The	cash	management	team	also	invests	the	cash	we	receive	as	collateral	for	securities	on	loan	in	other	portfolios.	Securities	lending,	which	is	offered	as	a	potential	source	of incremental	returns	on	long-term	portfolios,	is	managed	by	a	dedicated	team,	supported	by	quantitative	analysis,	proprietary	technology	and	disciplined	risk	management.	Fees	for securities	lending	can	be	structured	as	a	share	of	earnings	and/or	a	percentage	of	the	value	of	the	cash	collateral.	The	value	of	the	securities	on	loan	and	the	revenue	earned	is	captured in	the	corresponding	asset	class	being	managed.	The	value	of	the	collateral	is	not	included	in	AUM.

Outstanding	loan	balances	ended	the	year	at	approximately	$120	billion,	up	from	$104	billion	at	year-end	2010.	The	majority	of	the	increase	occurred	during	the	second	quarter,	with balances	remaining	relatively	stable	through	the	remainder	of	the	year.	Demand	generally	strengthened	in	the	latter	part	of	the	year,	as	equity	market	volatility	rose	in	response	to	the European	debt	crisis.	The	strong	rally	in	December	raised	notional	values	on	loans	and	offset	any	decline	in	end-user	borrowing	due	to	falling	volatility.	The	proportion	of	securities commanding	premium	lending	fees	grew	slowly	through	the	year,	and	started	2012	above	the	2011	average.

BlackRock	employs	a	conservative	investment	style	for	cash	and	securities	lending	collateral	that	emphasizes	quality,	liquidity	and	superior	client	service	through	all	market	cycles. Disciplined	risk	management,	including	a	rigorous	credit	surveillance	process,	is	an	integral	part	of	the	investment	process.	BlackRock's	Cash	Management	Risk	Committee	has established	risk	limits,	such	as	aggregate	issuer	exposure	limits	and	maturity	limits,	across	many	of	the	products	BlackRock	manages,	including	over	all	of	its	cash	management products.	In	the	ordinary	course	of	our	business,	there	may	be	instances	when	a	portfolio	may	exceed	an	internal	risk	limit	or	when	an	internal	risk	limit	may	be	changed.	No	such instances,	individually	or	in	the	aggregate,	have	been	material	to	the	Company.	To	the	extent	that	daily	evaluation/reporting	of	the	profile	of	the	portfolios	identifies	that	a	limit	has been	exceeded,	the	relevant	portfolio	will	be	adjusted.	To	the	extent	a	portfolio	manager	would	like	to	obtain	a	temporary	waiver	of	a	risk	limit,	the	portfolio	manager	must	obtain approval	from	the	credit	research	team,	which	is	independent	from	the	cash	management	portfolio	managers.	While	a	risk	limit	may	be	waived,	such	temporary	waivers	are	infrequent.

# Investment	Styles

# Long-term	AUM	by	Asset	Class	&	Style

| (Dollar	amounts	in	millions) | Active | index | iShares | Total |
| :--- | :--- | :--- | :--- | :--- |
| Equity | $275,156 | $865,299 | $419,651 | $1,560,106 |
| Fixed\tincome | 614,804 | 479,116 | 153,802 | 1,247,722 |
| Multi-asset\tclass | 218,459 | 6,149 | 562 | 225,170 |
| Alternatives | 79,262 | 6,345 | 19,341 | 104,948 |
| Long-term | $1,187,681 | $1,356,909 | $593,356 | $3,137,946 |

# Component	Changes	in	Long-term	AUM	by	Style

|  |  |  | BGI |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | merger- | merger- | Market\t/ |  |
|  |  | Net\tNew | related |  | FX\tApp |  |
| (Dollar\tamounts\tin\tmillions) | 12/31/2010 | Business | outflows | (1) | (Dep) | 12/31/2011 |
| Active | $1,190,480 | $(2,718) | $(7,508) | $(7,508) | $7,427 | $1,187,681 |
| Institutional\tindex | \t 1,350,424 | \t 17,067 | (20,743) | (20,743) | 10,161 | \t 1,356,909 |
| iShares | 590,212 | \t 53,000 | — | — | (49,856) | 593,356 |
| Long-term | $3,131,116 | $67,349 | $(28,251) | $(28,251) | $(32,268) | $3,137,946 |

Long-term 	product	offerings	include	active	and	passive	(index)	strategies.	Our	active	strategies	seek	to	earn	attractive	returns	in	excess	of	a	market	benchmark	or	performance	hurdle (alpha)	while	maintaining	an	appropriate	risk	profile.	In	contrast,	passive	strategies	seek	to	closely	track	the	returns	of	a	corresponding	index	(beta),	generally	by	investing	in substantially	the	same	underlying	securities	within	the	index	or	in	a	subset	of	those	securities	selected	to	approximate	a	similar	risk	and	return	profile	of	the	index.

Although	many	clients	use	both	active	and	passive	strategies,	the	application	of	these	strategies	differs	greatly.	For	example,	clients	may	use	index	products	to	gain	exposure	to	a market	or	asset	class	pending	reallocation	to	an	active	manager.	This	has	the	effect	of	increasing	turnover	of	index	AUM.	In	addition,	institutional	index	assignments	tend	to	be	very large	(multi-billion	dollars)	and	typically	reflect	low	fee	rates.	This	has	the	potential	to	exaggerate	the	significance	of	net	flows	in	institutional	index	on	BlackRock's	revenues	and earnings.

# Active	Strategies

# Component	Changes	in	AUM	-	Active

|  |  |  | BGI |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | merger- | merger- | Market\t/ |  |
|  |  | Net\tNew | related |  | FX\tApp |  |
| (Dollar\tamounts\tin\tmillions) | 12/31/2010 | Business | outflows | (1) | (Dep) | 12/31/2011 |
| Equity | $334,532 | $(22,876) | $(6,943) | $(6,943) | $(29,557) | $275,156 |
| Fixed\tincome | 592,303 | (17,397) | (413) | (413) | 40,311 | 614,804 |
| Multi-asset\tclass | 181,101 | 40,796 | — | — | (3,438) | 218,459 |
| Alternatives | 82,544 | (3,241) | (152) | (152) | 111 | 79,262 |
| Long-term | $1,190,480 | $(2,718) | $(7,508) | $(7,508) | $7,427 | $1,187,681 |

We	offer	two	types	of	active	strategies:	those	that	rely	primarily	on	fundamental	research	and	those	that	utilize	primarily	quantitative	models	to	drive	portfolio	construction.	Long- term	active	AUM	decreased	$2.8	billion	to	$1.188	trillion	at	year-end	2011	with	23%	in	equities,	52%	in	fixed	income,	18%	in	multi-asset	class	and	7%	in	alternatives.	Favorable markets	contributed	$7.4	billion	of	growth,	which	was	partially	offset	by	$2.7	billion	of	net	outflows,	largely	reflecting	investors'	risk-averse	posture	in	equities	and	fixed	income throughout	most	of	the	year.	AUM	growth	was	hampered	by	BGI	merger-related	outflows	of	$7.5	billion,	primarily	in	SAE.

See	discussions	of	Cash	Management	and	Advisory	(BRS)	offerings. 1

Active	Equity.	Active	equity	AUM	of	$275.2	billion	decreased	18%,	or	$59.4	billion,	from	year-end	2010.	Results	reflected	$29.6	billion	of	market	valuation	losses	and	net	outflows	of $22.9	billion	before	the	final	merger-related	outflows	of	$6.9	billion	in	the	first	half	of	2011.	Active	equity	reflects	a	broad	product	set	including	global	and	regional	portfolios;	value, growth	and	core	products;	large,	mid	and	small	cap	strategies;	and	selected	sector	funds.	We	believe	an	improving	U.S.	economy,	strong	corporate	balance	sheets	and	sustained	growth in	the	emerging	markets	bodes	well	for	equity	markets	in	2012,	although	geopolitical	risks,	particularly	in	Europe,	continue	to	weigh	heavily	on	investors'	psyches.

BlackRock	manages	active	equity	portfolios	for	a	diverse	base	of	institutional	and	retail	clients	globally.	At	December	31,	2011,	46%	of	our	active	equity	AUM,	or	$125.5	billion,	was managed	on	behalf	of	institutional	investors	in	separate	accounts,	collective	investment	trusts	and	mutual	funds	and	54%,	or	$149.7	billion,	was	managed	for	retail	and	high	net	worth investors,	largely	through	open-end	mutual	funds	and	separately	managed	accounts.	Approximately	48%	of	our	active	equity	AUM	was	managed	for	investors	based	in	the	Americas, 38%	in	EMEA	and	14%	in	Asia-Pacific.

•Fundamental	active	equity	ended	2011	with	$208.5	billion	in	AUM.	Net	inflows	of	$3.7	billion	in	U.S.	equity	and	sector-specific	strategies	were	more	than	offset	by outflows	of	$8.6	billion	in	global	and	non-U.S.	regional	mandates.	Market	valuation	losses	of	$25.3	billion	further	eroded	AUM.	Our	fundamental	active	equity strategies	seek	to	add	value	relative	to	a	specified	index	or	on	an	absolute	basis,	primarily	through	a	combination	of	proprietary	research	and	portfolio	manager judgment.	In	total,	44%,	54%	and	86%	of	fundamental	active	equity	AUM	outperformed	their	benchmarks	or	peer	medians	for	the	one-,	three-	and	five-year	periods ended	December	31,	2011,	respectively.

•Scientific	active	equity	AUM	declined	30%	to	$66.7	billion,	driven	by	net	outflows	of	$18.0	billion	before	giving	effect	to	$6.4	billion	of	BGI	merger-related	outflows recorded	in	the	first	quarter	of	2011.	Market	valuation	losses	of	$4.3	billion	further	weighed	on	results.	SAE	strategies	seek	superior	investment	outcomes	through	a stock	selection	process	that	aims	to	systematically	find	and	exploit	pricing	opportunities,	while	rigorously	managing	risk	and	cost.	As	a	result	of	recent	investments	in	the platform,	we	continue	to	generate	improving	performance	with	56%,	53%	and	43%	of	SAE	AUM	outperforming	their	benchmarks	or	peer	medians	for	the	one-,	three- and	five-year	periods	ended	December	31,	2011,	respectively.

Active	Fixed	Income.	Active	fixed	income	AUM	ended	2011	at	$614.8	billion,	an	increase	of	4%,	or	$22.5	billion,	from	the	end	of	2010,	reflecting	market	valuation	gains	of	$40.3 billion,	which	were	partially	offset	by	$17.4	billion	of	net	outflows.	Fixed	income	mandates	are	often	tailored	to	client-specified	liabilities,	accounting,	regulatory	or	rating	agency requirements,	or	other	investment	policies.	Overall,	U.S.	bonds	enjoyed	solid	absolute	returns	in	2011,	as	demonstrated	by	a	7.8%	return	in	the	Barclays	Capital	U.S.	Aggregate	Index. While	sovereign	credit	risk	remains	a	concern,	particularly	in	parts	of	Europe,	we	currently	expect	Federal	Reserve	policy	in	the	U.S.	to	target	stable	interest	rates.

Total	active	fixed	income	AUM	included	81%	in	institutional	assets	and	19%	in	retail	and	high	net	worth	assets.	The	client	base	reflects	our	historical	roots	with	70%	of	active	fixed income	AUM	managed	for	investors	in	the	Americas,	21%	for	EMEA-domiciled	clients	and	9%	for	investors	in	the	Asia-Pacific	region.	Net	inflows	of	$3.8	billion	from	Asia-Pacific clients	were	more	than	offset	by	outflows	of	$21.2	billion	from	investors	in	the	Americas	and	EMEA.

•Fundamental	fixed	income	AUM	totaled	$571.1	billion,	or	93%,	of	active	fixed	income	AUM	at	year-end	2011.	These	products	emphasize	risk-controlled	sector rotation	and	security	selection	driven	by	sector	experts	and	direct	interaction	with	issuers	and	market	makers.	Fundamental	strategies	increased	$17.6	billion,	driven	by $37.2	billion	of	market	valuation	gains.	These	results	were	partially	offset	by	$19.2	billion	of	net	outflows,	largely	reflecting	the	effect	of	client	changes	in	overall	asset allocation	(re-balancing),	long-term	performance	concerns	and	interest	in	indexation.	Positive	flows	of	$8.9	billion	into	domestic	specialty	mandates	such	as	U.S.	credit, high	yield	and	inflation	protected	products	and	$6.0	billion	into	U.S.	municipal	bonds	were	more	than	offset	by	outflows	of	$13.0	billion	from	local	currency	strategies and	$10.0	billion	of	outflows	from	U.S.	core	funds.	Fundamental	taxable	fixed	income	strategies	ended	the	year	with	43%,	78%	and	43%	of	AUM	above	their benchmarks	or	peer	medians	for	the	one-,	three-,	and	five-year	periods	ended	December	31,	2011,	respectively,	while	our	active	tax-exempt	business	showed	strong results	with	61%,	66%	and	73%	of	AUM	above	their	benchmarks	or	peer	medians	for	the	same	time	periods.

•	 Model-based	fixed	income	AUM	grew	$4.9	billion,	or	13%,	ending	the	year	at	$43.7	billion,	reflecting	net	inflows	of	$1.8	billion	and	$3.1	billion	of	market	valuation gains.	These	strategies	employ	models	to	identify	relative-return	opportunities	and	to	apply	those	results,	subject	to	a	pragmatic	review	of	model	risk,	on	a	systematic basis	across	portfolios.	Performance	in	our	model-based	fixed	income	strategies	was	strong,	with	70%,	86%	and	83%	of	AUM	above	benchmarks	or	peer	medians	for the	one-,	three-	and	five-year	periods	ended	December	31,	2011,	respectively.

Multi-asset	class	and	Alternatives.	Active	strategies	represented	97%	of	multi-asset	class	AUM	and	76%	of	AUM	in	alternative	investments.	These	products	are	discussed	earlier. (Please	see	the	corresponding	sections	under	"Products	–	Asset	Classes"	for	additional	information.)

# Institutional	Index

# Component	Changes	in	AUM	-	Institutional	Index

|  |  |  | merger- | merger- | Market	/ |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Net\tNew | related |  | FX\tApp |  |
| (Dollar\tamounts\tin\tmillions) | 12/31/2010 | Business | outflows | (1) | (Dep) | 12/31/2011 |
| Equity | $911,775 | $22,402 | $(20,630) | $(20,630) | $(48,248) | $865,299 |
| Fixed\tincome | 425,930 | (5,152) | (113) | (113) | 58,451 | 479,116 |
| Multi-asset\tclass | 4,116 | 1,659 | — | — | 374 | 6,149 |
| Alternatives | 8,603 | (1,842) | — | — | (416) | 6,345 |
| Long-term | $1,350,424 | $17,067 | $(20,743) | $(20,743) | $10,161 | $1,356,909 |

Includes	BGI	merger-related	outflows	due	to	manager	concentration	considerations	prior	to	third	quarter	2011. (1)

Institutional	index	AUM,	generally	managed	in	common	trust	funds	or	separate	accounts,	comprised	39%	of	total	AUM	at	December	31,	2011.	Long-term	AUM	growth	of	$6.5	billion was	driven	by	net	new	business	of	$17.1	billion,	before	the	effect	of	the	final	BGI	merger-related	outflows,	and	$10.2	billion	of	market	valuation	gains.	Merger-related	outflows	of $20.7	billion	were	concentrated	among	a	small	number	of	clients.

•Equity	products	comprised	64%	of	institutional	index	AUM,	ending	the	year	at	$865.3	billion,	with	net	inflows	of	$22.4	billion	more	than	offset	by	market	valuation declines	of	$48.2	billion.	Net	inflows	of	$34.6	billion	across	global	equity,	regional	strategies	and	currency	overlays	were	partially	offset	by	outflows	of	$11.6	billion from	U.S.	equity	mandates.	Toward	year-end,	U.S.	equities	experienced	modest	net	inflows	in	the	face	of	more	stable	economic	and	market	conditions.	Institutional index	equity	portfolios	closely	tracked	their	corresponding	benchmarks	with	96%,	84%,	and	98%	of	AUM	at	or	above	tracking	error	tolerance	for	the	one-,	three-,	and five-year	periods	ended	December	31,	2011,	respectively.

•Fixed	income	products	represented	35%,	or	$479.1	billion,	of	institutional	index	AUM,	an	increase	of	12%	or	$53.2	billion.	Net	outflows	totaled	$5.2	billion,	reflecting outflows	of	$14.6	billion	in	local	currency	mandates,	only	partly	offset	by	inflows	of	$9.4	billion	across	global	and	U.S.	core,	sector-specialty	and	target	duration strategies.	Investors	generally	sought	the	relative	safety	of	U.S.	fixed	income	products	and	retreated	from	European	exposure	as	uncertainty	around	the	sovereign	debt crisis	continued.	Institutional	index	fixed	income	portfolios	closely	tracked	their	respective	benchmarks	with	97%,	92%,	and	99%	of	AUM	at	or	above	tracking	error tolerance	for	the	one-,	three,	and	five-year	periods	ended	December	31,	2011,	respectively.

•Less	than	1%	of	institutional	index	AUM	is	in	alternatives	or	multi-asset	class	products.	(See	discussions	under	"Products	-	Asset	Classes,"	above.)

# iShares

# Component	Changes	in	AUM	-	iShares

|  |  | Net	New | FX	App |  |
| :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 12/31/2010 | Business | (Dep) | 12/31/2011 |
| Equity | $448,160 | $24,612 | $(53,121) | $419,651 |
| Fixed\tincome | \t 123,091 | \t 26,875 | 3,836 | \t 153,802 |
| Multi-asset\tclass | 370 | 200 | (8) | 562 |
| Alternatives | 18,591 | 1,313 | (563) | 19,341 |
| Long-term | $590,212 | $53,000 | $(49,856) | $593,356 |

The	ETP	industry	experienced	another	strong	year	with	$173	billion	of	net	new	business	and	positive	inflows	for	11	months	of	the	year.	The	industry	expanded	to	include	over	4,200 products	globally	with	year-end	AUM	totaling	$1.525 	trillion.	The	broad	spectrum	of	available	ETP	asset	classes	attracted	new	money	through	periods	that	were	characterized	as	both "risk-on"	and	"risk-off."

The	global	growth	of	the	ETP	market	reflects	both	continued	adoption	and	new	product	introduction	with	investor	product	preferences	driven	to	varying	degrees	by	performance	(as measured	by	tracking	error,	which	is	the	difference	between	net	returns	on	the	ETP	and	the	corresponding	targeted	index),	liquidity	(bid-ask	spread),	tax-efficiency,	transparency	and client	service.	Growth	was	lower	than	in	recent	years,	primarily	due	to	unfavorable	market	movements.	Industry	asset	growth	has	historically	been	linked	to	positive	markets,	with investors	looking	to	capitalize	on	strong	market	returns.	In	the	continued	environment	of	ultra-low	interest	rates,	industry	flows	shifted	toward	fixed	income	oriented	products	and, within	equities,	to	developed	markets	and	away	from	broad	and	single-country	emerging	market	funds.

iShares	is	the	leading	ETP	provider	in	the	world,	with	$593.4	billion	of	AUM	at	December	31,	2011,	which	increased	$3.1	billion,	or	1%,	since	year-end	2010.	iShares	was	the	top asset	gatherer	globally	in	2011 2	with	$53.0	billion	of	net	inflows	largely	offset	by	$49.9	billion	of	market	valuation	declines.	During	2011,	iShares	introduced	45	new	ETPs	and continued	our	dual	commitment	to	innovation	and	responsible	product	structuring.	Our	broad	product	range	offers	investors	a	precise,	transparent	and	low-cost	way	to	tap	market returns	and	gain	access	to	a	full	range	of	asset	classes	and	global	markets	that	have	been	difficult	or	expensive	for	many	investors	to	access	until	now,	as	well	as	the	liquidity	required	to make	adjustments	to	their	exposures	quickly	and	cost-efficiently.

At	year-end,	iShares	AUM	included	$419.7	billion,	or	71%,	in	equity	offerings,	$153.8	billion,	or	26%,	in	fixed	income	ETPs	and	$19.9	billion,	or	3%,	in	multi-asset	class	and alternative	investments.	iShares	equity	AUM	decreased	$28.5	billion,	or	6%,	from	year-end	2010,	with	$24.6	billion	in	net	inflows	more	than	offset	by	$53.1	billion	of	market	and foreign	exchange	losses.	iShares	fixed	income	AUM	rose	$30.7	billion,	or	25%,	over	the	previous	year,	with	88%	of	the	increase	being	driven	by	$26.9	billion	of	net	inflows.	iShares multi-asset	class	and	alternatives	AUM	grew	by	$0.9	billion,	or	5%,	with	$1.5	billion	of	net	inflows,	predominantly	in	commodity	products	such	as	gold	and	silver,	offset	by	$0.6 billion	of	market	and	foreign	exchange	declines.

iShares	offers	the	most	diverse	product	set	in	the	industry	with	504	ETPs	at	year-end	2011	and	serves	the	broadest	client	base,	covering	25	countries	on	five	continents	including	North America,	South	America,	Europe,	Asia	and	Australia 2.	iShares	remained	the	ETP	leader	in	top	asset	gathering	in	2011	with	four	of	the	top	ten	products	and	the	highest	number	of leading	products	as	measured	by	total	assets,	with	five	of	the	top	ten 2.	Notwithstanding	an	increase	in	the	number	of	ETP	products	offered	in	the	industry,	iShares	continued	to	maintain the	largest	share	of	global	AUM	with	39%	at	year-end	December	31,	2011 .

Year-end	2011	ETP	Landscape	Industry	Highlights;	BlackRock	Investment	Institute	ETP	Research	Team,	BlackRock,	Bloomberg,	National	Stock	Exchange	(NSX); Bloomberg

•U.S.	iShares	AUM	ended	at	$444.4	billion	with	$29.6	billion	of	net	inflows	driven	by	strong	demand	for	our	yield-oriented	and	equity	dividend	products	with	our flagship	emerging	markets	fund	also	attracting	strong	flows	in	the	fourth	quarter	2011.	However,	the	search	for	yield	did	not	deter	investment	in	low-rate	U.S. government	bond	ETPs,	which	attracted	significant	flows.	U.S.	broad	aggregate	bond	ETPs	also	remained	popular,	allowing	investors	to	capture	diversified	exposures. At	year-end	2011,	iShares	was	the	largest	U.S.	provider	with	42%	share	of	AUM.

•International	iShares	AUM	ended	at	$149.0	billion	with	robust	net	new	business	of	$23.4	billion	for	the	year,	dominated	by	developed	countries	equity	products.

Sovereign	and	bank	debt	concerns	in	Europe	spurred	a	"flight	to	safety",	leading	to	strong	investments	into	Europe-listed	ETPs	offering	exposure	to	German	equities.	A DAX	index-based	iShares	product	led	European	ETPs	overall,	with	net	new	inflows	of	$11.6	billion.	At	year-end	2011,	iShares	was	the	largest	European	provider	with 36%	of	AUM	and	79%	of	total	2011	industry	inflows	in	the	European	market 3.

In	addition,	we	were	the	largest	ETP	manager	in	Latin	America	with	over	80%	of	AUM	at	December	31,	2011.	We	continue	to	look	for	opportunities	to	further	diversify	product offerings	in	key	strategic	focus	areas	including	attractive,	high-growth	markets	as	demonstrated	by	the	July	2011	launch	of	iShares	COLCAP,	the	first	ETP	in	the	Colombian	market; and	by	our	January	2012	announced	acquisition	of	the	Canadian	ETP	provider	Claymore	Investments.	In	general,	we	expect	to	maintain	relatively	stable	pricing,	so	long	as	it	is supported	by	performance	and	the	iShares	value	proposition,	although	we	continually	seek	to	achieve	efficiencies	and	pass	them	on	to	our	clients.

BlackRock	Solutions.	BlackRock	Solutions	offers	investment	management	technology	systems,	risk	management	services	and	advisory	services	on	a	fee	basis.	In	2011,	approximately $10.2	trillion	of	positions	were	processed	on	our	Aladdin	proprietary	technology	platform,	which	serves	as	the	investment	system	for	both	BlackRock	and	a	growing	number	of sophisticated	institutional	investors	around	the	world.	BRS	also	offers	comprehensive	risk	reporting	capabilities	via	the	Green	Package ®	and	risk	management	advisory	services; interactive	fixed	income	analytics	through	our	web-based	calculator,	AnSer ®;	middle	and	back	office	outsourcing	services;	and	investment	accounting.	BRS'	Financial	Markets Advisory	("FMA")	group	provides	services	for	a	wide	range	of	global	clients,	such	as	valuation	and	risk	assessment	of	illiquid	assets,	portfolio	restructuring,	workouts	and dispositions	of	distressed	assets	and	financial	and	balance	sheet	strategies.

In	the	face	of	increasing	regulatory	scrutiny,	clients	have	increased	their	focus	on	risk	management	and	demand	for	BRS	services	continues	to	be	robust.	During	the	year,	BRS	added 50	net	new	assignments	and	ended	the	year	with	record	revenues	of	$510	million,	an	increase	of	$50	million,	or	11%,	from	2010.	This	was	driven	by	strong	demand	for	our	FMA, Aladdin	and	risk	management	services,	particularly	in	EMEA	and	in	Asia-Pacific,	where	we	added	a	number	of	new	clients.	Aladdin	assignments	are	long-term	contracts	that	provide significant	levels	of	recurring	revenue.	At	year-end,	BRS	served	166	clients,	including	banks,	insurance	companies,	official	institutions,	pension	funds,	asset	managers	and	other institutional	investors	across	North	America,	Europe,	Asia	and	Australia.

In	FMA,	the	growing	financial	crisis	in	Europe	led	to	several	short-term	risk	analytics	assignments	including	a	few	high-profile	engagements.	Overall,	the	nature	of	FMA	assignments is	shifting	to	longer-term	advisory	and	risk	monitoring	engagements.	Advisory	AUM	decreased	20%	to	$120.1	billion,	driven	by	$29.9	billion	of	planned	client	distributions	reflecting our	continued	success	in	disposing	of	assets	for	clients	at,	or	above,	targeted	levels.

The	BRS	and	Aladdin	teams	continued	to	support	key	aspects	of	the	BGI	integration	in	2011.	These	efforts	are	vital	to	establishing	a	unified	operating	platform	and	consistent operating	processes.	We	expect	the	integration	of	BGI's	extensive	quantitative	tools,	risk	management	models	and	portfolio	construction	applications	across	asset	classes	to	enhance the	Aladdin	platform	over	time.	Additionally,	we	will	seek	to	leverage	our	scale	for	the	benefit	of	our	clients	through	the	creation	of	a	robust	global	trading	platform	in	order	to	improve execution	and	enhance	alpha	as	well	as	other	initiatives.

Transition	Management	Services.	BlackRock	also	offers	transition	management	services,	involving	the	temporary	oversight	of	a	client's	assets	as	they	transition	from	one	manager to	another	or	from	one	strategy	to	another.	We	provide	a	comprehensive	service	that	includes	project	management	and	implementation	based	on	achieving	best	execution	consistent with	the	client's	risk	management	tolerances.	We	use	state-of-the-art	tools	and	work	closely	with	BlackRock's	global	trading	research	team	to	manage	four	dimensions	of	risk throughout	the	transition:	exposure,	execution,	process	and	operational	risk.	The	average	transition	assignment	is	executed	within	three	weeks,	although	the	duration	can	be	longer	or shorter	depending	on	the	size,	complexity	and	liquidity	of	the	related	assets.	These	portfolios	are	not	included	in	AUM	unless	BlackRock	has	been	retained	to	manage	the	assets	after the	transition	phase.

Risk	&	Quantitative	Analysis.	Across	all	asset	classes,	in	addition	to	the	efforts	of	the	portfolio	management	teams,	the	Risk	&	Quantitative	Analysis	("RQA")	group	at	BlackRock draws	on	extensive	analytical	systems	and	proprietary	and	third-party	data	to	identify,	measure	and	manage	a	wide	range	of	risks.	RQA	provides	risk	management	advice	and independent	risk	oversight	of	the	investment	management	processes,	identifies	and	helps	manage	counterparty	and	operational	risks,	coordinates	standards	for	firm	wide	investment performance	measurement	and	determines	risk	management-related	analytical	and	information	requirements.	Where	appropriate,	RQA	will	work	with	portfolio	managers	and developers	to	facilitate	the	development	or	improvement	of	risk	models	and	analytics.

Product	Performance	Notes.	Past	performance	is	not	indicative	of	future	results.	The	performance	information	shown	is	based	on	preliminarily	available	data.	The	performance information	for	actively	managed	accounts	reflects	U.S.	open-end	and	closed-end	mutual	funds	and	similar	EMEA-based	products	with	respect	to	peer	median	comparisons,	and actively	managed	institutional	and	high	net	worth	separate	accounts	and	funds	located	globally	with	respect	to	benchmark	comparisons,	as	determined	using	objectively	based	internal parameters,	using	the	most	current	verified	information	available	as	of	December	31,	2011.

Accounts	terminated	prior	to	December	31,	2011	are	not	included.	In	addition,	accounts	that	have	not	been	verified	as	of	January	30,	2012	have	not	been	included.	If	such	terminated and	other	accounts	had	been	included,	the	performance	information	may	have	differed	substantially	from	that	shown.	The	performance	information	does	not	include	funds	or	accounts that	are	not	measured	against	a	benchmark,	any	benchmark-based	alternatives	product,	private	equity	products,	CDOs,	or	liquidation	accounts	managed	by	BlackRock's	FMA	group. Comparisons	are	based	on	gross-of-fee	performance	for	U.S.	retail,	institutional	and	high	net	worth	separate	accounts	and	EMEA	institutional	separate	accounts	and	net-of-fee performance	for	EMEA	based	retail	products.	The	performance	tracking	information	for	institutional	index	accounts	is	based	on	gross-of-fee	performance	as	of	December	31,	2011, and	includes	all	institutional	accounts	and	all	iShares	funds	globally	using	an	index	strategy.	AUM	information	is	based	on	AUM	for	each	account	or	fund	in	the	asset	class	shown without	adjustment	for	overlapping	management	of	the	same	account	or	fund	as	of	December	31,	2011.	The	information	reported	may	differ	slightly	from	that	reported	previously	due to	the	increased	number	of	accounts	that	have	been	verified	since	the	last	performance	disclosure.	BlackRock	considers	these	differences	to	be	not	material.

The	source	of	performance	information	and	peer	medians	is	BlackRock	and	is	based	in	part	on	data	from	Lipper	Inc.	for	U.S.	funds	and	Morningstar,	Inc.	for	non-U.S.	funds.	Fund performance	reflects	the	reinvestment	of	dividends	and	distributions,	but	does	not	reflect	sales	charges.

# Clients

| (Dollar	amounts	in	millions) | Institutional | High	Net	Worth | iShares | (1) | Total |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Americas | $1,338,081 | $304,690 | $480,713 | $480,713 | $2,123,484 |
| EMEA | 849,439 | 71,887 | \t 105,617 | \t 105,617 | \t 1,026,943 |
| Asia-Pacific | 328,069 | 27,160 | 7,025 | 7,025 | 362,254 |
| Total | $2,515,589 | $403,737 | $593,355 | $593,355 | $3,512,681 |

Amounts	based	on	jurisdiction	of	product,	not	underlying	client. (1)

# Clients	(overview)

BlackRock	serves	institutional	and	retail	and	high	net	worth	("HNW")	investors	in	more	than	100	countries	through	the	efforts	of	professionals	located	in	27	countries.	We	strive	to leverage	our	global	investment	expertise	and	scale,	together	with	our	understanding	of	local	requirements	and	business	customs,	to	most	effectively	serve	our	clients.	Portfolios	may be	invested	in	local,	regional	or	global	capital	markets.	Products	may	be	structured	to	address	location-specific	issues,	such	as	regulations,	taxation,	operational	infrastructure	and market	liquidity,	and	client-specific	issues,	such	as	investment	policy,	liability	structure	and	ratings.

Our	matrix	organizational	structure	facilitates	strong	teamwork	globally	across	both	functions	and	regions	in	order	to	enhance	our	ability	to	leverage	best	practices	to	serve	our	clients and	continue	to	develop	our	talent.	The	global	functions	–	Portfolio	Management,	BRS,	Global	Client	Groups	and	Corporate	&	Business	Operations	–	are	key	to	driving	coordination and	consistency	and	to	further	enhancing	the	benefits	of	our	scale.	The	regions	–	Americas,	EMEA	and	Asia-Pacific	–	support	local	clients,	employees,	regulators	and	business strategy.	At	December	31,	2011,	44%	of	our	AUM	was	managed	for	clients	outside	the	United	States	and	43%	of	employees	were	based	outside	the	United	States.	We	expect	these figures	to	approach	50%	over	the	coming	years.	At	December	31,	2011	our	London	office	was	the	largest	with	18%	of	our	employees,	followed	by	New	York	and	San	Francisco.

# Global	Clientele

# AUM	by	Asset	Class	&	Client	Region

| (Dollar	amounts	in	millions) | Americas | EMEA | Pacific | Total |
| :--- | :--- | :--- | :--- | :--- |
| Equity | $980,632 | $426,009 | $153,465 | $1,560,106 |
| Fixed\tincome | 677,608 | 403,371 | 166,743 | 1,247,722 |
| Multi-asset\tclass | 124,337 | 86,251 | 14,582 | 225,170 |
| Alternatives | 58,623 | 23,235 | 23,090 | 104,948 |
| Long-term | 1,841,200 | 938,866 | 357,880 | 3,137,946 |
| Cash\tmanagement | 178,777 | 74,296 | 1,592 | 254,665 |
| Advisory | 103,507 | 13,781 | 2,782 | 120,070 |
| Total | $2,123,484 | $1,026,943 | $362,254 | $3,512,681 |

# AUM	by	Style	&	Client	Region

|  |  |  | Asia- |  |
| :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | Americas | EMEA | Pacific | Total |
| Active | $724,447 | $333,402 | $129,832 | $1,187,681 |
| Institutional\tindex | 636,040 | 499,847 | 221,023 | 1,356,910 |
| iShares^\t(1) | 480,713 | 105,617 | 7,025 | 593,355 |
| Long-term | 1,841,200 | 938,866 | 357,880 | 3,137,946 |
| Cash\tmanagement | 178,777 | 74,296 | 1,592 | 254,665 |
| Advisory | 103,507 | 13,781 | 2,782 | 120,070 |
| Total | $2,123,484 | $1,026,943 | $362,254 | $3,512,681 |

Americas.	At	year-end	2011,	assets	managed	on	behalf	of	clients	domiciled	in	the	Americas	(defined	as	the	U.S.,	Caribbean,	Canada,	Latin	America	and	Iberia),	totaled	$2.123	trillion or	60%	of	total	AUM	down	$54.0	billion,	or	2%,	since	year-end	2010.	Net	new	business	in	long-term	products	of	$54.7	billion	was	insufficient	to	overcome	outflows	of	$69.4	billion from	cash	and	advisory	and	$29.2	billion	in	market	valuation	losses.	During	the	year,	we	served	clients	through	offices	in	30	states	in	the	United	States	as	well	as	Canada,	Mexico, Brazil,	Chile	and	Spain.

Product	offerings	included	closed-end	funds	and	iShares	traded	on	various	local	stock	exchanges,	a	full	range	of	open-end	mutual	funds,	collective	investment	funds,	common	trusts, private	funds	and	separate	accounts.	Our	long-term	product	mix	is	well	diversified	and	proportional	to	the	firm's	mix	with	53%	in	equities,	37%	in	fixed	income,	7%	in	multi-asset class	and	3%	in	alternatives.	Cash	management	products	predominantly	serve	clients	in	the	Americas.	We	also	have	a	wide	variety	of	BRS	assignments	for	institutional	investors	and governmental	entities	in	the	United	States	and	Canada.

The	mix	by	investment	style	is	also	balanced,	with	39%	of	long-term	AUM	managed	in	active	products,	35%	in	institutional	index	accounts	and	26%	in	iShares	at	year-end.	(Note	that the	iShares	figures	are	based	on	the	jurisdiction	of	the	product	rather	than	the	underlying	investor.	Non-U.S.	investors	often	prefer	U.S.	iShares,	primarily	due	to	the	depth	of	the markets	and	liquidity	of	the	products.)

EMEA.	AUM	for	clients	based	in	EMEA	ended	the	year	at	$1.027	trillion,	or	29%,	of	total	AUM,	an	increase	of	$11.1	billion	from	year-end	2010.	During	the	year,	clients	awarded	us net	new	business	of	$23.5	billion,	including	inflows	from	investors	in	19	countries	across	the	region.	Our	offerings	include	fund	families	in	the	U.K.,	Luxembourg	and	Dublin	and iShares	listed	on	stock	exchanges	throughout	Europe	as	well	as	separate	accounts	and	pooled	investment	products.

Clients	invested	across	the	entire	product	spectrum	with	46%	of	long-term	AUM	in	equities,	43%	in	fixed	income,	9%	in	multi-asset	class	and	2%	in	alternatives.	EMEA	clients constitute	30%	of	our	cash	management	products	and	represent	11%	of	our	advisory	AUM.	BRS	has	steadily	built	its	presence	in	EMEA,	with	Aladdin	relationships	with	a	variety	of institutional	investors	and	FMA	engagements	for	financial	services	companies	and	official	institutions,	including	assignments	for	the	Central	Bank	of	Ireland	and	the	National	Bank	of Greece.

The	mix	by	investment	style	is	slightly	more	concentrated	than	in	the	Americas,	with	36%	invested	in	active	products,	53%	in	institutional	index	accounts	and	11%	in	iShares.	The relatively	higher	percentage	in	institutional	index	is	driven	by	low-fee	institutional	liability	hedging	portfolios,	which	account	for	approximately	20%	of	total	institutional	index	assets. The	relatively	lower	percentage	in	iShares	primarily	reflects	the	earlier	stage	of	development	of	the	European	ETP	market	and	our	lower	installed	share.

Asia-Pacific.	Clients	in	the	Asia-Pacific	region	are	served	through	offices	in	Japan,	Australia,	Hong	Kong,	Singapore,	Taiwan	and	Korea,	and	joint	ventures	in	China	and	India.	At December	31,	2011,	we	managed	$362.3	billion	of	AUM	for	clients	in	the	region,	a	decrease	of	1%,	or	$5.3	billion,	from	year-end	2010.	Net	new	business	of	$5.7	billion	was	offset	by $2.3	billion	of	unfavorable	market	movements	and	$8.7	billion	of	BGI	merger-related	outflows.

At	year-end,	the	mix	of	long-term	products	managed	for	these	clients	consisted	of	43%	equities,	47%	fixed	income,	4%	multi-asset	class	and	6%	alternative	investments.	Asia-Pacific clients	represented	2%	of	our	advisory	AUM	and	less	than	1%	of	our	cash	management	products.	BRS	serves	a	select	number	of	the	largest	and	most	sophisticated	investors	in	the region.	We	continue	to	grow	our	presence	in	the	region	with	the	addition	of	our	first	two	multi-asset	Aladdin	assignments	in	Japan.

The	mix	among	investment	styles	was	tilted	more	toward	institutional	index	accounts	than	in	the	other	regions,	with	$221.0	billion,	or	62%,	of	long-term	AUM	in	these	products.	This bias	can	be	traced	to	the	presence	of	very	large	governmental	institutions	and	pensions	that	are	heavy	users	of	index	products.	Asia-Pacific	institutional	investors	also	use	iShares	for tactical	allocation,	but	often	favor	the	liquidity	of	the	U.S.	products	(which	are	counted	in	Americas	iShares).	Active	mandates	represented	36%	of	AUM	managed	for	investors	in	the region	at	year-end.

Clients	Served.	We	serve	a	diverse	mix	of	institutional	and	retail	investors	worldwide.	Clients	include	tax-exempt	institutions,	such	as	defined	benefit	and	defined	contribution	pension plans,	charities,	foundations	and	endowments;	official	institutions,	such	as	central	banks,	sovereign	wealth	funds,	supranationals	and	other	government	entities;	taxable	institutions, including	insurance	companies,	financial	institutions,	corporations	and	third-party	fund	sponsors;	and	retail	and	high	net	worth	investors.	We	also	serve	both	institutional	and	retail	and high	net	worth	investors	who	acquire	iShares	on	exchanges	worldwide	(iShares	is	discussed	under	"Products"	above).

# Institutional	Investors

# Institutional	Long-Term	AUM	by	Asset	Class,	Style	&	Client	Region

| (Dollar	amounts	in	millions) | Americas | EMEA | Pacific | Total |
| :--- | :--- | :--- | :--- | :--- |
| Active: |  |  |  |  |
| Equity | $50,343 | $52,694 | $22,478 | $125,515 |
| Fixed\tincome | 327,215 | 120,551 | 52,161 | 499,927 |
| Multi-asset\tclass | 52,396 | 75,125 | 8,157 | 135,678 |
| Alternatives | 34,734 | 13,921 | 21,500 | 70,155 |
| Index: |  |  |  |  |
| Equity | 503,211 | 247,894 | 107,423 | 858,528 |
| Fixed\tincome | 124,058 | 243,438 | 111,442 | 478,938 |
| Multi-asset\tclass | 693 | 3,677 | 1,775 | 6,145 |
| Alternatives | 1,380 | 4,834 | 131 | 6,345 |
| Long-term\tinstitutional | $1,094,030 | $762,134 | $325,067 | $2,181,231 |

Long-term	assets	managed	for	institutional	investors	totaled	$2.181	trillion,	or	62%,	of	total	AUM	at	year-end	2011.	During	the	year,	net	new	business	in	long-term	products	totaled $0.9	billion	with	investment	performance	and	market	appreciation	contributing	$41.5	billion.

BlackRock's	institutional	business	is	well	diversified	by	both	product	and	region,	with	45%	of	long-term	AUM	in	equities,	45%	in	fixed	income,	7%	in	multi-asset	class	and	3%	in alternatives.	The	mix	by	investment	style	was	38%	active	and	62%	passive	(excluding	institutional	investors	in	iShares).	As	noted	earlier,	institutional	index	accounts	tend	to	be	larger mandates	managed	for	relatively	low	fee	rates	and	subject	to	higher	turnover.

We	serve	institutional	investors	on	six	continents,	with	50%	of	long-term	AUM	managed	on	behalf	of	investors	in	the	Americas,	35%	in	EMEA	and	15%	in	Asia-Pacific.	The institutional	business	is	further	diversified	by	sub-segments:	tax-exempt,	official	institutions	and	taxable	investors,	as	described	below.

•BlackRock	is	among	the	largest	managers	of	pension	plan	assets	in	the	world	with	$1.502	trillion,	or	69%,	of	long-term	institutional	AUM	managed	for	defined	benefit and	defined	contribution	and	other	pension	plans	for	corporations,	governments	and	unions	at	December	31,	2011.	An	additional	$48.7	billion	was	managed	for	other tax-exempt	investors,	including	charities,	foundations	and	endowments.	Assets	managed	for	these	clients	grew	$6.9	billion	during	2011,	including	$32.7	billion	of	long- term	net	inflows	from	defined	contribution	plans.	We	ended	2011	with	$330.0	billion	in	defined	contribution	AUM	and	BlackRock	remains	well	positioned	to	capitalize on	the	on-going	evolution	of	the	defined	contribution	market	and	demand	for	outcome-oriented	investments.

•	 We	also	managed	$129.3	billion,	or	6%,	of	long-term	institutional	AUM,	for	official	institutions,	including	central	banks,	sovereign	wealth	funds,	supranationals, multilateral	entities	and	government	ministries	and	agencies	at	year-end	2011.	These	clients	often	require	specialized	investment	policy	advice,	the	use	of	customized benchmarks	and	training	support.

•BlackRock	is	a	top	independent	manager	of	assets	for	insurance	companies,	which	accounted	for	$214.4	billion,	or	10%,	of	institutional	long-term	AUM	at	year-end 2011.	Assets	managed	for	other	taxable	institutions,	including	corporations,	banks	and	third-party	fund	sponsors	for	which	we	provide	sub-advisory	services,	totaled $287.3	billion	or	13%	of	long-term	institutional	AUM	at	year-end.

# Retail	and	High	Net	Worth	Investors

# Retail	/	HNW	Long-Term	AUM	by	Asset	Class	&	Client	Region

| (Dollar	amounts	in	millions) | Americas | EMEA | Pacific | Total |
| :--- | :--- | :--- | :--- | :--- |
| Equity | $88,792 | $50,968 | $16,652 | $156,412 |
| Fixed\tincome | \t 102,997 | 9,029 | 3,029 | \t 115,055 |
| Multi-asset\tclass | 70,685 | 7,449 | 4,650 | 82,784 |
| Alternatives | 3,980 | 3,669 | 1,458 | 9,107 |
| Long-term\tretail/High\tnet\tworth | $266,454 | $71,115 | $25,789 | $363,358 |

BlackRock	serves	retail	and	high	net	worth	investors	globally	through	separate	accounts,	open-end	and	closed-end	funds,	unit	trusts	and	private	investment	funds.	At	December	31, 2011,	long-term	assets	managed	for	retail	and	high	net	worth	investors	totaled	$363.4	billion,	down	3%,	or	$10.6	billion,	versus	year-end	2010.	During	the	year,	net	inflows	of	$13.4 billion	in	long-term	products	were	offset	by	market	valuation	declines	of	$24.0	billion.

Retail	and	high	net	worth	investors	are	served	principally	through	intermediaries,	including	broker-dealers,	banks,	trust	companies,	insurance	companies	and	independent	financial advisors.	Clients	invest	primarily	in	mutual	funds,	which	totaled	$286.4	billion,	or	79%,	of	retail	and	high	net	worth	long-term	AUM	at	year-end,	with	the	remainder	invested	in	private investment	funds	and	separately	managed	accounts.	The	product	mix	is	well	diversified,	with	43%	of	long-term	AUM	in	equities,	32%	in	fixed	income,	23%	in	multi-asset	class	and 2%	in	alternatives.	The	vast	majority	(98%)	of	long-term	AUM	is	invested	in	active	products,	although	this	is	partially	inflated	by	the	fact	that	iShares	is	shown	as	a	separate	client type,	since	we	do	not	identify	all	of	the	underlying	investors.

The	client	base	is	also	diversified	geographically,	with	73%	of	long-term	AUM	managed	for	investors	based	in	the	Americas,	20%	in	EMEA	and	7%	in	Asia-Pacific	at	year-end	2011.

•Americas	retail	and	high	net	worth	long-term	inflows	of	$16.8	billion	were	driven	by	strong	demand	for	global	allocation,	U.S.	sector-specialty	and	municipal	fixed income	mutual	fund	offerings.	Rising	concerns	over	sovereign	default	risks,	sustained	market	volatility	and	a	low	interest	rate	environment	led	investors	to	seek	a	more dynamic	fixed	income	management	approach	versus	a	"buy	and	hold"	strategy.	In	the	United	States,	we	had	over	70	product	placements	on	broker-dealer	platforms during	the	year	and	have	grown	our	market	position	from	tenth	to	fourth	largest	fund	manager	since	we	acquired	Merrill	Lynch	Investment	Managers	("MLIM")	in	late- 2006 .	Our	success	in	attracting	net	new	business	even	as	the	industry	experienced	heavy	outflows	resulted	in	our	improved	market	share	of	14%	of	long-term	flows	for 2011 .	In	2011,	BlackRock	won	the	Dalbar	award	for	customer	service	in	financial	services,	the	twelfth	occasion	on	which	we	have	been	recognized	for	outstanding achievement	in	this	area.

Simfund

•International	retail	outflows	of	$3.3	billion	in	2011	were	driven	by	continued	trends	toward	de-risking,	and	were	predominantly	from	regional	and	country-specific	equity strategies	due	to	uncertainty	in	European	markets.	Overshadowed	by	fixed	income	and	equity	outflows,	inflows	of	$0.6	billion	into	alternatives	products	demonstrate	an appetite	for	alternatives	in	the	retail	channel.	Our	international	retail	and	high	net	worth	offerings	include	our	Luxembourg	cross-border	fund	families,	BlackRock	Global Funds	("BGF"),	BlackRock	Strategic	Funds	with	over	$75.0	billion	and	$1.5	billion	of	AUM	at	year-end	2011,	respectively,	and	a	range	of	retail	funds	in	the	U.K.	BGF managed	64	funds	registered	in	35	jurisdictions	at	year-end	2011.	Over	55%	of	the	funds	were	rated	by	S&P.	In	2011,	we	were	ranked	as	the	third	largest	cross	border fund	provider 5.	In	the	U.K.,	we	ranked	among	the	five	largest	fund	managers,	and	are	known	for	our	innovative	product	offerings,	including	the	absolute	alpha	products we	introduced	six	years	ago.

Our	footprint	in	each	of	these	regions	reflects	strong	relationships	with	intermediaries	and	an	established	ability	to	deliver	our	global	investment	expertise	in	funds	and	other	products tailored	to	local	regulations	and	requirements.

Clients	in	cash	management	and	advisory	products	are	discussed	earlier.	(See	the	corresponding	sections	under	"Products	–	Asset	Classes"	and	under	"Products	–	Investment	Styles.")

Lipper	FERI 5

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	its	business,	BlackRock	must	be	able	to	compete	effectively	for	AUM.	Key	competitive factors	include	investment	performance	track	records,	the	efficient	delivery	of	beta	for	passively	managed	products,	investment	style	and	discipline,	client	service	and	brand	name recognition.	Historically,	the	Company	has	competed	principally	on	the	basis	of	its	long-term	investment	performance	track	record,	its	investment	process,	its	risk	management	and analytic	capabilities	and	the	quality	of	its	client	service.	These	factors	may	place	BlackRock	at	a	competitive	disadvantage	and	there	can	be	no	assurance	that	the	Company's	strategies and	efforts	to	maintain	its	existing	AUM	and	to	attract	new	business	will	be	successful.

# Geographic	Information

At	December	31,	2011,	BlackRock	had	clients	in	over	100	countries	across	the	globe,	including	the	United	States,	the	United	Kingdom	and	Japan.

The	following	table	illustrates	the	Company's	total	revenue	for	the	years	ended	December	2011,	2010	and	2009	by	geographic	region.	These	amounts	are	aggregated	on	a	legal	entity basis	and	do	not	necessarily	reflect	where	the	customer	resides.

| Revenue | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Americas | $6,064 | $5,824 | $3,309 |
| Europe | \t 2,517 | \t 2,300 | \t 1,179 |
| Asia-Pacific | 500 | 488 | 212 |
| Total\trevenue | $9,081 | $8,612 | $4,700 |

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

| Long-lived	Assets | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Americas | $13,133 | $13,092 | $12,983 |
| Europe | 123 | 42 | 46 |
| Asia-Pacific | 73 | 99 | 94 |
| Total\tlong-lived\tassets | $13,329 | $13,233 | $13,123 |

Americas	primarily	comprises	the	United	States,	Canada,	Brazil	and	Mexico,	while	Europe	primarily	comprises	the	United	Kingdom	and	Asia-Pacific	primarily	comprises	Japan, Australia	and	Hong	Kong.

Employees.	At	December	31,	2011,	BlackRock	had	a	total	of	approximately	10,100	employees,	including	approximately	4,400	located	in	offices	outside	the	United	States.	Consistent with	our	commitment	to	continually	expand	and	enhance	our	talent	base	to	support	our	clients,	we	added	over	900	employees	during	the	year,	including	in	strategic	focus	areas	such	as iShares,	alternatives,	institutional	sales	and	Asia.

# Regulation

Virtually	all	aspects	of	BlackRock's	business	are	subject	to	various	laws	and	regulations	both	in	and	outside	the	United	States,	some	of	which	are	summarized	below.	These	laws	and regulations	are	primarily	intended	to	protect	investment	advisory	clients,	investors	in	registered	and	unregistered	investment	companies,	trust	customers	of	BlackRock	Institutional Trust	Company,	N.A.	("BTC"),	PNC	and	its	bank	subsidiaries	and	their	customers,	and	the	financial	system.	Under	these	laws	and	regulations,	agencies	that	regulate	investment advisers,	investment	funds	and	financial	and	bank	holding	companies	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.	The	rules	governing	the	regulation	of	financial	institutions	and	their	holding	companies	and	subsidiaries	are	very	detailed	and	technical.	Accordingly, the	discussion	below	is	general	in	nature,	does	not	purport	to	be	complete	and	is	current	only	as	of	the	date	of	this	report.

# Regulatory	Reform

On	July	21,	2010,	the	Dodd-Frank	Wall	Street	Reform	and	Consumer	Protection	Act	(the	"DFA")	was	signed	into	law	in	the	United	States.	The	DFA	is	expansive	in	scope	and	requires the	adoption	of	extensive	regulations	and	numerous	regulatory	decisions	in	order	to	be	implemented.	The	adoption	of	these	regulations	and	decisions	will	in	large	measure	determine the	impact	of	the	DFA	on	BlackRock	and	other	financial	services	firms.	The	DFA	may	significantly	change	BlackRock's	operating	environment	and	the	financial	markets	in	general	in unpredictable	ways.	It	is	not	possible	to	predict	the	ultimate	effects	that	the	DFA,	or	subsequent	implementing	regulations	and	decisions,	will	have	upon	BlackRock's	business	and results	of	operations.	Among	the	potential	impacts	of	the	DFA,	provisions	of	the	DFA	referred	to	as	the	Volcker	Rule	could,	to	the	extent	the	final	Volcker	Rule	is	determined	to	apply to	BlackRock's	activities,	affect	the	method	by	which	BlackRock	invests	in	and	operates	its	investment	funds,	including	private	equity	funds,	hedge	funds	and	fund	of	funds	platforms. The	impact	of	the	Volcker	Rule	on	liquidity	and	pricing	in	the	broader	financial	markets	is	unknown	at	this	time.	In	addition,	BlackRock	could	become	designated	as	a	systemically important	financial	institution	("SIFI")	and	become	subject	to	direct	supervision	by	the	Board	of	Governors	of	the	Federal	Reserve	System	(the	"Federal	Reserve").	If	BlackRock	were designated	a	SIFI,	it	could	be	subject	to	enhanced	prudential,	supervisory	and	other	requirements,	such	as	risk-based	capital	requirements;	leverage	limits;	liquidity	requirements; resolution	plan	and	credit	exposure	report	requirements;	concentration	limits;	a	contingent	capital	requirement;	enhanced	public	disclosures;	short-term	debt	limits;	and	overall	risk management	requirements.	Further,	proposed	regulations	under	the	DFA,	relating	to	regulation	of	swaps	and	derivatives,	could	impact	the	manner	by	which	BlackRock	and BlackRock-advised	funds	and	accounts	use	and	trade	swaps	and	other	derivatives,	and	could	significantly	increase	the	costs	of	derivatives	trading.	Similarly,	BlackRock's	management of	funds	and	accounts	that	use	and	trade	swaps	and	derivatives	could	be	adversely	impacted	by	recently	adopted	changes	to	the	Commodity	Futures	Trading	Commission's	(the "CFTC")	regulations.	These	include	changes	imposing	limits	on	speculative	positions	in	contracts	on	certain	physical	commodities,	which	could	adversely	affect	liquidity	in	the	futures and	swaps	markets	in	which	BlackRock	trades	for	its	funds	and	accounts	and	could	expose	BlackRock	to	heightened	compliance	costs.	Other	jurisdictions	outside	the	United	States	in which	BlackRock	operates	are	also	in	the	process	of	devising	or	considering	more	pervasive	regulation	of	many	elements	of	the	financial	services	industry,	which	could	have	a	similar impact	on	BlackRock	and	the	broader	markets.

# Regulation	(continued)

The	DFA	and	its	regulations,	and	other	new	laws	or	regulations,	or	changes	in	enforcement	of	existing	laws	or	regulations,	could	materially	and	adversely	impact	the	scope	or profitability	of	BlackRock's	business	activities;	require	BlackRock	to	change	certain	business	practices;	divert	management's	time	and	attention	from	BlackRock's	business	activities to	compliance	activities;	and	expose	BlackRock	to	additional	costs	(including	compliance	and	tax	costs)	and	liabilities,	as	well	as	reputational	harm.	For	example,	in	addition	to regulatory	changes	mandated	by	the	DFA,	the	Securities	and	Exchange	Commission	(the	"SEC")	adopted	regulations	related	to,	and	continues	to	review	the	role	and	risks	related	to, money	market	funds	and	has	indicated	that	it	may	adopt	additional	regulations.	Some	of	the	proposed	changes,	if	adopted,	could	significantly	alter	money	market	fund	products	and	the entire	money	market	fund	industry.	Similarly,	the	SEC	continues	to	review	the	distribution	fees	paid	to	mutual	fund	distributors	in	accordance	with	Rule	12b-1	under	the	Investment Company	Act	of	1940,	as	amended	(the	"Investment	Company	Act"),	which	are	important	to	a	number	of	the	mutual	funds	BlackRock	manages.	Any	changes	to	12b-1	fees	would alter	the	way	BlackRock's	distribution	partners	distribute	BlackRock	products.	Additionally,	the	SEC,	the	Internal	Revenue	Service	("IRS")	and	the	CFTC	each	continue	to	review	the use	of	futures	and	derivatives	by	mutual	funds,	and	such	reviews	could	result	in	regulations	that	further	limit	the	use	of	futures	and	derivatives	by	mutual	funds.	If	adopted,	these limitations	could	require	BlackRock	to	change	certain	mutual	fund	business	practices	or	to	register	additional	entities	with	the	CFTC.	Another	example	of	new	regulation	is	the	SEC's recently	adopted	systemic	risk	reporting	requirement,	pursuant	to	which	BlackRock	will	be	required	to	file	SEC	Form	PF	beginning	in	2012.	In	addition,	the	CFTC	also	adopted systemic	reporting	requirements,	which	may	impose	significant	reporting	obligations	on	BlackRock.	Still	another	example	of	changes	in	the	regulatory	landscape	is	regulations	to	be adopted	by	the	IRS	under	the	Foreign	Account	Tax	Compliance	Act	("FATCA").	FATCA	was	enacted	in	2010	and	is	intended	to	address	tax	compliance	issues	associated	with	U.S. taxpayers	with	foreign	accounts.	FATCA	requires	foreign	financial	institutions	to	report	to	the	IRS	information	about	financial	accounts	held	by	U.S.	taxpayers	and	imposes withholding,	documentation	and	reporting	requirements	on	foreign	financial	institutions.	Final	regulations	are	expected	to	be	adopted	by	the	IRS	in	2012,	with	the	earliest implementation	dates	beginning	in	2013.	Such	regulations	could	cause	the	Company	to	incur	significant	administrative	and	compliance	costs.	In	addition,	globally,	regulators	are examining	the	potential	risks	in	ETFs	and	may	impose	additional	regulations	on	ETFs,	including	requirements	to	promote	increased	transparency	and	to	limit	the	ability	of	ETFs	to utilize	derivatives.	Any	of	these	regulatory	changes	could	also	lead	to	business	disruptions,	could	materially	and	adversely	impact	the	value	of	assets	in	which	BlackRock	has	invested directly	and/or	on	behalf	of	clients,	and,	to	the	extent	the	regulations	strictly	control	the	activities	of	financial	services	firms,	could	make	it	more	difficult	for	BlackRock	to	conduct certain	businesses	or	distinguish	itself	from	competitors.

Additional	legislation,	changes	in	rules	promulgated	by	regulators	and	self-regulatory	organizations,	or	changes	in	the	interpretation	or	enforcement	of	existing	laws	and	regulations may	directly	affect	the	method	of	operation	and	profitability	of	BlackRock.	BlackRock's	profitability	also	could	be	materially	and	adversely	affected	by	modification	of	the	rules	and regulations	that	impact	the	business	and	financial	communities	in	general,	including	changes	to	the	laws	governing	taxation,	antitrust	regulation	and	electronic	commerce.	See	the	Non- U.S.	Regulation	section	below	for	a	discussion	of	regulatory	reforms	being	considered	and/or	adopted	outside	of	the	United	States.

# U.S.	Regulation

BlackRock	and	certain	of	its	U.S.	subsidiaries	are	subject	to	regulation,	primarily	at	the	federal	level,	by	the	SEC,	the	Department	of	Labor	(the	"DOL"),	the	Federal	Reserve,	the Office	of	the	Comptroller	of	the	Currency	of	the	United	States	(the	"OCC"),	the	Financial	Industry	Regulatory	Authority	("FINRA"),	the	National	Futures	Association	(the	"NFA"), the	CFTC	and	other	government	agencies	and	regulatory	bodies.	Certain	of	BlackRock's	U.S.	subsidiaries	are	also	subject	to	various	anti-terrorist	financing,	privacy,	anti-money laundering	regulations	and	economic	sanctions,	laws	and	regulations	established	by	various	agencies.

The	Investment	Advisers	Act	of	1940,	as	amended	(the	"Advisers	Act"),	imposes	numerous	obligations	on	registered	investment	advisers	such	as	BlackRock,	including	record-keeping, operational	and	marketing	requirements,	disclosure	obligations	and	prohibitions	on	fraudulent	activities.	The	Investment	Company	Act	imposes	stringent	governance,	compliance, operational,	disclosure	and	related	obligations	on	registered	investment	companies	and	their	investment	advisers	and	distributors,	such	as	BlackRock.	The	SEC	is	authorized	to	institute proceedings	and	impose	sanctions	for	violations	of	the	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.	Non-compliance	with	the	Advisers	Act,	the	Investment	Company	Act	or	other	federal and	state	securities	laws	and	regulations	could	result	in	investigations,	sanctions,	disgorgement,	fines	and	reputational	damage.

BlackRock's	trading	and	investment	activities	for	client	accounts	are	regulated	under	the	Securities	Exchange	Act	of	1934,	as	amended	(the	"Exchange	Act"),	as	well	as	the	rules	of various	U.S.	and	non-U.S.	securities	exchanges	and	self-regulatory	organizations,	including	laws	governing	trading	on	inside	information,	market	manipulation	and	a	broad	number	of technical	requirements	(e.g.,	short	sale	limits,	volume	limitations,	reporting	obligations)	and	market	regulation	policies	in	the	United	States	and	globally.	Depending	on	the	scope	of	the rules	to	be	adopted	by	the	SEC,	provisions	of	the	DFA	added	to	the	Exchange	Act	may	require	certain	BlackRock	subsidiaries	to	register	as	municipal	advisers	in	relation	to	their services	for	state	and	local	governments,	pension	plans	and	other	investment	programs,	such	as	college	savings	plans.	In	addition,	BlackRock	manages	a	variety	of	investment	funds listed	on	U.S.	and	non-U.S.	exchanges,	which	are	subject	to	the	rules	of	such	exchanges.	Violation	of	these	laws	and	regulations	could	result	in	restrictions	on	the	Company's	activities and	damage	its	reputation.	BlackRock	manages	a	variety	of	private	pools	of	capital,	including	hedge	funds,	funds	of	hedge	funds,	private	equity	funds,	real	estate	funds,	collective investment	trusts,	managed	futures	funds	and	hybrid	funds.	Congress,	regulators,	tax	authorities	and	others	continue	to	explore,	on	their	own	and	in	response	to	demands	from	the investment	community	and	the	public,	increased	regulation	related	to	private	pools	of	capital,	including	changes	with	respect	to	investor	eligibility,	certain	limitations	on	trading activities,	record-keeping	and	reporting,	the	scope	of	anti-fraud	protections,	safekeeping	of	client	assets	and	a	variety	of	other	matters.	BlackRock	may	be	materially	and	adversely affected	by	new	legislation,	rule-making	or	changes	in	the	interpretation	or	enforcement	of	existing	rules	and	regulations	imposed	by	various	regulators.

Certain	BlackRock	subsidiaries	are	subject	to	the	Employee	Retirement	Income	Security	Act	of	1974,	as	amended	("ERISA"),	and	to	regulations	promulgated	thereunder	by	the	DOL, 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	impose	excise	taxes	for	violations	of	these	prohibitions,	mandate	certain	required periodic	reporting	and	disclosures	and	require	BlackRock	to	carry	bonds	ensuring	against	losses	caused	by	fraud	or	dishonesty.	ERISA	also	imposes	additional	compliance,	reporting and	operational	requirements	on	BlackRock	that	otherwise	are	not	applicable	to	non-benefit	plan	clients.

BlackRock	has	two	subsidiaries	that	are	registered	as	commodity	pool	operators	and	commodity	trading	advisers,	two	other	subsidiaries	that	are	only	registered	as	commodity	trading advisers	and	two	additional	subsidiaries	only	registered	as	commodity	pool	operators	with	the	CFTC.	All	six	of	these	subsidiaries	are	members	of	the	NFA.	Additional	BlackRock entities	may	need	to	register	as	a	commodity	pool	operator	or	commodity	trading	adviser	as	a	result	of	regulatory	changes	that	the	CFTC	recently	adopted	in	February	2012.	The	CFTC and	NFA	each	administer	a	comparable	regulatory	system	covering	futures	contracts	and	various	other	financial	instruments,	including	swaps	as	a	result	of	the	DFA,	in	which	certain BlackRock	clients	may	invest.	Four	of	BlackRock's	other	subsidiaries,	BlackRock	Investments,	LLC	("BRIL"),	BlackRock	Capital	Markets,	LLC,	BlackRock	Execution	Services,	and BlackRock	Fund	Distribution	Company	("BFDC")	are	registered	with	the	SEC	as	broker-dealers	and	are	member-firms	of	FINRA.	Each	broker-dealer	has	a	membership	agreement with	FINRA	that	limits	the	scope	of	such	broker-dealer's	permitted	activities.	BRIL	is	also	an	approved	person	with	the	New	York	Stock	Exchange	("NYSE").	BRIL	and	BFDC	are members	of	the	Municipal	Securities	Rulemaking	Board	("MSRB")	and	are	subject	to	MSRB	rules.

# U.S.	Banking	Regulation

PNC	is	a	bank	holding	company	and	regulated	as	a	"financial	holding	company"	by	the	Federal	Reserve	under	the	Bank	Holding	Company	Act	of	1956,	as	amended	(the	"BHC	Act"). Based	on	PNC's	interests	in	and	relationships	with	BlackRock,	BlackRock	is	deemed	to	be	a	non-bank	subsidiary	of	PNC	and	is	therefore	subject	to	the	supervision	and	regulation	of the	Federal	Reserve	and	to	most	banking	laws,	regulations	and	orders	that	apply	to	PNC.	The	supervision	and	regulation	of	PNC	and	its	subsidiaries	under	applicable	banking	laws	is intended	primarily	for	the	protection	of	its	banking	subsidiaries,	its	depositors,	the	Deposit	Insurance	Fund	of	the	Federal	Deposit	Insurance	Corporation,	and	the	financial	system	as	a whole,	rather	than	for	the	protection	of	stockholders,	creditors	or	clients	of	PNC	or	BlackRock.	PNC's	relationships	and	good	standing	with	its	regulators	are	important	to	the	conduct of	BlackRock's	business.	BlackRock	may	also	be	subject	to	foreign	banking	laws	and	supervision	that	could	affect	its	business.

BTC	is	a	limited	purpose	national	trust	company	that	does	not	accept	deposits	or	make	commercial	loans	and	is	a	member	of	the	Federal	Reserve	System.	Accordingly,	BTC	is examined	and	supervised	by	the	OCC	and	is	subject	to	various	banking	laws	and	regulations	enforced	by	the	OCC,	such	as	capital	adequacy,	regulations	governing	fiduciaries, conflicts	of	interest,	self-dealing,	and	anti-money	laundering	laws	and	regulations.	BTC	is	also	subject	to	various	Federal	Reserve	regulations	applicable	to	member	institutions,	such as	regulations	restricting	transactions	with	affiliates.	Many	of	these	laws	and	regulations	are	meant	for	the	protection	of	BTC's	customers	and	not	BTC,	BlackRock	and	its	affiliates,	or BlackRock's	stockholders.

BlackRock	generally	may	conduct	only	activities	that	are	authorized	for	a	"financial	holding	company"	under	the	BHC	Act.	Investment	management	is	an	authorized	activity,	but	must be	conducted	within	applicable	regulatory	requirements,	which	in	some	cases	are	more	restrictive	than	those	BlackRock	faces	under	applicable	securities	laws.	BlackRock	may	also invest	in	investment	companies	and	private	investment	funds	to	which	it	provides	advisory,	administrative	or	other	services,	only	to	the	extent	consistent	with	applicable	law	and regulatory	interpretations.	The	Federal	Reserve	has	broad	powers	to	approve,	deny	or	refuse	to	act	upon	applications	or	notices	for	BlackRock	to	conduct	new	activities,	acquire	or divest	businesses	or	assets,	or	reconfigure	existing	operations.	There	are	limits	on	the	ability	of	bank	subsidiaries	of	PNC	to	extend	credit	to	or	conduct	other	transactions	with BlackRock.	PNC	and	its	subsidiaries	are	also	subject	to	examination	by	various	banking	regulators,	which	results	in	examination	reports	and	ratings	that	may	adversely	impact	the conduct	and	growth	of	BlackRock's	businesses.

The	Federal	Reserve	has	broad	enforcement	authority	over	BlackRock,	including	the	power	to	prohibit	BlackRock	from	conducting	any	activity	that,	in	the	Federal	Reserve's	opinion, is	unauthorized	or	constitutes	an	unsafe	or	unsound	practice	in	conducting	BlackRock's	business.	The	Federal	Reserve	may	also	impose	substantial	fines	and	other	penalties	for violations	of	applicable	banking	laws,	regulations	and	orders.	The	DFA	strengthened	the	Federal	Reserve's	supervisory	and	enforcement	authority	over	a	bank	holding	company's	non- bank	affiliates,	such	as	BlackRock.

Any	failure	of	PNC	to	maintain	its	status	as	a	financial	holding	company	could	result	in	substantial	limitations	on	certain	BlackRock	activities	and	its	growth.	Such	a	change	of	status could	be	caused	by	any	failure	of	one	of	PNC's	bank	subsidiaries	to	remain	"well	capitalized,"	by	any	examination	downgrade	of	one	of	PNC's	bank	subsidiaries,	or	by	any	failure	of one	of	PNC's	bank	subsidiaries	to	maintain	a	satisfactory	rating	under	the	Community	Reinvestment	Act.	In	addition,	the	DFA	broadened	the	requirements	for	maintaining	financial holding	company	status	by	now	also	requiring	the	holding	company	to	remain	"well	capitalized"	and	"well	managed."

# Non-U.S.	Regulation

BlackRock's	international	operations	are	subject	to	the	laws	and	regulations	of	non-U.S.	jurisdictions	and	non-U.S.	regulatory	agencies	and	bodies.	As	BlackRock	continues	to	expand its	international	presence,	a	number	of	its	subsidiaries	and	international	operations	have	become	subject	to	regulatory	systems	comparable	to	those	affecting	its	operations	in	the	United States.

The	Financial	Services	Authority	(the	"FSA")	currently	regulates	certain	BlackRock	subsidiaries	in	the	United	Kingdom.	Authorization	by	the	FSA	is	required	to	conduct	any	financial services	related	business	in	the	United	Kingdom	pursuant	to	the	Financial	Services	and	Markets	Act	2000.	The	FSA's	rules	made	under	that	Act	govern	a	firm's	capital	resources requirements,	senior	management	arrangements,	conduct	of	business,	interaction	with	clients	and	systems	and	controls.	Breaches	of	these	rules	may	result	in	a	wide	range	of disciplinary	actions	against	the	Company's	U.K.-regulated	subsidiaries.	The	U.K.	government	announced	in	2010	that	it	intends	to	abolish	the	FSA	and	to	establish	three	new regulatory	bodies,	the	Financial	Policy	Committee	of	the	Bank	of	England,	the	Prudential	Regulation	Authority	and	the	Financial	Conduct	Authority	in	its	place.	Detailed	proposals and	draft	legislation	were	published	in	mid-2011	and	it	is	intended	that	completion	of	the	necessary	primary	legislation	will	take	place	by	the	end	of	2012	with	transfers	of	power	in early	2013.	Pending	formal	implementation,	the	FSA	has	introduced	a	shadow	internal	structure	in	anticipation	of	the	creation	of	the	Prudential	Regulation	Authority	and	the	Financial Conduct	Authority,	and	the	Bank	of	England	has	created	an	interim	Financial	Policy	Committee.

In	addition	to	the	above,	the	Company's	U.K.-regulated	subsidiaries	and	other	European	subsidiaries	and	branches,	must	comply	with	the	pan-European	regime	established	by	the Markets	in	Financial	Instruments	Directive	("MiFID"),	which	became	effective	on	November	1,	2007	and	regulates	the	provision	of	investment	services	and	activities	throughout	the European	Economic	Area	("EEA"),	as	well	as	the	Capital	Requirements	Directive,	which	delineates	regulatory	capital	requirements.	MiFID	sets	out	detailed	requirements	governing the	organization	and	conduct	of	business	of	investment	firms	and	regulated	markets.	It	also	includes	pre-	and	post-trade	transparency	requirements	for	equity	markets	and	extensive transaction	reporting	requirements.

The	United	Kingdom	has	adopted	the	MiFID	rules	into	national	legislation	and	FSA	regulations,	as	have	those	other	European	jurisdictions	(excluding	Switzerland	which	is	not	part	of the	EU	or	EEA)	in	which	BlackRock	has	a	presence.	A	review	of	MiFID	by	the	European	Commission	has	led	to	the	publication	of	a	draft	amendment	Directive	and	a	draft	new Markets	in	Financial	Instruments	Regulation.	The	proposals,	if	implemented,	are	likely	to	result	in	changes	to	pre-	and	post-trade	reporting	obligations	and	an	expansion	of	the	types	of instruments	subject	to	these	requirements.	They	may	affect	the	buying	and	selling	of	derivatives	by	moving	most	derivative	trading	onto	regulated	trading	venues	and	may	control	the activities	of	algorithmic	trading.	The	proposals	may	also	result	in	changes	to	conduct	of	business	requirements	including	selling	practices,	intermediary	inducements	and	client categorization.	The	proposals	also	envisage	giving	the	European	Commission	power	to	ban	certain	products	and	services.	A	European	Commission	proposal	(the	European	Market Infrastructure	Regulation	("EMIR")),	when	implemented,	will	require	the	central	clearing	of	standardized	OTC	derivatives.

In	addition,	the	FSA	is	in	the	process	of	finalizing	its	rules	following	its	retail	distribution	review.	These	rules,	which	come	into	effect	on	December	31,	2012,	will	change	how	retail clients	pay	for	investment	advice	given	in	respect	of	all	retail	investment	products,	including	open-ended	and	closed-ended	funds,	structured	products	and	insurance-based	savings products.

In	the	aftermath	of	the	financial	crisis,	the	European	Commission	set	out	a	detailed	plan	for	EU	financial	reform,	outlining	a	number	of	initiatives	to	be	reflected	in	new	or	updated directives,	regulations	and	recommendations	of	which	the	MiFID	review	(mentioned	above)	was	part.	These	will	have	direct	and	indirect	effects	on	BlackRock's	operations	in	the EEA.

The	EU	Alternative	Investment	Fund	Managers	Directive	("AIFMD"),	which	became	effective	on	July	21,	2011,	needs	to	be	implemented	by	EU	member	states	by	July	22,	2012.	The AIFMD	will	regulate	managers	of,	and	service	providers	to,	alternative	investment	funds	("AIFs")	domiciled	within	and	(depending	on	the	precise	circumstances)	outside	the	EU.	The AIFMD	will	also	regulate	the	marketing	of	all	alternative	investment	funds	inside	the	EEA.	In	general,	the	AIFMD	is	expected	to	have	a	staged	implementation	between	mid-2013	and 2018.	Compliance	with	the	AIFMD's	requirement	may	restrict	AIF	marketing	and	place	additional	compliance	obligations	in	the	form	of	remuneration	policies,	capital	requirements, leverage	oversight,	valuation,	stakes	in	EU	companies,	the	domicile	of	custodians	and	liquidity	management.

The	European	Commission	has	also	published	proposals	to	replace	the	Market	Abuse	Directive	with	a	regulation	on	insider	dealing	and	market	manipulation	and	with	an accompanying	directive	on	criminal	sanctions.	There	are	also	ongoing	plans	to	reform	the	framework	to	which	regulated	firms	are	subject,	including	in	relation	to	regulatory	capital and	the	protection	of	client	assets,	which	will	have	a	direct	effect	on	some	of	BlackRock's	European	operations.

The	next	iteration	of	the	Undertakings	for	Collective	Investment	in	Transferable	Securities	Directive	("UCITS	IV"),	was	required	to	be	adopted	in	the	national	law	of	each	EU	member state	by	July	1,	2011.	The	United	Kingdom	has	adopted	UCITS	IV	requirements	into	national	legislation	and	FSA	regulation.	Luxembourg	and	Ireland	have	also	adopted	UCITS	IV into	their	national	legislation.	However,	several	other	EU	member	states	are	still	in	various	stages	of	the	adoption	process.	UCITS	IV	introduced	new	requirements	including	a requirement	on	UCITS	funds	to	provide	a	key	investor	information	document.	There	are	also	European	Commission	consultations	in	process	that	are	intended	to	improve	retail investor	protection,	including	UCITS	V,	which	addresses,	among	other	items,	custodial	liability.

Recent	proposals	on	packaged	retail	investment	products	("PRIPs")	are	to	be	implemented	through	the	strengthening	of	MiFID	standards	(for	non-insurance	PRIPs),	revisions	to	the Insurance	Mediation	Directive's	selling	standard	(for	all	insurance-based	PRIPs)	and	new	investor	disclosure	requirements	for	all	PRIPs	though	a	separate	EU	legislative	process.

In	addition,	in	September	2011,	the	European	Commission	proposed	a	financial	transaction	tax	("FTT	proposal")	in	the	European	Union,	which	would,	if	approved	by	all	27	Member States,	apply	to	all	financial	transactions	where	at	least	one	party	is	established	in	an	EU	Member	State	and	either	that	party	or	another	party	to	the	transaction	is	a	financial	institution. While	the	specific	terms	of	the	FTT	proposal	remain	subject	to	negotiation,	any	tax	on	securities	transactions	would	likely	have	a	negative	impact	on	the	liquidity	of	the	derivatives	and securities	markets	in	Europe	and	would	adversely	impact	our	European	clients'	assets	and	our	non-European	clients	to	the	extent	that	they	are	or	want	to	be	invested	in	European assets.

For	the	insurance	sector	the	Solvency	II	process	will	increase	the	amount	of	capital	that	insurers	will	have	to	set	aside	and	will	have	an	indirect	effect	on	fund	managers	with	insurance clients.

In	addition	to	the	FSA,	the	activities	of	certain	BlackRock	subsidiaries,	branches,	and	representative	offices	are	overseen	by	financial	services	regulators	in	Germany,	The	Netherlands, Ireland,	Luxembourg,	Switzerland,	Isle	of	Man,	Jersey,	Guernsey,	France,	Belgium,	Italy,	Poland,	Spain	and	Sweden.	Regulators	in	these	jurisdictions	have	authority	with	respect	to financial	services	including,	among	other	things,	the	authority	to	grant	or	cancel	required	licenses	or	registrations.	In	addition,	these	regulators	may	subject	certain	BlackRock subsidiaries	to	net	capital	requirements.	Other	BlackRock	subsidiaries,	branches,	and	representative	offices	are	regulated	in	Japan,	Australia,	China,	Hong	Kong,	Singapore,	Taiwan, South	Korea,	India,	Dubai,	Cayman	Islands,	Brazil,	Chile,	Mexico	and	Canada.

In	Japan,	certain	BlackRock	subsidiaries	are	subject	to	the	Financial	Instruments	and	Exchange	Law	(the	"FIEL")	and	the	Law	Concerning	Investment	Trusts	and	Investment Corporations.	These	laws	are	administered	and	enforced	by	the	Japanese	Financial	Services	Agency	(the	"JFSA"),	which	establishes	standards	for	compliance,	including	capital adequacy	and	financial	soundness	requirements,	customer	protection	requirements	and	conduct	of	business	rules.	The	JFSA	is	empowered	to	conduct	administrative	proceedings	that can	result	in	censure,	fine,	the	issuance	of	cease	and	desist	orders	or	the	suspension	or	revocation	of	registrations	and	licenses	granted	under	the	FIEL.

In	Australia,	BlackRock's	subsidiaries	are	subject	to	various	Australian	federal	and	state	laws	and	certain	subsidiaries	are	regulated	by	the	Australian	Securities	and	Investments Commission	(the	"ASIC")	and	the	Australian	Prudential	Regulation	Authority	(the	"APRA").	The	ASIC	regulates	companies	and	financial	services	in	Australia	and	is	responsible	for promoting	investor,	creditor	and	consumer	protection.	The	APRA	is	the	prudential	regulator	of	the	Australian	financial	services	industry	and	oversees	banks,	credit	unions,	building societies,	general	insurance	and	reinsurance	companies,	life	insurance,	friendly	societies	and	most	members	of	the	superannuation	(pension)	industry.	Failure	to	comply	with	applicable law	and	regulations	could	result	in	the	cancellation,	suspension	or	variation	of	the	regulated	subsidiaries	licenses	in	Australia.

The	activities	of	certain	BlackRock	subsidiaries	in	Hong	Kong	are	subject	to	the	Securities	and	Futures	Ordinance	(the	"SFO")	which	governs	the	securities	and	futures	markets	and regulates,	among	others,	offers	of	investments	to	the	public	and	provides	for	the	licensing	of	intermediaries.	The	SFO	is	administered	by	the	Securities	and	Futures	Commission	(the "SFC").	The	SFC	is	also	empowered	under	the	SFO	to	establish	standards	for	compliance	as	well	as	codes	and	guidelines.	The	relevant	BlackRock	subsidiaries	and	the	employees conducting	any	of	the	regulated	activities	specified	in	the	SFO	are	required	to	be	licensed	with	the	SFC,	and	are	subject	to	the	rules,	codes	and	guidelines	issued	by	the	SFC	from	time to	time.	Failure	to	comply	with	the	applicable	laws,	regulations,	codes	and	guidelines	issued	by	the	SFC	could	result	in	the	suspension	or	revocations	of	the	licenses	granted	by	the SFC.

There	are	parallel	legal	and	regulatory	arrangements	in	force	in	many	other	non-U.S.	jurisdictions	where	BlackRock's	subsidiaries	are	authorized	to	conduct	business.

# 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,	the	Company's	Annual	Reports	on	Form	10-K,	Quarterly	Reports	on	Form	10-Q,	Current	Reports	on	Form	8-K,	proxy statements	and	all	amendments	to	those	filings,	as	soon	as	reasonably	practicable	after	such	material	is	electronically	filed	with	or	furnished	to	the	SEC.	The	Company	also	makes available	on	its	website	the	charters	for	the	Audit	Committee,	Management	Development	and	Compensation	Committee	and	Nominating	and	Governance	Committee	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	the	Company's	Annual	Reports	on	Form	10-K,	Quarterly	Reports	on	Form	10-Q,	Current	Reports	on	Form	8- K,	proxy	statements	and	all	amendments	to	those	filings	as	well	as	the	committee	charters,	its	Code	of	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	Investor	Relations,	BlackRock,	Inc.,	55	East	52nd	Street,	New	York,	New York	10055.	Investors	may	read	and	copy	any	document	BlackRock	files	at	the	SEC's	Public	Reference	Room	at	100	F	Street	N.E.,	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.

# Item	1A. RISK	FACTORS

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.	While	BlackRock	devotes	significant	resources	across	all	of	its	operations	to	identify,	measure,	monitor,	manage	and	analyze	market	and	operating	risks,	BlackRock's business,	financial	condition,	operating	results	or	non-operating	results	could	be	materially	adversely	affected,	or	the	Company's	stock	price	could	decline	as	a	result	of	any	of	the following	risks.

# Risks	Related	to	BlackRock's	Business	and	Competition

# Changes	in	the	value	levels	of	the	capital,	commodities	or	currency	markets	or	other	asset	classes	could	lead	to	a	decline	in	revenues	and	earnings.

BlackRock's	investment	management	revenues	are	primarily	comprised	of	fees	based	on	a	percentage	of	the	value	of	AUM	and,	in	some	cases,	performance	fees	expressed	as	a percentage	of	the	returns	earned	on	AUM.	Movements	in	equity,	debt,	commodity,	real	estate	or	alternative	investment	market	prices,	interest	rates	or	foreign	exchange	rates	could cause:

•the	value	of	AUM	to	decrease;

•the	returns	realized	on	AUM	to	decrease;

•clients	to	withdraw	funds	in	favor	of	products	in	markets	that	they	perceive	offer	greater	opportunity	that	BlackRock	may	not	serve;

•clients	to	rebalance	assets	away	from	products	that	BlackRock	manages	into	products	that	it	may	not	manage;

•clients	to	rebalance	assets	away	from	products	that	earn	higher	fees	into	products	with	lower	fees;	and

•an	impairment	to	the	value	of	intangible	assets	and	goodwill.

The	occurrence	of	any	of	these	events	could	result	in	lower	investment	advisory,	administration	and	performance	fees	or	earnings	and	cause	the	Company's	stock	price	to	decline.

# Poor	investment	performance	could	lead	to	the	loss	of	clients	and	a	decline	in	revenues	and	earnings.

The	Company's	management	believes	that	investment	performance,	including	the	efficient	delivery	of	beta	for	passively	managed	products,	is	one	of	the	most	important	factors	for	the growth	and	retention	of	AUM.	Poor	investment	performance	relative	to	applicable	portfolio	benchmarks	or	to	competitors	could	reduce	revenues	and	cause	earnings	to	decline	as	a result	of:

•existing	clients	withdrawing	funds	in	favor	of	better	performing	products,	which	could	result	in	lower	investment	advisory	and	administration	fees;

•the	diminishing	ability	to	attract	funds	from	existing	and	new	clients;

•the	Company	earning	minimal	or	no	performance	fees;	and

# The	determination	to	provide	support	to	particular	products	from	time	to	time	or	provide	securities	lending	indemnifications	may	reduce	earnings	or	other	investments	in	the business.

BlackRock	may,	at	its	option,	from	time	to	time	support	investment	products	through	capital	or	credit	support.	Such	support	and	indemnifications	utilize	capital	that	would	otherwise be	available	for	other	corporate	purposes.	Losses	or	prohibitions	on	such	support	and	indemnifications,	or	failure	to	have	or	devote	sufficient	capital	to	support	products	and	securities lending,	could	have	an	adverse	impact	on	revenues	and	earnings.

# Changes	in	the	value	levels	of	the	capital	markets	or	other	asset	classes	could	lead	to	a	decline	in	the	value	of	investments	that	BlackRock	owns.

At	December	31,	2011,	BlackRock's	net	economic	investment	exposure	of	approximately	$1.1	billion	in	its	investments	(see	Item	7A,	Quantitative	and	Qualitative	Disclosures	About Market	Risk)	primarily	resulted	from	co-investments	and	seed	investments	in	its	sponsored	investment	funds.	A	decline	in	the	prices	of	equity	or	debt	securities,	or	the	value	of	real estate	or	other	alternative	investments	within	or	outside	the	United	States	could	lower	the	value	of	these	investments	and	result	in	a	decline	of	non-operating	income	and	an	increase	in the	volatility	of	BlackRock's	earnings.

# Item	1A. RISK	FACTORS	(continued)

# Continued	capital	losses	on	investments	could	have	adverse	income	tax	consequences.

The	Company	may	generate	realized	and	unrealized	capital	losses	on	seed	investments	and	co-investments.	Realized	capital	losses	may	be	carried	back	three	years	and	carried	forward five	years	and	offset	against	realized	capital	gains	for	federal	income	tax	purposes.	The	Company	has	unrealized	capital	losses	for	which	a	deferred	tax	asset	has	been	established.	In the	event	such	unrealized	losses	are	realized,	the	Company	may	not	be	able	to	offset	such	losses	within	the	carryback	or	carryforward	period	or	from	future	realized	capital	gains,	in which	case	the	deferred	tax	asset	will	not	be	realized.	The	failure	to	utilize	the	deferred	tax	asset	could	materially	increase	BlackRock's	income	tax	expense.

# The	soundness	of	other	financial	institutions	could	adversely	affect	BlackRock.

Financial	services	institutions	are	interrelated	as	a	result	of	trading,	clearing,	counterparty,	or	other	relationships.	BlackRock,	and	the	products	and	accounts	that	it	manages,	have exposure	to	many	different	industries	and	counterparties,	and	routinely	execute	transactions	with	counterparties	in	the	financial	services	industry,	including	brokers	and	dealers, commercial	banks,	investment	banks,	clearing	organizations,	mutual	and	hedge	funds,	and	other	institutional	clients.	Many	of	these	transactions	expose	BlackRock	or	the	funds	and accounts	that	it	manages	to	credit	risk	in	the	event	of	default	of	its	counterparty	or	client.	While	BlackRock	regularly	conducts	assessments	of	such	risk	posed	by	its	counterparties,	the risk	of	non-performance	by	such	parties	is	subject	to	sudden	swings	in	the	financial	and	credit	markets,	including	the	effects	of	the	European	sovereign	debt	crisis	and/or	a	collapse	of the	Eurozone	financial	system.	There	is	no	assurance	that	any	such	losses	would	not	materially	and	adversely	impact	BlackRock's	revenues	and	earnings.

# The	failure	or	negative	performance	of	products	of	other	financial	institutions	could	lead	to	reduced	AUM	in	similar	products	of	BlackRock	without	regard	to	the	performance	of BlackRock's	products.

The	failure	or	negative	performance	of	products	of	other	financial	institutions	could	lead	to	a	loss	of	confidence	in	similar	products	of	BlackRock	without	regard	to	the	performance	of BlackRock's	products.	Such	a	negative	contagion	could	lead	to	withdrawals,	redemptions	and	liquidity	issues	in	such	products	and	have	a	material	adverse	impact	on	the	Company's AUM,	revenues	and	earnings.

# Loss	of	employees	could	lead	to	the	loss	of	clients	and	a	decline	in	revenues.

The	ability	to	attract	and	retain	quality	personnel	has	contributed	significantly	to	BlackRock's	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	the	Company	will	be	successful	in	its	efforts	to recruit	and	retain	required	personnel.	Loss	of	personnel	could	have	a	material	adverse	effect	on	the	Company.

# BlackRock's	investment	advisory	contracts	may	be	terminated	or	may	not	be	renewed	by	clients	and	the	liquidation	of	certain	funds	may	be	accelerated	at	the	option	of	investors.

Separate	account	and	commingled	trust	clients	may	terminate	their	investment	management	contracts	with	BlackRock	or	withdraw	funds	on	short	notice.	The	Company	has,	from	time to	time,	lost	separate	accounts	and	could,	in	the	future,	lose	accounts	or	significant	AUM	due	to	various	circumstances	such	as	adverse	market	conditions	or	poor	performance.

Additionally,	BlackRock	manages	its	U.S.	mutual	funds,	closed-end	funds	and	exchanged-traded	funds	under	management	contracts	with	the	funds	that	must	be	renewed	and	approved by	the	funds'	boards	of	directors	annually.	A	majority	of	the	directors	of	each	such	fund	are	independent	from	BlackRock.	Consequently,	there	can	be	no	assurance	that	the	board	of directors	of	each	fund	managed	by	the	Company	will	approve	the	fund's	management	contract	each	year,	or	will	not	condition	its	approval	on	the	terms	of	the	management	contract being	revised	in	a	way	that	is	adverse	to	the	Company.

Further,	the	governing	agreements	of	many	of	the	Company's	private	investment	funds	generally	provide	that,	subject	to	certain	conditions,	investors	in	those	funds,	and	in	some	cases independent	directors	of	those	funds,	may	remove	BlackRock	as	the	investment	adviser,	general	partner	or	the	equivalent	of	the	fund	or	liquidate	the	fund	without	cause	by	a	simple majority	vote,	resulting	in	a	reduction	in	the	management	or	performance	fees	as	well	as	the	total	carried	interest	BlackRock	could	earn.

# Failure	to	comply	with	client	contractual	requirements	and/or	guidelines	could	result	in	damage	awards	against	BlackRock	and	loss	of	revenues	due	to	client	terminations.

When	clients	retain	BlackRock	to	manage	assets	or	provide	products	or	services	on	their	behalf,	they	typically	specify	guidelines	or	contractual	requirements	that	the	Company	is required	to	observe	in	the	provision	of	its	services.	A	failure	to	comply	with	these	guidelines	or	contractual	requirements	could	result	in	damage	to	BlackRock's	reputation	or	in	its clients	seeking	to	recover	losses,	withdrawing	their	AUM	or	terminating	their	contracts,	any	of	which	could	cause	the	Company's	revenues	and	earnings	to	decline.

# Competitive	fee	pressures	could	reduce	revenues	and	profit	margins.

The	investment	management	industry,	including	the	offering	of	exchange-traded	funds,	is	highly	competitive	and	has	relatively	low	barriers	to	entry.	To	the	extent	that	BlackRock	is forced	to	compete	on	the	basis	of	price,	it	may	not	be	able	to	maintain	its	current	fee	structure.	Fee	reductions	on	existing	or	future	new	business	could	cause	revenues	and	profit margins	to	decline.

# Performance	fees	may	increase	revenue	and	earnings	volatility.

A	portion	of	the	Company's	revenues	is	derived	from	performance	fees	on	investment	and	risk	management	advisory	assignments.	Performance	fees	represented	$371	million,	or	4%, of	total	revenue	for	the	year	ended	December	31,	2011.	In	most	cases,	performance	fees	are	based	on	relative	or	absolute	investment	returns,	although	in	some	cases	they	are	based	on achieving	specific	service	standards.	Generally,	the	Company	is	entitled	to	performance	fees	only	if	the	returns	on	the	related	portfolios	exceed	agreed-upon	periodic	or	cumulative return	targets.	If	these	targets	are	not	exceeded,	performance	fees	for	that	period	will	not	be	earned	and,	if	targets	are	based	on	cumulative	returns,	the	Company	may	not	earn performance	fees	in	future	periods.	Performance	fees	will	vary	from	period	to	period	in	relation	to	volatility	in	investment	returns	and	the	timing	of	revenue	recognition,	causing earnings	to	be	more	volatile.

# Additional	acquisitions	may	decrease	earnings	and	harm	the	Company's	competitive	position.

BlackRock	employs	a	variety	of	strategies	intended	to	enhance	earnings	and	expand	product	offerings	in	order	to	improve	profit	margins.	These	strategies	have	included	hiring	smaller- sized	investment	teams	and	acquisitions	of	investment	management	businesses,	such	as	the	MLIM,	Quellos	and	BGI	Transactions.	These	strategies	may	not	be	effective,	and	failure	to successfully	develop	and	implement	these	strategies	may	decrease	earnings	and	harm	the	Company's	competitive	position	in	the	investment	management	industry.	In	the	event BlackRock	pursues	additional	acquisitions,	it	may	not	be	able	to	find	suitable	businesses	to	acquire	at	acceptable	prices,	and	it	may	not	be	able	to	successfully	integrate	or	realize	the intended	benefits	from	such	acquisitions.

# Risks	Related	to	BlackRock's	Operations

# Failure	to	maintain	adequate	infrastructure	could	impede	BlackRock's	productivity	and	growth.

The	Company's	infrastructure,	including	its	technological	capacity,	data	centers,	and	office	space,	is	vital	to	the	competitiveness	of	its	business.	The	failure	to	maintain	an	adequate infrastructure	commensurate	with	the	size	and	scope	of	its	business,	including	any	expansion,	could	impede	the	Company's	productivity	and	growth,	which	could	cause	the	Company's earnings	or	stock	price	to	decline.	Additionally,	the	overall	stability	of	the	euro	and	the	possible	withdrawal	of	one	or	more	individual	Eurozone	countries	from	the	euro	could	pose operational	risks	to	the	Company	or	the	funds	and	accounts	that	it	manages	as	a	result	of	the	adverse	impacts	that	such	issues	may	have	on	the	Company's	trading,	clearing,	or counterparty	relationships.

# Failure	to	maintain	adequate	business	continuity	plans	could	have	a	material	adverse	impact	on	BlackRock	and	its	products.

A	significant	portion	of	BlackRock's	critical	business	operations	is	concentrated	in	a	few	geographic	areas,	including	San	Francisco,	California,	New	York,	New	York	and	London, England.	A	major	earthquake,	fire,	terrorist	or	other	catastrophic	event	could	result	in	disruption	to	the	business.	The	failure	of	the	Company	to	maintain	updated	adequate	business continuity	plans,	including	secure	backup	facilities,	systems	and	personnel	could	impede	the	Company's	ability	to	operate	upon	a	disruption,	which	could	cause	the	Company's earnings	or	stock	price	to	decline.

# Operating	in	international	markets	increases	BlackRock's	operational,	regulatory	and	other	risks.

As	a	result	of	BlackRock's	extensive	international	business	activities,	the	Company	faces	increased	operational,	regulatory,	reputational	and	foreign	exchange	rate	risks.	The	failure	of the	Company's	systems	of	internal	control	to	properly	mitigate	such	additional	risks,	or	of	its	operating	infrastructure	to	support	such	international	activities,	could	result	in	operational failures	and	regulatory	fines	or	sanctions,	which	could	cause	the	Company's	earnings	or	stock	price	to	decline.

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

A	key	element	to	BlackRock's	continued	success	is	the	ability	to	maintain	a	technological	advantage	in	providing	the	sophisticated	risk	analytics	incorporated	into	BlackRock's Aladdin	technology	platform	that	support	investment	advisory	and	BRS	clients.	Moreover,	the	Company's	technological	and	software	advantage	is	dependent	on	a	number	of	third parties	who	provide	various	types	of	data	and	software.	The	failure	of	these	third	parties	to	provide	such	data	or	software	could	result	in	operational	difficulties	and	adversely	impact BlackRock's	ability	to	provide	services	to	its	investment	advisory	and	BRS	clients.	There	can	be	no	assurance	that	the	Company	will	be	able	to	maintain	this	technological	advantage or	be	able	to	effectively	protect	and	enforce	its	intellectual	property	rights	in	these	systems	and	processes.

# Failure	to	implement	effective	information	and	cyber	security	policies,	procedures	and	capabilities	could	disrupt	operations	and	cause	financial	losses	that	could	result	in	a decrease	in	BlackRock's	earnings	or	stock	price.

BlackRock	is	dependent	on	the	effectiveness	of	its	information	and	cyber	security	policies,	procedures	and	capabilities	to	protect	its	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,	virus	or	worm,	or	an	internally	caused	issue,	such	as failure	to	control	access	to	sensitive	systems,	could	materially	interrupt	business	operations	or	cause	disclosure	or	modification	of	sensitive	or	confidential	client	or	competitive information	and	could	result	in	material	financial	loss,	loss	of	competitive	position,	regulatory	actions,	breach	of	client	contracts,	reputational	harm	or	legal	liability,	which,	in	turn, could	cause	a	decline	in	the	Company's	earnings	or	stock	price.

# The	failure	of	a	key	vendor	to	BlackRock	to	fulfill	its	obligations	could	have	a	material	adverse	effect	on	BlackRock	and	its	products.

BlackRock	depends	on	a	number	of	key	vendors	for	various	fund	administration,	accounting,	custody	and	transfer	agent	roles	and	other	operational	needs.	The	failure	or	inability	of BlackRock	to	diversify	its	sources	for	key	services	or	the	failure	of	any	key	vendors	to	fulfill	their	obligations	could	lead	to	operational	issues	for	the	Company	and	in	certain	products, which	could	result	in	financial	losses	for	the	Company	and	its	clients.

# Failure	to	manage	risks	in	operating	BlackRock's	securities	lending	program	for	clients	could	lead	to	a	loss	of	clients	and	a	decline	in	revenues	and	liquidity.

The	size	of	BlackRock's	securities	lending	programs	increased	significantly	with	the	completion	of	the	BGI	Transaction.	As	part	of	these	programs,	BlackRock	must	manage	risks associated	with	(i)	ensuring	that	the	value	of	the	collateral	held	against	the	securities	on	loan	does	not	decline	in	value	or	become	illiquid	and	that	its	nature	and	value	complies	with regulatory	requirements	and	investment	requirements;	(ii)	the	potential	that	a	borrower	defaults	or	does	not	return	a	loaned	security	on	a	timely	basis;	and	(iii)	errors	in	the	settlement	of securities,	daily	mark-to-market	valuations	and	collateral	collection.	The	failure	of	the	Company's	controls	to	mitigate	these	risks	could	result	in	financial	losses	for	the	Company's clients	that	participate	in	its	securities	lending	programs	as	well	as	for	the	Company.

# Risks	Related	to	Relationships	with	Bank	of	America/Merrill	Lynch,	PNC,	Barclays	and	Other	Institutional	Investors

# Merrill	Lynch	is	an	important	distributor	of	BlackRock's	products,	and	the	Company	is,	therefore,	subject	to	risks	associated	with	the	business	of	Merrill	Lynch.

Under	a	global	distribution	agreement	entered	into	with	Merrill	Lynch,	Merrill	Lynch	provides	distribution,	portfolio	administration	and	servicing	for	certain	BlackRock	investment management	products	and	services	through	its	various	distribution	channels.	The	Company	may	not	be	successful	in	distributing	products	through	Merrill	Lynch	or	in	distributing	its products	and	services	through	other	third-party	distributors.	If	BlackRock	is	unable	to	distribute	its	products	and	services	successfully	or	if	it	experiences	an	increase	in	distribution- related	costs,	BlackRock's	business,	results	of	operations	or	financial	condition	may	be	materially	and	adversely	affected.

# Loss	of	market	share	within	Merrill	Lynch's	Global	Wealth	&	Investment	Management	business	could	harm	operating	results.

A	significant	portion	of	BlackRock's	revenue	has	historically	come	from	AUM	generated	by	Merrill	Lynch's	Global	Wealth	&	Investment	Management	("GWIM")	business. BlackRock's	ability	to	maintain	a	strong	relationship	within	GWIM	is	material	to	the	Company's	future	performance.	If	one	of	the	Company's	competitors	gains	significant	additional market	share	within	the	GWIM	retail	channel	at	the	expense	of	BlackRock,	then	BlackRock's	business,	results	of	operations	or	financial	condition	may	be	negatively	impacted.

The	failure	of	Barclays	to	fulfill	its	commitments,	or	the	inadequacy	of	the	support	provided,	under	certain	capital	support	agreements	in	favor	of	a	number	of	cash	management funds	acquired	in	the	BGI	Transaction,	could	negatively	impact	such	funds	and	BlackRock.

Barclays	has	provided	capital	support	agreements	through	December	2013,	or	until	certain	criteria	are	met,	to	support	certain	cash	management	products,	which	were	acquired	by BlackRock	in	the	BGI	Transaction.	The	failure	of	Barclays	to	fulfill	its	obligations	under	these	agreements,	or	the	inadequacy	of	the	support	provided,	could	cause	our	clients	to	suffer losses	and	BlackRock	to	suffer	reputational	and	other	adverse	impacts.	For	a	discussion	on	the	capital	support	agreements	see	"Management,	Discussion	and	Analysis	–	Liquidity	and Capital	Resources	–	Barclays	Support	of	Certain	Cash	Funds."

# PNC	and	Barclays	have	each	agreed	to	vote	as	stockholders	in	accordance	with	the	recommendation	of	BlackRock's	Board	of	Directors,	and	certain	actions	will	require	special board	approval	or	the	prior	approval	of	PNC	and	Barclays.

PNC	and	Barclays	have	agreed	to	vote	all	of	their	voting	shares	in	accordance	with	the	recommendation	of	BlackRock's	Board	of	Directors	in	accordance	with	the	provisions	of	their respective	stockholder	agreements	with	BlackRock.	As	a	consequence,	if	the	shares	held	by	PNC	and	Barclays	constitute	a	substantial	portion	of	the	outstanding	voting	shares,	matters submitted	to	a	stockholder	vote	that	require	a	majority	or	a	plurality	of	votes	for	approval,	including	elections	of	directors,	will	have	a	substantial	number	of	shares	voted	in	accordance with	the	determinations	of	the	BlackRock	Board	of	Directors.	This	arrangement	has	the	effect	of	concentrating	a	significant	block	of	voting	control	over	BlackRock	in	its	Board	of Directors,	whether	or	not	stockholders	agree	with	any	particular	determination	of	the	Board.	At	December	31,	2011,	PNC	and	Barclays	owned	approximately	24.0%	and	2.2%, respectively,	of	BlackRock's	voting	common	stock.

# A	large	portion	of	BlackRock's	capital	stock	is	held	by	a	small	group	of	significant	shareholders.	Future	sales	of	our	common	stock	in	the	public	market	by	the	Company	or	its large	stockholders	could	adversely	affect	the	trading	price	of	our	common	stock.

As	of	December	31,	2011,	PNC	and	Barclays	owned	21.0%	and	19.7%	of	the	Company's	capital	stock,	respectively.	The	Company	has	entered	into	registration	rights	agreements	with PNC	and	Barclays	as	well	as	the	institutional	investors	who	purchased	shares	of	BlackRock	capital	stock	in	connection	with	the	BGI	Transaction.	The	registration	rights	agreements, which	include	customary	"piggyback"	registration	provisions,	may	continue	to	allow	the	respective	stockholders	to	cause	us	to	file	one	or	more	registration	statements	for	the	resale	of their	respective	shares	of	capital	stock	and	cooperate	in	certain	underwritten	offerings.	Sales	by	us	or	our	large	stockholders	of	a	substantial	number	of	shares	of	our	common	stock	in the	public	market	pursuant	to	registration	rights	or	otherwise,	or	the	perception	that	these	sales	might	occur,	could	cause	the	market	price	of	our	common	stock	to	decline.

# Legal	and	Regulatory	Risks

# BlackRock	is	subject	to	extensive	regulation	in	the	United	States	and	internationally.

BlackRock's	business	is	subject	to	extensive	regulation	in	the	United	States	and	around	the	world.	See	the	discussion	under	the	heading	"Business	–	Regulation."	Violation	of applicable	laws	or	regulations	could	result	in	fines,	temporary	or	permanent	prohibition	of	the	engagement	in	certain	activities,	reputational	harm	and	related	client	terminations, suspensions	of	personnel	or	revocation	of	their	licenses,	suspension	or	termination	of	investment	adviser	or	broker-dealer	registrations,	or	other	sanctions,	which	could	have	a	material adverse	effect	on	BlackRock's	reputation,	business,	results	of	operations	or	financial	condition	and	cause	the	Company's	earnings	or	stock	price	to	decline.

# BlackRock	may	be	adversely	impacted	by	legal	and	regulatory	changes	in	the	United	States	and	internationally.

As	previously	mentioned,	on	July	21,	2010,	the	DFA	was	signed	into	law	in	the	United	States.	The	DFA	is	expansive	in	scope	and	requires	the	adoption	of	extensive	regulations	and numerous	regulatory	decisions	in	order	to	be	implemented.	The	adoption	of	these	regulations	and	decisions	will	in	large	measure	determine	the	impact	of	the	DFA	on	BlackRock.

The	DFA	and	its	regulations,	and	other	new	laws	or	regulations,	or	changes	in	enforcement	of	existing	laws	or	regulations	in	the	United	States	or	internationally,	could	adversely impact	the	scope	or	profitability	of	BlackRock's	business	activities,	could	require	BlackRock	to	change	certain	business	practices	and	could	expose	BlackRock	to	additional	costs (including	compliance	and	tax	costs)	and	liabilities,	as	well	as	reputational	harm.	Regulatory	changes	could	also	lead	to	business	disruptions,	could	adversely	impact	the	value	of	assets in	which	BlackRock	has	invested	on	behalf	of	clients	and/or	via	seed	or	co-investments,	and,	to	the	extent	the	regulations	strictly	control	the	activities	of	financial	services	firms,	could make	it	more	difficult	for	BlackRock	to	conduct	certain	business	activities	or	distinguish	itself	from	competitors.

# Failure	to	comply	with	the	Advisers	Act	and	the	Investment	Company	Act	and	related	regulations	could	result	in	substantial	harm	to	BlackRock's	reputation	and	results	of operations.

Certain	BlackRock	subsidiaries	are	registered	with	the	SEC	under	the	Advisers	Act	and	BlackRock's	U.S.	mutual	funds	and	exchange-traded	funds	are	registered	with	the	SEC	under the	Investment	Company	Act.	The	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	and	compliance	requirements,	on	investment	advisers	to	registered	investment	companies.	The	failure	of	any	of	the	relevant	subsidiaries	to	comply	with	the	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	the	Company's	reputation,	any	of which	could	cause	its	earnings	or	stock	price	to	decline.

# Failure	to	comply	with	ERISA	regulations	could	result	in	penalties	and	cause	the	Company's	earnings	or	stock	price	to	decline.

Certain	BlackRock	subsidiaries	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	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	the	relevant	subsidiaries	to	comply	with	these	requirements	could	result	in	significant penalties	that	could	reduce	the	Company's	earnings	or	cause	its	stock	price	to	decline.

# BlackRock	is	subject	to	banking	regulations	that	may	limit	its	business	activities.

Because	the	total	equity	ownership	interest	of	PNC	in	BlackRock	exceeds	certain	thresholds,	BlackRock	is	deemed	to	be	a	non-bank	subsidiary	of	PNC,	which	is	regulated	as	a financial	holding	company	under	the	Bank	Holding	Company	Act	of	1956,	as	amended.	As	a	non-bank	subsidiary	of	PNC,	BlackRock	is	subject	to	banking	regulation,	including	the supervision	and	regulation	of	the	Federal	Reserve.	Such	banking	regulation	limits	the	activities	and	the	types	of	businesses	that	BlackRock	may	conduct.	The	Federal	Reserve	has broad	enforcement	authority	over	BlackRock,	including	the	power	to	prohibit	BlackRock	from	conducting	any	activity	that,	in	the	Federal	Reserve's	opinion,	is	unauthorized	or constitutes	an	unsafe	or	unsound	practice	in	conducting	BlackRock's	business,	and	to	impose	substantial	fines	and	other	penalties	for	violations.	Any	failure	of	PNC	to	maintain	its status	as	a	financial	holding	company	could	result	in	substantial	limitations	on	certain	BlackRock	activities	and	its	growth.	In	addition,	BlackRock's	trust	bank	subsidiary	is	subject	to regulation	by	the	OCC,	and	is	subject	to	capital	requirements	established	by	the	OCC.	The	OCC	has	broad	enforcement	authority	over	BlackRock's	trust	bank	subsidiary.	Also, provisions	of	the	DFA	referred	to	as	the	Volcker	Rule	could,	to	the	extent	the	final	Volcker	Rule	is	determined	to	apply	to	BlackRock's	activities,	affect	the	method	by	which BlackRock	invests	in	and	operates	its	investment	funds,	including	private	equity	funds,	hedge	funds	and	fund	of	funds	platforms.	Being	subject	to	banking	regulation,	including potentially	the	Volcker	Rule,	may	put	BlackRock	at	a	competitive	disadvantage	because	most	of	its	competitors	are	not	subject	to	these	limitations.

# Failure	to	comply	with	laws	and	regulations	in	the	United	Kingdom,	other	member	states	of	the	European	Union,	Hong	Kong,	Japan,	Australia	and	other	non-U.S.	jurisdictions in	which	BlackRock	operates	could	result	in	substantial	harm	to	BlackRock's	reputation	and	results	of	operations.

The	FSA	regulates	BlackRock's	subsidiaries	in	the	United	Kingdom.	Authorization	by	the	FSA	is	required	to	conduct	any	financial	services-related	business	in	the	United	Kingdom under	the	Financial	Services	and	Markets	Act	2000.	The	FSA's	rules	made	under	that	Act	govern	a	firm's	capital	resources	requirements,	senior	management	arrangements,	conduct	of business,	interaction	with	clients	and	systems	and	controls.	Breaches	of	these	rules	may	result	in	a	wide	range	of	disciplinary	actions	against	the	Company's	U.K.-regulated subsidiaries.

In	addition,	these	subsidiaries,	and	other	European	subsidiaries,	branches	or	representative	offices,	must	comply	with	the	pan-European	regime	established	by	the	Markets	in	Financial Instruments	Directive	("MiFID"),	which	regulates	the	provision	of	investment	services	and	activities	throughout	the	EEA,	as	well	as	the	Capital	Requirements	Directive,	which delineates	regulatory	capital	requirements.	As	discussed	under	"Business-Regulation,"	in	the	aftermath	of	the	financial	crisis	the	European	Commission	set	out	a	detailed	plan	to complete	the	EU's	financial	reform,	outlining	a	number	of	initiatives	to	be	reflected	in	new	or	updated	directives,	regulations	and	recommendations.	The	Alternative	Investment	Fund Managers	Directive	("AIFMD"),	which	became	effective	on	July	21,	2011,	must	be	implemented	by	EU	member	states	by	July	22,	2012.	Compliance	with	the	AIFMD's	requirements may	restrict	alternative	investment	funds	marketing	and	place	additional	compliance	obligations	in	the	form	of	remuneration	policies,	capital	requirements,	leverage	oversight, valuation,	stakes	in	EU	companies,	the	domicile	of	custodians	and	liquidity	management.	UCITS	IV	was	required	to	be	adopted	in	the	national	law	of	each	EU	member	state	by	July	1, 2011.	UCITS	IV	was	adopted	into	national	law	by	the	United	Kingdom	prior	to	the	deadline	but	several	other	EU	member	states	are	still	in	various	stages	of	the	adoption	process. There	are	also	European	Commission	consultations	in	process	that	are	intended	to	improve	retail	investor	protection	including	UCITS	V,	which	addresses,	among	other	items, custodial	liability.	Recent	proposals	on	packaged	retail	investment	products	("PRIPs")	are	to	be	implemented	through	the	strengthening	of	MiFID	standards	(for	non-insurance	PRIPs), revisions	to	the	Insurance	Mediation	Directive's	selling	standard	(for	all	insurance-based	PRIPs)	and	new	investor	disclosure	requirements	for	all	PRIPs	through	a	separate	EU legislative	process.	In	the	United	Kingdom,	the	Bribery	Act	2010	came	into	force	in	July	2011	and	has	required	the	implementation	of	additional	procedures	on	the	Company's	U.K.- regulated	subsidiaries.	In	addition,	a	retail	distribution	review	initiated	by	the	FSA	is	expected	to	change	how	investment	advice	is	paid	for	in	the	United	Kingdom	for	all	investment products.	Final	retail	distribution	rules	were	published	in	2011,	with	implementation	to	occur	at	the	end	of	2012.	In	a	similar	area,	a	further	European	Commission	proposal	(the European	Market	Infrastructure	Regulation	("EMIR")),	when	implemented,	will	require	the	central	clearing	of	standardized	OTC	derivatives.

In	Japan,	certain	BlackRock	subsidiaries	are	subject	to	the	Financial	Instruments	and	Exchange	Law	(the	"FIEL")	and	the	Law	Concerning	Investment	Trusts	and	Investment Corporations.	These	laws	are	administered	and	enforced	by	the	Japanese	Financial	Services	Agency	(the	"JFSA"),	which	establishes	standards	for	compliance,	including	capital adequacy	and	financial	soundness	requirements,	customer	protection	requirements	and	conduct	of	business	rules.	The	JFSA	is	empowered	to	conduct	administrative	proceedings	that can	result	in	censure,	fines,	the	issuance	of	cease	and	desist	orders	or	the	suspension	or	revocation	of	registrations	and	licenses	granted	under	the	FIEL.

In	Australia,	BlackRock's	subsidiaries	are	subject	to	various	Australian	federal	and	state	laws	and	certain	subsidiaries	are	regulated	by	the	Australian	Securities	and	Investments Commission	(the	"ASIC")	and	the	Australian	Prudential	Regulation	Authority.	The	ASIC	regulates	companies	and	financial	services	in	Australia	and	is	responsible	for	promoting investor,	creditor	and	consumer	protection.	Failure	to	comply	with	applicable	law	and	regulations	could	result	in	the	cancellation,	suspension	or	variation	of	the	relevant	subsidiaries' licenses	in	Australia.

There	are	similar	legal	and	regulatory	arrangements	in	force	in	many	other	non-U.S.	jurisdictions	where	BlackRock's	subsidiaries	conduct	business	or	where	the	funds	and	products	it manages	are	organized.	Failure	to	comply	with	laws	and	regulations	in	any	of	these	jurisdictions	could	result	in	substantial	harm	to	BlackRock's	reputation	and	results	of	operation.

# Legal	proceedings	could	adversely	affect	operating	results,	financial	condition	and	cash	flows	for	a	particular	period.

Many	aspects	of	BlackRock's	business	involve	substantial	risks	of	legal	liability.	The	Company	and	certain	of	its	subsidiaries	have	been	named	as	defendants	in	various	legal	actions, including	arbitrations,	class	actions	and	other	litigation	arising	in	connection	with	BlackRock's	activities.	From	time	to	time,	BlackRock	receives	subpoenas	or	other	requests	for information	from	various	U.S.	and	non-U.S.	governmental	and	regulatory	authorities	in	connection	with	certain	industry-wide,	company-specific	or	other	investigations	or	proceedings. Additionally,	certain	of	the	investment	funds	that	the	Company	manages	are	subject	to	lawsuits,	any	of	which	could	potentially	harm	the	investment	returns	of	the	applicable	fund	or result	in	the	Company	being	liable	to	the	funds	for	any	resulting	damages.

# Item	1B. UNRESOLVED	STAFF	COMMENTS

The	Company	has	no	unresolved	comments	from	the	SEC	staff	relating	to	BlackRock's	periodic	or	current	reports	filed	with	the	SEC	pursuant	to	the	Exchange	Act.

# Item	2. PROPERTIES

BlackRock's	principal	office,	which	is	leased,	is	located	at	55	East	52nd	Street,	New	York,	New	York.	BlackRock	leases	additional	office	space	in	New	York	City	at	40	East	52nd Street	and	throughout	the	world,	including	Boston,	Chicago,	Edinburgh,	Gurgaon	(India),	Hong	Kong,	London,	Melbourne,	Munich,	Princeton	(New	Jersey),	San	Francisco,	Seattle, Singapore,	Sydney,	Taipei	and	Tokyo.	The	Company	also	owns	an	84,500	square	foot	office	building	in	Wilmington	(Delaware).

# Item	3. LEGAL	PROCEEDINGS

From	time	to	time,	BlackRock	receives	subpoenas	or	other	requests	for	information	from	various	U.S.	federal,	state	governmental	and	regulatory	authorities	in	connection	with	certain industry-wide,	company-specific	or	other	investigations	or	proceedings.	It	is	BlackRock's	policy	to	fully	cooperate	with	such	inquiries.	The	Company	and	certain	of	its	subsidiaries have	been	named	as	defendants	in	various	legal	actions,	including	arbitrations	and	other	litigation	arising	in	connection	with	BlackRock's	activities.	Additionally,	certain	of	the investment	funds	that	the	Company	manages	are	subject	to	lawsuits,	any	of	which	could	potentially	harm	the	investment	returns	of	the	applicable	fund	or	result	in	the	Company	being liable	to	the	funds	for	any	resulting	damages.

Management,	after	consultation	with	legal	counsel,	currently	does	not	anticipate	that	the	aggregate	liability,	if	any,	arising	out	of	regulatory	matters	or	lawsuits	will	have	a	material adverse	effect	on	BlackRock's	earnings,	financial	position,	or	cash	flows,	although,	at	the	present	time,	management	is	not	in	a	position	to	determine	whether	any	such	pending	or threatened	matters	will	have	a	material	adverse	effect	on	BlackRock's	results	of	operations	in	any	future	reporting	period.

# Item	4. MINE	SAFETY	DISCLOSURES

Not	applicable.

# Part	II

# Item	5. MARKET	FOR	REGISTRANT'S	COMMON	EQUITY,	RELATED	STOCKHOLDER	MATTERS	AND	ISSUER	PURCHASES	OF	EQUITY SECURITIES

BlackRock's	common	stock	is	listed	on	the	NYSE	and	is	traded	under	the	symbol	"BLK".	At	the	close	of	business	on	January	31,	2012,	there	were	375	common	stockholders	of record.	Common	stockholders	include	institutional	or	omnibus	accounts	that	hold	common	stock	for	multiple	underlying	investors.

The	following	table	sets	forth	for	the	periods	indicated	the	high	and	low	reported	sale	prices,	period-end	closing	prices	for	the	common	stock	and	dividends	declared	per	share	for	the common	stock	as	reported	on	the	NYSE:

|  | Common	Stock	Price<br>Ranges<br>High | Low | Closing<br>Price | Cash<br>Dividend<br>Declared |
| :--- | :--- | :--- | :--- | :--- |
| 2011 |  |  |  |  |
| First\tQuarter | $209.77 | $179.52 | $201.01 | $ 1.375 |
| Second\tQuarter | $207.42 | $183.51 | $191.81 | $ 1.375 |
| Third\tQuarter | $199.10 | $140.22 | $148.01 | $ 1.375 |
| Fourth\tQuarter | $179.77 | $137.00 | $178.24 | $ 1.375 |
| 2010 |  |  |  |  |
| First\tQuarter | $243.80 | $200.56 | $217.76 | $1.00 |
| Second\tQuarter | $212.27 | $143.01 | $143.40 | $1.00 |
| Third\tQuarter | $172.87 | $138.42 | $170.25 | $1.00 |
| Fourth\tQuarter | $193.74 | $161.53 | $190.58 | $1.00 |

# Dividends

On	February	23,	2012,	the	Board	of	Directors	approved	BlackRock's	quarterly	dividend	of	$1.50	to	be	paid	on	March	23,	2012	to	stockholders	of	record	on	March	7,	2012.

Barclays	and	PNC	and	their	respective	affiliates	along	with	other	institutional	investors	that	hold	non-voting	participating	preferred	stock	receive	dividends	on	these	shares,	which	are equivalent	to	the	dividends	received	by	common	stockholders.

# Issuer	Purchases	of	Equity	Securities

During	the	three	months	ended	December	31,	2011,	the	Company	made	the	following	purchases	of	its	common	stock,	which	is	registered	pursuant	to	Section	12(b)	of	the	Exchange Act.

|  | Total<br>Number	of<br>Shares<br>Purchased | Average<br>Price	Paid<br>per	Share | as	Part	of<br>Publicly<br>Announced	Plans<br>or	Programs | Purchased<br>Under	the<br>Plans	or<br>(1)<br>Programs |
| :--- | :--- | :--- | :--- | :--- |
| October\t1,\t2011\tthrough\tOctober\t31,\t2011 | 6,065^(2) | $161.33 | — | \t4,203,898 |
| November\t1,\t2011\tthrough\tNovember\t30,\t2011 | \t537,395^(2) | $160.85 | 537,000 | \t3,666,898 |
| December\t1,\t2011\tthrough\tDecember\t31,\t2011 | 85,120^(2) | $168.95 | 81,000 | \t3,585,898 |
| Total | \t628,580 | $161.95 | 618,000 |  |

In	July	2010,	the	Company	announced	a	5.1	million	share	repurchase	program	with	no	stated	expiration	date.	In	February	2012,	the	Board	of	Directors	approved	an	increase	in the	availability	under	the	Company's	existing	share	repurchase	program	to	allow	for	the	repurchase	of	up	to	5.0	million	shares	of	BlackRock	common	stock. (1)

Includes	purchases	made	by	the	Company	primarily	to	satisfy	income	tax	withholding	obligations	of	employees	and	members	of	our	Board	of	Directors	related	to	the	vesting	of certain	restricted	stock	or	restricted	stock	unit	awards,	and	purchases	made	by	the	Company	as	part	of	the	publicly	announced	share	repurchase	program. (2)

# Item	6. SELECTED	FINANCIAL	DATA

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	Item	7. Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	included	in	this	Form	10-K.	Prior	year	data	reflects	certain	reclassifications	to	conform	to	the current	year	presentation.

|  |  | Year	ended	December	31, | Year	ended	December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions,\texcept\tper\tshare\tdata) | 2011 | (1)\n2010 | 2009 | 2008 | 2007 |
| Income\tstatement\tdata: |  |  |  |  |  |
| Related\tparties^(2) | $5,431 | $5,025 | $2,716 | $3,006 | $2,663 |
| Other\tthird\tparties | 3,650 | 3,587 | 1,984 | \t 2,058 | \t 2,182 |
| Total\trevenue | 9,081 | 8,612 | 4,700 | \t 5,064 | \t 4,845 |
| Expenses |  |  |  |  |  |
| Restructuring\tcharges | 32 | — | 22 | 38 | — |
| Termination\tof\tclosed-end\tfund\tadministration\tand\tservicing\tarrangements | — | — | — | — | 128 |
| Other\toperating\texpenses | 5,800 | 5,614 | 3,400 | \t 3,433 | \t 3,423 |
| Total\texpenses | 5,832 | 5,614 | 3,422 | \t 3,471 | \t 3,551 |
| Operating\tincome | 3,249 | 2,998 | 1,278 | \t 1,593 | \t 1,294 |
| Total\tnon-operating\tincome\t(expense) | (114) | 23 | (6) | (577) | 526 |
| Income\tbefore\tincome\ttaxes | 3,135 | 3,021 | 1,272 | \t 1,016 | \t 1,820 |
| Income\ttax\texpense | 796 | 971 | 375 | 387 | 463 |
| Net\tincome | 2,339 | 2,050 | 897 | 629 | \t 1,357 |
| Less:\tNet\tincome\t(loss)\tattributable\tto\tnon-controlling\tinterests | 2 | (13) | 22 | (155) | 364 |
| Net\tincome\tattributable\tto\tBlackRock,\tInc. | $2,337 | $2,063 | $875 | $784 | $993 |
| Per\tshare\tdata:^(3) |  |  |  |  |  |
| Basic\tearnings | $12.56 | $10.67 | $6.24 | $5.86 | $7.53 |
| Diluted\tearnings | $12.37 | $10.55 | $6.11 | $5.78 | $7.37 |
| Book\tvalue^(4) | $140.07 | $136.09 | $128.86 | $92.91 | $90.16 |
| Common\tand\tpreferred\tcash\tdividends | $5.50 | $4.00 | $3.12 | $3.12 | $2.68 |

| (Dollar	amounts	in	millions) | 2011 | 2010 | (1)<br>2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Balance\tsheet\tdata: |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $3,506 | $3,367 | $4,708 | $2,032 | $1,656 |
| Goodwill\tand\tintangible\tassets,\tnet | 30,148 | 30,317 | 30,346 | 11,974 | 12,073 |
| Total\tassets^(5) | 179,896 | 178,459 | 178,124 | 19,924 | 22,561 |
| Less: |  |  |  |  |  |
| \t\tSeparate\taccount\tassets^(6) | 118,871 | 121,137 | 119,629 | 2,623 | 4,670 |
| \t\tCollateral\theld\tunder\tsecurities\tlending\tagreements^(6) | 20,918 | 17,638 | 19,335 | — | — |
| \t\tConsolidated\tinvestment\tvehicles^(7) | 2,006 | 1,610 | 282 | 502 | 805 |
| \t\t\t\tAdjusted\ttotal\tassets | $38,101 | $38,074 | $38,878 | $16,799 | $17,086 |
| Short-term\tborrowings | $100 | $100 | $2,234 | $200 | $300 |
| Convertible\tdebentures | — | 67 | 243 | 245 | 242 |
| Long-term\tborrowings | 4,690 | 3,192 | 3,191 | 697 | 697 |
| Total\tborrowings | $4,790 | $3,359 | $5,668 | $1,142 | $1,239 |
| Total\tstockholders'\tequity | $25,048 | $26,094 | $24,329 | $12,069 | $11,601 |

| (Dollar	amounts	in	millions) | 2011 | 2010 | (1)<br>2009 | 2008 | 2007 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Assets\tunder\tmanagement: |  |  |  |  |  |
| Equity: |  |  |  |  |  |
| Active | $275,156 | $334,532 | $348,574 | $152,216 | $291,324 |
| Institutional\tindex | 865,299 | 911,775 | 806,082 | 51,076 | 71,381 |
| iShares | 419,651 | 448,160 | 381,399 | — | — |
| Fixed\tincome: |  |  |  |  |  |
| Active | 614,804 | 592,303 | 595,580 | 477,492 | 506,265 |
| Institutional\tindex | 479,116 | 425,930 | 357,557 | 3,873 | 3,942 |
| iShares | 153,802 | 123,091 | 102,490 | — | — |
| Multi-asset\tclass | 225,170 | 185,587 | 142,029 | 77,516 | 98,623 |
| Alternatives^(8) : |  |  |  |  |  |
| Core | 63,647 | 63,603 | 66,058 | 60,954 | 70,884 |
| Currency\tand\tcommodities | 41,301 | 46,135 | 36,043 | 590 | 887 |
| Long-term | \t 3,137,946 | 3,131,116 | 2,835,812 | 823,717 | 1,043,306 |
| Cash\tmanagement | 254,665 | 279,175 | 349,277 | 338,439 | 313,338 |
| Sub-total | \t 3,392,611 | 3,410,291 | 3,185,089 | 1,162,156 | 1,356,644 |
| Advisory^(9) | 120,070 | 150,677 | 161,167 | 144,995 | — |
| Total | $3,512,681 | $3,560,968 | $3,346,256 | $1,307,151 | $1,356,644 |

Significant	increases	in	2009	(for	balance	sheet	data	and	AUM)	and	2010	(for	income	statement	data)	were	primarily	the	result	of	the	BGI	Transaction	which	closed	on December	1,	2009. (1)

BlackRock's	related	party	revenue	includes	fees	for	services	provided	to	registered	investment	companies	that	it	manages,	which	include	mutual	funds	and	exchange-traded funds,	as	a	result	of	the	Company's	advisory	relationship.	In	addition,	equity	method	investments	are	considered	related	parties	due	to	the	Company's	influence	over	the financial	and	operating	policies	of	the	investee.	See	Note	15	to	the	consolidated	financial	statements	for	more	information	on	related	parties. (2)

Participating	preferred	stock	is	considered	to	be	a	common	stock	equivalent	for	purposes	of	earnings	per	share	calculations. (3)

Total	BlackRock	stockholders'	equity,	excluding	appropriated	retained	earnings,	divided	by	total	common	and	preferred	shares	outstanding	at	December	31	of	the	respective year-end. (4)

Includes	separate	account	assets	that	are	segregated	funds	held	for	purposes	of	funding	individual	and	group	pension	contracts	and	collateral	held	under	securities	lending agreements	related	to	these	assets	that	have	equal	and	offsetting	amounts	recorded	in	liabilities	and	ultimately	do	not	impact	BlackRock's	stockholders'	equity	or	cash	flows. (5)

Equal	and	offsetting	amounts,	related	to	separate	account	assets	and	collateral	held	under	securities	lending	agreements,	are	recorded	in	liabilities. (6)

Includes	assets	held	by	consolidated	variable	interest	entities	and	consolidated	sponsored	investments	funds. (7)

Data	reflects	the	reclassification	of	prior	period	AUM	to	the	current	period	presentation. (8)

Advisory	AUM	represents	long-term	portfolio	liquidation	assignments. (9)

# Item	7. MANAGEMENT'S	DISCUSSION	AND	ANALYSIS	OF	FINANCIAL	CONDITION	AND	RESULTS	OF	OPERATIONS

# Forward-looking	Statements

This	report,	and	other	statements	that	BlackRock	may	make,	may	contain	forward-looking	statements	within	the	meaning	of	the	Private	Securities	Litigation	Reform	Act,	with	respect to	BlackRock's	future	financial	or	business	performance,	strategies	or	expectations.	Forward-looking	statements	are	typically	identified	by	words	or	phrases	such	as	"trend," "potential,"	"opportunity,"	"pipeline,"	"believe,"	"comfortable,"	"expect,"	"anticipate,"	"current,"	"intention,"	"estimate,"	"position,"	"assume,"	"outlook,"	"continue,"	"remain," "maintain,"	"sustain,"	"seek,"	"achieve,"	and	similar	expressions,	or	future	or	conditional	verbs	such	as	"will,"	"would,"	"should,"	"could,"	"may"	or	similar	expressions.

BlackRock	cautions	that	forward-looking	statements	are	subject	to	numerous	assumptions,	risks	and	uncertainties,	which	change	over	time.	Forward-looking	statements	speak	only	as of	the	date	they	are	made,	and	BlackRock	assumes	no	duty	to	and	does	not	undertake	to	update	forward-looking	statements.	Actual	results	could	differ	materially	from	those anticipated	in	forward-looking	statements	and	future	results	could	differ	materially	from	historical	performance.

In	addition	to	risk	factors	previously	disclosed	in	BlackRock's	Securities	and	Exchange	Commission	("SEC")	reports	and	those	identified	elsewhere	in	this	report	the	following	factors, among	others,	could	cause	actual	results	to	differ	materially	from	forward-looking	statements	or	historical	performance:	(1)	the	introduction,	withdrawal,	success	and	timing	of business	initiatives	and	strategies;	(2)	changes	and	volatility	in	political,	economic	or	industry	conditions,	the	interest	rate	environment,	foreign	exchange	rates	or	financial	and	capital markets,	which	could	result	in	changes	in	demand	for	products	or	services	or	in	the	value	of	assets	under	management;	(3)	the	relative	and	absolute	investment	performance	of BlackRock's	investment	products;	(4)	the	impact	of	increased	competition;	(5)	the	impact	of	future	acquisitions	or	divestitures;	(6)	the	unfavorable	resolution	of	legal	proceedings; (7)	the	extent	and	timing	of	any	share	repurchases;	(8)	the	impact,	extent	and	timing	of	technological	changes	and	the	adequacy	of	intellectual	property	and	information	security protection;	(9)	the	impact	of	legislative	and	regulatory	actions	and	reforms,	including	the	Dodd-Frank	Wall	Street	Reform	and	Consumer	Protection	Act,	and	regulatory,	supervisory	or enforcement	actions	of	government	agencies	relating	to	BlackRock,	Barclays	Bank	PLC	("Barclays")	or	The	PNC	Financial	Services	Group,	Inc.	("PNC");	(10)	terrorist	activities, international	hostilities	and	natural	disasters,	which	may	adversely	affect	the	general	economy,	domestic	and	local	financial	and	capital	markets,	specific	industries	or	BlackRock; (11)	the	ability	to	attract	and	retain	highly	talented	professionals;	(12)	fluctuations	in	the	carrying	value	of	BlackRock's	economic	investments;	(13)	the	impact	of	changes	to	tax legislation,	including	taxation	on	products	or	transactions	which	could	affect	the	value	proposition	to	clients	and,	generally,	the	tax	position	of	the	Company;	(14)	BlackRock's	success in	maintaining	the	distribution	of	its	products;	(15)	the	impact	of	BlackRock	electing	to	provide	support	to	its	products	from	time	to	time;	and	(16)	the	impact	of	problems	at	other financial	institutions	or	the	failure	or	negative	performance	of	products	at	other	financial	institutions.

BlackRock,	Inc.	("BlackRock"	or	the	"Company")	is	the	world's	largest	publicly-traded	investment	management	firm.	As	of	December	31,	2011,	the	Company	managed	$3.513 trillion	of	assets	under	management	("AUM")	on	behalf	of	institutional	and	individual	investors	worldwide.	The	Company	provides	a	wide	array	of	passively	and	actively	managed products,	including	various	equities,	fixed	income,	multi-asset	class,	alternative	investment	and	cash	management	products.	BlackRock	offers	clients	diversified	access	to	global markets	through	separate	accounts,	collective	investment	trusts,	open-end	and	closed-end	mutual	funds,	exchange-traded	products,	hedge	funds	and	funds	of	funds.	In	addition, BlackRock	Solutions	provides	market	risk	management,	financial	markets	advisory	and	enterprise	investment	system	services	to	a	broad	base	of	clients.	Financial	markets	advisory services	include	valuation	of	illiquid	securities,	dispositions	and	workout	assignments	(including	long-term	portfolio	liquidation	assignments),	risk	management	and	strategic	planning and	execution.

As	of	December	31,	2011,	equity	ownership	of	BlackRock	was	as	follows:

|  | Common<br>Stock | Capital		Stock | (1) |
| :--- | :--- | :--- | :--- |
| PNC | 24.0% | 21.0% | 21.0% |
| Barclays | 2.2% | 19.7% | 19.7% |
| Other | 73.8% | 59.3% | 59.3% |
|  | 100.0% | 100.0% | 100.0% |

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

# Financial	Highlights

# (Dollar	amounts	in	millions,	except	per	share	data)

|  | 2011 | Year	ended	December	31,<br>2010 | 2009 | 2011	vs.	2010<br>Amount | % | 2010	vs.	2009<br>Amount | % |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| GAAP\tbasis: |  |  |  |  |  |  |  |
| Total\trevenue | $9,081 | $8,612 | $4,700 | $469 | 5% | $3,912 | 83% |
| Total\texpenses | $5,832 | $5,614 | $3,422 | $218 | 4% | $2,192 | 64% |
| Operating\tincome | $3,249 | $2,998 | $1,278 | $251 | 8% | $1,720 | \t135% |
| Operating\tmargin | 35.8% | 34.8% | 27.2% | 1.0% | 3% | 7.6% | 28% |
| Non-operating\tincome\t(expense),\tless\tnet\tincome\t(loss)\tattributable |  |  |  |  |  |  |  |
| to\tnon-controlling\tinterests | $(116) | $36 | $(28) | $(152) | * | $64 | * |
| Net\tincome\tattributable\tto\tBlackRock,\tInc. | $2,337 | $2,063 | $875 | $274 | \t 13% | $1,188 | \t136% |
| Diluted\tearnings\tper\tcommon\tshare^\t(e) | $12.37 | $10.55 | $6.11 | $1.82 | \t 17% | $4.44 | 73% |
| Effective\ttax\trate | 25.4% | 32.0% | 30.0% | (6.6%) | \t(21%) | 2.0% | 7% |
| As\tadjusted: |  |  |  |  |  |  |  |
| Operating\tincome^\t(a) | $3,392 | $3,167 | $1,570 | $225 | 7% | $1,597 | \t102% |
| Operating\tmargin^\t(a) | 39.7% | 39.3% | 38.2% | 0.4% | 1% | 1.1% | 3% |
| Non-operating\tincome\t(expense),\tless\tnet\tincome\t(loss)\tattributable |  |  |  |  |  |  |  |
| to\tnon-controlling\tinterests^\t(b) | $(113) | $25 | $(46) | $(138) | * | $71 | * |
| Net\tincome\tattributable\tto\tBlackRock,\tInc.^(c),\t(d) | $2,239 | $2,139 | $1,021 | $100 | 5% | $1,118 | \t110% |
| Diluted\tearnings\tper\tcommon\tshare^\t(c),\t(d),\t(e) | $11.85 | $10.94 | $7.13 | $0.91 | 8% | $3.81 | 53% |
| Effective\ttax\trate | 31.7% | 33.0% | 33.0% | (1.3%) | (4%) | —\t\t% | \t—\t\t% |
| Other: |  |  |  |  |  |  |  |
| Assets\tunder\tmanagement\t(end\tof\tperiod) | $3,512,681 | $3,560,968 | $3,346,256 | $(48,287) | (1%) | $214,712 | 6% |
| Diluted\tweighted-average\tcommon\tshares\toutstanding^\t(e) | \t 187,116,410 | \t 192,692,047 | \t 139,481,449 | (5,575,637) | (3%) | \t 53,210,598 | 38% |
| Shares\toutstanding\t(end\tof\tperiod) | \t 178,309,109 | \t 191,191,553 | \t 188,806,296 | (12,882,444) | (7%) | 2,385,257 | 1% |
| Book\tvalue\tper\tshare\t** | $140.07 | $136.09 | $128.86 | $3.98 | 3% | $7.23 | 6% |
| Cash\tdividends\tdeclared\tand\tpaid\tper\tshare | $5.50 | $4.00 | $3.12 | $1.50 | \t 38% | $0.88 | 28% |

# (continued)

BlackRock	reports	its	financial	results	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	("GAAP");	however,	management	believes	that evaluating	the	Company's	ongoing	operating	results	may	be	enhanced	if	investors	have	additional	non-GAAP	basis	financial	measures.	Management	reviews	non-GAAP financial	measures	to	assess	ongoing	operations	and,	for	the	reasons	described	below,	considers	them	to	be	effective	indicators,	for	both	management	and	investors,	of BlackRock's	financial	performance	over	time.	BlackRock's	management	does	not	advocate	that	investors	consider	such	non-GAAP	financial	measures	in	isolation	from,	or	as	a substitute	for,	financial	information	prepared	in	accordance	with	GAAP.

Computations	for	all	periods	are	derived	from	the	Company's	consolidated	statements	of	income	as	follows:

(a) Operating	income,	as	adjusted,	and	operating	margin,	as	adjusted:

Operating	income,	as	adjusted,	equals	operating	income,	GAAP	basis,	excluding	certain	items	management	deems	non-recurring,	or	transactions	that	ultimately	will	not	impact BlackRock's	book	value,	as	indicated	in	the	table	below.	Operating	income	used	for	operating	margin	measurement	equals	operating	income,	as	adjusted,	excluding	the	impact of	closed-end	fund	launch	costs	and	commissions.	Operating	margin,	as	adjusted,	equals	operating	income	used	for	operating	margin	measurement,	divided	by	revenue	used	for operating	margin	measurement,	as	indicated	in	the	table	below.

|  |  | Year	ended	December	31, |  |
| :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | 2009 |
| Operating\tincome,\tGAAP\tbasis | $3,249 | $2,998 | $1,278 |
| Non-GAAP\texpense\tadjustments: |  |  |  |
| BGI\ttransaction/integration\tcosts |  |  |  |
| Employee\tcompensation\tand\tbenefits | — | 25 | 60 |
| General\tand\tadministration | — | 65 | 123 |
| Total\tBGI\ttransaction/integration\tcosts | — | 90 | 183 |
| UK\tlease\texit\tcosts | 63 | — | — |
| Restructuring\tcharges | 32 | — | 22 |
| PNC\tLTIP\tfunding\tobligation | 44 | 58 | 59 |
| Merrill\tLynch\tcompensation\tcontribution | 7 | 10 | 10 |
| Compensation\texpense\trelated\tto\tappreciation\t(depreciation)\ton\tdeferred\tcompensation\tplans | (3) | 11 | 18 |
| Operating\tincome,\tas\tadjusted | \t 3,392 | \t 3,167 | \t 1,570 |
| Closed-end\tfund\tlaunch\tcosts | 26 | 15 | 2 |
| Closed-end\tfund\tlaunch\tcommissions | 3 | 2 | 1 |
| Operating\tincome\tused\tfor\toperating\tmargin\tmeasurement | $3,421 | $3,184 | $1,573 |
| Revenue,\tGAAP\tbasis | $9,081 | $8,612 | $4,700 |
| Non-GAAP\tadjustments: |  |  |  |
| Distribution\tand\tservicing\tcosts | (386) | (408) | (477) |
| Amortization\tof\tdeferred\tsales\tcommissions | (81) | (102) | (100) |
| Revenue\tused\tfor\toperating\tmargin\tmeasurement | $8,614 | $8,102 | $4,123 |
| Operating\tmargin,\tGAAP\tbasis | 35.8% | 34.8% | 27.2% |
| Operating\tmargin,\tas\tadjusted | 39.7% | 39.3% | 38.2% |

Management	believes	operating	income,	as	adjusted,	and	operating	margin,	as	adjusted,	are	effective	indicators	of	BlackRock's	financial	performance	over	time	and,	therefore,	provide useful	disclosure	to	investors.

# Operating	income,	as	adjusted:

BGI	transaction	and	integration	costs	consisted	principally	of	compensation	expense,	legal	fees,	marketing	and	promotional,	occupancy	and	consulting	expenses	incurred	in conjunction	with	the	BGI	acquisition	from	Barclays.	Restructuring	charges	recorded	in	2011	and	2009	consisted	of	compensation	costs	and	professional	fees.	Restructuring charges	in	2009	also	included	occupancy	costs.	UK	lease	exit	costs	represent	costs	to	exit	two	locations	in	London	in	the	third	quarter	2011.

The	portion	of	compensation	expense	associated	with	certain	long-term	incentive	plans	("LTIP")	that	has	been	or	will	be	funded	through	distributions	to	participants	of	shares of	BlackRock	stock	held	by	PNC	and	a	Merrill	Lynch	cash	compensation	contribution,	a	portion	of	which	has	been	received,	has	been	excluded	because	these	charges ultimately	do	not	impact	BlackRock's	book	value.	The	expense	related	to	the	Merrill	Lynch	cash	compensation	contribution	ceased	at	the	end	of	the	third	quarter	2011.

Compensation	expense	associated	with	appreciation	(depreciation)	on	investments	related	to	certain	BlackRock	deferred	compensation	plans	has	been	excluded	as	returns	on investments	set	aside	for	these	plans,	which	substantially	offset	this	expense,	are	reported	in	non-operating	income	(expense).

Management	believes	operating	income	exclusive	of	these	costs	is	a	useful	measure	in	evaluating	BlackRock's	operating	performance	and	helps	enhance	the	comparability	of this	information	for	the	reporting	periods	presented.

# Operating	margin,	as	adjusted:

Operating	income	used	for	measuring	operating	margin,	as	adjusted,	is	equal	to	operating	income,	as	adjusted,	excluding	the	impact	of	closed-end	fund	launch	costs	and commissions.	Management	believes	the	exclusion	of	such	costs	and	commissions	is	useful	because	these	costs	can	fluctuate	considerably	and	revenues	associated	with	the expenditure	of	these	costs	will	not	fully	impact	the	Company's	results	until	future	periods.

Operating	margin,	as	adjusted,	allows	the	Company	to	compare	performance	from	period-to-period	by	adjusting	for	items	that	may	not	recur,	recur	infrequently	or	may	have	an economic	offset	in	non-operating	income.,	Examples	of	such	adjustments	include	restructuring	charges,	BGI	transaction	and	integration	costs,	UK	lease	exit	costs,	closed-end fund	launch	costs,	commissions	paid	to	certain	employees	as	compensation	and	fluctuations	in	compensation	expense	based	on	mark-to-market	movements	in	investments	held to	fund	certain	compensation	plans.	The	Company	also	uses	operating	margin,	as	adjusted,	to	monitor	corporate	performance	and	efficiency	and	as	a	benchmark	to	compare	its performance	with	other	companies.	Management	uses	both	the	GAAP	and	non-GAAP	financial	measures	in	evaluating	the	financial	performance	of	BlackRock.	The	non- GAAP	measure	by	itself	may	pose	limitations	because	it	does	not	include	all	of	the	Company's	revenues	and	expenses.

Revenue	used	for	operating	margin,	as	adjusted,	excludes	distribution	and	servicing	costs	paid	to	related	parties	and	other	third	parties.	Management	believes	the	exclusion	of such	costs	is	useful	because	it	creates	consistency	in	the	treatment	for	certain	contracts	for	similar	services,	which	due	to	the	terms	of	the	contracts,	are	accounted	for	under GAAP	on	a	net	basis	within	investment	advisory,	administration	fees	and	securities	lending	revenue.	Amortization	of	deferred	sales	commissions	is	excluded	from	revenue	used for	operating	margin	measurement,	as	adjusted,	because	such	costs,	over	time,	offset	distribution	fee	revenue	earned	by	the	Company.	BlackRock	excludes	from	revenue	used for	operating	margin,	as	adjusted,	the	costs	related	to	each	of	these	items	as	a	proxy	for	such	offsetting	revenues.

(b) Non-operating	income	(expense),	less	net	income	(loss)	attributable	to	non-controlling	interests,	as	adjusted:

Non-operating	income	(expense),	less	net	income	(loss)	attributable	to	non-controlling	interests	("NCI"),	as	adjusted,	equals	non-operating	income	(expense),	GAAP	basis,	less net	income	(loss)	attributable	to	NCI,	GAAP	basis,	adjusted	for	compensation	expense	associated	with	(appreciation)	depreciation	on	investments	related	to	certain	BlackRock deferred	compensation	plans.	The	compensation	expense	offset	is	recorded	in	operating	income.	This	compensation	expense	has	been	included	in	non-operating	income (expense),	less	net	income	(loss)	attributable	to	NCI,	as	adjusted,	to	offset	returns	on	investments	set	aside	for	these	plans,	which	are	reported	in	non-operating	income (expense),	GAAP	basis.

|  |  | Year	ended<br>December	31, |  |
| :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | 2009 |
| Non-operating\tincome\t(expense),\tGAAP\tbasis | $(114) | $23 | $(6) |
| Less:\tNet\tincome\t(loss)\tattributable\tto\tNCI | 2 | (13) | 22 |
| Non-operating\tincome\t(expense)^\t(1) | (116) | 36 | (28) |
| Compensation\texpense\trelated\tto\t(appreciation)\tdepreciation\ton\tdeferred\tcompensation\tplans | 3 | (11) | (18) |
| Non-operating\tincome\t(expense),\tless\tnet\tincome\t(loss)\tattributable\tto\tNCI,\tas\tadjusted | $(113) | $25 | $(46) |

Management	believes	non-operating	income	(expense),	less	net	income	(loss)	attributable	to	NCI,	as	adjusted,	provides	comparability	of	this	information	among	reporting periods	and	is	an	effective	measure	for	reviewing	BlackRock's	non-operating	contribution	to	its	results.	As	compensation	expense	associated	with	(appreciation)	depreciation on	investments	related	to	certain	deferred	compensation	plans,	which	is	included	in	operating	income,	substantially	offsets	the	gain	(loss)	on	the	investments	set	aside	for	these plans,	management	believes	non-operating	income	(expense),	less	net	income	(loss)	attributable	to	NCI,	as	adjusted,	provides	a	useful	measure,	for	both	management	and investors,	of	BlackRock's	non-operating	results	that	impact	book	value.

# (c) Net	income	attributable	to	BlackRock,	Inc.,	as	adjusted:

Management	believes	net	income	attributable	to	BlackRock,	Inc.,	as	adjusted,	and	diluted	earnings	per	common	share,	as	adjusted,	are	useful	measures	of	BlackRock's profitability	and	financial	performance.	Net	income	attributable	to	BlackRock,	Inc.,	as	adjusted,	equals	net	income	attributable	to	BlackRock,	Inc.,	GAAP	basis,	adjusted	for significant	non-recurring	items,	charges	that	ultimately	will	not	impact	BlackRock's	book	value	or	certain	tax	items	that	do	not	impact	cash	flow.

| (Dollar	amounts	in	millions,	except	per	share	data) | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Net\tincome\tattributable\tto\tBlackRock,\tInc.,\tGAAP\tbasis | $2,337 | $2,063 | $875 |
| Non-GAAP\tadjustments,\tnet\tof\ttax:^\t(d) |  |  |  |
| BGI\ttransaction/integration\tcosts | — | 59 | 129 |
| UK\tlease\texit\tcosts | 43 | — | — |
| Restructuring\tcharges | 22 | — | 14 |
| PNC\tLTIP\tfunding\tobligation | 30 | 40 | 41 |
| Merrill\tLynch\tcompensation\tcontribution | 5 | 7 | 7 |
| Income\ttax\tlaw\tchanges/election | (198) | (30) | (45) |
| Net\tincome\tattributable\tto\tBlackRock,\tInc.,\tas\tadjusted | $2,239 | $2,139 | $1,021 |
| Allocation\tof\tnet\tincome\tattributable\tto\tBlackRock,\tInc.,\tas\tadjusted: |  |  |  |
| Common\tshares^\t(e) | $2,218 | $2,109 | $995 |
| Participating\trestricted\tstock\tunits | 21 | 30 | 26 |
| Net\tincome\tattributable\tto\tBlackRock,\tInc.,\tas\tadjusted | $2,239 | $2,139 | $1,021 |
| Diluted\tweighted-average\tcommon\tshares\toutstanding^\t(e) | \t 187,116,410 | \t 192,692,047 | \t 139,481,449 |
| Diluted\tearnings\tper\tcommon\tshare,\tGAAP\tbasis^\t(e) | $12.37 | $10.55 | $6.11 |
| Diluted\tearnings\tper\tcommon\tshare,\tas\tadjusted^\t(e) | $11.85 | $10.94 | $7.13 |

See	note	(a)	Operating	income,	as	adjusted,	and	operating	margin,	as	adjusted,	for	information	on	BGI	transaction/integration	costs,	UK	lease	exit	costs,	PNC	LTIP	funding obligation,	Merrill	Lynch	compensation	contribution	and	restructuring	charges.

During	the	years	ended	December	31,	2011,	2010	and	2009,	adjustments	primarily	related	to	a	state	tax	election	and	certain	enacted	UK,	Japan,	US	state	and	local	tax legislation,	which	resulted	in	the	re-measurement	of	certain	deferred	income	tax	liabilities	primarily	related	to	acquired	indefinite-lived	intangible	assets.	The	resulting	increase or	decrease	in	income	taxes	has	been	excluded	from	net	income	attributable	to	BlackRock,	Inc.,	as	adjusted,	as	these	items	will	not	have	a	cash	flow	impact	and	to	ensure comparability	for	periods	presented.

(d) For	the	years	ended	December	31,	2011,	2010	and	2009	non-GAAP	adjustments	were	tax	effected	at	31.8%,	33%	and	30%,	respectively,	which	reflects	the	blended	rate applicable	to	the	adjustments.

(e) Non-voting	participating	preferred	shares	are	considered	to	be	common	stock	equivalents	for	purposes	of	determining	basic	and	diluted	earnings	per	share	calculations.	Certain unvested	restricted	stock	units	are	not	included	in	this	number	as	they	are	deemed	participating	securities	in	accordance	with	required	provisions	of	Accounting	Standards Codification	260-10,	Earnings	per	Share.	For	the	years	ended	December	31,	2011,	2010	and	2009	average	outstanding	participating	securities	were	1.8	million,	2.8	million	and 3.8	million,	respectively.

BlackRock	has	portfolio	managers	located	around	the	world,	including	the	United	States,	the	United	Kingdom,	the	Netherlands,	Japan,	Hong	Kong,	Singapore,	Australia	and Germany.	The	Company	provides	a	wide	array	of	products,	including	passively	and	actively	managed	equities,	fixed	income,	multi-asset	class,	cash	management	and	alternatives. BlackRock	offers	clients	diversified	access	to	global	markets	through	separate	accounts,	collective	investment	trusts,	open-end	and	closed-end	mutual	funds,	exchange-traded	products, hedge	funds,	and	funds	of	funds.	BlackRock	provides	global	advisory	services	for	private	investment	funds	and	retail	products.	The	Company's	non-U.S.	investment	funds	are	based	in a	number	of	domiciles	and	cover	a	range	of	asset	classes,	including	equities,	fixed	income,	cash	management	and	alternatives.

In	the	United	States	retail	offerings	include	various	open-end	and	closed-end	funds,	including	iShares,	the	global	product	leader	in	exchange-traded	products	for	institutional,	retail	and high	net	worth	investors.	There	are	504	iShares	products	globally	across	equities,	fixed	income	and	commodities,	which	trade	like	common	stocks	on	20	exchanges	worldwide. iShares	AUM	totaled	$593.4	billion	at	December	31,	2011.	The	BlackRock	Global	Funds,	the	Company's	primary	retail	fund	group	offered	outside	the	United	States,	are	authorized for	distribution	in	35	jurisdictions	worldwide.	Additional	fund	offerings	include	structured	products,	real	estate	funds,	hedge	funds,	hedge	funds	of	funds,	private	equity	funds	and	funds of	funds,	managed	futures	funds	and	exchange	funds.	These	products	are	sold	to	both	U.S.	and	non-U.S.	high	net	worth,	retail	and	institutional	investors	in	a	wide	variety	of	active	and passive	strategies	covering	both	equity	and	fixed	income	assets.

BlackRock's	client	base	consists	of	financial	institutions	and	other	corporate	clients,	pension	plans,	charities,	official	institutions,	such	as	central	banks,	sovereign	wealth	funds, supranational	authorities	and	other	government	entities,	high	net	worth	individuals	and	retail	investors	around	the	world.	BlackRock	maintains	a	significant	sales	and	marketing presence	both	inside	and	outside	the	United	States	that	is	focused	on	establishing	and	maintaining	retail	and	institutional	investment	management	relationships	by	marketing	its services	to	investors	directly	and	through	financial	professionals,	pension	consultants	and	establishing	third-party	distribution	relationships.	BlackRock	also	distributes	its	products	and services	through	Merrill	Lynch	under	a	global	distribution	agreement	in	effect	until	January	2014.	After	such	term,	the	agreement	will	renew	for	one	automatic	three-year	extension	if certain	conditions	are	met.

BlackRock	derives	a	substantial	portion	of	its	revenue	from	investment	advisory	and	administration	fees,	which	are	recognized	as	the	services	are	performed.	Such	fees	are	primarily based	on	pre-determined	percentages	of	the	market	value	of	AUM	or	percentages	of	committed	capital	during	investment	periods	of	certain	alternative	products	and	are	affected	by changes	in	AUM,	including	market	appreciation	or	depreciation,	foreign	exchange	translation	and	net	subscriptions	or	redemptions.	Net	subscriptions	or	redemptions	represent	the	sum of	new	client	assets,	additional	fundings	from	existing	clients	(including	dividend	reinvestment),	withdrawals	of	assets	from,	and	termination	of,	client	accounts	and	distributions	to investors	representing	return	of	capital	and	return	on	investments	to	investors.	Market	appreciation	or	depreciation	includes	current	income	earned	on,	and	changes	in	the	fair	value	of, securities	held	in	client	accounts.	Foreign	exchange	translation	reflects	the	impact	of	converting	non-U.S.	dollar	denominated	AUM	into	U.S.	dollars	for	reporting	purposes.

BlackRock	also	earns	revenue	by	lending	securities	on	behalf	of	clients,	primarily	to	brokerage	institutions.	The	securities	loaned	are	secured	by	collateral	in	the	form	of	cash	or securities,	with	minimums	generally	ranging	from	approximately	102%	to	112%	of	the	value	of	the	loaned	securities.	The	revenue	earned	is	shared	between	BlackRock	and	the	funds or	other	third-party	accounts	managed	by	the	Company	from	which	the	securities	are	borrowed.

Investment	advisory	agreements	for	certain	separate	accounts	and	investment	funds	provide	for	performance	fees,	based	upon	relative	and/or	absolute	investment	performance,	in addition	to	base	fees	based	on	AUM.	Investment	advisory	performance	fees	generally	are	earned	after	a	given	period	of	time	and	when	investment	performance	exceeds	a	contractual threshold.	As	such,	the	timing	of	recognition	of	performance	fees	may	increase	the	volatility	of	BlackRock's	revenue	and	earnings.	Historically,	the	magnitude	of	performance	fees	in the	third	and	fourth	quarters	generally	exceeds	the	first	two	calendar	quarters	in	a	year	due	to	the	greater	number	of	products	with	performance	measurement	periods	that	end	on	either September	30	or	December	31.

BlackRock	provides	a	variety	of	risk	management,	investment	analytic	and	investment	system	and	advisory	services	to	financial	institutions,	pension	funds,	asset	managers, foundations,	consultants,	mutual	fund	sponsors,	real	estate	investment	trusts	and	government	agencies.	These	services	are	provided	under	the	brand	name	BlackRock	Solutions	and include	a	wide	array	of	risk	management	services,	valuation	services	related	to	illiquid	securities,	disposition	and	workout	assignments	(including	long-term	portfolio	liquidation assignments),	strategic	planning	and	execution,	and	enterprise	investment	system	outsourcing	to	clients.	Approximately	$10	trillion	of	positions	are	processed	on	the	Company's Aladdin	operating	platform,	which	serves	as	the	investment/	risk	solutions	system	for	BlackRock	and	other	institutional	investors.	Fees	earned	for	BlackRock	Solutions	and	advisory services	are	determined	using	some,	or	all,	of	the	following	methods:	(i)	fixed	fees,	(ii)	percentages	of	various	attributes	of	advisory	AUM	or	value	of	positions	on	the	Aladdin	platform and	(iii)	performance	fees	if	contractual	thresholds	are	met.

BlackRock	builds	upon	its	leadership	position	to	meet	the	growing	need	for	investment	and	risk	management	solutions.	Through	its	scale	and	diversity	of	products,	it	is	able	to	provide its	clients	with	customized	solutions	including	fiduciary	outsourcing	for	liability-driven	investments	and	overlay	strategies	for	pension	plan	sponsors,	balance	sheet	management	and related	services	for	insurance	companies	and	target	date	and	target	return	funds,	as	well	as	asset	allocation	portfolios,	for	retail	investors.	BlackRock	is	also	able	to	service	these	clients via	its	Aladdin	platform	to	provide	risk	management	and	other	outsourcing	services	for	institutional	investors	and	custom	and	tailored	solutions	to	address	complex	risk	exposures.

The	Company	earns	fees	for	transition	management	services	comprised	of	commissions	from	acting	as	an	introducing	broker-dealer	in	buying	and	selling	securities	on	behalf	of	its customers.	Commissions	related	to	transition	management	services	are	recorded	on	a	trade-date	basis	as	securities	transactions	occur.

Operating	expenses	reflect	employee	compensation	and	benefits,	distribution	and	servicing	costs,	amortization	of	deferred	sales	commissions,	direct	fund	expenses,	general	and administration	expenses	and	amortization	of	finite-lived	intangible	assets.

•Employee	compensation	and	benefits	expense	includes	salaries,	commissions,	temporary	help,	deferred	and	incentive	compensation,	employer	payroll	taxes	and	related benefit	costs.

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

•Direct	fund	expenses	primarily	consist	of	third	party	non-advisory	expenses	incurred	by	BlackRock	related	to	certain	funds	for	the	use	of	index	trademarks,	reference data	for	indices,	custodial	services,	fund	administration,	fund	accounting,	transfer	agent	services,	shareholder	reporting	services,	legal	expenses,	audit	and	tax	services	as well	as	other	fund	related	expenses	directly	attributable	to	the	non-advisory	operations	of	the	fund.	These	expenses	may	vary	over	time	with	fluctuations	in	AUM, number	of	shareholder	accounts,	or	other	attributes	directly	related	to	volume	of	business.

•General	and	administration	expenses	include	marketing	and	promotional,	occupancy	and	office-related	costs,	portfolio	services	(including	clearing	expenses	related	to transition	management	services),	technology,	professional	services,	communications,	closed-end	fund	launch	costs	and	other	general	and	administration	expenses, including	foreign	currency	remeasurement	costs.

Non-operating	income	(expense)	includes	the	effect	of	changes	in	the	valuations	on	investments	(excluding	available-for-sale	investments)	and	earnings	on	equity	method	investments, as	well	as	interest	and	dividend	income	and	interest	expense.	Other	comprehensive	income	includes	changes	in	valuations	related	to	available-for-sale	investments.	BlackRock primarily	holds	seed	and	co-investments	in	sponsored	investment	products	that	invest	in	a	variety	of	asset	classes,	including	private	equity,	distressed	credit/mortgage	debt	securities, hedge	funds	and	real	estate.	Investments	generally	are	made	for	co-investment	purposes,	to	establish	a	performance	track	record,	to	hedge	exposure	to	certain	deferred	compensation plans,	or	for	regulatory	purposes,	including	Federal	Reserve	Bank	stock.	BlackRock	does	not	engage	in	proprietary	trading	or	other	investment	activities	that	could	conflict	with	the interests	of	its	clients.

In	addition,	non-operating	income	(expense)	includes	the	impact	of	changes	in	the	valuations	of	consolidated	sponsored	investment	funds	and	consolidated	collateralized	loan obligations.	The	portion	of	non-operating	income	(expense)	not	attributable	to	BlackRock	is	allocated	to	non-controlling	interests	on	the	consolidated	statements	of	income.

# Assets	Under	Management

AUM	for	reporting	purposes	is	generally	based	upon	how	investment	advisory	and	administration	fees	are	calculated	for	each	portfolio.	Net	asset	values,	total	assets,	committed	assets or	other	measures	may	be	used	to	determine	portfolio	AUM.

| (Dollar	amounts	in	millions) | 2011 | December	31,<br>2010 | 2009 | Variance<br>2011	vs.	2010 | 2010	vs.	2009 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Equity: |  |  |  |  |  |
| Active | $275,156 | $334,532 | $348,574 | (18%) | (4%) |
| Institutional\tindex | 865,299 | 911,775 | 806,082 | (5%) | 13% |
| iShares | 419,651 | 448,160 | 381,399 | (6%) | 18% |
| Fixed\tincome: |  |  |  |  |  |
| Active | 614,804 | 592,303 | 595,580 | 4% | (1%) |
| Institutional\tindex | 479,116 | 425,930 | 357,557 | 12% | 19% |
| iShares | 153,802 | 123,091 | 102,490 | 25% | 20% |
| Multi-asset\tclass | 225,170 | 185,587 | 142,029 | 21% | 31% |
| Alternatives^(1) : |  |  |  |  |  |
| Core | 63,647 | 63,603 | 66,058 | —\t\t% | (4%) |
| Currency\tand\tcommodities | 41,301 | 46,135 | 36,043 | (10%) | 28% |
| Long-term | \t 3,137,946 | \t 3,131,116 | \t 2,835,812 | —\t\t% | 10% |
| Cash\tmanagement | 254,665 | 279,175 | 349,277 | (9%) | (20%) |
| Sub-total | \t 3,392,611 | \t 3,410,291 | \t 3,185,089 | (1%) | 7% |
| Advisory^\t(2) | 120,070 | 150,677 | 161,167 | (20%) | (7%) |
| Total | $3,512,681 | $3,560,968 | $3,346,256 | (1%) | 6% |

# Mix	of	Assets	Under	Management	-	by	Asset	Class

|  | 2011 | December	31,<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Equity: |  |  |  |
| Active | 8% | 9% | 10% |
| Institutional\tindex | 25% | 26% | 25% |
| iShares | 12% | 13% | 11% |
| Fixed\tincome: |  |  |  |
| Active | 18% | 17% | 18% |
| Institutional\tindex | 14% | 12% | 11% |
| iShares | 4% | 3% | 3% |
| Multi-asset\tclass | 6% | 5% | 4% |
| Alternatives^(1) : |  |  |  |
| Core | 2% | 2% | 2% |
| Currency\tand\tcommodities | 1% | 1% | 1% |
| Long-term | 90% | 88% | 85% |
| Cash\tmanagement | 7% | 8% | 10% |
| Sub-total | 97% | 96% | 95% |
| Advisory^(2) | 3% | 4% | 5% |
| Total | \t100% | \t100% | \t100% |

Data	reflects	the	reclassification	of	prior	period	AUM	into	the	current	period	presentation. (1)

# Assets	Under	Management	(continued)

The	following	table	presents	the	component	changes	in	BlackRock's	AUM	for	the	years	ended	December	31,	2011,	2010	and	2009.

| (Dollar	amounts	in	millions) | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Beginning\tassets\tunder\tmanagement | $3,560,968 | $3,346,256 | $1,307,151 |
| Net\tsubscriptions/(redemptions)^\t(1) |  |  |  |
| Long-term | 67,349 | 131,206 | 84,436 |
| Cash\tmanagement | (22,899) | (61,424) | (49,122) |
| Advisory^\t(2) | (29,903) | (12,021) | 11,642 |
| Total\tnet\tsubscriptions/(redemptions) | 14,547 | 57,761 | 46,956 |
| BGI\tmerger-related\toutflows^\t(3) | (28,251) | (120,969) | (2,894) |
| Acquisitions^\t(4) | — | (6,160) | \t 1,850,252 |
| Market\tappreciation/(depreciation) | (27,513) | 266,981 | 143,706 |
| Foreign\texchange^\t(5) | (7,070) | 17,099 | 1,085 |
| Total\tchange | (48,287) | 214,712 | \t 2,039,105 |
| Ending\tassets\tunder\tmanagement | $3,512,681 | $3,560,968 | $3,346,256 |

Amounts	include	planned	distributions	representing	return	of	capital	and	return	on	investment	to	investors. (1)

Amounts	include	outflows	due	to	manager	concentration	considerations	prior	to	third	quarter	2011	and	outflows	from	scientific	active	equity	performance	prior	to	second quarter	2011. (3)

Amounts	include	AUM	acquired	from	Barclays	in	December	2009	and	R3	Capital	Management,	LLC	in	April	2009,	and	BGI	acquisition	adjustments	in	2010. (4)

Foreign	exchange	reflects	the	impact	of	converting	non-U.S.	dollar	denominated	AUM	into	U.S.	dollars	for	reporting	purposes. (5)

BlackRock	has	historically	grown	aggregate	AUM	through	organic	growth	and	acquisitions.	Management	believes	that	the	Company	will	be	able	to	continue	to	grow	AUM	by focusing	on	strong	investment	performance,	the	efficient	delivery	of	beta	for	index	products,	client	service	and	by	developing	new	products	and	new	distribution	capabilities.

The	following	table	presents	the	component	changes	in	BlackRock's	AUM	for	the	year	ended	December	31,	2011.

|  |  | Net | BGI	merger- | BGI	merger- | Market |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | December\t31, | subscriptions | related |  | appreciation | Foreign | Foreign | December\t31, |
| (Dollar\tamounts\tin\tmillions) | 2010 | (2)\n(redemptions) | outflows | (3) | (depreciation) | exchange | (4) | 2011 |
| Equity: |  |  |  |  |  |  |  |  |
| Active | $334,532 | $(22,876) | $(6,943) | $(6,943) | $(29,793) | $236 | $236 | $275,156 |
| Institutional\tindex | 911,775 | 22,403 | (20,630) | (20,630) | (48,402) | 153 | 153 | 865,299 |
| iShares | 448,160 | 24,612 |  | — | (49,863) | (3,258) | (3,258) | 419,651 |
| Fixed\tincome: |  |  |  |  |  |  |  |  |
| Active | 592,303 | (17,398) |  | (413) | 40,366 | (54) | (54) | 614,804 |
| Institutional\tindex | 425,930 | (5,152) |  | (113) | 55,463 | 2,988 | 2,988 | 479,116 |
| iShares | 123,091 | 26,876 |  | — | 4,824 | (989) | (989) | 153,802 |
| Multi-asset\tclass | 185,587 | 42,654 |  | — | (401) | (2,670) | (2,670) | 225,170 |
| Alternatives^(1) : |  |  |  |  |  |  |  |  |
| Core | 63,603 | 48 |  | (152) | 179 | (31) | (31) | 63,647 |
| Currency\tand\tcommodities | 46,135 | (3,818) |  | — | (1,462) | 446 | 446 | 41,301 |
| Long-term | \t 3,131,116 | 67,349 | (28,251) | (28,251) | (29,089) | (3,179) | (3,179) | \t 3,137,946 |
| Cash\tmanagement | 279,175 | (22,899) |  | — | 128 | (1,739) | (1,739) | 254,665 |
| Sub-total | \t 3,410,291 | 44,450 | (28,251) | (28,251) | (28,961) | (4,918) | (4,918) | \t 3,392,611 |
| Advisory^(5) | 150,677 | (29,903) |  | — | 1,448 | (2,152) | (2,152) | 120,070 |
| Total | $3,560,968 | $14,547 | $(28,251) | $(28,251) | $(27,513) | $(7,070) | $(7,070) | $3,512,681 |

AUM	decreased	approximately	$48.3	billion,	or	1%,	to	$3.513	trillion	at	December	31,	2011	from	$3.561	trillion	at	December	31,	2010.	The	decline	in	AUM	was	primarily attributable	to	$34.6	billion	in	net	market	and	foreign	exchange	valuation	declines,	$29.9	billion	of	advisory	distributions	and	$22.9	billion	of	cash	management	net	outflows,	partially offset	by	$67.3	billion	of	long-term	net	new	business,	before	giving	effect	to	the	final	BGI	merger-related	outflows	of	$28.3	billion	recorded	in	the	first	half	of	2011.

Net	market	depreciation	of	$27.5	billion	included	$128.1	billion	of	depreciation	in	equity	products	resulting	from	the	decline	in	global	equity,	partially	offset	by	appreciation	in	fixed income	products	of	$100.7	billion.

The	$7.1	billion	net	decrease	in	AUM	from	converting	non-U.S.	dollar	denominated	AUM	into	U.S.	dollars	was	primarily	due	to	the	strengthening	of	the	U.S.	dollar	against	the	euro, pound	sterling	and	Canadian	dollar,	partially	offset	by	weakening	of	the	U.S.	dollar	against	the	Japanese	yen.

# Business	Outlook

The	diversity	of	the	Company's	business	model,	which	offers	a	significant	breadth	of	asset	classes	along	with	alpha	and	beta	management	styles,	and	its	global	reach,	allows BlackRock	to	capture	asset	flows	as	investor	sentiment	shifts.	BlackRock	finished	2011	with	strong	index	flows	as	clients	continued	to	rebalance	their	portfolios	from	active	products due	to	volatile	market	conditions.	BlackRock	expects	such	conditions	to	continue	into	2012	due	to	the	European	sovereign	debt	crisis,	global	political	elections	in	2012,	and	continued unrest	in	the	Middle	East.

# Business	Outlook	(continued)

In	early	2012,	BlackRock	continues	to	see	signs	of	economic	strength	in	the	U.S.	as	the	pace	of	expansion	accelerates	and	the	unemployment	rate	declines.	During	2012,	BlackRock expects	emerging	economies	to	outperform,	while	the	U.S.	and	Japan	grow	at	lower	rates	and	Europe	faces	a	slow	economic	recovery.	BlackRock	will	actively	monitor	global monetary	policies	(including	quantitative	easing	and	the	direction	of	interest	rates),	bank	lending	policies,	the	Euro	crisis,	global	political	elections,	and	the	U.S.	debt	ceiling	and housing	market	along	with	the	effects	on	global	corporate	earnings	growth.

The	Company	offers	a	broad	range	of	equity,	fixed	income,	multi-asset	and	alternative	products	designed	to	track	various	indices,	target	returns	in	excess	of	specified	benchmarks	or focus	on	absolute	returns.	BlackRock's	broad	set	of	product	offerings,	risk	skills	and	tools	allow	the	Company	to	work	with	clients	in	meeting	their	investment	objectives	over	both short-	and	long-term	horizons.	While	investing	for	stable	income	continues	to	be	a	core	objective	of	many	clients,	BlackRock	expects	clients	to	trend	towards	indexing,	retirement	and income,	alternatives	and	multi-asset	class	solutions	along	with	risk	management	tools	and	advisory	services.

# The	following	items	could	impact	the	Company's	results	in	2012	and	beyond:

# AUM	and	Flows

•As	investors	shift	preferences	between	asset	classes,	and	active	and	passive	investment	styles,	the	Company's	broad	product	profile,	including	a	wide	array	of	offerings in	asset	types	and	management	styles,	should	enable	it	to	retain	and	capture	revenue.	As	equity	markets	improve	and	with	no	sign	of	rising	interest	rates	from	their historic	lows	in	the	near	term,	BlackRock	expects	clients	who	in	the	latter	half	of	2011	were	delaying	investment	decisions,	to	re-risk	into	beta	and	alpha	equity	and alternative	products.

•BlackRock's	unique	combination	of	index	and	active	capabilities	positions	it	well	to	assist	companies	in	narrowing	the	gap	on	underfunded	pension	plans	by implementing	barbell	strategies	using	a	combination	of	index,	alpha	and	alternative	products.	In	addition,	as	retirement	money	moves	away	from	defined	benefit	plans into	defined	contributions	plans	and	ultimately	to	individuals,	BlackRock	is	well	positioned	to	offer	individual	investment	options	with	its	LifePath ®	target	date portfolios	and	wide	array	of	ETFs	and	other	mutual	fund	products.

•BlackRock	has	a	leading	global	market	share	in	exchange-traded	products	("ETP")	due	to	its	large	array	of	products	and	AUM	in	this	market.	The	global	growth	of	the ETP	market	reflects	both	continued	adoption	and	new	product	introduction	with	investor	product	preferences	driven	to	varying	degrees	by	performance	(as	measured	by tracking	error,	which	is	the	difference	between	net	returns	on	the	ETP	and	the	corresponding	targeted	index),	liquidity	(bid-ask	spread),	tax-efficiency,	transparency	and client	service.	Industry	asset	growth	has	historically	been	linked	to	positive	markets,	with	investors	looking	to	capitalize	on	strong	market	returns.	In	the	continued environment	of	ultra-low	interest	rates,	industry	flows	shifted	toward	fixed	income	oriented	products	and,	within	equities,	to	developed	markets	and	away	from	broad and	single-country	emerging	market	funds.	Additional	asset	managers	may	enter	the	marketplace	and	offer	similar	exchange-traded	products	at	lower	fee	structures; however,	the	Company	believes	that	many	factors	beyond	pricing	influence	investor	preferences.

•BlackRock	believes	alternative	products	will	become	more	important	for	both	institutional	and	retail	clients	to	invest	in	alpha-generating	products	to	generate	higher returns.	The	Company	significantly	invested	in	its	alternatives	platform	during	2011	for	products	expected	to	be	introduced	in	2012,	which	will	invest	in	private	equity, renewable	power,	real	estate	as	well	as	other	opportunistic	asset	classes.

•Cash	management	assets	may	continue	to	decline	from	year-end	levels	if	clients	begin	to	re-risk	their	portfolios	in	search	of	yield	or	equity	return	opportunities	as	rates remain	low,	including	those	in	the	U.S.	as	the	Federal	Reserve	currently	expects	U.S.	rates	to	remain	low	until	2014.	The	Company's	diversified	global	product	offerings, client	service	and	independent	advice	may	enable	it	to	retain	a	portion	of	these	assets.

•The	regulatory	environment	in	2011	continued	to	evolve	for	financial	institutions	as	well	as	money	market	funds	with	the	intent	of	the	reform	supported	by	BlackRock, to	protect	the	industry	and	our	clients.	Regulatory	reform	continues	to	evolve	and	may	affect	the	competitive	environment,	including	liquidity	and	trading	costs,	and	may provide	BlackRock	and	its	clients	with	risks	as	well	as	opportunities.

# Performance	fees	and	BRS/advisory	fees

•	 While	most	of	BlackRock's	absolute	return	AUM	products	eligible	for	performance	fees	are	marginally	below	"high	water	marks",	a	return	to	higher	market	levels	may enable	the	Company's	alternative	investment	products	to	contribute	additional	performance	fee	revenue.

•The	sovereign	uncertainty	in	2011	across	Europe	and	an	increasing	focus	on	risk	management	led	to	unique	opportunities	for	BlackRock's	risk	tools	and	advisory services,	combining	the	Company's	extensive	capital	markets	and	structuring	expertise	with	rigorous	modeling	and	analytical	capabilities	across	an	increasingly	global client	base.	In	2012,	the	Company	expects	continuing	strong	global	demand	for	its	Aladdin	operating	platform	and	its	comprehensive	risk	reporting	from	sophisticated institutional	investors	and	governmental	agencies	investing	in	longer	term	risk	management	solutions	as	well	as	strong	demand	for	financial	market	advisory	services.

# Future	opportunities

•The	Company	plans	to	continue	to	invest	in	its	people,	its	platform	and	its	global	BlackRock	brand.	In	addition,	it	will	build	out	key	products	and	geographic	locations	as well	as	an	internal	trading	platform	on	its	enterprise	systems	to	cross	trades	within	its	platform	and	potentially	among	other	client	transactions,	which	is	expected	to result	in	lower	portfolio	transaction	costs	and	ultimately	increased	performance	returns	for	clients.

# Operating	results	for	the	year	ended	December	31,	2011	compared	with	the	year	ended	December	31,	2010

# Operating	Income	and	Operating	Margin	Overview

| (Dollar	amounts	in	millions) | 2011 | 2010 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Revenue | $9,081 | $8,612 | $469 | 5% |
| Expenses | \t 5,832 | \t 5,614 | 218 | 4% |
| Operating\tincome | $3,249 | $2,998 | $251 | 8% |
| Operating\tmargin | 35.8% | 34.8% | 1.0% | 3% |

The	increase	in	operating	income	and	operating	margin	for	the	year	ended	December	31,	2011	was	attributable	to	the	$469	million	increase	in	revenue	primarily	due	to	higher	base	fees associated	with	growth	in	long-term	average	AUM,	which	included	the	benefit	of	higher	average	markets	and	the	benefit	of	net	new	business,	and	higher	BlackRock	Solutions	and advisory	revenue,	partially	offset	by	lower	performance	fees.	The	increase	in	revenue	was	partially	offset	by	a	$218	million	net	increase	in	operating	expenses	related	to	business growth,	including	an	increase	in	the	number	of	employees,	professional	fees	and	average	long-dated	AUM	growth,	which	affects	certain	expenses,	including	direct	fund	expenses.

In	addition,	operating	income	and	operating	margin	for	the	year	ended	December	31,	2011	included	$63	million	of	UK	lease	exit	costs	related	to	the	Company's	exit	from	two	London locations	and	$32	million	of	restructuring	charges.	Operating	income	and	operating	margin	for	the	year	ended	December	31,	2010	included	$90	million	of	BGI	integration	costs.	Each of	these	items	are	excluded	from	the	as	adjusted	results	below.

# As	Adjusted

| (Dollar	amounts	in	millions) | 2011 | 2010 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Revenue | $9,081 | $8,612 | $469 | 5% |
| Expenses | \t 5,689 | \t 5,445 | 244 | 4% |
| Operating\tincome^\t(1) | $3,392 | $3,167 | $225 | 7% |
| Operating\tmargin^\t(1) | 39.7% | 39.3% | 0.4% | 1% |

Operating	income,	as	adjusted,	and	operating	margin,	as	adjusted,	are	described	in	more	detail	in	the	Overview	to	Management's	Discussion	and	Analysis	of	Financial Condition	and	Results	of	Operations. (1)

The	increase	in	operating	income	and	operating	margin,	as	adjusted,	for	the	year	ended	December	31,	2011	was	attributable	to	the	$469	million	increase	in	revenue	as	discussed	above. The	increase	was	partially	offset	by	a	$244	million	net	increase	in	operating	expenses	as	discussed	above	as	well	as	higher	marketing	and	promotional	costs.

# Revenue

|  | Year	ended |  |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | December\t31, |  | Variance |  |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | Amount | %\tChange |
| Investment\tadvisory,\tadministration\tfees\tand\tsecurities\tlending\trevenue: |  |  |  |  |
| Equity: |  |  |  |  |
| Active | $1,967 | $1,848 | $119 | 6% |
| Institutional\tindex | 488 | 424 | 64 | 15% |
| iShares | \t 1,847 | \t 1,660 | 187 | 11% |
| Fixed\tincome: |  |  |  |  |
| Active | \t 1,104 | \t 1,047 | 57 | 5% |
| Institutional\tindex | 203 | 166 | 37 | 22% |
| iShares | 317 | 263 | 54 | 21% |
| Multi-asset\tclass | 894 | 740 | 154 | 21% |
| Alternatives: |  |  |  |  |
| Core | 557 | 522 | 35 | 7% |
| Currency\tand\tcommodities | 136 | 110 | 26 | 24% |
| Long-term | \t 7,513 | \t 6,780 | 733 | 11% |
| Cash\tmanagement | 383 | 510 | (127) | (25%) |
| Total | \t 7,896 | \t 7,290 | 606 | 8% |
| Investment\tadvisory\tperformance\tfees: |  |  |  |  |
| Equity | 145 | 123 | 22 | 18% |
| Fixed\tincome | 35 | 55 | (20) | (36%) |
| Multi-asset\tclass | 20 | 33 | (13) | (39%) |
| Alternatives | 171 | 329 | (158) | (48%) |
| Total | 371 | 540 | (169) | (31%) |
| BlackRock\tSolutions\tand\tadvisory | 510 | 460 | 50 | 11% |
| Distribution\tfees | 100 | 116 | (16) | (14%) |
| Other\trevenue | 204 | 206 | (2) | (1%) |
| Total\trevenue | $9,081 | $8,612 | $469 | 5% |

The	$469	million	increase	in	revenues	reflected	a	$606	million	increase	in	total	investment	advisory,	administration	fees	and	securities	lending	revenue	primarily	due	to	growth	in	long- dated	average	AUM	and	a	$50	million	increase	in	BlackRock	Solutions	and	advisory	revenue	largely	driven	by	on-going	and	additional	Aladdin	mandates	and	advisory	assignments. The	increase	was	partially	offset	by	a	$169	million	decrease	in	performance	fees	primarily	reflecting	lower	fees	from	hedge	funds	and	a	$16	million	decrease	in	distribution	fees.

# Operating	results	for	the	year	ended	December	31,	2011	compared	with	the	year	ended	December	31,	2010	(continued)

# Revenue	(continued)

Investment	Advisory,	Administration	Fees	and	Securities	Lending	Revenue.	Investment	advisory,	administration	fees	and	securities	lending	revenues	increased	$606	million	to $7,896	million	for	the	year	ended	December	31,	2011	from	$7,290	million	for	the	year	ended	December	31,	2010.	This	growth	primarily	reflected	growth	in	average	long-term	AUM, which	included	the	benefit	of	net	new	business,	partially	offset	by	a	decline	in	fees	from	cash	management	products	due	to	lower	average	AUM	and	higher	fee	waivers.	Securities lending	fees	were	$397	million	for	the	year	ended	December	31,	2011	compared	with	$325	million	for	year	ended	December	31,	2010,	reflecting	an	increase	in	average	balances	of securities	on	loan	and	higher	lending	rates.

The	below	table	lists	the	asset	type	mix	of	investment	advisory,	administration	fees	and	securities	lending	revenue	(collectively	"base	fees")	and	mix	of	average	AUM	by	asset	class:

|  | 2011 | 2010 | 2011 | 2010 |
| :--- | :--- | :--- | :--- | :--- |
| Equity: |  |  |  |  |
| Active | 25% | 25% | 9% | 10% |
| Institutional\tindex | 6% | 6% | 26% | 26% |
| iShares | 23% | 23% | 13% | 12% |
| Fixed\tincome: |  |  |  |  |
| Active | 14% | 14% | 18% | 19% |
| Institutional\tindex | 3% | 2% | 13% | 12% |
| iShares | 4% | 4% | 4% | 4% |
| Multi-asset\tclass | 11% | 10% | 6% | 5% |
| Alternatives: |  |  |  |  |
| Core | 7% | 7% | 2% | 2% |
| Currency\tand\tcommodities | 2% | 2% | 1% | 1% |
| Long-term | 95% | 93% | 92% | 91% |
| Cash\tmanagement | 5% | 7% | 8% | 9% |
| Total\texcluding\tAdvisory\tAUM | \t100% | \t 100% | 100% | 100% |

Average	AUM	represents	a	five	point	average	of	quarter-end	spot	AUM.

For	the	year	ended	December	31,	2011,	institutional	index	equity	and	fixed	income	was	only	9%	of	total	base	fees;	however,	AUM	associated	with	these	base	fees	represented	39%	of total	average	AUM.

# Performance	Fees

|  | Year	Ended<br>December	31, |  | Variance |  |
| :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | Amount | %\tChange |
| Equity | $145 | $123 | $22 | 18% |
| Fixed\tincome | 35 | 55 | (20) | (36%) |
| Multi-asset\tclass | 20 | 33 | (13) | (39%) |
| Alternatives | \t 171 | \t 329 | (158) | (48%) |
| Total | $371 | $540 | $(169) | (31%) |

Investment	advisory	performance	fees	decreased	$169	million,	or	31%,	to	$371	million	for	the	year	ended	December	31,	2011	from	$540	million	for	the	year	ended	December	31, 2010,	primarily	reflecting	lower	performance	fees	from	alternative	strategies,	including	multi-strategy	and	single-strategy	equity	and	fixed	income	hedge	funds	and	opportunistic funds.	The	decrease	was	partially	offset	by	higher	performance	fees	due	to	strong	relative	performance	from	regional/country	and	global	equity	strategies.

BlackRock	Solutions	and	Advisory.	BlackRock	Solutions	and	advisory	revenue	for	the	year	ended	December	31,	2011	increased	$50	million,	or	11%,	from	the	year	ended December	31,	2010,	primarily	due	to	on-going	and	additional	Aladdin	mandates	and	advisory	assignments.

Distribution	Fees.	Distribution	fees	of	$100	million	for	the	year	ended	December	31,	2011	decreased	$16	million	from	$116	million	for	the	year	ended	December	31,	2010,	primarily due	to	lower	AUM	in	certain	share	classes	of	BlackRock	Funds.

# Expenses

| (Dollar	amounts	in	millions) | 2011 | 2010 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Expenses: |  |  |  |  |
| Employee\tcompensation\tand\tbenefits | $3,199 | $3,097 | $102 | 3% |
| Distribution\tand\tservicing\tcosts | 386 | 408 | (22) | (5%) |
| Amortization\tof\tdeferred\tsales\tcommissions | 81 | 102 | (21) | (21%) |
| Direct\tfund\texpenses | 563 | 493 | 70 | 14% |
| General\tand\tadministration | \t 1,415 | \t 1,354 | 61 | 5% |
| Restructuring\tcharges | 32 | — | 32 | * |
| Amortization\tof\tintangible\tassets | 156 | 160 | (4) | (3%) |
| Total\texpenses,\tGAAP | $5,832 | $5,614 | $218 | 4% |
| Total\texpenses,\tGAAP | $5,832 | $5,614 | $218 | 4% |
| Less\tnon-GAAP\texpense\tadjustments: |  |  |  |  |
| BGI\tintegration\tcosts |  |  |  |  |
| Employee\tcompensation\tand\tbenefits | — | 25 | (25) | (100%) |
| General\tand\tadministration | — | 65 | (65) | (100%) |
| Total\tBGI\tintegration\tcosts | — | 90 | (90) | (100%) |
| UK\tlease\texit\tcosts | 63 | — | 63 | * |
| Restructuring\tcharges | 32 | — | 32 | * |
| PNC\tLTIP\tfunding\tobligation | 44 | 58 | (14) | (24%) |
| Merrill\tLynch\tcompensation\tcontribution | 7 | 10 | (3) | (30%) |
| Compensation\texpense\trelated\tto\tappreciation\t(depreciation)\ton\tdeferred\tcompensation\tplans | (3) | 11 | (14) | * |
| Total\tnon-GAAP\texpense\tadjustments | 143 | 169 | (26) | (15%) |
| Total\texpenses,\tas\tadjusted | $5,689 | $5,445 | $244 | 4% |

Total	GAAP	expenses	increased	$218	million,	or	4%,	to	$5,832	million	for	the	year	ended	December	31,	2011	from	$5,614	million	for	the	year	ended	December	31,	2010.	Excluding certain	items	deemed	non-recurring	by	management	or	transactions	that	ultimately	will	not	affect	the	Company's	book	value,	total	expenses,	as	adjusted,	increased	$244	million,	or 4%.	The	increase	in	total	expenses,	as	adjusted,	is	primarily	attributable	to	increases	in	employee	compensation	and	benefits,	direct	fund	expenses	and	general	and	administration expenses,	partially	offset	by	a	reduction	in	distribution	and	servicing	costs	and	amortization	of	deferred	sales	commissions.

# Expenses	(continued)

# Employee	Compensation	and	Benefits

| (Dollar	amounts	in	millions) | 2011 | 2010 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Employee\tcompensation\tand\tbenefits,\tGAAP | $3,199 | $3,097 | $102 | 3% |
| Less\tnon-GAAP\texpense\tadjustments: |  |  |  |  |
| BGI\tintegration\tcosts | — | 25 | (25) | (100%) |
| PNC\tLTIP\tfunding\tobligation | 44 | 58 | (14) | (24%) |
| Merrill\tLynch\tcompensation\tcontribution | 7 | 10 | (3) | (30%) |
| Compensation\texpense\trelated\tto\tappreciation\t(depreciation)\ton\tdeferred\tcompensation\tplans | (3) | 11 | (14) | * |
| Total\tnon-GAAP\texpense\tadjustments | 48 | 104 | (56) | (54%) |
| Employee\tcompensation\tand\tbenefits,\tas\tadjusted | $3,151 | $2,993 | $158 | 5% |

Employee	compensation	and	benefits,	as	adjusted,	increased	by	$158	million,	reflecting	a	$164	million	increase	in	base	salaries	due	to	an	increase	in	the	number	of	employees	and salary	levels,	and	a	$41	million	increase	in	other	compensation,	including	payroll	taxes,	benefits,	and	commissions.	These	increases	were	partially	offset	by	a	$47	million	decrease	in incentive	compensation.

Distribution	and	Servicing	Costs.	Distribution	and	servicing	costs	decreased	$22	million	to	$386	million	for	the	year	ended	December	31,	2011	from	$408	million	for	the	year	ended December	31,	2010.	These	costs	include	payments	to	Bank	of	America/Merrill	Lynch	under	a	global	distribution	agreement,	PNC	and	Barclays,	as	well	as	other	third	parties,	primarily associated	with	the	distribution	and	servicing	of	client	investments	in	certain	BlackRock	products.	The	$22	million	decrease	related	to	lower	cash	management-related	costs	of	$45 million,	reflecting	lower	average	AUM	and	higher	yield-support	waivers	resulting	in	lower	levels	of	distribution	costs,	partially	offset	by	higher	costs	due	to	increases	in	average	AUM for	open-end	and	closed-end	funds,	separate	accounts	and	variable	annuities.

Distribution	and	servicing	costs	for	the	year	ended	December	31,	2011	included	$207	million	of	costs	attributable	to	Bank	of	America/Merrill	Lynch	and	affiliates,	and	$3	million	of costs	attributable	to	PNC	and	affiliates	as	compared	to	$246	million	and	$10	million,	respectively,	in	the	year	ended	December	31,	2010.	Distribution	and	servicing	costs	related	to other	third	parties,	including	Barclays,	increased	$24	million	to	$176	million	for	the	year	ended	December	31,	2011	from	$152	million	for	the	year	ended	December	31,	2010	due	to	an expansion	of	distribution	platforms	and	higher	long-term	AUM.

Amortization	of	Deferred	Sales	Commissions.	Amortization	of	deferred	sales	commissions	decreased	$21	million	to	$81	million	for	the	year	ended	December	31,	2011	from	$102 million	for	the	year	ended	December	31,	2010.	Lower	sales	in	certain	share	classes	of	U.S.	open-end	mutual	funds	contributed	to	the	decline.

Direct	Fund	Expenses.	Direct	fund	expenses	increased	$70	million	reflecting	growth	in	average	AUM	for	the	funds	(predominately	iShares)	where	BlackRock	pays	certain	non- advisory	expenses	of	the	funds.

# General	and	Administration	Expenses

| (Dollar	amounts	in	millions) | 2011 | 2010 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| General\tand\tadministration\texpenses,\tGAAP: |  |  |  |  |
| Marketing\tand\tpromotional | $315 | $328 | $(13) | (4%) |
| Occupancy\tand\toffice\trelated | 373 | 317 | 56 | 18% |
| Portfolio\tservices | 189 | 177 | 12 | 7% |
| Technology | 146 | 152 | (6) | (4%) |
| Professional\tservices | 139 | 115 | 24 | 21% |
| Communications | 40 | 49 | (9) | (18%) |
| Regulatory,\tfiling\tand\tlicense\tfees | 16 | 34 | (18) | (53%) |
| Charitable\tcontributions | 7 | 26 | (19) | (73%) |
| Closed-end\tfund\tlaunch\tcosts | 26 | 15 | 11 | 73% |
| Other\tgeneral\tand\tadministration | 164 | 141 | 23 | 16% |
| Total\tgeneral\tand\tadministration\texpenses,\tGAAP | $1,415 | $1,354 | $61 | 5% |
| Less\tnon-GAAP\tadjustments: |  |  |  |  |
| Marketing\tand\tpromotional | $— | $33 | $(33) | (100%) |
| Occupancy\tand\toffice\trelated | 63 | 12 | 51 | 425% |
| Technology | — | 2 | (2) | (100%) |
| Professional\tservices | — | 12 | (12) | (100%) |
| Other\tgeneral\tand\tadministration | — | 6 | (6) | (100%) |
| Total\tnon-GAAP\tadjustments | $63 | $65 | $(2) | (3%) |
| General\tand\tadministration\texpenses,\tas\tadjusted: |  |  |  |  |
| Marketing\tand\tpromotional | $315 | $295 | $20 | 7% |
| Occupancy\tand\toffice\trelated | 310 | 305 | 5 | 2% |
| Portfolio\tservices | 189 | 177 | 12 | 7% |
| Technology | 146 | 150 | (4) | (3%) |
| Professional\tservices | 139 | 103 | 36 | 35% |
| Communications | 40 | 49 | (9) | (18%) |
| Regulatory,\tfiling\tand\tlicense\tfees | 16 | 34 | (18) | (53%) |
| Charitable\tcontributions | 7 | 26 | (19) | (73%) |
| Closed-end\tfund\tlaunch\tcosts | 26 | 15 | 11 | 73% |
| Other\tgeneral\tand\tadministration | 164 | 135 | 29 | 21% |
| Total\tgeneral\tand\tadministration\texpenses,\tas\tadjusted | $1,352 | $1,289 | $63 | 5% |

Data	reflects	certain	reclassifications	of	prior	period	data	to	conform	to	the	current	period	presentation. (1)

General	and	Administration	Expenses,	GAAP.	General	and	administration	expenses	increased	$61	million,	or	5%,	to	$1,415	million	for	the	year	ended	December	31,	2011	from	$1,354 million	for	year	ended	December	31,	2010.	Higher	occupancy	and	office-related	expenses	(including	$63	million	of	UK	lease	exit	costs),	higher	professional	services	costs	and	other general	and	administration	expenses	contributed	to	the	overall	net	increase	in	general	and	administration	expenses.	The	$23	million	increase	in	other	general	and	administration expenses	reflected	higher	VAT	expense	and	recruiting	costs	in	2011	offset	by	the	non-recurrence	of	other	general	and	administration	provisions	recorded	in	2010	related	to	an outstanding	loan	to	Anthracite	Capital	Inc.	The	increase	in	general	and	administration	expenses,	GAAP	was	partially	offset	by	decreases	in	charitable	contributions	and	regulatory, filing	and	licenses	fees,	primarily	due	to	a	$20	million	2010	U.K.	industry	regulatory	assessment.

Non-GAAP	Adjustments.	The	year	ended	December	31,	2011	general	and	administration	expenses	included	$63	million	of	UK	lease	exit	costs	related	to	the	Company's	exit	from	two London	locations.	The	year	ended	December	31,	2010	general	and	administration	expenses	included	$65	million	of	BGI	integration	costs	primarily	consisting	of	marketing	and promotional	costs,	professional	services	and	occupancy	costs.

General	and	Administration	Expenses,	as	Adjusted.	Excluding	the	UK	lease	exit	costs	and	BGI	integration	expenses,	general	and	administration	expenses,	as	adjusted,	of	$1,352 million	increased	$63	million,	or	5%,	for	the	year	ended	December	31,	2011	from	$1,289	million	for	the	year	ended	December	31,	2010.	See	general	and	administration	expenses, GAAP,	above	for	discussion	on	the	increase	in	general	and	administration	expenses	and	for	items	offsetting	the	overall	increase	in	general	and	administration	expenses,	as	adjusted.	In addition,	general	and	administration	expenses,	as	adjusted,	reflected	higher	marketing	and	promotional	costs	in	2011.

Restructuring	Charges.	For	the	year	ended	December	31,	2011,	BlackRock	recorded	pre-tax	restructuring	charges	of	$32	million,	primarily	related	to	severance,	accelerated amortization	of	certain	previously	granted	stock	awards,	and	legal	and	outplacement	costs,	associated	with	a	reduction	in	work	force	and	reengineering	efforts.

# Non-operating	results	for	the	year	ended	December	31,	2011	compared	with	the	year	ended	December	31,	2010

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

Non-operating	income	(expense),	less	net	income	(loss)	attributable	to	non-controlling	interests	for	the	years	ended	December	31,	2011	and	2010	was	as	follows:

| (Dollar	amounts	in	millions) | Year	ended<br>December	31,<br>2011 | 2010 | $	Change |
| :--- | :--- | :--- | :--- |
| Non-operating\tincome\t(expense),\tGAAP\tbasis | $(114) | $23 | $(137) |
| Less:\tNet\tincome\t(loss)\tattributable\tto\tNCI^(1) | 2 | (13) | 15 |
| Non-operating\tincome\t(expense)^(2) | (116) | 36 | (152) |
| Compensation\texpense\trelated\tto\t(appreciation)\tdepreciation\ton\tdeferred\tcompensation\tplans | 3 | (11) | 14 |
| Non-operating\tincome\t(expense),\tas\tadjusted^(2) | $(113) | $25 | $(138) |

Amount	includes	an	$18	million	loss	and	a	$35	million	loss	attributable	to	consolidated	variable	interest	entities	for	the	year	ended	December	31,	2011	and	2010,	respectively. (1)

The	components	of	non-operating	income	(expense),	less	net	income	(loss)	attributable	to	non-controlling	interests,	for	the	years	ended	December	31,	2011	and	2010	were	as	follows:

| (Dollar	amounts	in	millions) | Year	ended<br>December	31,<br>2011 | 2010 | $	Change |
| :--- | :--- | :--- | :--- |
| Net\tgain\t(loss)\ton\tinvestments^(1) |  |  |  |
| Private\tequity | $36 | $31 | $5 |
| Real\testate | 10 | 17 | (7) |
| Distressed\tcredit/mortgage\tfunds | (13) | 66 | (79) |
| Hedge\tfunds/funds\tof\thedge\tfunds | (5) | 18 | (23) |
| Other\tinvestments^(2) | 1 | 14 | (13) |
| Sub-total | 29 | 146 | (117) |
| Investments\trelated\tto\tdeferred\tcompensation\tplans | (3) | 11 | (14) |
| Total\tnet\tgain\t(loss)\ton\tinvestments | 26 | 157 | (131) |
| Interest\tand\tdividend\tincome | 34 | 29 | 5 |
| Interest\texpense | (176) | (150) | (26) |
| Net\tinterest\texpense | (142) | (121) | (21) |
| Total\tnon-operating\tincome\t(expense)^(1) | (116) | 36 | (152) |
| Compensation\texpense\trelated\tto\t(appreciation)\tdepreciation\ton\tdeferred\tcompensation\tplans | 3 | (11) | 14 |
| Non-operating\tincome\t(expense),\tas\tadjusted^(1) | $(113) | $25 | $(138) |

Amount	includes	net	gains	(losses)	related	to	equity	and	fixed	income	investments	and	BlackRock's	seed	capital	hedging	program.

Non-operating	expense,	less	net	income	(loss)	attributable	to	non-controlling	interests,	decreased	$152	million	to	$116	million	for	the	year	ended	December	31,	2011	compared	with $36	million	of	net	non-operating	income	for	the	year	ended	December	31,	2010.	The	year	ended	December	31,	2011	included	$142	million	of	net	interest	expense,	partially	offset	by $26	million	of	net	positive	marks	primarily	on	private	equity	and	real	estate	fund	co-investments,	partially	offset	by	net	negative	marks	in	distressed	credit/mortgage	fund	co- investments.

Net	gains	on	co-investments	and	seed	investments	decreased	$117	million	during	the	year	ended	December	31,	2011,	primarily	due	a	reduction	in	values	on	distressed	credit/mortgage funds	and	hedge	funds/funds	of	hedge	funds	compared	with	an	increase	in	values	in	the	prior	year.

Net	interest	expense	was	$142	million,	an	increase	of	$21	million	from	the	prior	year.	The	increase	reflected	the	May	2011	issuance	of	$1.5	billion	of	long-term	debt	in	connection with	the	repurchase	of	Bank	of	America's	remaining	ownership	interest	in	BlackRock,	partially	offset	by	higher	interest	and	dividend	income.

# Non-operating	results	for	the	year	ended	December	31,	2011	compared	with	the	year	ended	December	31,	2010	(continued)

# Income	Tax	Expense

|  | GAAP<br>Year	ended<br>December	31, |  |  | As	adjusted<br>Year	ended<br>December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | % |  |  | % |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | Change | 2011 | 2010 | Change |
| Income\tbefore\tincome\ttaxes^(1) | $3,133 | $3,034 | 3% | $3,279 | $3,192 | 3% |
| Income\ttax\texpense | $796 | $971 | (18%) | $1,040 | $1,053 | (1%) |
| Effective\ttax\trate | 25.4% | 32.0% |  | 31.7% | 33.0% |  |

The	GAAP	effective	tax	rate	of	25.4%	for	the	year	ended	December	31,	2011	included	a	$24	million	benefit	related	to	the	resolution	of	certain	outstanding	tax	positions	and	$198 million	of	net	non-cash	tax	benefits	due	to	a	state	tax	election	and	enacted	U.K.,	Japan,	U.S.	state	and	local	tax	legislation.

The	as	adjusted	effective	tax	rate	of	31.7%	for	the	year	ended	December	31,	2011	included	the	$24	million	benefit	mentioned	above	and	excluded	the	$198	million	of	net	non-cash	tax benefits	due	to	a	state	tax	election	and	enacted	U.K.,	Japan,	U.S.	state	and	local	tax	legislation.

The	GAAP	effective	tax	rate	for	the	year	ended	December	31,	2010	included	a	$30	million	non-cash	tax	benefit	related	to	the	revaluation	of	certain	net	deferred	income	tax	liabilities primarily	related	to	acquired	intangible	assets	due	to	enacted	U.K.	tax	legislation.	In	addition,	the	year	ended	December	31,	2010	included	the	effect	of	favorable	tax	rulings	and	the resolution	of	certain	outstanding	tax	positions.

The	as	adjusted	effective	tax	rate	of	33.0%	for	the	year	ended	December	31,	2010	excluded	the	$30	million	non-cash	tax	benefit	mentioned	above.

The	Company's	tax	rate	is	affected	by	tax	rates	in	foreign	jurisdictions	and	the	relative	amount	of	income	earned	in	those	jurisdictions,	which	the	Company	expects	to	be	fairly consistent	in	the	near	term.	The	significant	foreign	jurisdictions,	which	have	lower	statutory	tax	rates	than	the	U.S.	federal	statutory	rate	of	35%,	include	the	United	Kingdom, Luxembourg,	Canada	and	the	Netherlands.	U.S.	income	taxes	were	not	provided	for	certain	undistributed	foreign	earnings	intended	to	be	indefinitely	reinvested	outside	the	United States.

# Net	Income	Attributable	to	BlackRock,	Inc.

The	components	of	net	income	attributable	to	BlackRock,	Inc.	and	net	income	attributable	to	BlackRock,	Inc.,	as	adjusted,	for	the	years	ended	December	31,	2011	and	2010	are	as follows:

|  | GAAP |  |  | As	adjusted |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Year\tended |  |  | Year\tended |  |  |
|  | December\t31, |  | % | December\t31, |  | % |
| (Dollar\tamounts\tin\tmillions,\texcept\tper\tshare\tdata) | 2011 | 2010 | Change | 2011 | 2010 | Change |
| Operating\tincome | \t\t $3,249 | $2,998 | 8% | $3,392 | $3,167 | 7% |
| Non-operating\tincome\t(expense)^(1) | (116) | 36 | * | (113) | 25 | * |
| Income\ttax\texpense | (796) | (971) | (18%) | (1,040) | (1,053) | (1%) |
| Net\tincome\tattributable\tto\tBlackRock,\tInc. | \t\t $2,337 | $2,063 | 13% | $2,239 | $2,139 | 5% |
| %\tattributable\tto\tcommon\tshares | 99.1% | 98.6% |  | 99.1% | 98.6% |  |
| Net\tincome\tattributable\tto\tcommon\tshares | \t\t $2,315 | $2,033 | 14% | $2,218 | $2,109 | 5% |
| Diluted\tweighted-average\tcommon\tshares\toutstanding^(2) | \t 187,116,410 | \t 192,692,047 | (3%) | \t 187,116,410 | \t 192,692,047 | (3%) |
| Diluted\tEPS: |  |  |  |  |  |  |
| Operating\tincome | \t\t $11.60 | $10.28 | 13% | $12.12 | $10.85 | 12% |
| Non-operating\tincome\t(expense)^(1) | (0.41) | 0.12 | * | (0.40) | 0.09 | * |
| Income\ttax\tbenefit | 1.18 | 0.15 | 687% | 0.13 | — | * |
| Diluted\tearnings\tper\tcommon\tshare | \t\t $12.37 | $10.55 | 17% | $11.85 | $10.94 | 8% |

Net	of	net	income	(loss)	attributable	to	non-controlling	interests	(redeemable	and	nonredeemable). (1)

Unvested	RSUs	that	contain	non-forfeitable	rights	to	dividends	are	not	included	as	they	are	deemed	participating	securities	in	accordance	with	GAAP.	Upon	vesting	of	the participating	RSUs	the	shares	are	added	to	the	weighted-average	shares	outstanding,	which	results	in	an	increase	to	the	percentage	of	net	income	attributable	to	common	shares. In	addition,	non-voting	preferred	shares	are	considered	to	be	common	stock	equivalents	for	purposes	of	determining	basic	and	diluted	earnings	per	share	calculations. (2)

GAAP.	Net	income	attributable	to	BlackRock,	Inc.	of	$2,337	million,	or	$12.37	per	diluted	common	share,	for	the	year	ended	December	31,	2011,	rose	$274	million,	or	$1.82	per diluted	common	share,	from	the	year	ended	December	31,	2010

Net	income	attributable	to	BlackRock,	Inc.	of	$2,337	million	for	the	year	ended	December	31,	2011	included	the	after-tax	effect	of	UK	lease	exit	costs	of	$43	million,	restructuring charges	of	$22	million,	the	portion	of	certain	LTIP	awards	to	be	funded	through	a	capital	contribution	of	BlackRock	stock	held	by	PNC	of	$30	million	and	an	expected	contribution	by Merrill	Lynch	of	$5	million	to	fund	certain	compensation	of	former	MLIM	employees.	Net	income	for	the	year	ended	December	31,	2011	included	the	previously	mentioned	non-cash income	tax	benefits.

# Net	Income	Attributable	to	BlackRock,	Inc.	(continued)

Net	income	attributable	to	BlackRock,	Inc.	of	$2,063	million	for	the	year	ended	December	31,	2010	included	the	after-tax	effect	of	the	BGI	integration	costs	of	$59	million,	the	portion of	certain	LTIP	awards,	which	will	be	funded	through	a	capital	contribution	of	BlackRock	stock	held	by	PNC	of	$40	million,	and	certain	compensation	of	former	MLIM	employees	of $7	million	to	be	funded	through	a	cash	contribution	by	Merrill	Lynch.

As	Adjusted.	Exclusive	of	the	items	discussed	above,	net	income	attributable	to	BlackRock,	Inc.	as	adjusted,	totaled	$2,239	million,	or	$11.85	per	diluted	common	share,	for	the	year ended	December	31,	2011,	which	was	an	increase	of	$100	million,	or	$0.91	per	diluted	common	share,	from	the	year	ended	December	31,	2010.

Net	income	and	diluted	earnings	per	common	share,	as	adjusted,	are	described	in	more	detail	in	the	Overview	to	Management's	Discussion	and	Analysis	of	Financial	Condition	and Results	of	Operations.

# Operating	results	for	the	year	ended	December	31,	2010	compared	with	the	year	ended	December	31,	2009

The	following	table	presents	the	component	changes	in	BlackRock's	AUM	for	the	year	ended	December	31,	2010.

| (Dollar	amounts	in	millions) | December	31,<br>2009 | Net<br>subscriptions<br>(2)<br>(redemptions) | merger-<br>related<br>outflows | (3) | Acquisition/<br>(4)<br>reclassifications | Market<br>appreciation/<br>(depreciation) | Foreign<br>exchange | (5) | December	31,<br>2010 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Equity: |  |  |  |  |  |  |  |  |  |
| Active | $348,574 | $2,632 | $(54,490) | $(54,490) | $(3,920) | $40,670 | $1,066 | $1,066 | $334,532 |
| Institutional\tindex | 806,082 | 44,570 | (44,907) | (44,907) | (4,390) | 104,152 | 6,268 | 6,268 | 911,775 |
| iShares | 381,399 | 21,865 |  | — | — | 45,830 | (934) | (934) | 448,160 |
| Fixed\tincome: |  |  |  |  |  |  |  |  |  |
| Active | 595,580 | (22,143) | (9,474) | (9,474) | (3,922) | 31,945 | 317 | 317 | 592,303 |
| Institutional\tindex | 357,557 | 39,148 | (10,408) | (10,408) | 7,374 | 21,220 | 11,039 | 11,039 | 425,930 |
| iShares | 102,490 | 19,008 |  | — | — | 2,195 | (602) | (602) | 123,091 |
| Multi-asset\tclass | 142,029 | 26,262 | (127) | (127) | 3,550 | 13,917 | (44) | (44) | 185,587 |
| Alternatives^(1) :\nCore | 66,058 | (3,022) | (490) | (490) | — | 821 | 236 | 236 | 63,603 |
| Currency\tand\tcommodities | 36,043 | 2,886 |  | — | — | 6,349 | 857 | 857 | 46,135 |
| Long-term | \t 2,835,812 | 131,206 | (119,896) | (119,896) | (1,308) | 267,099 | 18,203 | 18,203 | \t 3,131,116 |
| Cash\tmanagement | 349,277 | (61,424) | (1,063) | (1,063) | (4,852) | (38) | (2,725) | (2,725) | 279,175 |
| Sub-total | \t 3,185,089 | 69,782 | (120,959) | (120,959) | (6,160) | 267,061 | 15,478 | 15,478 | \t 3,410,291 |
| Advisory^(6) | 161,167 | (12,021) |  | (10) | — | (80) | 1,621 | 1,621 | 150,677 |
| Total | $3,346,256 | $57,761 | $(120,969) | $(120,969) | $(6,160) | $266,981 | $17,099 | $17,099 | $3,560,968 |

Amounts	include	outflows	due	to	manager	concentration	considerations	and	active	equity	quantitative	performance. (3)

Amounts	include	acquisition	adjustments	and	reclasses	of	AUM	acquired	from	Barclays	in	December	2009	and	other	reclassifications	to	conform	to	current	period	combined AUM	policy. (4)

AUM	increased	approximately	$214.7	billion,	or	6%,	to	$3.561	trillion	at	December	31,	2010	from	$3.346	trillion	at	December	31,	2009.	The	growth	in	AUM	was	primarily attributable	to	$267.0	billion	in	net	market	appreciation,	$131.2	billion	of	net	subscriptions	in	long-term	mandates	and	a	$17.1	billion	increase	due	to	foreign	exchange	movements, partially	offset	by	$127	billion	of	BGI	merger-related	outflows	(due	to	manager	concentration	considerations	and	active	equity	quantitative	performance)	and	acquisition	adjustments, $61.4	billion	of	net	outflows	in	cash	management	products	and	$12.0	billion	of	net	client	distributions	in	advisory	assignments.

Net	market	appreciation	of	$267.0	billion	included	$190.7	billion	of	net	appreciation	in	equity	products	due	to	an	increase	in	global	equity	markets,	$55.4	billion	in	fixed	income products	due	to	current	income	and	changes	in	interest	rate	spreads,	$13.9	billion	in	multi-asset	class	products,	and	$7.2	billion	in	alternatives,	primarily	due	to	appreciation	in	precious metals,	including	silver	and	gold.

The	$17.1	billion	net	increase	in	AUM	from	converting	non-U.S.	dollar	denominated	AUM	into	U.S.	dollars	was	primarily	due	to	the	weakening	of	the	U.S.	dollar	against	the	Japanese yen,	Canadian	dollar	and	Australian	dollar,	partially	offset	by	the	strengthening	of	the	U.S.	dollar	against	the	euro	and	pound	sterling.

# Operating	results	for	the	year	ended	December	31,	2010	compared	with	the	year	ended	December	31,	2009	(continued)

| (Dollar	amounts	in	millions) | 2010 | 2009 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Revenue | $8,612 | $4,700 | $3,912 | 83% |
| Expenses | \t 5,614 | \t 3,422 | \t 2,192 | 64% |
| Operating\tincome | $2,998 | $1,278 | $1,720 | 135% |
| Operating\tmargin | 34.8% | 27.2% | 7.6% | 28% |

Operating	income	and	operating	margin	for	the	year	ended	December	31,	2010	included	the	full	year	effect	of	revenue	and	expenses	related	to	the	December	1,	2009	acquisition	of BGI	and	$90	million	of	BGI	integration	costs	compared	with	$183	million	of	BGI	transaction/integration	costs	for	the	year	ended	December	31,	2009.	The	transaction/integration expenses	were	not	part	of	BlackRock's	on-going	business	and	are	principally	comprised	of	compensation	expense,	legal	fees,	advisory	payments,	occupancy	costs,	marketing	and promotional	and	consulting	expenses.

The	increase	in	the	operating	income	for	the	year	ended	December	31,	2010	is	attributable	to	the	$3.9	billion	increase	in	revenue	primarily	related	to	an	increase	in	base	and performance	fees	associated	with	the	AUM	acquired	in	the	BGI	Transaction	and	growth	in	long-term	AUM,	which	included	market	appreciation	and	net	new	business,	partially	offset by	a	$2.2	billion	net	increase	in	operating	expenses	related	to	increases	in	employee	compensation	and	benefits,	general	and	administrative	expenses	and	direct	fund	expenses	due	to the	BGI	Transaction.

The	increase	in	the	operating	margin	for	year	ended	December	31,	2010	included	the	positive	effects	of	synergies	related	to	the	BGI	Transaction,	growth	in	long-term	AUM	driven	by market	appreciation,	a	$93	million	decrease	in	BGI	transaction/integration	costs,	a	decline	of	$22	million	in	restructuring	charges	and	a	$17	million	change	in	foreign	currency remeasurement	costs/benefits.	Higher	employee	compensation	and	benefits	expense,	general	and	administrative	expenses	and	direct	fund	expenses	as	well	as	increased	investments	to grow	the	business	partially	offset	the	increase	in	operating	margin.

For	further	discussion	regarding	revenue	and	expense	variances,	see	"Revenue"	and	"Expenses"	herein.

| (Dollar	amounts	in	millions) | 2010 | 2009 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Revenue | $8,612 | $4,700 | $3,912 | 83% |
| Expenses | \t 5,445 | \t 3,130 | \t 2,315 | 74% |
| Operating\tincome^\t(1) | $3,167 | $1,570 | $1,597 | 102% |
| Operating\tmargin^\t(1) | 39.3% | 38.2% | 1.1% | 3% |

The	increase	in	operating	income,	as	adjusted,	for	the	year	ended	December	31,	2010	was	attributable	to	the	$3.9	billion	increase	in	revenue,	discussed	above.	The	increase	was partially	offset	by	a	$2.3	billion	net	increase	in	operating	expenses,	primarily	related	to	increases	in	employee	compensation	and	benefits,	general	and	administration	expenses	and direct	fund	expenses	due	to	the	BGI	Transaction.

The	increase	in	the	operating	margin,	as	adjusted,	for	the	year	ended	December	31,	2010	included	the	benefit	of	synergies	related	to	the	BGI	Transaction	and	growth	in	long-term AUM	driven	by	market	appreciation.	The	increase	in	operating	margin	was	partially	offset	by	higher	employee	compensation	and	benefits	expense,	net	increases	in	operating	expenses related	to	the	BGI	Transaction	as	well	as	increased	investments	to	grow	the	business.

|  | Year	ended<br>December	31, |  | Variance |  |
| :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2010 | 2009 | Amount | %\tChange |
| Investment\tadvisory,\tadministration\tfees\tand\tsecurities\tlending\trevenue: |  |  |  |  |
| Equity: |  |  |  |  |
| Active | $1,848 | $1,230 | $618 | 50% |
| Institutional\tindex | 424 | 56 | 368 | 657% |
| iShares | \t 1,660 | 136 | \t 1,524 | * |
| Fixed\tincome: |  |  |  |  |
| Active | \t 1,047 | 865 | 182 | 21% |
| Institutional\tindex | 166 | 16 | 150 | 938% |
| iShares | 263 | 19 | 244 | * |
| Multi-asset\tclass | 740 | 479 | 261 | 54% |
| Alternatives^(1) |  |  |  |  |
| Core | 522 | 389 | 133 | 34% |
| Currency\tand\tcommodities | 110 | 11 | 99 | 900% |
| Long-term | \t 6,780 | \t 3,201 | \t 3,579 | 112% |
| Cash\tmanagement | 510 | 625 | (115) | (18%) |
| Total | \t 7,290 | \t 3,826 | \t 3,464 | 91% |
| Investment\tadvisory\tperformance\tfees: |  |  |  |  |
| Equity | 123 | 46 | 77 | 167% |
| Fixed\tincome | 55 | 21 | 34 | 162% |
| Multi-asset\tclass | 33 | 20 | 13 | 65% |
| Alternatives | 329 | 115 | 214 | 186% |
| Total | 540 | 202 | 338 | 167% |
| BlackRock\tSolutions\tand\tadvisory | 460 | 477 | (17) | (4%) |
| Distribution\tfees | 116 | 100 | 16 | 16% |
| Other\trevenue | 206 | 95 | 111 | 117% |
| Total\trevenue | $8,612 | $4,700 | $3,912 | 83% |

Data	reflects	the	reclassification	of	prior	period	AUM	to	the	current	year's	presentation. (1)

Investment	Advisory,	Administration	Fees	and	Securities	Lending	Revenue.	Investment	advisory,	administration	fees	and	securities	lending	revenues	increased	$3,464	million	to $7,290	million	for	the	year	ended	December	31,	2010	from	$3,826	million	for	the	year	ended	December	31,	2009.	The	increase	primarily	related	to	fees	earned	on	products	acquired	in the	BGI	acquisition	as	well	as	organic	growth	in	long-term	AUM	due	to	market	appreciation	and	net	new	business,	which	included	securities	lending	revenue	of	$325	million	for	the year	ended	December	31,	2010	compared	with	$36	million	for	the	year	ended	December	31,	2009.

Performance	Fees.	Investment	advisory	performance	fees	increased	$338	million,	or	167%,	to	$540	million	for	the	year	ended	December	31,	2010	from	$202	million	for	the	year ended	December	31,	2009,	primarily	due	to	an	increase	in	performance	fees	earned	upon	exceeding	absolute	investment	or	relative	investment	return	thresholds	on	alternative	multi- strategy,	fixed	income	and	equity	hedge	funds	and	separate	accounts	across	regional/country	equity	strategies,	fixed	income	and	multi-asset	class	products.

BlackRock	Solutions	and	Advisory.	BlackRock	Solutions	and	advisory	revenue	for	the	year	ended	December	31,	2010	decreased	$17	million,	or	4%,	from	the	year	ended December	31,	2009.	The	decrease	was	primarily	due	to	a	decline	in	non-recurring	advisory	assignments,	as	well	as	the	effect	of	a	decline	in	advisory	AUM	due	to	distributions	in portfolio	liquidation	assignments,	which	have	AUM-based	fees,	partially	offset	by	additional	Aladdin,	risk	management	solutions	and	investment	accounting	mandates.	Revenue earned	on	advisory	assignments	was	comprised	of	advisory	and	portfolio	structuring	assignment	fees	and	ongoing	fees	based	on	AUM	of	the	respective	portfolio	assignments.

Distribution	Fees.	Distribution	fees	of	$116	million	for	the	year	ended	December	31,	2010	increased	$16	million	from	$100	million	for	the	year	ended	December	31,	2009.	The increase	primarily	reflected	higher	AUM	in	certain	share	classes	of	BlackRock	Funds.

Other	Revenue.	Other	revenue	of	$206	million	for	the	year	ended	December	31,	2010	increased	$111	million	from	$95	million	for	the	year	ended	December	31,	2009.	The	increase	in other	revenue	primarily	resulted	from	a	$52	million	increase	in	fees,	which	excludes	related	portfolio	service	costs,	earned	for	transition	management	services	due	to	an	increase	in transactions	to	execute	transitions	of	equity	and	fixed	income	mandates,	a	$25	million	increase	in	marketing	fees	earned	from	Barclays	for	services	to	distribute	Barclays	iPath^® products	and	$12	million	increase	for	custody	fees	earned	on	LifePath	products	(a	portion	of	which	is	paid	to	a	third	party	sub-custodian	and	reflected	within	direct	fund	expenses).

| (Dollar	amounts	in	millions) | 2010 | 2009 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Expenses: |  |  |  |  |
| Employee\tcompensation\tand\tbenefits | $3,097 | $1,802 | $1,295 | 72% |
| Distribution\tand\tservicing\tcosts | 408 | 477 | (69) | (14%) |
| Amortization\tof\tdeferred\tsales\tcommissions | 102 | 100 | 2 | 2% |
| Direct\tfund\texpenses | 493 | 95 | 398 | 419% |
| General\tand\tadministration | \t 1,354 | 779 | 575 | 74% |
| Restructuring\tcharges | — | 22 | (22) | (100%) |
| Amortization\tof\tintangible\tassets | 160 | 147 | 13 | 9% |
| Total\texpenses,\tGAAP | $5,614 | $3,422 | $2,192 | 64% |
| Total\texpenses,\tGAAP | $5,614 | $3,422 | $2,192 | 64% |
| Less\tnon-GAAP\texpense\tadjustments: |  |  |  |  |
| BGI\ttransaction/integration\tcosts |  |  |  |  |
| Employee\tcompensation\tand\tbenefits | 25 | 60 | (35) | (58%) |
| General\tand\tadministration | 65 | 123 | (58) | (47%) |
| Total\tBGI\ttransaction/integration\tcosts | 90 | 183 | (93) | (51%) |
| PNC\tLTIP\tfunding\tobligation | 58 | 59 | (1) | (2%) |
| Merrill\tLynch\tcompensation\tcontribution | 10 | 10 | — | —\t\t% |
| Restructuring\tcharges | — | 22 | (22) | (100%) |
| Compensation\texpense\trelated\tto\tappreciation\t(depreciation)\ton\tdeferred\tcompensation\tplans | 11 | 18 | (7) | (39%) |
| Total\tnon-GAAP\texpense\tadjustments | 169 | 292 | (123) | (42%) |
| Total\texpenses,\tas\tadjusted | $5,445 | $3,130 | $2,315 | 74% |

Total	GAAP	expenses	increased	$2,192	million,	or	64%,	to	$5,614	million	for	the	year	ended	December	31,	2010	from	$3,422	million	for	the	year	ended	December	31,	2009. Excluding	certain	items	deemed	non-recurring	by	management	or	transactions	that	ultimately	will	not	affect	the	Company's	book	value,	total	expenses,	as	adjusted,	increased	$2,315 million,	or	74%.	The	increase	in	total	expenses,	as	adjusted,	was	primarily	attributable	to	the	BGI	Transaction	including	increases	in	employee	compensation	and	benefits,	general	and administration	expenses	and	direct	fund	expenses,	partially	offset	by	a	reduction	of	distribution	and	servicing	costs.

| (Dollar	amounts	in	millions) | 2010 | 2009 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Employee\tcompensation\tand\tbenefits,\tGAAP | $3,097 | $1,802 | $1,295 | 72% |
| Less\tnon-GAAP\texpense\tadjustments: |  |  |  |  |
| BGI\ttransaction/integration\tcosts | 25 | 60 | (35) | (58%) |
| PNC\tLTIP\tfunding\tobligation | 58 | 59 | (1) | (2%) |
| Merrill\tLynch\tcompensation\tcontribution | 10 | 10 | — | —\t\t% |
| Compensation\texpense\trelated\tto\tappreciation\t(depreciation)\ton\tdeferred\tcompensation\tplans | 11 | 18 | (7) | (39%) |
| Total\tnon-GAAP\texpense\tadjustments | 104 | 147 | (43) | (29%) |
| Employee\tcompensation\tand\tbenefits,\tas\tadjusted | $2,993 | $1,655 | $1,338 | 81% |

Employee	compensation	and	benefits,	as	adjusted,	increased	by	$1,338	million	excluding	the	$43	million	decrease	in	non-GAAP	adjustments	primarily	related	to	lower	BGI integration	costs.	The	$1,338	million	increase	in	employee	compensation	and	benefits	expense	for	the	year	ended	December	31,	2010	was	attributable	to	a	$721	million	increase	in incentive	compensation	and	a	$617	million	increase	in	salaries,	benefits,	payroll	taxes,	temporary	help	and	commissions.	The	increase	in	incentive	compensation	is	primarily associated	with	the	increase	in	operating	income	after	excluding	the	BGI	integration	costs,	a	$132	million	increase	in	stock-based	compensation	expense	related	to	the	effect	of additional	grants	to	a	larger	number	of	employees	at	the	end	of	January	2010.	The	$617	million	increase	in	salaries,	benefits	and	payroll	taxes	reflected	an	increase	in	the	number	of employees	primarily	resulting	from	the	BGI	Transaction	as	well	as	growth	in	number	of	employees	subsequent	to	the	BGI	Transaction.

Distribution	and	Servicing	Costs.	Distribution	and	servicing	costs	decreased	$69	million	to	$408	million	for	the	year	ended	December	31,	2010	from	$477	million	for	the	year	ended December	31,	2009.	These	costs	include	payments	to	Bank	of	America/Merrill	Lynch	under	a	global	distribution	agreement,	PNC	and	Barclays,	as	well	as	other	third	parties,	primarily associated	with	the	distribution	and	servicing	of	client	investments	in	certain	BlackRock	products.	The	$69	million	decrease	primarily	related	to	lower	levels	of	distribution	payments due	to	lower	levels	of	average	cash	management	AUM	and	a	decrease	of	costs	due	to	an	increase	in	advisory	fee	waivers	for	certain	cash	management	funds	serviced	by	Merrill Lynch.

Distribution	and	servicing	costs	for	the	year	ended	December	31,	2010	included	$246	million	of	costs	attributable	to	Bank	of	America/Merrill	Lynch	and	affiliates,	and	$10	million	of costs	attributable	to	PNC	and	affiliates	compared	with	$349	million	and	$19	million	of	costs,	respectively,	in	the	year	ended	December	31,	2009.	Distribution	and	servicing	costs related	to	other	third	parties,	including	Barclays,	increased	$43	million	to	$152	million	for	the	year	ended	December	31,	2010	from	$109	million	for	the	year	ended	December	31,	2009 due	to	an	expansion	of	distribution	platforms	and	higher	long-term	AUM.

Amortization	of	Deferred	Sales	Commissions.	Amortization	of	deferred	sales	commissions	increased	$2	million	to	$102	million	for	the	year	ended	December	31,	2010	from	$100 million	for	the	year	ended	December	31,	2009.

Direct	Fund	Expenses.	Direct	fund	expenses	increased	$398	million	primarily	related	to	the	addition	of	legacy	BGI	funds	subject	to	arrangements	under	which	BlackRock	pays certain	fund	expenses.

| (Dollar	amounts	in	millions) | Year	ended<br>December	31,<br>2010 | 2009 | Amount | Variance | %	Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| General\tand\tadministration\texpenses^(1)\n,\tGAAP: |  |  |  |  |  |
| Marketing\tand\tpromotional | $328 | $85 | $243 |  | 286% |
| Occupancy\tand\toffice\trelated | 317 | \t 182 | 135 |  | 74% |
| Portfolio\tservices | 177 | \t 100 | 77 |  | 77% |
| Technology | 152 | \t 114 | 38 |  | 33% |
| Professional\tservices | 115 | \t 162 | (47) |  | (29%) |
| Communications | 49 | 26 | 23 |  | 88% |
| Regulatory,\tfiling\tand\tlicense\tfees | 34 | 5 | 29 |  | 580% |
| Charitable\tcontributions | 26 | 2 | 24 |  | * |
| Closed-end\tfund\tlaunch\tcosts | 15 | 2 | 13 |  | 650% |
| Other\tgeneral\tand\tadministration | 141 | \t 101 | 40 |  | 40% |
| Total\tgeneral\tand\tadministration\texpenses,\tGAAP | $1,354 | $779 | $575 |  | 74% |
| Less\tBGI\ttransaction\tand\tintegration\tcosts: |  |  |  |  |  |
| Marketing\tand\tpromotional | $33 | $11 | $22 |  | 200% |
| Occupancy\tand\toffice\trelated | 12 | 1 | 11 |  | * |
| Technology | 2 | 7 | (5) |  | (71%) |
| Professional\tservices | 12 | 91 | (79) |  | (87%) |
| Other\tgeneral\tand\tadministration | 6 | 13 | (7) |  | (54%) |
| Total\tBGI\ttransaction\tand\tintegration\tcosts | $65 | $123 | $(58) |  | (47%) |
| General\tand\tadministration\texpenses,\tas\tadjusted: |  |  |  |  |  |
| Marketing\tand\tpromotional | $295 | $74 | $221 |  | 299% |
| Occupancy\tand\toffice\trelated | 305 | \t 181 | 124 |  | 69% |
| Portfolio\tservices | 177 | \t 100 | 77 |  | 77% |
| Technology | 150 | \t 107 | 43 |  | 40% |
| Professional\tservices | 103 | 71 | 32 |  | 45% |
| Communications | 49 | 26 | 23 |  | 88% |
| Regulatory,\tfiling\tand\tlicense\tfees | 34 | 5 | 29 |  | 580% |
| Charitable\tcontributions | 26 | 2 | 24 |  | * |
| Closed-end\tfund\tlaunch\tcosts | 15 | 2 | 13 |  | 650% |
| Other\tgeneral\tand\tadministration | 135 | 88 | 47 |  | 53% |
| Total\tgeneral\tand\tadministration\texpenses,\tas\tadjusted | $1,289 | $656 | $633 |  | 96% |

*	–	Not	applicable. Data	reflects	certain	reclassifications	of	prior	period	data	to	conform	to	the	current	period	presentation. (1)

General	and	Administration	Expenses,	GAAP.	General	and	administration	expenses	increased	$575	million,	or	74%,	for	the	year	ended	December	31,	2010	from	the	year	ended December	31,	2009,	primarily	due	to	the	BGI	Transaction.

BGI	Transaction	and	Integration	Costs.	BGI	integration	costs	of	$65	million	for	the	year	ended	December	31,	2010	decreased	$58	million	from	the	year	ended	December	31,	2009 primarily	due	to	advisory	and	legal	costs	incurred	for	the	year	ended	December	31,	2009,	partially	offset	by	higher	re-branding	costs	in	2010.

# General	and	Administration	Expenses	(continued)

# General	and	Administration	Expenses,	as	Adjusted

•	 Marketing	and	promotional	expenses	increased	$221	million,	primarily	due	to	an	increase	in	global	and	exchange-traded	fund	marketing	expenses,	which	included travel,	promotional	and	rebranding	and	advertising	expenses.

•Occupancy	and	office-related	expenses	increased	$124	million	primarily	related	to	the	expansion	of	the	Company	due	to	the	BGI	Transaction,	including	expenses	related to	Drapers	Gardens	and	an	increase	in	lease	impairments	as	a	result	of	vacating	certain	locations	in	the	year	ended	December	31,	2010.

•Portfolio	service	costs	increased	$77	million,	due	to	an	increase	in	market	data	and	research	expenses	as	well	as	transition	management	execution	and	clearing	expenses.

•Technology	expenses	increased	$43	million	primarily	due	to	an	increase	in	software	licensing	and	maintenance	and	hardware	depreciation	expenses.

•Professional	services	increased	$32	million	primarily	related	to	consulting,	accounting/tax	and	legal	costs.

•Communications	increased	$23	million	primarily	related	to	the	expansion	of	the	Company	due	to	the	BGI	Transaction.

•Regulatory,	filing	and	license	fees	increased	$29	million	primarily	due	to	a	$20	million	U.K.	regulatory	assessment.

•Charitable	contributions	increased	$24	million,	which	is	primarily	related	to	a	contribution	to	a	donor	advised	charitable	fund.

•Closed-end	fund	launch	costs	(excluding	compensation	costs)	increased	$13	million	due	to	the	Build	America	Bond	Trust	fund,	which	launched	during	the	year	ended December	31,	2010	and	generated	approximately	$1.2	billion	in	AUM.

•Other	general	and	administration	expenses	increased	$47	million	due	to	an	increase	of	$86	million	related	to	growth	of	the	Company	including	recruiting,	training	and insurance	costs,	as	well	as	costs	for	potential	operating	errors/fines,	partially	offset	by	a	$17	million	change	in	foreign	currency	remeasurement	costs/benefits	from	$11 million	of	costs	in	the	year	ended	December	31,	2009	to	a	$6	million	benefit	in	the	year	ended	December	31,	2010,	a	$9	million	decline	in	an	expense	for	a	potentially uncollectible	receivable	recorded	in	2009	and	$9	million	of	lower	provisions	related	to	an	outstanding	loan	to	Anthracite	Capital	Inc.

Restructuring	Charges.	For	the	year	ended	December	31,	2009,	BlackRock	recorded	pre-tax	restructuring	charges	of	$22	million	primarily	related	to	severance,	outplacement	costs, occupancy	costs	and	accelerated	amortization	of	certain	previously	granted	stock	awards	associated	with	a	reduction	in	work	force	and	reengineering	efforts.

Amortization	of	Intangible	Assets.	Amortization	of	intangible	assets	increased	$13	million	to	$160	million	for	the	year	ended	December	31,	2010	from	$147	million	for	the	year	ended December	31,	2009.	The	increase	in	amortization	of	intangible	assets	reflects	amortization	of	finite-lived	management	contracts	acquired	in	the	BGI	Transaction.

# Non-operating	results	for	the	year	ended	December	31,	2010	compared	with	the	year	ended	December	31,	2009

Non-operating	income	(expense),	less	net	income	(loss)	attributable	to	non-controlling	interests,	for	the	years	ended	December	31,	2010	and	2009	was	as	follows:

|  | Year	ended<br>December	31, |  |  |
| :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2010 | 2009 | $\tChange |
| Non-operating\tincome\t(expense),\tGAAP\tbasis | $23 | $(6) | $29 |
| Less:\tNet\tincome\t(loss)\tattributable\tto\tNCI^(1) | (13) | 22 | (35) |
| Non-operating\tincome\t(expense)^(2) | 36 | (28) | 64 |
| Compensation\texpense\trelated\tto\t(appreciation)\tdepreciation\ton\tdeferred\tcompensation\tplans | (11) | (18) | 7 |
| Non-operating\tincome\t(expense),\tas\tadjusted^(2) | $25 | $(46) | $71 |

Amount	includes	a	$35	million	loss	attributable	to	consolidated	variable	interest	entities	for	the	year	ended	December	31,	2010. (1)

The	components	of	non-operating	income	(expense),	less	net	income	(loss)	attributable	to	non-controlling	interests,	for	the	years	ended	December	31,	2010	and	2009	were	as	follows:

| (Dollar	amounts	in	millions) | 2010 | 2009 | $	Change |
| :--- | :--- | :--- | :--- |
| Net\tgain\t(loss)\ton\tinvestments^(1) |  |  |  |
| Private\tequity | $31 | $9 | $22 |
| Real\testate | 17 | (114) | 131 |
| Distressed\tcredit/mortgage\tfunds | 66 | 100 | (34) |
| Hedge\tfunds/funds\tof\thedge\tfunds | 18 | 18 | — |
| Other\tinvestments^(2) | 14 | (11) | 25 |
| Sub-total | 146 | 2 | 144 |
| Investments\trelated\tto\tdeferred\tcompensation\tplans | 11 | 18 | (7) |
| Total\tnet\tgain\t(loss)\ton\tinvestments | 157 | 20 | 137 |
| Interest\tand\tdividend\tincome | 29 | 20 | 9 |
| Interest\texpense | (150) | (68) | (82) |
| Net\tinterest\texpense | (121) | (48) | (73) |
| Total\tnon-operating\tincome\t(expense)^(1) | 36 | (28) | 64 |
| Compensation\texpense\trelated\tto\t(appreciation)\tdepreciation\ton\tdeferred\tcompensation\tplans | (11) | (18) | 7 |
| Non-operating\tincome\t(expense),\tas\tadjusted^(1) | $25 | $(46) | $71 |

Non-operating	income,	less	net	income	(loss)	attributable	to	non-controlling	interests,	increased	$64	million	to	$36	million	for	the	year	ended	December	31,	2010	from	$28	million	net non-operating	expense	for	the	year	ended	December	31,	2009.	The	$36	million	non-operating	income,	net	of	non-controlling	interests	for	the	year	ended	December	31,	2010	was comprised	of	$146	million	of	net	gains	on	co-investments	and	seed	investments	and	$11	million	of	appreciation	related	to	hedges	of	deferred	compensation,	partially	offset	by	$121 million	of	net	interest	expense.

Net	gain	on	co-investments	and	seed	investments	increased	$144	million	from	the	year	ended	December	31,	2009	primarily	due	to	the	non-recurrence	of	2009	valuation	declines	in	real estate	equity	and	debt	co-investments.

Net	interest	expense	was	$121	million,	an	increase	of	$73	million	primarily	due	to	an	increase	in	interest	expense	related	to	the	December	2009	issuances	of	$2.5	billion	of	long-term notes,	partially	offset	by	higher	dividend	income	related	to	an	investment	required	for	regulatory	purposes.

# Non-operating	results	for	the	year	ended	December	31,	2010	compared	with	the	year	ended	December	31,	2009	(continued)

|  | Year	ended<br>December	31, |  |  | Year	ended<br>December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2010 | 2009 | % | 2010 | 2009 | % |
| (Dollar\tamounts\tin\tmillions) | GAAP | GAAP | Change | As\tadjusted | As\tadjusted | Change |
| Income\tbefore\tincome\ttaxes^(1) | $3,034 | $1,250 | 143% | $3,192 | $1,524 | 109% |
| Income\ttax\texpense | $971 | $375 | 159% | $1,053 | $503 | 109% |
| Effective\ttax\trate | 32.0% | 30.0% |  | 33.0% | 33.0% |  |

GAAP	effective	tax	rate	for	the	year	ended	December	31,	2010	included	$30	million	of	non-cash	tax	benefits	due	to	enacted	UK	tax	legislation	and	the	effect	of	favorable	tax	rulings and	the	resolution	of	certain	outstanding	tax	positions.

As	adjusted	effective	tax	rate	of	33.0%	for	the	year	ended	December	31,	2010	excluded	$30	million	of	non-cash	benefits	due	to	UK	tax	legislation.

GAAP	effective	tax	rate	for	the	year	ended	December	31,	2009	included	a	$45	million	of	non-cash	tax	benefits	due	to	legislation	enacted	primarily	with	respect	to	New	York	City corporate	income	taxes	and	$25	million	of	tax	benefits	primarily	related	to	a	favorable	tax	ruling	and	the	final	resolution	of	outstanding	tax	matters.

As	adjusted	effective	tax	rate	of	33.0%	for	the	year	ended	December	31,	2009	excluded	$45	million	of	non-cash	benefits	due	to	legislation	enacted	primarily	with	respect	to	New	York City	corporate	income	taxes.

The	Company	succeeded	to	a	$580	million	California	net	operating	loss	carryforward	for	fiscal	year	2007,	2008	and	2009	in	connection	with	the	BGI	Transaction,	for	which	it	has	not recorded	a	deferred	income	tax	asset	because	of	certain	technical	matters	related	to	the	predecessor's	unitary	tax	returns.	The	Company	will	continue	to	assess	these	matters,	which may	result	in	future	tax	benefits	which,	based	on	current	factors,	could	approximate	$40	million,	if	they	are	resolved	favorably.

The	components	of	net	income	attributable	to	BlackRock,	Inc.	and	net	income	attributable	to	BlackRock,	Inc.,	as	adjusted,	for	the	years	ended	December	31,	2010	and	2009	are	as follows:

|  | Year	ended<br>December	31, |  |  | Year	ended<br>December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2010 | 2009 | % | 2010 | 2009 | % |
| (Dollar\tamounts\tin\tmillions,\texcept\tper\tshare\tdata) | GAAP | GAAP | Change | As\tadjusted | As\tadjusted | Change |
| Operating\tincome | $2,998 | $1,278 | 135% | $3,167 | $1,570 | 102% |
| Non-operating\tincome\t(expense)^(1) | 36 | (28) | * | 25 | (46) | * |
| Income\ttax\texpense | (971) | (375) | 159% | (1,053) | (503) | 109% |
| Net\tincome\tattributable\tto\tBlackRock,\tInc. | $2,063 | $875 | 136% | $2,139 | $1,021 | 110% |
| %\tattributable\tto\tcommon\tshares | 98.6% | 97.3% |  | 98.6% | 97.3% |  |
| Net\tincome\tattributable\tto\tcommon\tshares | $2,033 | $853 | 138% | $2,109 | $995 | 112% |
| Diluted\tweighted-average\tcommon\tshares\noutstanding^(2) | \t 192,692,047 | \t 139,481,449 | 38% | \t 192,692,047 | \t 139,481,449 | 38% |
| Diluted\tEPS\tcomponents: |  |  |  |  |  |  |
| Operating\tincome | $10.28 | $5.75 | 79% | $10.85 | $7.17 | 51% |
| Non-operating\tincome\t(expense)^(1) | 0.12 | (0.13) | * | 0.09 | (0.21) | * |
| Income\ttax\tbenefit | 0.15 | 0.49 | (69%) | — | 0.17 | (100%) |
| Diluted\tearnings\tper\tcommon\tshare | $10.55 | $6.11 | 73% | $10.94 | $7.13 | 53% |

GAAP.	Net	income	attributable	to	BlackRock,	Inc.	of	$2,063	million,	or	$10.55	per	diluted	common	share,	for	the	year	ended	December	31,	2010,	increased	$1,188	million,	or	$4.44 per	diluted	common	share,	from	the	year	ended	December	31,	2009.

Net	income	attributable	to	BlackRock,	Inc.	of	$2,063	million	for	the	year	ended	December	31,	2010	included	the	after-tax	effect	of	the	BGI	integration	costs	of	$59	million,	the	portion of	certain	LTIP	awards,	which	will	be	funded	through	a	capital	contribution	of	BlackRock	stock	held	by	PNC	of	$40	million,	and	certain	compensation	of	former	MLIM	employees	of $7	million	to	be	funded	through	a	cash	contribution	by	Merrill	Lynch,	a	portion	of	which	was	received	by	BlackRock	in	2010.

Net	income	attributable	to	BlackRock,	Inc.	of	$875	million	for	the	year	ended	December	31,	2009	included	the	after-tax	effect	of	the	portion	of	certain	LTIP	awards,	which	will	be funded	through	a	capital	contribution	of	BlackRock	stock	held	by	PNC	of	$41	million,	BGI	transaction/integration	costs	of	$129	million,	restructuring	charges	of	$14	million	and certain	compensation	of	former	MLIM	employees	of	$7	million	to	be	funded	through	a	cash	contribution	by	Merrill	Lynch,	a	portion	of	which	was	received	by	BlackRock	in	2009.

Exclusive	of	the	items	discussed	above,	net	income	attributable	to	BlackRock,	Inc.	as	adjusted,	totaled	$2,139	million	or	10.94	per	diluted	common	share,	as	adjusted,	for	the	year ended	December	31,	2010,	which	was	an	increase	of	$1,118	million	or	$3.81	per	diluted	earnings	per	common	share	from	the	year	ended	December	31,	2009.

# Balance	Sheet	Overview

# As	Adjusted	Balance	Sheet

The	following	table	presents	a	reconciliation	of	the	Company's	consolidated	statement	of	financial	condition	presented	on	a	GAAP	basis	to	the	Company's	consolidated	statement	of financial	condition,	excluding	the	impact	of	separate	account	assets	and	collateral	held	under	securities	lending	agreements	(directly	related	to	lending	securities	held	by	separate account	assets)	and	separate	account	liabilities	and	collateral	liabilities	under	securities	lending	agreements,	consolidated	variable	interest	entities	("VIEs")	and	consolidated	sponsored investment	funds.

The	Company	presents	the	as	adjusted	balance	sheet	as	additional	information	to	enable	investors	to	eliminate	gross	presentation	of	certain	assets	that	have	equal	and	offsetting liabilities	or	non-controlling	interests	and	ultimately	do	not	have	an	impact	on	stockholders'	equity	(excluding	appropriated	retained	earnings	related	to	consolidated	collateralized	loan obligations	("CLOs"))	or	cash	flows.	Management	reviews	its	as-adjusted	balance	sheet,	a	non-GAAP	financial	measure,	as	an	economic	presentation	of	its	total	assets	and	liabilities; however,	it	does	not	advocate	that	investors	consider	such	non-GAAP	financial	measure	in	isolation	from,	or	as	a	substitute	for,	financial	information	prepared	in	accordance	with GAAP.

# Separate	Account	Assets	and	Liabilities	and	Collateral	Held	under	Securities	Lending	Agreements

The	separate	account	assets	are	maintained	by	a	wholly	owned	subsidiary	of	the	Company,	which	is	a	registered	life	insurance	company	in	the	United	Kingdom,	and	represent segregated	assets	held	for	purposes	of	funding	individual	and	group	pension	contracts.	In	accordance	with	GAAP,	the	Company	records	equal	and	offsetting	separate	account liabilities.	The	separate	account	assets	are	not	available	to	creditors	of	the	Company	and	the	holders	of	the	pension	contracts	have	no	recourse	to	the	Company.	The	net	investment income	attributable	to	separate	account	assets	accrues	directly	to	the	contract	owners	and	is	not	reported	on	the	Company's	consolidated	statements	of	income.	While	BlackRock	has no	economic	interest	in	these	assets	or	liabilities,	BlackRock	earns	an	investment	advisory	fee	for	the	service	of	managing	these	assets	on	behalf	of	the	clients.

In	addition,	the	Company	records	on	its	consolidated	statements	of	financial	condition	the	collateral	received	under	securities	lending	agreements	(directly	related	to	lending	securities held	by	separate	account	assets)	as	its	own	asset	in	addition	to	an	equal	and	offsetting	collateral	liability	for	the	obligation	to	return	the	collateral.

# Consolidated	VIEs

As	of	December	31,	2011,	BlackRock	consolidated	five	VIEs.	The	assets	of	these	VIEs	are	not	available	to	creditors	of	the	Company	and	the	Company	has	no	obligation	to	settle	the liabilities	of	the	VIEs.	While	BlackRock	has	no	economic	interest	in	these	assets	or	liabilities,	BlackRock	earns	an	investment	advisory	fee	for	the	service	of	managing	these	assets	on behalf	of	the	clients.

# Balance	Sheet	Overview	(continued)

# Segregated	client	assets

generating	advisory	fees	in

which	BlackRock	has	no

|  |  | Separate |  | Consolidated |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Account |  | Sponsored |  |
|  | GAAP | Assets/ | Consolidated | Investment | As |
| (Dollar\tamounts\tin\tmillions) | Basis | Collateral | VIEs | Funds | Adjusted |
| Assets |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $3,506 | $— | $— | $196 | $3,310 |
| Accounts\treceivable | 1,960 | — | — | — | 1,960 |
| Investments | 1,631 | — | — | 112 | 1,519 |
| Assets\tof\tconsolidated\tvariable\tinterest\tentities | 1,693 | — | 1,693 | — | — |
| Separate\taccount\tassets\tand\tcollateral\theld\tunder\tsecurities\tlending\tagreements | \t 139,789 | \t 139,789 | — | — | — |
| Other\tassets^(1) | 1,169 | — | — | 5 | 1,164 |
| Sub-total | \t 149,748 | \t 139,789 | 1,693 | 313 | 7,953 |
| Goodwill\tand\tintangible\tassets,\tnet | 30,148 | — | — | — | \t 30,148 |
| Total\tassets | $179,896 | $139,789 | $1,693 | $313 | $38,101 |
| Liabilities |  |  |  |  |  |
| Accrued\tcompensation\tand\tbenefits | $1,383 | $— | $— | $— | $1,383 |
| Accounts\tpayable\tand\taccrued\tliabilities | 923 | — | — | — | 923 |
| Borrowings^(2) | 4,790 | — | — | — | 4,790 |
| Liabilities\tof\tconsolidated\tvariable\tinterest\tentities | 1,583 | — | 1,583 | — | — |
| Separate\taccount\tliabilities\tand\tcollateral\tliabilities\tunder\tsecurities\tlending\tagreements | \t 139,789 | \t 139,789 | — | — | — |
| Deferred\tincome\ttax\tliabilities | 5,323 | — | — | — | 5,323 |
| Other\tliabilities^(3) | 743 | — | — | 37 | 706 |
| Total\tliabilities | \t 154,534 | \t 139,789 | 1,583 | 37 | \t 13,125 |
| Equity |  |  |  |  |  |
| Total\tstockholders'\tequity | 25,048 | — | 72 | — | \t 24,976 |
| Non-controlling\tinterests | 314 | — | 38 | 276 | — |
| Total\tequity | 25,362 | — | 110 | 276 | \t 24,976 |
| Total\tliabilities\tand\tequity | $179,896 | $139,789 | $1,693 | $313 | $38,101 |

Amount	includes	due	from	related	parties,	deferred	sales	commissions,	property	and	equipment	and	other	assets.

Amount	includes	short-term	and	long-term	borrowings.

Amount	includes	due	to	related	parties	and	other	liabilities.

The	following	table	presents	selected	significant	components	of	BlackRock's	GAAP	consolidated	statements	of	financial	condition	at	December	31,	2011	and	2010:

|  | December	31,<br>2011 | December	31,<br>2010 | Amount | Variance | %	Change |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Assets: |  |  |  |  |  |
| Cash\tand\tcash\tequivalents | $3,506 | $3,367 | $139 |  | 4% |
| Accounts\treceivable | 1,960 | 2,095 | (135) |  | (6%) |
| Investments | 1,631 | 1,540 | 91 |  | 6% |
| Goodwill\tand\tintangible\tassets,\tnet | 30,148 | 30,317 | (169) |  | (1%) |
| Other\tassets^(1) | 1,169 | 960 | 209 |  | 22% |
| Liabilities: |  |  |  |  |  |
| Accrued\tcompensation\tand\tbenefits | 1,383 | 1,520 | (137) |  | (9%) |
| Accounts\tpayable\tand\taccrued\tliabilities | 923 | 1,068 | (145) |  | (14%) |
| Borrowings^(2) | 4,790 | 3,359 | 1,431 |  | 43% |
| Deferred\tincome\ttax\tliabilities | 5,323 | 5,477 | (154) |  | (3%) |
| Other\tliabilities^(3) | 743 | 641 | 102 |  | 16% |
| Stockholders'\tequity | 25,048 | 26,094 | (1,046) |  | (4%) |

Includes	due	from	related	parties,	deferred	sales	commissions,	property	and	equipment	and	other	assets. (1)

Includes	short-term	borrowings,	convertible	debentures	at	December	31,	2010	and	long-term	borrowings. (2)

Includes	due	to	related	parties	and	other	liabilities. (3)

The	following	discussion	summarizes	the	significant	changes	in	assets	and	liabilities.	These	changes	do	not	include	assets	and	liabilities	that	are	equal	and	offsetting	and	have	no impact	on	BlackRock's	stockholders'	equity.

Cash	and	Cash	Equivalents.	Cash	and	cash	equivalents	at	December	31,	2011	and	2010	included	$196	million	and	$65	million	of	cash	held	by	consolidated	sponsored	investment funds,	respectively.	See	Liquidity	and	Capital	Resources	for	details	on	the	change	in	cash	and	cash	equivalents	during	2011.

Accounts	Receivable.	Accounts	receivable	at	December	31,	2011	decreased	$135	million	from	December	31,	2010,	primarily	reflecting	lower	performance	fees	receivables	at December	31,	2011	partially	offset	by	higher	receivables	related	to	securities	lending	revenue.

Investments.	BlackRock	reports	its	investments	on	a	GAAP	basis,	which	includes	investments	that	are	owned	by	sponsored	investment	funds	deemed	to	be	controlled	by	BlackRock	in accordance	with	GAAP	and,	therefore,	consolidated	even	though	BlackRock	may	not	own	the	majority	of	any	such	funds.	As	a	result,	management	reviews	its	investments	on	an "economic"	basis,	which	eliminates	the	portion	of	investments	that	do	not	impact	BlackRock's	book	value.	BlackRock's	management	does	not	advocate	that	investors	consider	such non-GAAP	financial	measures	in	isolation	from,	or	as	a	substitute	for,	financial	information	prepared	in	accordance	with	GAAP.

The	Company	presents	total	investments,	as	adjusted,	to	enable	investors	to	understand	the	portion	of	its	investments	that	are	owned	by	the	Company,	net	of	non-controlling	interests, as	a	gauge	to	measure	the	impact	of	changes	in	net	non-operating	gain	(loss)	on	investments	to	net	income	(loss)	attributable	to	BlackRock,	Inc.

The	Company	further	presents	total	net	"economic"	investment	exposure,	net	of	deferred	compensation	investments	and	hedged	investments,	to	reflect	another	gauge	for	investors	as the	economic	impact	of	investments	held	pursuant	to	deferred	compensation	arrangements	is	substantially	offset	by	a	change	in	compensation	expense	and	the	impact	of	hedged investments	is	substantially	mitigated	by	total	return	swap	hedges.	Carried	interest	capital	allocations	are	excluded	as	generally	there	is	no	impact	to	BlackRock's	stockholders'	equity as	the	balance	fluctuates.	Finally,	the	Company's	regulatory	investment	in	Federal	Reserve	Bank	stock,	which	is	not	subject	to	market	or	interest	rate	risk,	is	excluded	from	the Company's	net	economic	investment	exposure.

| (Dollar	amounts	in	millions) | 2011 | 2010 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Total\tinvestments,\tGAAP | $1,631 | $1,540 | $91 | 6% |
| Investments\theld\tby\tconsolidated\tsponsored\tinvestment\tfunds^(1) | (587) | (397) | (190) | (48%) |
| Net\texposure\tto\tconsolidated\tinvestment\tfunds | 475 | 260 | 215 | 83% |
| Total\tinvestments,\tas\tadjusted | 1,519 | 1,403 | 116 | 8% |
| Federal\tReserve\tBank\tstock | (328) | (325) | (3) | (1%) |
| Carried\tinterest | (21) | (13) | (8) | (62%) |
| Deferred\tcompensation\tinvestments | (65) | (76) | 11 | 14% |
| Hedged\tinvestments | (43) | (25) | (18) | (72%) |
| Total\t"economic"\tinvestment\texposure | $1,062 | $964 | $98 | 10% |

At	December	31,	2011	and	2010,	approximately	$587	million	and	$397	million,	respectively,	of	BlackRock's	total	GAAP	investments	were	maintained	in	sponsored	investment funds	that	are	deemed	to	be	controlled	by	BlackRock	in	accordance	with	GAAP	and,	therefore,	are	consolidated	even	though	BlackRock	may	not	economically	own	a	majority of	such	funds. (1)

Total	investments,	as	adjusted,	at	December	31,	2011	increased	$116	million	from	December	31,	2010,	resulting	from	$457	million	of	purchases/capital	contributions,	$9	million	of positive	market	valuations	and	earnings	from	equity	method	investments,	and	$8	million	of	net	additional	carried	interest	capital	allocations,	partially	offset	by	$280	million	of sales/maturities	and	$78	million	of	distributions	representing	return	of	capital	and	return	on	investments.

The	following	table	represents	the	carrying	value	of	investments,	by	asset	type,	at	December	31,	2011	and	2010:

| (Dollar	amounts	in	millions) | 2011 | 2010 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Private\tequity | $306 | $277 | $29 | 10% |
| Real\testate | 108 | 54 | 54 | 100% |
| Distressed\tcredit/mortgage\tfunds | 217 | 267 | (50) | (19%) |
| Hedge\tfunds/funds\tof\thedge\tfunds | 167 | 97 | 70 | 72% |
| Other\tinvestments^(1) | 264 | 269 | (5) | (2%) |
| Total\t"economic"\tinvestment\texposure | $1,062 | $964 | $98 | 10% |

Other	investments	primarily	include	seed	investments	in	fixed	income	and	equity	funds/strategies	as	well	as	U.K.	government	securities	held	for	regulatory	purposes. (1)

# Investments	(continued)

The	following	table	represents	investments,	as	adjusted,	measured	at	fair	value	on	a	recurring	basis	at	December	31,	2011:

Goodwill	and	Intangible	Assets.	Goodwill	and	intangible	assets	at	December	31,	2011	decreased	$169	million	from	December	31,	2010,	primarily	due	to	$156	million	of	amortization expense	related	to	finite-lived	intangibles.

Other	Assets.	Other	assets	at	December	31,	2011	increased	$209	million	from	December	31,	2010	primarily	resulting	from	a	$109	million	increase	in	property	and	equipment	due	to additional	leasehold	improvements	and	equipment,	including	capital	expenditures	related	to	the	lease	of	U.K.	office	space	located	at	Drapers	Gardens,	and	a	$51	million	increase	in	tax receivables.

Accrued	Compensation	and	Benefits.	Accrued	compensation	and	benefits	at	December	31,	2011	decreased	$137	million	from	December	31,	2010	primarily	related	to	lower	2011 incentive	compensation	accruals.

Accounts	Payable	and	Accrued	Liabilities.	Accounts	payable	and	accrued	liabilities	at	December	31,	2011	decreased	$145	million	from	December	31,	2010,	resulting	from	decreases in	current	income	taxes	payable	and	unit	trust	payables.

Borrowings.	Borrowings	at	December	31,	2011	increased	$1,431	million	from	December	31,	2010	primarily	resulting	from	net	proceeds	from	new	issuances	of	long-term	borrowings of	$1,496	million,	partially	offset	by	conversions	of	the	final	$67	million	of	convertible	debt.

Deferred	Income	Tax	Liabilities.	Deferred	income	tax	liabilities	at	December	31,	2011	decreased	$154	million	primarily	as	a	result	of	revaluation	of	certain	deferred	income	tax liabilities	primarily	due	to	a	state	tax	election,	enacted	U.K.,	Japan,	U.S.	state	and	local	legislation.	In	addition,	the	decrease	included	the	effects	of	temporary	differences	associated with	deferred	stock	compensation	and	investment	income.

Other	Liabilities.	Other	liabilities	at	December	31,	2011	increased	$102	million	from	December	31,	2010	primarily	resulting	from	an	accrual	for	U.K.	lease	exit	costs,	increases	in deferred	carried	interest	and	liabilities	of	consolidated	funds,	partially	offset	by	repayments	to	Barclays	to	settle	certain	non-interest	bearing	notes	assumed	in	the	BGI	Transaction	and a	payment	related	to	a	U.K.	regulatory	assessment.

Stockholders'	Equity.	Total	stockholders'	equity	at	December	31,	2011	decreased	$1.0	billion	from	December	31,	2010,	principally	resulting	from	$2.8	billion	of	stock	repurchases, including	$2.5	billion	to	repurchase	Bank	of	America's	remaining	ownership	interest	in	BlackRock	and	$239	million	of	employee	tax	withholdings	related	to	employee	stock transactions,	$1.0	billion	of	cash	dividend	payments,	partially	offset	by	$2.3	billion	of	net	income	attributable	to	BlackRock	and	$497	million	of	stock-based	compensation	expense.

# Liquidity	and	Capital	Resources

# BlackRock	Cash	Flows	Excluding	the	Impact	of	Consolidated	Sponsored	Investment	Funds	and	VIEs

In	accordance	with	GAAP,	BlackRock	consolidates	certain	BlackRock	sponsored	investment	funds	and	CLOs,	notwithstanding	the	fact	BlackRock	may	only	have	a	minority	interest, if	any,	in	these	funds	or	CLOs.	As	a	result,	BlackRock's	consolidated	statements	of	cash	flows	include	the	cash	flows	of	consolidated	sponsored	investment	funds	and	CLOs.	The Company	uses	an	adjusted	cash	flow	statement,	which	excludes	the	impact	of	consolidated	sponsored	investment	funds	and	CLOs,	as	a	supplemental	non-GAAP	measure	to	assess liquidity	and	capital	requirements.	The	Company	believes	its	cash	flows,	excluding	the	impact	of	the	consolidated	sponsored	investment	funds	and	CLOs,	provide	investors	with	useful information	on	the	cash	flows	of	BlackRock	relating	to	its	ability	to	fund	additional	operating,	investing	and	financing	activities.	BlackRock's	management	does	not	advocate	that investors	consider	such	non-GAAP	measures	in	isolation	from,	or	as	a	substitute	for	its	cash	flow	presented	in	accordance	with	GAAP.

The	following	tables	present	a	reconciliation	of	the	Company's	consolidated	statements	of	cash	flows	presented	on	a	GAAP	basis	to	the	Company's	consolidated	statements	of	cash flows,	excluding	the	impact	of	the	cash	flows	of	consolidated	sponsored	investment	funds	and	consolidated	VIEs:

|  |  | Impact	on |  | Impact	of |
| :--- | :--- | :--- | :--- | :--- |
|  |  | Cash\tFlows | Impact\ton | Consolidated |
|  |  | of\tConsolidated | Cash\tFlows | Sponsored |
|  |  | Sponsored | of | Investment |
|  | GAAP | Investment | Consolidated | Funds |
| (Dollar\tamounts\tin\tmillions) | Basis | Funds | VIEs | and\tVIEs |
| Cash\tand\tcash\tequivalents,\tbeginning\tof\tyear | $3,367 | $65 | $— | $3,302 |
| Cash\tflows\tfrom\toperating\tactivities | 2,826 | 42 | 136 | 2,648 |
| Cash\tflows\tfrom\tinvesting\tactivities | (204) | 24 | — | (228) |
| Cash\tflows\tfrom\tfinancing\tactivities | (2,485) | 65 | (136) | (2,414) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | 2 | — | — | 2 |
| Net\tchange\tin\tcash\tand\tcash\tequivalents | 139 | 131 | — | 8 |
| Cash\tand\tcash\tequivalents,\tend\tof\tyear | $3,506 | $196 | $— | $3,310 |

|  |  | Impact	on |  | Excluding |
| :--- | :--- | :--- | :--- | :--- |
|  |  | Cash\tFlows\tof | Impact\ton | Impact\tof |
|  |  | Consolidated | Cash\tFlows | Consolidated |
|  |  | Sponsored | of | Sponsored |
|  | GAAP | Investment | Consolidated | Investment |
| (Dollar\tamounts\tin\tmillions) | Basis | Funds | VIEs | Funds\tand\tVIEs |
| Cash\tand\tcash\tequivalents,\tbeginning\tof\tyear | $4,708 | $75 | $9 | $4,624 |
| Cash\tflows\tfrom\toperating\tactivities | 2,488 | (76) | (1) | 2,565 |
| Cash\tflows\tfrom\tinvesting\tactivities | (627) | (52) | — | (575) |
| Cash\tflows\tfrom\tfinancing\tactivities | (3,170) | 118 | (8) | (3,280) |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | (32) | — | — | (32) |
| Net\tchange\tin\tcash\tand\tcash\tequivalents | (1,341) | (10) | (9) | (1,322) |
| Cash\tand\tcash\tequivalents,\tend\tof\tyear | $3,367 | $65 | $— | $3,302 |

# Liquidity	and	Capital	Resources	(continued)

Operating	Activities.	Sources	of	BlackRock's	operating	cash	primarily	include	investment	advisory,	administration	fees	and	securities	lending	revenue,	performance	fees,	revenues from	BlackRock	Solutions	and	advisory	products	and	services,	other	revenue	and	distribution	fees.	BlackRock	uses	its	cash	to	pay	compensation	and	benefits,	distribution	and	servicing costs,	direct	fund	expenses,	general	and	administration	expenses,	interest	and	principal	on	the	Company's	borrowings,	income	taxes,	dividends	on	BlackRock's	capital	stock,	capital expenditures	and	to	purchase	co-investments	and	seed	investments.

Cash	inflows	from	operating	activities,	excluding	the	impact	of	consolidated	sponsored	investment	funds	and	VIEs,	primarily	include	the	receipt	of	investment	advisory	and administration	fees,	securities	lending	revenue	and	other	revenue	offset	by	the	payment	of	operating	expenses	incurred	in	the	normal	course	of	business.

Investing	Activities.	Cash	outflows	from	investing	activities,	excluding	the	impact	of	consolidated	sponsored	investment	funds	and	VIEs,	for	the	year	ended	December	31,	2011	were $228	million	and	primarily	included	$247	million	of	purchases	of	property	and	equipment	and	$262	million	of	purchases	of	investments,	partially	offset	by	$247	million	of	net proceeds	from	sales	and	maturities	of	investments	and	$34	million	of	return	of	capital	from	equity	method	investees.

Financing	Activities.	Cash	outflows	from	financing	activities,	excluding	the	impact	of	consolidated	sponsored	investment	funds	and	VIEs,	for	the	year	ended	December	31,	2011	were $2,414	million,	which	included	$2.8	billion	of	stock	repurchases,	including	$2.5	billion	related	to	the	repurchase	of	Bank	of	America's	remaining	ownership	interest	in	BlackRock	and $239	million	for	employee	tax	withholdings	related	to	employee	stock	transactions,	$1.0	billion	of	cash	dividend	payments	and	$67	million	for	convertible	debt	repayments.	Cash outflows	from	financing	activities	were	partially	offset	by	cash	inflows	related	to	$1,496	million	of	net	proceeds	from	long-term	borrowings	and	$56	million	of	other	inflows	including excess	tax	benefits	from	stock-based	compensation	and	proceeds	from	stock	option	exercises.

# Capital	Resources

The	Company	manages	its	financial	condition	and	funding	to	maintain	appropriate	liquidity	for	the	business.	Capital	resources	at	December	31,	2011	and	2010	were	as	follows:

| (Dollar	amounts	in	millions) | 2011 | 2010 | Amount | %	Change |
| :--- | :--- | :--- | :--- | :--- |
| Cash\tand\tcash\tequivalents | $3,506 | $3,367 | $139 | 4% |
| Cash\tand\tcash\tequivalents\theld\tby\tconsolidated\tsponsored\tinvestment\tfunds^(1) | (196) | (65) | (131) | (202%) |
| Subtotal | 3,310 | 3,302 | 8 | —\t\t% |
| 2011\tcredit\tfacility\t–\tundrawn | 3,400 | — | 3,400 | * |
| 2007\tcredit\tfacility\t–\tundrawn^(2) | — | 2,266 | (2,266) | (100%) |
| Total\tliquidity | $6,710 | $5,568 | $1,142 | 21% |
| Required\tregulatory\tcapital^(3) | $1,196 | $897 | $299 | 33% |

*	–	Not	applicable. The	Company	may	not	be	able	to	access	such	cash	to	use	in	its	operating	activities. Amount	excludes	$134	million	of	undrawn	amounts	at	December	31,	2010	related	to	Lehman	Commercial	Paper,	Inc.	The	2007	credit	facility	was	terminated	in	March	2011. A	portion	of	the	required	regulatory	capital	is	partially	met	with	cash	and	cash	equivalents. (1) (2) (3)

Total	liquidity	improved	by	$1,142	million	during	the	year	ended	December	31,	2011	primarily	reflecting	the	additional	borrowing	capacity	under	the	2011	credit	facility	compared with	the	2007	credit	facility.

During	the	year	ended	December	31,	2011,	the	Company's	net	capital	requirements	increased	$299	million	due	to	increases	related	to	certain	European	and	Asia-Pacific	regulated legal	entities.

A	significant	portion	of	the	Company's	$1,519	million	of	total	investments,	as	adjusted,	is	illiquid	in	nature	and,	as	such,	may	not	be	readily	convertible	to	cash.

# Short-term	borrowings

The	following	describes	the	Company's	short-term	borrowing	arrangements,	which	the	Company	has	access	to	utilize.

2011	Revolving	Credit	Facility.	In	March	2011,	the	Company	entered	into	a	five-year	$3.5	billion	unsecured	revolving	credit	facility	(the	"2011	credit	facility"),	which	replaced	the 2007	facility.	The	2011	credit	facility	permits	the	Company	to	request	an	additional	$1.0	billion	of	borrowing	capacity,	subject	to	lender	credit	approval,	increasing	the	overall	size	of the	2011	credit	facility	to	an	aggregate	principal	amount	not	to	exceed	$4.5	billion.	Interest	on	borrowings	outstanding	accrues	at	a	rate	based	on	the	applicable	London	Interbank Offered	Rate	("LIBOR")	plus	a	spread.	The	2011	credit	facility	requires	the	Company	not	to	exceed	a	maximum	leverage	ratio	(ratio	of	net	debt	to	earnings	before	interest,	taxes, depreciation	and	amortization,	where	net	debt	equals	total	debt	less	unrestricted	cash)	of	3	to	1,	which	was	satisfied	with	a	ratio	of	approximately	1	to	1	at	December	31,	2011.

The	2011	credit	facility	provides	back-up	liquidity,	funds	ongoing	working	capital	for	general	corporate	purposes	and	funds	various	investment	opportunities.	At	December	31,	2011, the	Company	had	$100	million	outstanding	under	this	facility	with	an	interest	rate	of	1.27%	and	a	maturity	during	January	2012.	During	January	2012,	the	Company	rolled	over	the $100	million	in	borrowings	at	an	interest	rate	of	1.30%	and	a	maturity	during	February	2012.	During	February	2012,	the	Company	rolled	over	the	$100	million	in	borrowings	at	an interest	rate	of	1.26%	and	a	maturity	during	March	2012.

Barclays	has	a	$255	million	participation	under	the	2011	credit	facility.

Commercial	Paper	Program.	On	October	14,	2009,	BlackRock	established	a	commercial	paper	program	(the	"CP	Program")	under	which	the	Company	could	issue	unsecured commercial	paper	notes	(the	"CP	Notes")	on	a	private	placement	basis	up	to	a	maximum	aggregate	amount	outstanding	at	any	time	of	$3	billion.	The	proceeds	of	the	commercial	paper issuances	during	2011	were	used	to	fund	a	portion	of	the	repurchase	of	BlackRock's	Series	B	Preferred	Stock	from	affiliates	of	Merrill	Lynch.	On	May	13,	2011,	BlackRock	increased the	maximum	aggregate	amount	that	may	be	borrowed	under	the	CP	Program	from	$3.0	billion	to	$3.5	billion.	The	CP	Program	is	currently	supported	by	the	2011	credit	facility.

As	of	December	31,	2011	and	2010,	BlackRock	had	no	CP	Notes	outstanding.

Share	Repurchase	Approvals.	In	July	2010,	BlackRock	announced	that	its	Board	of	Directors	(the	"Board")	approved	the	repurchase	of	up	to	5,100,000	shares	to	neutralize	the	dilutive effects	of	restricted	stock	units	and	options	that	have	been	granted	to	employees	that	will	become	dilutive	over	the	next	several	years.	The	shares	are	to	be	repurchased	with management	discretion	on	the	timing	of	the	repurchases.	The	Company	repurchased	618,000	shares	in	open	market	transactions	for	approximately	$100	million	in	2011.	As	of December	31,	2011,	the	Company	had	repurchased	approximately	1,514,000	shares	and	there	were	3,586,000	shares	still	authorized	to	be	repurchased.	In	February	2012,	the	Board approved	an	increase	in	the	availability	under	the	Company's	existing	share	repurchase	program	to	allow	for	the	repurchase	of	up	to	5.0	million	shares	of	BlackRock	common	stock.

Barclays	Support	of	Certain	Cash	Funds.	Barclays	has	provided	capital	support	agreements	to	support	certain	cash	management	products	acquired	by	BlackRock	in	the	BGI Transaction.	Pursuant	to	the	terms	of	the	capital	support	agreements,	Barclays	agreed	to	cover	losses	on	covered	securities	within	the	products	in	the	aggregate	of	up	to	$2.2	billion from	December	1,	2009	through	December	1,	2013	or	until	certain	criteria	are	met.	BlackRock	and	Barclays	have	procedures	in	place	to	determine	loss	events	on	covered	securities within	the	products	and	to	ensure	support	payments	from	Barclays.	At	December	31,	2011,	Barclays'	remaining	maximum	potential	obligation	in	the	aggregate	under	the	capital support	agreements	was	$1.6	billion.	At	December	31,	2011,	BlackRock	concluded	that	although	these	funds	were	variable	interest	entities,	it	was	not	the	primary	beneficiary	of	these funds.

Net	Capital	Requirements.	The	Company	is	required	to	maintain	net	capital	in	certain	regulated	subsidiaries	within	a	number	of	jurisdictions,	which	is	partially	maintained	by retaining	cash	and	cash	equivalents	in	those	jurisdictions.	As	a	result,	such	subsidiaries	of	the	Company	may	be	restricted	in	their	ability	to	transfer	cash	between	different	jurisdictions and	to	their	parents.	Additionally,	transfers	of	cash	between	international	jurisdictions,	including	repatriation	to	the	United	States,	may	have	adverse	tax	consequences	that	could discourage	such	transfers.

BTC	is	chartered	as	a	national	bank	that	does	not	accept	client	deposits	and	whose	powers	are	limited	to	trust	activities.	BTC	provides	investment	management	services,	including investment	advisory	and	securities	lending	agency	services	to	institutional	investors	and	other	clients.	BTC	is	subject	to	various	regulatory	capital	and	liquid	asset	requirements administered	by	Federal	banking	agencies.

At	December	31,	2011,	the	Company	was	required	to	maintain	approximately	$1,196	million	in	net	capital	in	certain	regulated	subsidiaries,	including	BTC	and	entities	regulated	by the	FSA	in	the	United	Kingdom,	and	was	in	compliance	with	all	applicable	regulatory	minimum	net	capital	requirements.

Undistributed	Earnings	of	Foreign	Subsidiaries.	As	of	December	31,	2011,	the	Company	has	not	provided	for	U.S.	federal	and	state	income	taxes	on	approximately	$1,516	million	of undistributed	earnings	of	its	foreign	subsidiaries.	Such	earnings	are	considered	indefinitely	reinvested	outside	the	United	States.	The	Company's	current	plans	do	not	demonstrate	a need	to	repatriate	these	funds.

# Contractual	Obligations,	Commitments	and	Contingencies

The	following	table	sets	forth	contractual	obligations,	commitments	and	contingencies	by	year	of	payment	at	December	31,	2011:

| (Dollar	amounts	in	millions) | 2012 | 2013 | 2014 | 2015 | 2016 | Thereafter | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Contractual\tobligations\tand\tcommitments: |  |  |  |  |  |  |  |
| Short-term\tborrowings: |  |  |  |  |  |  |  |
| Principal | $100 | $— | $— | $— | $— | $— | $100 |
| Long-term\tborrowings: |  |  |  |  |  |  |  |
| Principal | 500 | 750 | \t 1,000 | \t — | \t — | 2,450 | \t 4,700 |
| Interest | 180 | 169 | 161 | \t 126 | \t 126 | 353 | \t 1,115 |
| Operating\tleases | 120 | 131 | 121 | \t 110 | 99 | 814 | \t 1,395 |
| Purchase\tobligations | 101 | 80 | 65 | 22 | 11 | — | 279 |
| Investment\tcommitments | 112 | — | — | \t — | \t — | — | 112 |
| Total\tcontractual\tobligations\tand\tcommitments | \t 1,113 | \t 1,130 | \t 1,347 | \t 258 | \t 236 | 3,617 | \t 7,701 |
| Contingent\tobligations: |  |  |  |  |  |  |  |
| Contingent\tdistribution\tobligations | 194 | 194 | — | \t — | \t — | — | 388 |
| Total\tcontractual\tobligations,\tcommitments\tand\tcontingent\tobligations^(1) | $1,307 | $1,324 | $1,347 | $258 | $236 | $3,617 | $8,089 |

As	of	December	31,	2011,	the	Company	had	$281	million	of	net	unrecognized	tax	benefits.	Due	to	the	uncertainty	of	timing	and	amounts	that	will	ultimately	be	paid,	this amount	has	been	excluded	from	the	table	above. (1)

# Contractual	Obligations,	Commitments	and	Contingencies	(continued)

Short-term	Borrowings.	At	December	31,	2011,	the	Company	had	$100	million	outstanding	under	the	2011	credit	facility	with	an	interest	rate	of	1.27%	and	a	maturity	during	January 2012.	During	January	2012,	the	Company	rolled	over	the	$100	million	in	borrowings	at	an	interest	rate	of	1.30%	and	a	maturity	during	February	2012.	During	February	2012,	the Company	rolled	over	the	$100	million	in	borrowings	at	an	interest	rate	of	1.26%	and	a	maturity	during	March	2012.

2017	Notes.	In	September	2007,	the	Company	issued	$700	million	in	aggregate	principal	amount	of	6.25%	senior	unsecured	notes	maturing	on	September	15,	2017	(the	"2017	Notes"). A	portion	of	the	net	proceeds	of	the	2017	Notes	was	used	to	fund	the	initial	cash	payment	for	the	acquisition	of	the	fund	of	funds	business	of	Quellos	and	the	remainder	was	used	for general	corporate	purposes.	Interest	is	payable	semi-annually	in	arrears	on	March	15	and	September	15	of	each	year,	or	approximately	$44	million	per	year.	The	2017	Notes	may	be redeemed	prior	to	maturity	at	any	time	in	whole	or	in	part	at	the	option	of	the	Company	at	a	"make-whole"	redemption	price.

2012,	2014	and	2019	Notes.	In	December	2009,	the	Company	issued	$2.5	billion	in	aggregate	principal	amount	of	unsecured	and	unsubordinated	obligations.	These	notes	were	issued as	three	separate	series	of	senior	debt	securities	including	$0.5	billion	of	2.25%	notes,	$1.0	billion	of	3.50%	notes	and	$1.0	billion	of	5.0%	notes	maturing	in	December	2012,	2014	and 2019,	respectively.	Net	proceeds	of	this	offering	were	used	to	repay	borrowings	under	our	CP	program,	which	was	used	to	finance	a	portion	of	the	BGI	Transaction,	and	for	general corporate	purposes.	Interest	on	these	notes	of	approximately	$96	million	per	year	is	payable	semi-annually	in	arrears	on	June	10	and	December	10	of	each	year.	These	notes	may	be redeemed	prior	to	maturity	at	any	time	in	whole	or	in	part	at	the	option	of	the	Company	at	a	"make-whole"	redemption	price.

2013	and	2021	Notes.	In	May	2011,	the	Company	issued	$1.5	billion	in	aggregate	principal	amount	of	unsecured	unsubordinated	obligations.	These	notes	were	issued	as	two	separate series	of	senior	debt	securities	including	$750	million	of	4.25%	notes	and	$750	million	of	floating	rate	notes	maturing	in	May	2021	and	2013,	respectively.	Net	proceeds	of	this offering	were	used	to	fund	the	repurchase	of	BlackRock's	Series	B	Preferred	Stock	from	affiliates	of	Merrill	Lynch.	Interest	on	the	4.25%	notes	due	in	2021	("2021	Notes")	is	payable semi-annually	on	May	24	and	November	24	of	each	year	commencing	November	24,	2011	and	is	approximately	$32	million	per	year.	Interest	on	the	floating	rate	notes	due	in	2013 ("2013	Floating	Rate	Notes")	is	payable	quarterly	on	February	24,	May	24,	August	24	and	November	24	of	each	year.	The	2021	Notes	may	be	redeemed	prior	to	maturity	at	any	time in	whole	or	in	part	at	the	option	of	the	Company	at	a	"make-whole"	redemption	price.	The	2013	Floating	Rate	Notes	may	not	be	redeemed	at	the	Company's	option	before	maturity.

In	May	2011,	in	conjunction	with	the	issuance	of	the	2013	Floating	Rate	Notes,	the	Company	entered	into	a	$750	million	notional	interest	rate	swap	maturing	in	2013	to	hedge	the future	cash	flows	of	the	obligation	at	a	fixed	rate	of	1.03%	payable	semi-annually	on	May	24	and	November	24	of	each	year	commencing	November	24,	2011.	The	interest	rate	swap effectively	converts	the	2013	Floating	Rate	Notes	to	a	fixed	rate	obligation.

Operating	Leases.	The	Company	leases	its	primary	office	locations	under	agreements	that	currently	expire	through	2035.	In	connection	with	certain	lease	agreements,	the	Company	is responsible	for	escalation	payments.	The	contractual	obligations	table	above	includes	only	guaranteed	minimum	lease	payments	for	such	leases	and	does	not	project	potential	escalation or	other	lease-related	payments.	These	leases	are	classified	as	operating	leases	and,	as	such,	are	not	recorded	as	liabilities	on	the	consolidated	statements	of	financial	condition.

Purchase	Obligations.	In	the	ordinary	course	of	business,	BlackRock	enters	into	contracts	or	purchase	obligations	with	third	parties	whereby	the	third	parties	provide	services	to	or	on behalf	of	BlackRock.	Purchase	obligations	included	in	the	contractual	obligations	table	above	represent	executory	contracts,	which	are	either	non-cancelable	or	cancelable	with	a penalty.	At	December	31,	2011,	the	Company's	obligations	primarily	reflected	standard	service	contracts	for	portfolio,	market	data,	office-related	services	and	third-party	marketing and	promotional	services.	Purchase	obligations	are	recorded	on	the	Company's	financial	statements	when	services	are	provided	and,	as	such,	obligations	for	services	not	received	are not	included	in	the	Company's	consolidated	statement	of	financial	condition	at	December	31,	2011.

Investment	Commitments.	At	December	31,	2011,	the	Company	had	$112	million	of	various	capital	commitments	to	fund	sponsored	investment	funds,	including	funds	of	private equity	funds,	real	estate	funds	and	distressed	credit	funds.	This	amount	excludes	additional	commitments	made	by	consolidated	funds	of	funds	to	underlying	third-party	funds	as	third- party	non-controlling	interest	holders	have	the	legal	obligation	to	fund	the	respective	commitments	of	such	funds	of	funds.	Generally,	the	timing	of	the	funding	of	these	commitments is	unknown	and	the	commitments	are	callable	on	demand	at	any	time	prior	to	the	expiration	of	the	commitment	and	are,	therefore,	presented	in	2012.	These	unfunded	commitments	are not	recorded	on	the	Company's	consolidated	statements	of	financial	condition.	The	above	schedule	does	not	include	potential	future	commitments	approved	by	the	Company's	Capital Committee,	but	which	are	not	yet	legally	binding.	The	Company	intends	to	make	additional	capital	commitments	from	time	to	time	to	fund	additional	investment	products	for,	and with,	its	clients.

Carried	Interest	Claw-back.	As	a	general	partner	in	certain	investment	funds,	including	private	equity	partnerships	and	certain	hedge	funds,	the	Company	may	receive	certain	carried interest	cash	distributions	from	the	partnerships	in	accordance	with	distribution	provisions	of	the	partnership	agreements.	The	Company	may,	from	time	to	time,	be	required	to	return all	or	a	portion	of	such	distributions	to	the	limited	partners	in	the	event	the	limited	partners	do	not	achieve	a	certain	return	as	specified	in	the	various	partnership	agreements.

Contingent	Distribution	Obligations.	In	November	2010,	BlackRock	entered	into	a	second	amended	and	restated	global	distribution	agreement	with	Merrill	Lynch,	which	requires	the Company	to	make	payments	to	Merrill	Lynch	contingent	upon	sales	of	products	and	level	of	AUM	maintained	in	certain	BlackRock	products.	The	economic	terms	of	the	agreement will	remain	in	effect	until	January	2014.	After	such	term,	the	agreement	will	renew	for	one	automatic	three-year	extension	if	certain	conditions	are	satisfied.	The	above	schedule reflects	the	Company's	estimated	payments	for	2012,	which	due	to	uncertainty	of	asset	levels	and	future	additional	sales,	has	been	held	constant	for	2013.

The	following	items	have	not	been	included	in	the	contractual	obligations,	commitments	and	contingencies	table:

Compensation	and	Benefit	Obligations.	The	Company	has	various	compensation	and	benefit	obligations,	including	bonuses,	commissions	and	incentive	payments	payable,	defined contribution	plan	matching	contribution	obligations,	and	deferred	compensation	arrangements,	that	are	excluded	from	the	table	above	primarily	due	to	uncertainties	in	their	payout periods.	These	arrangements	are	discussed	in	more	detail	in	Notes	13,	Stock-Based	Compensation,	and	14,	Employee	Benefit	Plans,	to	the	consolidated	financial	statements	beginning on	page	F-1	of	this	Form	10-K.	Accrued	compensation	and	benefits	at	December	31,	2011	totaled	$1,383	million	and	included	incentive	compensation	of	$1,079	million,	deferred compensation	of	$91	million	and	other	compensation	and	benefits	related	obligations	of	$213	million.	Substantially	all	of	the	incentive	compensation	liability	was	paid	in	the	first quarter	of	2012,	while	the	deferred	compensation	obligations	are	payable	over	periods	up	to	five	years.

Separate	Account	Liabilities.	The	separate	account	assets	are	maintained	by	a	wholly	owned	subsidiary	of	the	Company,	which	is	a	registered	life	insurance	company	in	the	United Kingdom,	and	represent	segregated	assets	held	for	purposes	of	funding	individual	and	group	pension	contracts.	In	accordance	with	GAAP,	the	Company	records	equal	and	offsetting separate	account	liabilities.	The	separate	account	assets	are	not	available	to	creditors	of	the	Company	and	the	holders	of	the	pension	contracts	have	no	recourse	to	the	Company.	The net	investment	income	attributable	to	separate	account	assets	accrues	directly	to	the	contract	owners	and	is	not	reported	on	the	Company's	consolidated	statements	of	income.	While BlackRock	has	no	economic	interest	in	these	assets	or	liabilities,	BlackRock	earns	an	investment	advisory	fee	for	the	service	of	managing	these	assets	on	behalf	of	the	clients.	At December	31,	2011,	the	Company	had	$118.9	billion	of	assets	and	offsetting	liabilities	on	the	consolidated	statement	of	financial	condition.	The	payment	of	these	contractual obligations	is	inherently	uncertain	and	varies	by	customer.	As	such,	these	liabilities	have	been	excluded	from	the	contractual	obligations	table	above.

Indemnifications.	In	many	of	the	Company's	contracts,	including	the	BGI,	MLIM	and	Quellos	Transaction	agreements,	BlackRock	agrees	to	indemnify	third	parties	under	certain circumstances.	The	terms	of	the	indemnities	vary	from	contract	to	contract	and	the	amount	of	indemnification	liability,	if	any,	cannot	be	determined	and	has	not	been	included	in	the table	above	or	recorded	in	the	Company's	consolidated	statement	of	financial	condition	at	December	31,	2011.	See	further	discussion	in	Note	12,	Commitments	and	Contingencies,	to the	consolidated	financial	statements	beginning	on	page	F-1	of	this	Form	10-K.

Acquisitions.	In	January	2012,	BlackRock	announced	that	it	has	agreed	to	acquire	Toronto-based	Claymore	Investments,	Inc.	("Claymore"),	subject	to	customary	closing	conditions. Claymore	is	a	wholly	owned	independent	Canadian	subsidiary	of	Guggenheim	Funds	Services	Group,	a	subsidiary	of	Guggenheim	Partners,	LLC.	The	total	consideration	estimated	to be	paid	at	closing	will	be	approximately	$210	million.

# Critical	Accounting	Policies

The	preparation	of	consolidated	financial	statements	in	conformity	with	GAAP	requires	management	to	make	estimates	and	assumptions	that	affect	the	reported	amounts	of	assets	and liabilities	and	disclosure	of	contingent	assets	and	liabilities	at	the	date	of	the	consolidated	financial	statements	and	the	reported	amounts	of	revenues	and	expenses	during	the	reporting periods.	Actual	results	could	differ	significantly	from	those	estimates.	Management	considers	the	following	critical	accounting	policies	important	to	understanding	the	consolidated financial	statements.	For	a	summary	of	these	and	additional	accounting	policies	see	Note	2,	Significant	Accounting	Policies,	to	the	consolidated	financial	statements	beginning	on	page F-1	of	this	Form	10-K.

Consolidation	of	Sponsored	Investment	Funds	and	Securitization	Products.	Consolidation	of	sponsored	investment	funds	and	securitization	products	(collectively	"investment products")	is	determined	pursuant	to	ASC	810,	Consolidation.	The	accounting	method	used	by	the	Company	depends	upon	the	influence	the	Company	has	over	its	investee,	the investment	product.	To	the	extent	that	BlackRock	can	exert	control	over	the	financial	and	operating	policies	of	the	investment	product,	which	generally	exists	if	there	is	a	50%	or greater	voting	interest	or	if	partners	or	members	of	certain	products	do	not	have	substantive	rights,	BlackRock	consolidates	the	investment	product.

For	investment	products	in	which	BlackRock's	voting	interest	is	less	than	50%,	an	analysis	is	performed	to	determine	if	the	investment	product	is	a	variable	interest	entity	("VIE")	or	a voting	rights	entity.	Upon	the	determination	that	the	investment	product	is	a	VIE,	further	analysis,	as	discussed	below,	is	performed	to	determine	if	BlackRock	is	the	primary beneficiary	("PB")	of	the	investment	product,	which	would	require	consolidation.

Consolidation	of	Variable	Interest	Entities.	Pursuant	to	ASC	810-10,	certain	investment	products	for	which	the	risks	and	rewards	of	ownership	are	not	directly	linked	to	voting interests	may	be	deemed	VIEs.	BlackRock	reviews	factors,	including	the	rights	of	the	equity	holders	and	obligations	of	equity	holders	to	absorb	losses	or	receive	expected	residual returns	to	determine	if	the	investment	product	is	a	VIE.	BlackRock	is	required	to	consolidate	a	VIE	when	it	is	deemed	to	be	the	PB,	which	is	evaluated	continuously	as	facts	and circumstances	change.

ASU	2010-10,	Amendments	to	Statement	167	for	Certain	Investment	Funds	("ASU	2010-10")	defers	the	application	of	Statement	of	Financial	Accounting	Standards	("SFAS") No.	167,	Amendments	to	FASB	Interpretation	No.	46(R),	for	certain	investment	funds,	including	money	market	funds.

The	PB	of	a	VIE	that	meets	the	conditions	of	ASU	2010-10	is	the	enterprise	that	has	a	variable	interest	(or	combination	of	variable	interests,	including	those	of	related	parties)	that absorbs	the	majority	of	the	entity's	expected	losses,	receives	a	majority	of	the	entity's	expected	residual	returns,	or	both.	Effective	January	1,	2010,	the	PB	of	a	VIE	that	does	not	meet the	conditions	for	deferral	in	ASU	2010-10	is	the	enterprise	that	has	the	power	to	direct	activities	of	the	entity	that	most	significantly	impact	the	entity's	economic	performance	and	has the	obligation	to	absorb	losses	or	the	right	to	receive	benefits	that	potentially	could	be	significant	to	the	VIE.

Significant	judgment	is	required	in	the	determination	of	whether	the	Company	is	the	PB	of	a	VIE.	If	the	Company,	together	with	its	related	parties,	is	determined	to	be	the	PB	of	a	VIE, BlackRock	will	consolidate	the	entity.	In	order	to	determine	whether	the	Company	is	the	PB	of	a	VIE	for	entities	that	meet	the	conditions	of	ASU	2010-10,	management	must	make significant	estimates	and	assumptions	of	probable	future	cash	flows	and	assign	probabilities	to	different	cash	flow	scenarios.	Assumptions	made	in	such	analyses	include,	but	are	not limited	to,	market	prices	of	securities,	market	interest	rates,	potential	credit	defaults	on	individual	securities	or	default	rates	on	a	portfolio	of	securities,	gain	realization,	liquidity	or marketability	of	certain	securities,	discount	rates	and	the	probability	of	certain	other	outcomes.

In	the	normal	course	of	business,	the	Company	is	the	manager	of	various	types	of	sponsored	investment	vehicles,	including	collateralized	debt	obligations	("CDOs")	or	CLOs	that	do not	meet	the	conditions	of	ASU	2010-10	and	sponsored	investment	funds,	which	may	be	considered	VIEs.	At	December	31,	2011,	the	Company	consolidated	five	VIEs,	including	four CLOs	and	one	sponsored	private	equity	fund.

# Critical	Accounting	Policies	(continued)

# Consolidation	of	Variable	Interest	Entities	(continued)

At	December	31,	2011,	the	following	balances	related	to	the	five	VIEs	consolidated	on	the	Company's	consolidated	statement	of	financial	condition:

|  |  | Sponsored | Total |
| :--- | :--- | :--- | :--- |
|  |  | Private | Consolidated |
| (Dollar\tamounts\tin\tmillions) | CLOs | Equity\tFund | VIEs |
| Assets\tof\tconsolidated\tVIEs: |  |  |  |
| Cash\tand\tcash\tequivalents | $47 | $7 | $54 |
| Bank\tloans,\tbonds\tand\tother\tinvestments | 1,608 | 31 | 1,639 |
| Liabilities\tof\tconsolidated\tVIEs: |  |  |  |
| Borrowings | (1,574) | — | (1,574) |
| Other\tliabilities | (9) | — | (9) |
| Appropriated\tretained\tearnings | (72) | — | (72) |
| Non-controlling\tinterests\tof\tconsolidated\tVIEs | — | (38) | (38) |
| Total\tBlackRock\tnet\tinterests\tin\tconsolidated\tVIEs | $— | $— | $— |

As	of	December	31,	2011,	BlackRock	was	the	manager	of	over	20	CLOs/CDOs	and	other	securitization	entities,	including	the	four	aforementioned	CLOs	in	which	BlackRock,	in accordance	with	ASU	2009-17,	was	determined	to	be	the	PB,	which	required	BlackRock	to	consolidate	these	VIEs.	BlackRock	was	deemed	to	be	the	PB	because	it	has	the	power	to direct	the	activities	of	the	CLO	that	most	significantly	impact	the	entity's	economic	performance	and	has	the	right	to	receive	benefits	that	potentially	could	be	significant	to	the	VIE.	At December	31,	2011,	the	Company	had	$1,655	million	and	$1,583	million	in	assets	and	liabilities,	respectively,	on	its	consolidated	statement	of	financial	condition	related	to	these consolidated	CLOs.	In	addition,	the	Company	recorded	appropriated	retained	earnings	for	the	difference	between	the	assets	and	liabilities,	as	the	CLO	noteholders,	not	BlackRock, ultimately	will	receive	the	benefits	or	absorb	the	losses	associated	with	the	CLO's	assets	and	liabilities.	The	changes	in	the	assets	and	liabilities	of	these	CLOs	have	no	impact	on	net income	attributable	to	BlackRock	or	its	cash	flows.	Excluding	outstanding	management	fee	receivables,	the	Company	has	no	risk	of	loss	with	its	involvement	with	these	VIEs.

At	December	31,	2011,	BlackRock	was	determined	to	be	the	PB	of	one	sponsored	private	equity	investment	fund	of	funds	in	which	it	had	a	non-substantive	investment	and	was deemed	to	absorb	the	majority	of	the	variability	due	to	its	de-facto	third-party	relationships	with	other	partners	in	the	fund,	which	limits	the	ability	of	the	partners	to	transfer	or	sell	their interests	without	BlackRock's	consent	as	the	general	partner	of	the	fund.	At	December	31,	2011,	the	Company	had	recorded	$7	million,	$31	million	and	$38	million	in	cash	and	cash equivalents,	private	equity	investments	and	nonredeemable	non-controlling	interests	of	consolidated	VIEs,	respectively,	on	its	consolidated	statement	of	financial	condition	related	to this	VIE.	The	changes	in	the	assets	and	liabilities	of	this	VIE	have	no	impact	on	net	income	attributable	to	BlackRock.	Excluding	outstanding	management	fee	receivables,	the Company	has	no	risk	of	loss	with	its	involvement	with	this	VIE.

Consolidation	of	Voting	Rights	Entities.	To	the	extent	that	BlackRock	can	exert	control	over	the	financial	and	operating	policies	of	the	investee,	which	generally	exists	if	there	is	a	50% or	greater	voting	interest	or	if	partners	or	members	of	certain	products	do	not	have	substantive	rights,	BlackRock	consolidates	the	investee.

The	Company,	as	general	partner	or	managing	member	of	certain	sponsored	investment	funds,	generally	is	presumed	to	control	funds	that	are	limited	partnerships	or	limited	liability companies.	Pursuant	to	ASC	810-20,	Control	of	Partnerships	and	Similar	Entities	("ASC	810-20"),	the	Company	reviews	such	investment	vehicles	to	determine	if	such	a	presumption can	be	overcome	by	determining	if	other	non-affiliated	partners	or	members	of	the	limited	partnership	or	limited	liability	company	have	the	substantive	ability	to	dissolve	(liquidate) the	investment	vehicle,	or	otherwise	to	remove	BlackRock	as	the	general	partner	or	managing	member	without	cause	based	on	a	simple	unaffiliated	majority	vote,	or	have	other substantive	participating	rights.	If	the	investment	vehicle	is	not	a	VIE	and	the	presumption	of	control	is	not	overcome,	BlackRock	will	consolidate	the	investment	vehicle.

At	December	31,	2011	and	2010,	as	a	result	of	consolidation	of	various	investment	products	deemed	to	be	voting	rights	entities,	including	products	where	BlackRock	owns	50%	of greater	of	the	voting	rights	of	the	product,	under	the	consolidation	policies	described	above,	the	Company	had	the	following	balances	on	its	consolidated	statements	of	financial condition:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 |
| Cash\tand\tcash\tequivalents | $196 | $65 |
| Investments: |  |  |
| Trading\tinvestments | 214 | 60 |
| Other\tinvestments | 373 | 337 |
| Other\tassets | 5 | 3 |
| Other\tliabilities | (37) | (10) |
| Non-controlling\tinterests | (276) | (195) |
| BlackRock's\tnet\tinterests\tin\tconsolidated\tinvestment\tfunds | $475 | $260 |

The	Company	retained	the	specialized	accounting	of	these	investment	funds	pursuant	to	ASC	810-10.	VIEs,	including	a	consolidated	sponsored	investment	fund	and	CLOs,	were excluded	from	the	balances	above	as	these	balances	are	reported	separately	on	the	consolidated	statements	of	financial	condition.

# Investments

Equity	Method	Investments.	For	equity	investments	where	BlackRock	does	not	control	the	investee,	and	where	the	Company	is	not	the	PB	of	a	VIE,	but	can	exert	significant	influence over	the	financial	and	operating	policies	of	the	investee,	the	Company	uses	the	equity	method	of	accounting.	The	evaluation	of	whether	the	Company	exerts	control	or	significant influence	over	the	financial	and	operational	policies	of	its	investees	requires	significant	judgment	based	on	the	facts	and	circumstances	surrounding	each	individual	investment.	Factors considered	in	these	evaluations	may	include	the	type	of	investment,	the	legal	structure	of	the	investee,	the	terms	and	structure	of	the	investment	agreement,	including	investor	voting	or other	rights,	the	terms	of	BlackRock's	advisory	agreement	or	other	agreements	with	the	investee,	any	influence	BlackRock	may	have	on	the	governing	board	of	the	investee,	the	legal rights	of	other	investors	in	the	entity	pursuant	to	the	fund's	operating	documents	and	the	relationship	between	BlackRock	and	other	investors	in	the	entity.

# Equity	Method	Investments	(continued)

Substantially	all	of	BlackRock's	equity	method	investees	are	investment	companies	that	record	their	underlying	investments	at	fair	value.	Therefore,	under	the	equity	method	of accounting,	BlackRock's	share	of	the	investee's	underlying	net	income	predominantly	represents	fair	value	adjustments	in	the	investments	held	by	the	equity	method	investees. BlackRock's	share	of	the	investee's	underlying	net	income	or	loss	is	based	upon	the	most	currently	available	information	and	is	recorded	as	non-operating	income	(expense)	for investments	in	investment	companies,	or	as	other	revenue	for	operating	advisory	company	investments,	which	are	recorded	in	other	assets,	since	such	investees	are	considered	to	be	an extension	of	BlackRock's	core	business.

At	December	31,	2011,	the	Company	had	$476	million	and	$80	million	of	equity	method	investments,	including	equity	method	investments	held	for	deferred	compensation,	reflected within	investments	and	other	assets,	respectively,	and	at	December	31,	2010,	the	Company	had	$583	million	and	$58	million	of	equity	method	investees	reflected	in	investments	and other	assets,	respectively.

Impairment	of	Investments.	The	Company's	management	periodically	assesses	its	equity	method,	available-for-sale,	held-to-maturity	and	cost	investments	for	impairment.	If circumstances	indicate	that	impairment	may	exist,	investments	are	evaluated	using	market	values,	where	available,	or	the	expected	future	cash	flows	of	the	investment.	If	the undiscounted	expected	future	cash	flows	are	lower	than	the	Company's	carrying	value	of	the	investment,	an	impairment	charge	is	recorded	in	the	consolidated	statement	of	income.

When	the	fair	value	of	an	available-for-sale	security	is	lower	than	cost,	the	Company	evaluates	the	security	to	determine	whether	the	impairment	is	considered	to	be	"other-than- temporary".

In	making	this	determination	for	equity	securities,	the	Company	considers,	among	other	factors,	the	length	of	time	the	security	has	been	in	a	loss	position,	the	extent	to	which	the security's	market	value	is	less	than	cost,	the	financial	condition	and	near-term	prospects	of	the	security's	issuer	and	the	Company's	ability	and	intent	to	hold	the	security	for	a	length	of time	sufficient	to	allow	for	recovery	of	such	unrealized	losses.	If	the	impairment	is	considered	other-than-temporary,	a	charge	is	recorded	in	the	consolidated	statement	of	income.

In	making	this	determination	for	debt	securities,	the	Company	considers	whether:	(1)	the	Company	has	the	intent	to	sell	the	security,	(2)	it	is	more	likely	than	not	that	the	Company will	be	required	to	sell	the	security	before	recovery	or	(3)	the	Company	does	not	expect	to	recover	the	entire	amortized	cost	basis	of	the	security.	If	the	Company	does	not	intend	to	sell a	security	and	it	is	not	more	likely	than	not	that	it	will	be	required	to	sell	the	security,	but	the	security	has	suffered	a	credit	loss,	the	credit	loss	will	be	bifurcated	from	the	total impairment	and	recorded	in	earnings	with	the	remaining	portion	recorded	in	accumulated	other	comprehensive	income.

# Impairment	of	Investments	(continued)

Evaluation	of	securities	impairments	involves	significant	assumptions	and	management	judgments,	which	could	differ	from	actual	results,	and	these	differences	could	have	a	material impact	on	the	Company's	consolidated	statements	of	income.

# Fair	Value	Measurements

Hierarchy	of	Fair	Value	Inputs.	The	provisions	of	ASC	820-10	establish	a	hierarchy	that	prioritizes	inputs	to	valuation	techniques	used	to	measure	fair	value	and	requires	companies	to disclose	the	fair	value	of	their	financial	instruments	according	to	the	fair	value	hierarchy	(i.e.,	Level	1,	2	and	3	inputs,	as	defined).	The	fair	value	hierarchy	gives	the	highest	priority	to quoted	prices	(unadjusted)	in	active	markets	for	identical	assets	or	liabilities	and	the	lowest	priority	to	unobservable	inputs.

Assets	and	liabilities	measured	and	reported	at	fair	value	are	classified	and	disclosed	in	one	of	the	following	categories:

# Level	1	Inputs:

Quoted	prices	(unadjusted)	in	active	markets	for	identical	assets	or	liabilities	at	the	reporting	date.

•Level	1	assets	may	include	listed	mutual	funds	(including	those	accounted	for	under	the	equity	method	of	accounting	as	these	mutual	funds	are	investment	companies that	have	publicly	available	net	asset	values	("NAVs"),	which	in	accordance	with	GAAP	are	calculated	under	fair	value	measures	and	the	changes	are	equal	to	the earnings	of	such	funds),	ETFs,	and	public	equities	and	certain	exchange-traded	derivatives.

Quoted	prices	for	similar	assets	or	liabilities	in	active	markets;	quoted	prices	for	identical	or	similar	assets	or	liabilities	that	are	not	active;	quotes	from	pricing	services	or brokers,	for	which	the	Company	can	determine	that	orderly	transactions	took	place	at	the	quoted	price	or	that	the	inputs	used	to	arrive	at	the	price	were	observable;	and	inputs other	than	quoted	prices	that	are	observable,	such	as	models	or	other	valuation	methodologies.	As	a	practical	expedient,	the	Company	relies	on	the	NAV	(or	its	equivalent)	of certain	investments	as	their	fair	value.

•Level	2	assets	in	this	category	may	include	debt	securities,	bank	loans,	short-term	floating	rate	notes	and	asset-backed	securities,	securities	held	within	consolidated hedge	funds,	certain	equity	method	limited	partnership	interests	in	hedge	funds	valued	based	on	NAVs	where	the	Company	has	the	ability	to	redeem	at	the	measurement date	or	within	the	near	term	without	redemption	restrictions,	restricted	public	securities	valued	at	a	discount,	as	well	as	over–the-counter	derivatives,	including	interest and	inflation	rate	swaps	and	foreign	exchange	currency	contracts	that	have	inputs	to	the	valuations	that	generally	can	be	corroborated	by	observable	market	data.

Unobservable	inputs	for	the	valuation	of	the	asset	or	liability,	which	may	include	non-binding	broker	quotes.	Level	3	assets	include	investments	for	which	there	is	little,	if	any, market	activity.	These	inputs	require	significant	management	judgment	or	estimation.	Certain	investments	that	are	valued	using	NAVs	and	are	subject	to	current	redemption restrictions	that	will	not	be	lifted	in	the	near	term	are	included	in	Level	3.

•Level	3	assets	in	this	category	generally	include	general	and	limited	partnership	interests	in	private	equity	funds,	funds	of	private	equity	funds,	real	estate	funds,	hedge funds,	funds	of	hedge	funds,	direct	private	equity	investments	held	within	consolidated	funds,	bonds	and	bank	loans.

# Fair	Value	Measurements	(continued)

# Hierarchy	of	Fair	Value	Inputs	(continued)

•Level	3	inputs	include	the	most	currently	available	information,	including	capital	accounts	for	its	partnership	interests	in	various	alternative	investments,	which	may	be adjusted	by	using	the	returns	of	certain	market	indices.	BlackRock's	$702	million	of	Level	3	investments	or	43%	of	total	GAAP	investments	at	December	31,	2011 primarily	included	the	above	mentioned	co-investments.	Many	of	these	investees	are	investment	companies,	which	record	their	underlying	investments	at	fair	value based	on	fair	value	policies	established	by	management	of	the	underlying	fund,	which	could	include	BlackRock	employees.	Fair	value	policies	at	the	underlying	fund generally	utilize	pricing/valuation	information,	including	independent	appraisals	from	third-party	sources;	however,	in	some	instances	current	valuation	information	for illiquid	securities	or	securities	in	markets	that	are	not	active	may	not	be	available	from	any	third-party	source	or	fund	management	may	conclude	that	the	valuations	that are	available	from	third-party	sources	are	not	reliable.	In	these	instances	fund	management	may	perform	model-based	analytical	valuations	that	may	be	used	to	value these	investments.

•Level	3	liabilities	in	this	category	include	borrowings	of	CLOs	valued	based	upon	non-binding	single	broker	quotes.

Significance	of	Inputs.	The	Company's	assessment	of	the	significance	of	a	particular	input	to	the	fair	value	measurement	in	its	entirety	requires	judgment	and	considers	factors	specific to	the	financial	instrument.

Pricing	Services	and	Broker	Quotes.	A	significant	amount	of	inputs	used	to	value	equity	and	debt	securities	are	sourced	from	well-recognized	third-party	pricing	vendors.	Generally, prices	obtained	from	pricing	vendors	are	categorized	as	Level	1	inputs	for	identical	securities	traded	in	active	markets	and	as	Level	2	for	other	similar	securities	if	the	vendor	uses observable	inputs	in	determining	the	price.	Annually,	BlackRock	reviews	both	the	valuation	methodology,	including	the	general	assumptions	and	methods	used	to	value	various	asset classes,	and	operational	process	with	these	vendors.	In	addition,	on	a	quarterly	basis	meetings	are	held	with	the	vendors	to	identify	any	significant	changes	to	the	vendors'	processes.

In	addition,	quotes	obtained	from	brokers	generally	are	non-binding	and	categorized	as	Level	3	inputs.	However,	if	the	Company	is	able	to	determine	that	market	participants	have transacted	for	the	asset	in	an	orderly	manner	near	the	quoted	price	or	if	the	Company	can	determine	that	the	inputs	used	by	the	broker	are	observable,	the	quote	is	classified	as	a	Level	2 input.

Significant	Transfers	Into	and	Out	of	Levels	1,	2,	and	3.	During	the	year	ended	December	31,	2010,	the	Company	reclassified	approximately	$47	million	of	net	investments	out	of Level	3	predominantly	to	Level	2.	The	majority	of	the	net	reclassifications	were	related	to	investments	that	the	Company	values	using	a	NAV	(or	a	capital	account)	and	it	currently	has the	ability	to	redeem	in	the	near	term.

Changes	in	Valuation.	Changes	in	value	on	$1,116	million	of	investments	will	impact	the	Company's	non-operating	income	(expense),	$52	million	will	impact	accumulated	other comprehensive	income,	$442	million	are	held	at	cost	or	amortized	cost	and	the	remaining	$21	million	related	to	carried	interest	has	no	impact	on	non-operating	income	(expense).	As of	December	31,	2011,	changes	in	fair	value	of	approximately	$587	million	of	such	investments	within	consolidated	sponsored	investment	funds	will	impact	BlackRock's	net	income (loss)	attributable	to	non-controlling	interests	expense	on	the	consolidated	statements	of	income.	BlackRock's	net	exposure	to	changes	in	fair	value	of	such	consolidated	sponsored investment	funds	was	$475	million.

# Goodwill	and	Intangible	Assets

At	December	31,	2011	and	2010,	the	carrying	amounts	of	the	Company's	goodwill	and	intangible	assets	were	as	follows:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 |
| Goodwill | $12,792 | $12,805 |
| Intangible\tassets |  |  |
| Indefinite–lived |  |  |
| Management\tcontracts | 15,188 | 15,188 |
| Trade\tnames/trademarks | 1,403 | 1,403 |
| License | 6 | 6 |
| Finite–lived,\tnet\tof\taccumulated\tamortization |  |  |
| Management\tcontracts | 755 | 911 |
| Other | 4 | 4 |
| Total\tgoodwill\tand\tintangible\tassets | $30,148 | $30,317 |

The	value	of	advisory	contracts	acquired	in	business	acquisitions	to	manage	AUM	in	proprietary	open-	and	closed-end	investment	funds	as	well	as	collective	trust	funds	and	certain other	commingled	products	without	a	specified	termination	date	is	generally	classified	as	indefinite-lived	intangible	assets.	The	assignment	of	indefinite	lives	to	such	investment	fund contracts	is	based	upon	the	assumption	that	there	is	no	foreseeable	limit	on	the	contract	period	to	manage	these	funds	due	to	the	likelihood	of	continued	renewal	at	little	or	no	cost.	In addition,	trade	names/trademarks	are	considered	indefinite-lived	intangibles	as	they	are	expected	to	generate	cash	flows	indefinitely.	Goodwill	represents	the	cost	of	a	business acquisition	in	excess	of	the	fair	value	of	the	net	assets	acquired.	In	accordance	with	the	applicable	provisions	of	ASC	350,	Intangibles	–	Goodwill	and	Other	("ASC	350"),	indefinite- lived	intangible	assets	and	goodwill	are	not	amortized.	Finite-lived	management	contracts,	which	relate	to	acquired	separate	accounts	and	funds	with	a	specified	termination	date,	are amortized	over	their	remaining	expected	useful	lives,	which,	at	December	31,	2011,	ranged	from	2	years	to	13	years	with	a	weighted-average	remaining	estimated	useful	life	of	5.4 years.

Goodwill.	The	Company	assesses	its	goodwill	for	impairment	at	least	annually,	considering	such	factors	as	the	book	value	and	the	market	capitalization	of	the	Company.	The impairment	test	performed	as	of	July	31,	2011	indicated	no	impairment	charge	was	required.	The	Company	continues	to	monitor	its	book	value	per	share	as	compared	to	closing	prices of	its	common	stock	for	potential	indicators	of	impairment.	At	December	31,	2011	the	Company's	common	stock	closed	at	$178.24,	which	exceeded	its	book	value	per	share	of approximately	$140.07	after	excluding	appropriated	retained	earnings.

Indefinite-lived	and	finite-lived	intangibles.	The	Company	considers	if	triggering	events	have	occurred	that	may	indicate	fair	values	have	declined	below	their	respective	carrying amounts	on	a	quarterly	basis.	Triggering	events	may	include	significant	adverse	changes	in	the	Company's	business,	financial	results,	legal	or	regulatory	environment,	the	loss	of	key personnel,	or	other	events.	If	a	triggering	event	has	occurred,	the	Company	performs	assessments,	which	include	a	review	of	all	significant	assumptions,	that	would	be	used	to	value the	asset,	to	determine	if	any	intangible	assets	are	potentially	impaired.	The	Company	performs	such	assessments	of	its	intangible	assets	at	least	annually.	In	its	assessment	of management	contracts	and	trade	names/trademarks,	the	Company	considers	various	factors,	including	AUM,	revenue	basis	points,	projected	AUM	growth	rates,	operating	margins,	tax rates	and	discount	rates	to	determine	whether	the	carrying	values	of	each	intangible	asset	unit	of	account	are	potentially	impaired	and	whether	the	indefinite-life	classification	is	still appropriate.

# Goodwill	and	Intangible	Assets	(continued)

# Indefinite-lived	and	finite-lived	intangibles	(continued)

If	potential	impairment	circumstances	are	considered	to	exist,	the	Company	will	perform	an	impairment	test,	using	an	undiscounted	cash	flow	analysis.	If	the	asset	is	determined	to	be impaired,	the	difference	between	the	book	value	of	the	asset	and	its	current	fair	value	is	recognized	as	an	expense	in	the	period	in	which	the	impairment	occurs.	Actual	results	could differ	from	these	cash	flow	estimates,	which	could	materially	impact	the	impairment	conclusion.

In	addition,	management	judgment	is	required	to	estimate	the	period	over	which	finite-lived	intangible	assets	will	contribute	to	the	Company's	cash	flows	and	the	pattern	in	which these	assets	will	be	consumed.	A	change	in	the	remaining	useful	life	of	any	of	these	assets,	or	the	reclassification	of	an	indefinite-lived	intangible	asset	to	a	finite-lived	intangible	asset, could	have	a	significant	impact	on	the	Company's	amortization	expense,	which	was	$156	million,	$160	million	and	$147	million	for	the	years	ended	December	31,	2011,	2010	and 2009,	respectively.

In	2011,	2010	and	2009,	the	Company	performed	impairment	tests	that	indicated	no	impairment	charges	were	required,	the	classification	of	indefinite-lived	versus	finite-lived intangibles	was	still	appropriate	and	no	changes	to	the	expected	lives	of	the	finite-lived	intangibles	were	required.	The	Company	continuously	monitors	various	factors,	including AUM,	for	potential	indicators	of	impairment.

Income	Taxes.	The	Company	accounts	for	income	taxes	under	the	asset	and	liability	method	prescribed	by	ASC	740,	Income	Taxes.	Deferred	income	tax	assets	and	liabilities	are recognized	for	future	tax	consequences	attributable	to	temporary	differences	between	the	financial	statement	carrying	amounts	of	existing	assets	and	liabilities	and	their	respective	tax bases	using	currently	enacted	tax	rates	in	effect	for	the	year	in	which	the	differences	are	expected	to	reverse.	The	effect	of	a	change	in	tax	rates	on	deferred	tax	assets	and	liabilities	is recognized	in	income	in	the	period	that	includes	the	enactment	date.

The	application	of	ASC	740	requires	management	to	make	estimates	of	the	ranges	of	possible	outcomes,	the	probability	of	favorable	or	unfavorable	tax	outcomes	and	potential	interest and	penalties	related	to	such	unfavorable	outcomes,	that	require	significant	management	judgment.	Actual	future	tax	consequences	relating	to	uncertain	tax	positions	may	be	materially different	than	the	Company's	current	estimates.	At	December	31,	2011,	BlackRock	had	$349	million	of	gross	unrecognized	tax	benefits,	of	which	$226	million,	if	recognized,	would affect	the	effective	tax	rate.

In	accordance	with	ASC	740,	management	is	required	to	estimate	the	timing	of	the	recognition	of	deferred	tax	assets	and	liabilities,	make	assumptions	about	the	future	deductibility	of deferred	income	tax	assets	and	assess	deferred	income	tax	liabilities	based	on	enacted	tax	rates	for	the	appropriate	tax	jurisdictions	to	determine	the	amount	of	such	deferred	income tax	assets	and	liabilities.	At	December	31,	2011,	the	Company	had	deferred	tax	assets	of	$6	million	and	deferred	tax	liabilities	of	approximately	$5,323	million	on	the	consolidated statement	of	financial	condition.	Changes	in	the	calculated	deferred	tax	assets	and	liabilities	may	occur	in	certain	circumstances,	including	statutory	income	tax	rate	changes,	statutory tax	law	changes,	changes	in	the	anticipated	timing	of	recognition	of	deferred	tax	assets	and	liabilities	or	changes	in	the	structure	or	tax	status	of	the	Company.	ASC	740	requires	the Company	to	assess	whether	a	valuation	allowance	should	be	established	against	its	deferred	income	tax	assets	based	on	consideration	of	all	available	evidence,	both	positive	and negative,	using	a	more	likely	than	not	standard.	This	assessment	considers,	among	other	matters,	the	nature,	frequency	and	severity	of	recent	losses,	forecast	of	future	profitability,	the duration	of	statutory	carry	back	and	carry	forward	periods,	the	Company's	experience	with	tax	attributes	expiring	unused,	and	tax	planning	alternatives.

# Income	Taxes	(continued)

At	December	31,	2011,	the	Company	had	recorded	a	deferred	tax	asset	of	$110	million	for	unrealized	investment	losses;	however,	no	valuation	allowance	has	been	established	because the	Company	expects	to	be	able	to	carry	back	a	portion	of	its	unrealized	capital	losses	when	realized,	hold	certain	equity	method	investments	which	invest	in	fixed	income	securities over	a	period	sufficient	for	them	to	recover	their	unrealized	losses,	and	generate	future	capital	gains	sufficient	to	offset	the	unrealized	capital	losses.	Based	on	the	weight	of	available evidence,	it	is	more	likely	than	not	that	the	deferred	tax	asset	will	be	realized.	However,	changes	in	circumstance	could	cause	the	Company	to	revalue	its	deferred	tax	balances	with	the resulting	change	impacting	the	consolidated	statements	of	income	in	the	period	of	the	change.	Such	changes	may	be	material	to	the	Company's	consolidated	financial	statements.	See Note	19,	Income	Taxes,	to	the	consolidated	financial	statements	beginning	on	page	F-1	of	this	Form	10-K	for	further	details.

The	Company	records	income	taxes	based	upon	its	estimated	income	tax	liability	or	benefit.	The	Company's	actual	tax	liability	or	benefit	may	differ	from	the	estimated	income	tax liability	or	benefit.	The	Company	had	current	income	taxes	receivable	of	approximately	$108	million	and	current	income	taxes	payable	of	$102	million	at	December	31,	2011.

Revenue	Recognition.	Investment	advisory	and	administration	fees	are	recognized	as	the	services	are	performed.	Such	fees	are	primarily	based	on	pre-determined	percentages	of	the market	value	of	AUM	or,	in	the	case	of	certain	real	estate	clients,	net	operating	income	generated	by	the	underlying	properties.	Investment	advisory	and	administration	fees	are	affected by	changes	in	AUM,	including	market	appreciation	or	depreciation,	foreign	exchange	translation	and	net	subscriptions	or	redemptions.	Investment	advisory	and	administration	fees	for investment	funds	are	shown	net	of	fees	waived	pursuant	to	contractual	expense	limitations	of	the	funds	or	voluntary	waivers.

The	Company	contracts	with	third	parties	and	related	parties	for	various	fund	distribution	and	shareholder	servicing	to	be	performed	on	behalf	of	certain	funds	managed	by	the Company.	Such	arrangements	generally	are	priced	as	a	portion	of	the	management	fee	paid	by	the	fund.	In	certain	cases,	the	fund	takes	on	the	primary	responsibility	for	payment	for services	such	that	BlackRock	bears	no	credit	risk	to	the	third	party.	The	Company	accounts	for	such	retrocession	arrangements	in	accordance	with	ASC	605-45,	Revenue	Recognition	– Principle	Agent	Considerations	("ASC	605-45"),	and	records	its	management	fees	net	of	retrocessions.	Retrocessions	for	the	years	ended	December	31,	2011,	2010	and	2009	were $928	million,	$831	million	and	$611	million,	respectively.	The	Company	has	additional	contracts	for	similar	services	with	third	parties,	which	due	to	the	terms	of	the	contracts,	are recorded	as	distribution	and	servicing	costs	and	thus	not	netted	on	the	consolidated	statements	of	income.

The	Company	earns	revenue	by	lending	securities	on	behalf	of	clients,	primarily	to	brokerage	institutions.	Such	revenues	are	accounted	for	on	an	accrual	basis.	The	securities	loaned are	secured	by	collateral	in	the	form	of	cash	and	securities,	generally	ranging	from	102%	to	112%	of	the	value	of	the	loaned	securities.	The	revenue	earned	is	shared	between	the Company	and	the	funds	or	other	third-party	accounts	managed	by	the	Company	from	which	the	securities	are	borrowed.	For	the	years	ended	December	31,	2011,	2010	and	2009, securities	lending	revenue	totaled	$397	million,	$325	million	and	$36	million,	respectively,	and	is	recorded	in	investment	advisory,	administration	fees	and	securities	lending	revenue on	the	consolidated	statements	of	income.

Investment	advisory,	administration	fees	and	securities	lending	revenue	are	reported	together	as	the	fees	for	these	services	often	are	agreed	upon	with	clients	as	a	bundled	fee.

# Revenue	Recognition	(continued)

The	Company	receives	performance	fees	or	incentive	allocations	from	alternative	investment	products	and	certain	separately	managed	accounts.	These	performance	fees	are	earned upon	exceeding	specified	relative	and/or	absolute	investment	return	thresholds.	Such	fees	are	recorded	upon	completion	of	the	measurement	period,	which	varies	by	product	or account,	and	could	be	monthly,	quarterly,	annually	or	longer.	For	the	years	ended	December	31,	2011,	2010	and	2009,	performance	fee	revenue	totaled	$371	million,	$540	million	and $202	million,	respectively.	In	addition,	the	Company	receives	carried	interest	from	certain	alternative	products	upon	exceeding	performance	thresholds.	BlackRock	may	be	required	to return	all,	or	part,	of	such	carried	interest	depending	upon	performance	of	these	funds.	Therefore,	BlackRock	records	carried	interest	subject	to	such	claw-back	provisions	in investments	or	cash	to	the	extent	that	it	is	distributed,	on	its	consolidated	statements	of	financial	condition.	Carried	interest	is	realized	and	recorded	as	performance	fees	upon	the	earlier of	the	termination	of	the	investment	fund	or	when	the	likelihood	of	claw-back	is	mathematically	improbable.	The	Company	records	realized	carried	interest	as	performance	fees	on	its consolidated	statements	of	income.	The	Company	records	a	deferred	carried	interest	liability	to	the	extent	it	receives	cash	or	capital	allocations	related	to	carried	interest	prior	to meeting	the	revenue	recognition	criteria.	At	December	31,	2011	and	2010,	the	Company	had	$33	million	and	$23	million,	respectively,	of	deferred	carried	interest	recorded	in	other liabilities	on	the	consolidated	statements	of	financial	condition.	The	ultimate	recognition	of	revenue,	if	any,	for	these	products	is	unknown.

Fees	earned	for	BlackRock	Solutions,	which	include	advisory	services,	are	recorded	as	services	are	performed	and	are	determined	using	some,	or	all,	of	the	following	methods:	(i)	fixed fees,	(ii)	percentages	of	various	attributes	of	advisory	AUM	or	value	of	positions	on	the	Aladdin	platform	and	(iii)	performance	fees	if	contractual	thresholds	are	met.	Revenue	earned on	advisory	assignments	was	comprised	of	one-time	advisory	and	portfolio	structuring	fees	and	ongoing	fees	based	on	AUM	of	the	respective	portfolio	assignment.	For	the	years ended	December	31,	2011,	2010	and	2009,	BlackRock	Solutions	and	advisory	revenue	totaled	$510	million,	$460	million	and	$477	million,	respectively.

Adjustments	to	revenue	arising	from	initial	estimates	historically	have	been	immaterial	since	the	majority	of	BlackRock's	investment	advisory	and	administration	revenue	is	calculated based	on	the	fair	value	of	AUM	and	since	the	Company	does	not	record	performance	revenues	until	performance	thresholds	have	been	exceeded	and	the	likelihood	of	claw-back	is mathematically	improbable.

# Recent	Accounting	Pronouncements	Not	Yet	Adopted

Amendments	to	Fair	Value	Measurements	and	Disclosures.	In	May	2011,	the	Financial	Accounting	Standards	Board	("FASB")	issued	ASU	2011-04,	Fair	Value	Measurement:

Amendments	to	Achieve	Common	Fair	Value	Measurement	and	Disclosure	Requirements	in	U.S.	GAAP	and	IFRSs	("ASU	2011-04"),	which	amends	the	existing	fair	value	guidance within	ASC	820.	The	amendments	include:

(1)	application	of	the	concepts	of	highest	and	best	use	and	valuation	premise	only	to	measuring	the	fair	value	of	nonfinancial	assets	(that	is,	it	does	not	apply	to	financial	assets or	any	liabilities),	(2)	an	exception	to	fair	value	measurement	principles	for	financial	assets	and	financial	liabilities	(and	derivatives)	with	offsetting	positions	in	market	risks	or counterparty	credit	risk,	which	allows	an	entity	to	measure	the	fair	value	of	the	net	risk	position,	when	several	criteria	are	met,	(3)	extension	of	the	prohibition	of	a	blockage factor	application	to	all	fair	value	measurements,	(4)	a	model	for	the	fair	value	measurement	of	instruments	classified	within	an	entity's	shareholders'	equity	which	is	consistent with	the	guidance	of	measuring	the	fair	value	for	liabilities,	(5)	additional	disclosures	for	fair	value	measurements	categorized	in	Level	3	of	the	fair	value	hierarchy	including: (i)	quantitative	information	about	unobservable	inputs	used,	(ii)	a	description	of	the	valuation	processes	used	by	the	entity	and	(iii)	a	qualitative	discussion	about	the	sensitivity of	the	measurements,	(6)	disclosure	of	the	level	in	the	fair	value	hierarchy	of	assets	and	liabilities	not	recorded	at	fair	value	but	where	fair	value	is	disclosed	and	(7)	disclosure of	any	transfers	between	Levels	1	and	2	of	the	fair	value	hierarchy,	not	just	significant	transfers.

The	provisions	of	ASU	2011-04	are	effective	for	the	Company	for	the	interim	period	beginning	after	December	15,	2011.	The	adoption	of	ASU	2011-04	is	not	expected	to	materially impact	BlackRock's	consolidated	financial	statements.

Amendments	to	Goodwill	Impairment	Testing.	In	September	2011,	the	FASB	issued	ASU	2011-08,	Testing	Goodwill	for	Impairment	("ASU	2011-08"),	which	amends	the	guidance in	ASC	350	on	testing	goodwill	for	impairment.	Under	the	revised	guidance,	entities	testing	goodwill	for	impairment	have	the	option	of	performing	a	qualitative	assessment	before calculating	the	fair	value	of	the	reporting	unit	(i.e.,	step	1	of	the	goodwill	impairment	test).	If	entities	determine,	on	the	basis	of	qualitative	factors,	that	the	fair	value	of	the	reporting unit	is	more	likely	than	not	to	be	less	than	the	carrying	amount,	the	two-step	impairment	test	would	be	required.	The	amendments	are	effective	for	the	Company	for	annual	and	interim goodwill	impairment	tests	performed	beginning	after	December	15,	2011.	The	provisions	of	SU	2011-08,	if	elected	to	be	adopted,	are	not	expected	to	materially	impact	BlackRock's consolidated	financial	statements.

# Item	7A. QUANTITATIVE	AND	QUALITATIVE	DISCLOSURES	ABOUT	MARKET	RISK

AUM	Market	Price	Risk.	BlackRock's	investment	advisory	and	administration	fees	are	primarily	comprised	of	fees	based	on	a	percentage	of	the	value	of	AUM	and,	in	some	cases, performance	fees	expressed	as	a	percentage	of	the	returns	realized	on	AUM.	At	December	31,	2011,	the	majority	of	the	Company's	investment	advisory	and	administration	fees	was based	on	average	or	period	end	AUM	of	the	applicable	investment	funds	or	separate	accounts.	Movements	in	equity	market	prices,	interest	rates/credit	spreads,	foreign	exchange	rates or	all	three	could	cause	the	value	of	AUM	to	decline,	which	would	result	in	lower	investment	advisory	and	administration	fees.

Corporate	Investments	Portfolio	Risks.	As	a	leading	investment	management	firm,	BlackRock	devotes	significant	resources	across	all	of	its	operations	to	identifying,	measuring, monitoring,	managing	and	analyzing	market	and	operating	risks,	including	the	management	and	oversight	of	its	own	investment	portfolio.	The	Board	of	Directors	of	the	Company	has adopted	guidelines	for	the	review	of	investments	to	be	made	by	the	Company,	requiring,	among	other	things,	investments	be	reviewed	by	the	Company's	Capital	Committee,	which consists	of	senior	officers	of	the	Company,	and	that	certain	investments	may	be	referred	to	the	Audit	Committee	or	the	Board	of	Directors,	depending	on	the	circumstances,	for approval.

In	the	normal	course	of	its	business,	BlackRock	is	exposed	to	equity	market	price	risk,	interest	rate/credit	spread	risk	and	foreign	exchange	rate	risk	associated	with	its	corporate investments.

BlackRock	has	investments	primarily	in	sponsored	investment	products	that	invest	in	a	variety	of	asset	classes	including	real	estate,	private	equity	and	hedge	funds.	Investments generally	are	made	for	co-investment	purposes,	to	establish	a	performance	track	record,	to	hedge	exposure	to	certain	deferred	compensation	plans	or	for	regulatory	purposes.	Currently, the	Company	has	a	seed	capital	hedging	program	in	which	it	enters	into	total	return	swaps	to	hedge	exposure	to	certain	investments.	At	December	31,	2011,	the	outstanding	total	return swaps	had	an	aggregate	notional	value	of	approximately	$43	million.

# Corporate	Investments	Portfolio	Risks	(continued)

At	December	31,	2011,	approximately	$587	million	of	BlackRock's	total	investments	were	maintained	in	sponsored	investment	funds	deemed	to	be	controlled	by	BlackRock	in accordance	with	GAAP	and	therefore	are	consolidated	even	though	BlackRock	may	not	own	a	majority	of	such	funds.	Excluding	the	impact	of	the	Federal	Reserve	Bank	stock,	carried interest,	investments	made	to	hedge	exposure	to	certain	deferred	compensation	plans	and	certain	equity	investments	that	are	hedged	via	the	seed	capital	hedging	program,	the Company's	economic	exposure	to	its	investment	portfolio	is	as	follows:

|  | December	31, | December	31, |  | Variance |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | Amount |  | %\tChange |
| Total\tinvestments,\tGAAP | $1,631 | $1,540 | $91 |  | 6% |
| Investments\theld\tby\tconsolidated\tsponsored\tinvestment\tfunds | (587) | (397) | (190) |  | (48%) |
| Net\texposure\tto\tconsolidated\tinvestment\tfunds | 475 | 260 | 215 |  | 83% |
| Total\tinvestments,\tas\tadjusted | 1,519 | 1,403 | 116 |  | 8% |
| Federal\tReserve\tBank\tstock | (328) | (325) | (3) |  | (1%) |
| Carried\tinterest | (21) | (13) | (8) |  | (62%) |
| Deferred\tcompensation\tinvestments | (65) | (76) | 11 |  | 14% |
| Hedged\tinvestments | (43) | (25) | (18) |  | (72%) |
| Total\t"economic"\tinvestment\texposure | $1,062 | $964 | $98 |  | 10% |

The	"economic"	investment	exposure	of	the	portfolio	is	presented	in	either	the	equity	market	price	or	the	interest	rate/credit	spread	risk	disclosures	below:

Equity	Market	Price	Risk.	At	December	31,	2011,	the	Company's	net	exposure	to	market	price	risk	in	its	investment	portfolio	was	approximately	$596	million	of	the	Company's	total economic	investment	exposure.	Investments	subject	to	market	price	risk	include	private	equity	and	real	estate	investments,	hedge	funds	and	fund	of	funds	as	well	as	mutual	funds.	The Company	estimates	that	a	10%	adverse	change	in	market	prices	would	result	in	a	decrease	of	approximately	$59.6	million	in	the	carrying	value	of	such	investments.

Interest	Rate/Credit	Spread	Risk.	At	December	31,	2011,	the	Company	was	exposed	to	interest-rate	risk	and	credit	spread	risk	as	a	result	of	approximately	$466	million	of	investments in	debt	securities	and	sponsored	investment	products	that	invest	primarily	in	debt	securities.	Management	considered	a	hypothetical	100	basis	point	fluctuation	in	interest	rates	or	credit spreads	and	estimates	that	the	impact	of	such	a	fluctuation	on	these	investments,	in	the	aggregate,	would	result	in	a	decrease,	or	increase,	of	approximately	$3	million	in	the	carrying value	of	such	investments.

Foreign	Exchange	Rate	Risk.	As	discussed	above,	the	Company	invests	in	sponsored	investment	products	that	invest	in	a	variety	of	asset	classes.	The	carrying	value	of	the	total economic	investment	exposure	denominated	in	foreign	currencies,	primarily	the	pound	sterling	and	euro	was	$152	million.	A	10%	adverse	change	in	the	applicable	foreign	exchange rates	would	result	in	approximately	a	$15.2	million	decline	in	the	carrying	value	of	such	investments.

# Item	8. FINANCIAL	STATEMENTS	AND	SUPPLEMENTAL	DATA

The	report	of	the	independent	registered	public	accounting	firm	and	financial	statements	listed	in	the	accompanying	index	are	included	in	Item	15	of	this	report.	See	Index	to	the consolidated	financial	statements	on	page	F-1	of	this	Form	10-K.

# Item	9. CHANGES	IN	AND	DISAGREEMENTS	WITH	ACCOUNTANTS	ON	ACCOUNTING	AND	FINANCIAL	DISCLOSURE

There	have	been	no	disagreements	on	accounting	and	financial	disclosure	matters.	BlackRock	has	not	changed	accountants	in	the	two	most	recent	fiscal	years.

# Item	9A. CONTROLS	AND	PROCEDURES

Disclosure	Controls	and	Procedures.	Under	the	direction	of	BlackRock's	Chief	Executive	Officer	and	Chief	Financial	Officer,	BlackRock	evaluated	the	effectiveness	of	its	disclosure controls	and	procedures	(as	such	term	is	defined	in	Rules	13a-15(e)	and	15d	-	15(e)	under	the	Exchange	Act)	as	of	the	end	of	the	period	covered	by	this	annual	report	on	Form	10-K. Based	on	this	evaluation,	BlackRock's	Chief	Executive	Officer	and	Chief	Financial	Officer	have	concluded	that	BlackRock's	disclosure	controls	and	procedures	were	effective.

Internal	Control	and	Financial	Reporting.	There	have	been	no	changes	in	internal	control	over	financial	reporting	during	the	latest	fiscal	quarter	that	have	materially	affected	or	are reasonably	likely	to	materially	affect	such	internal	control	over	financial	reporting.

# Management's	Report	on	Internal	Control	Over	Financial	Reporting

Management	of	BlackRock,	Inc.	(the	"Company")	is	responsible	for	establishing	and	maintaining	effective	internal	control	over	financial	reporting.	Internal	control	over	financial reporting	is	defined	in	Rules	13a-15(f)	and	15d-15(f)	under	the	Securities	Exchange	Act	of	1934,	as	amended,	as	a	process	designed	by,	or	under	the	supervision	of,	the	Company's principal	executive	and	principal	financial	officers,	or	persons	performing	similar	functions,	and	affected	by	the	Company's	board	of	directors,	management	and	other	personnel,	to provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	accounting	principles generally	accepted	in	the	United	States	of	America	and	includes	those	policies	and	procedures	that:

•pertain	to	the	maintenance	of	records	that,	in	reasonable	detail	accurately	and	fairly	reflect	the	transactions	and	dispositions	of	the	assets	of	the	Company;

•provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with	accounting	principles	generally accepted	in	the	United	States	of	America,	and	that	receipts	and	expenditures	of	the	Company	are	being	made	only	in	accordance	with	the	authorizations	of	management and	directors	of	the	Company;	and

•provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use	or	disposition	of	the	Company's	assets	that	could	have	a	material effect	on	the	financial	statements.

Because	of	the	inherent	limitations	of	internal	control	over	financial	reporting,	including	the	possibility	of	collusion	or	improper	management	override	of	controls,	material misstatements	due	to	error	or	fraud	may	not	be	prevented	or	detected	on	a	timely	basis.	Also,	projections	of	any	evaluation	of	effectiveness	of	the	internal	control	over	financial reporting	to	future	periods	are	subject	to	the	risks	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the	policies	or procedures	may	deteriorate.

Management	assessed	the	effectiveness	of	the	Company's	internal	control	over	financial	reporting	as	of	December	31,	2011	based	on	the	criteria	established	in	Internal	Control	– Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.	Based	on	this	assessment,	management	concluded	that,	as	of	December	31, 2011,	the	Company's	internal	control	over	financial	reporting	is	effective.

The	Company's	independent	registered	public	accounting	firm	has	issued	an	attestation	report	on	the	effectiveness	of	the	Company's	internal	control	over	financial	reporting.

# REPORT	OF	INDEPENDENT	REGISTERED	PUBLIC	ACCOUNTING	FIRM

To	the	Board	of	Directors	and	Stockholders	of	BlackRock,	Inc.:

We	have	audited	the	internal	control	over	financial	reporting	of	BlackRock,	Inc.	and	subsidiaries	(the	"Company")	as	of	December	31,	2011,	based	on	criteria	established	in	Internal Control	–	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.	The	Company's	management	is	responsible	for	maintaining effective	internal	control	over	financial	reporting	and	for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting,	included	in	the	accompanying	Management's Report	on	Internal	Control	Over	Financial	Reporting.	Our	responsibility	is	to	express	an	opinion	on	the	Company's	internal	control	over	financial	reporting	based	on	our	audit.

We	conducted	our	audit	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and	perform	the audit	to	obtain	reasonable	assurance	about	whether	effective	internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audit	included	obtaining	an understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	testing	and	evaluating	the	design	and	operating	effectiveness	of	internal control	based	on	the	assessed	risk,	and	performing	such	other	procedures	as	we	considered	necessary	in	the	circumstances.	We	believe	that	our	audit	provides	a	reasonable	basis	for	our opinion.

A	company's	internal	control	over	financial	reporting	is	a	process	designed	by,	or	under	the	supervision	of,	the	company's	principal	executive	and	principal	financial	officers,	or persons	performing	similar	functions,	and	effected	by	the	company's	board	of	directors,	management,	and	other	personnel	to	provide	reasonable	assurance	regarding	the	reliability	of financial	reporting	and	the	preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over financial	reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in	accordance	with generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with	authorizations	of	management	and	directors	of	the company;	and	(3)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or	disposition	of	the	company's	assets	that	could	have	a material	effect	on	the	financial	statements.

Because	of	the	inherent	limitations	of	internal	control	over	financial	reporting,	including	the	possibility	of	collusion	or	improper	management	override	of	controls,	material misstatements	due	to	error	or	fraud	may	not	be	prevented	or	detected	on	a	timely	basis.	Also,	projections	of	any	evaluation	of	the	effectiveness	of	the	internal	control	over	financial reporting	to	future	periods	are	subject	to	the	risk	that	the	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the	policies	or procedures	may	deteriorate.

In	our	opinion,	the	Company	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of	December	31,	2011,	based	on	the	criteria	established	in Internal	Control	–	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.

We	have	also	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	consolidated	statement	of	financial	condition	as	of December	31,	2011	and	the	related	consolidated	statements	of	income,	comprehensive	income,	changes	in	equity	and	cash	flows	for	the	year	then	ended	of	the	Company	and	our	report dated	February	28,	2012	expressed	an	unqualified	opinion	on	those	consolidated	financial	statements.

/s/	Deloitte	&	Touche	LLP

New	York,	New	York

# Item	9B. OTHER	INFORMATION

The	Company	is	furnishing	no	other	information	in	this	Form	10-K.

# Part	III

# Item	10. DIRECTORS,	EXECUTIVE	OFFICERS	AND	CORPORATE	GOVERNANCE

The	information	regarding	directors	and	executive	officers	set	forth	under	the	captions	"Item	1:	Election	of	Directors	–	Information	Concerning	the	Nominees	and	Directors"	and "Item	1:	Election	of	Directors	–	Other	Executive	Officers"	of	the	Proxy	Statement	is	incorporated	herein	by	reference.

The	information	regarding	compliance	with	Section	16(a)	of	the	Exchange	Act	set	forth	under	the	caption	"Item	1:	Section	16(a)	Beneficial	Ownership	Reporting	Compliance"	of	the Proxy	Statement	is	incorporated	herein	by	reference.

The	information	regarding	BlackRock's	Code	of	Ethics	for	Chief	Executive	and	Senior	Financial	Officers	under	the	caption	"Item	1:	Corporate	Governance	Guidelines	and	Code	of Business	Conduct	and	Ethics"	of	the	Proxy	Statement	is	incorporated	herein	by	reference.

# Item	11. EXECUTIVE	COMPENSATION

The	information	contained	in	the	sections	captioned	"Item	1:	Compensation	of	Executive	Officers"	and	"Item	1:	2011	Director	Compensation"	of	the	Proxy	Statement	is	incorporated herein	by	reference.

# Item	12. SECURITY	OWNERSHIP	OF	CERTAIN	BENEFICIAL	OWNERS	AND	MANAGEMENT	AND	RELATED	STOCKHOLDER	MATTERS

The	information	contained	in	the	sections	captioned	"Item	1:	Ownership	of	BlackRock	Common	and	Preferred	Stock"	and	"Equity	Compensation	Plan	Information"	of	the	Proxy Statement	is	incorporated	herein	by	reference.

# Item	13. CERTAIN	RELATIONSHIPS	AND	RELATED	TRANSACTIONS,	AND	DIRECTOR	INDEPENDENCE

The	information	contained	in	the	sections	captioned	"Item	1:	Certain	Relationships	and	Related	Transactions"	and	"Item	1:	Director	Independence"	of	the	Proxy	Statement	is incorporated	herein	by	reference.

# Item	14. PRINCIPAL	ACCOUNTANT	FEES	AND	SERVICES

The	information	regarding	BlackRock's	independent	auditor	fees	and	services	in	the	section	captioned	"Item	4:	Ratification	of	Appointment	of	Independent	Registered	Public Accounting	Firm"	of	the	Proxy	Statement	is	incorporated	herein	by	reference.

# Part	IV

# Item	15. EXHIBITS	AND	FINANCIAL	STATEMENT	SCHEDULES

# 1.	Financial	Statements

The	Company's	consolidated	financial	statements	are	included	beginning	on	pages	F-1.

# 2.	Financial	Statement	Schedules

Ratio	of	Earnings	to	Fixed	Charges	has	been	included	as	Exhibit	12.1.	All	other	schedules	have	been	omitted	because	they	are	not	applicable,	not	required	or	the	information	required is	included	in	the	Company's	consolidated	financial	statements	or	notes	thereto.

# 3.	Exhibit	Index

As	used	in	this	exhibit	list,	"BlackRock"	refers	to	BlackRock,	Inc.	(formerly	named	New	BlackRock,	Inc.	and	previously,	New	Boise,	Inc.)	(Commission	File	No.	001-33099)	and	"Old BlackRock"	refers	to	BlackRock	Holdco	2,	Inc.	(formerly	named	BlackRock,	Inc.)	(Commission	File	No.	001-15305),	which	is	the	predecessor	of	BlackRock.	The	following	exhibits are	filed	as	part	of	this	Annual	Report	on	Form	10-K:

Please	note	that	the	agreements	included	as	exhibits	to	this	Form	10-K	are	included	to	provide	information	regarding	their	terms	and	are	not	intended	to	provide	any	other	factual	or disclosure	information	about	BlackRock	or	the	other	parties	to	the	agreements.	The	agreements	contain	representations	and	warranties	by	each	of	the	parties	to	the	applicable agreement	that	have	been	made	solely	for	the	benefit	of	the	other	parties	to	the	applicable	agreement	and	may	not	describe	the	actual	state	of	affairs	as	of	the	date	they	were	made	or	at any	other	time.

				3.3(2) Amendment	No.	2	to	the	Amended	and	Restated	Bylaws	of	BlackRock.

				3.4(1) Certificate	of	Designations	of	Series	A	Convertible	Participating	Preferred	Stock	of	BlackRock.

				3.5(3) Certificate	of	Designations	of	Series	B	Convertible	Participating	Preferred	Stock	of	BlackRock.

				3.6(3) Certificate	of	Designations	of	Series	C	Convertible	Participating	Preferred	Stock	of	BlackRock.

				3.7(4) Certificate	of	Designations	of	Series	D	Convertible	Participating	Preferred	Stock	of	BlackRock.

				4.1(5) Specimen	of	Common	Stock	Certificate.

		10.2(11) Amended	and	Restated	BlackRock,	Inc.	1999	Annual	Incentive	Performance	Plan.	+

		10.3(12) Amendment	No.	1	to	the	BlackRock,	Inc.	Amended	and	Restated	1999	Annual	Incentive	Performance	Plan.+

		10.16(18) Asset	Purchase	Agreement,	dated	as	of	June	26,	2007,	by	and	among	BlackRock,	BAA	Holdings,	LLC	and	Quellos	Holdings,	LLC.

		10.17(19) Five-Year	Revolving	Credit	Agreement,	dated	as	of	March	10,	2011,	by	and	among	BlackRock,	Inc.,	certain	of	its	subsidiaries,	Wells	Fargo	Bank,	National Association,	as	administrative	agent,	swingline	lender,	issuing	lender	and	L/C	agent,	Sumitomo	Mitsui	Banking	Corporation,	as	Japanese	Yen	lender,	a	group	of lenders,	Wells	Fargo	Securities,	LLC,	Citigroup	Global	Markets	Inc.,	Merrill	Lynch,	Pierce,	Fenner	&	Smith	Incorporated,	Barclays	Capital,	J.P.	Morgan Securities	LLC	and	Morgan	Stanley	Senior	Funding,	Inc.,	as	joint	lead	arrangers	and	joint	book	runners,	Citibank,	N.A.,	as	syndication	agent	and	Bank	of America,	N.A.,	Barclays	Bank	PLC,	JPMorgan	Chase	Bank,	N.A.	and	Morgan	Stanley	Senior	Funding,	Inc.,	as	documentation	agents.

		10.22(22) Stock	Purchase	Agreement,	dated	as	of	June	11,	2009,	between	The	PNC	Financial	Services	Group,	Inc.	and	BlackRock.

		10.23(23) Commercial	Paper	Dealer	Agreement	between	BlackRock	and	Barclays	Capital	Inc.,	dated	as	of	October	14,	2009.

		10.24(4) Amended	and	Restated	Stock	Purchase	Agreement,	dated	as	of	June	16,	2009,	by	and	among	Barclays	Bank	PLC,	Barclays	PLC	(solely	for	the	purposes	of Section	6.16,	Section	6.18	and	Section	6.24)	and	BlackRock.

(1) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	October	5,	2006.

(2) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	February	27,	2012.

(3) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	February	27,	2009.

(4) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	December	3,	2009.

(5) Incorporated	by	reference	to	BlackRock's	Registration	Statement	on	Form	S-8	(Registration	No.	333-137708)	filed	on	September	29,	2006.

(6) Incorporated	by	reference	to	BlackRock's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2007.

(7) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	September	17,	2007.

(8) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	December	10,	2009.

(9) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	May	25,	2011.

(10) Incorporated	by	reference	to	BlackRock's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	June	30,	2010.

(11) Incorporated	by	reference	to	Old	BlackRock's	Annual	Report	on	Form	10-K	for	the	year	ended	December	31,	2002.

(12) Incorporated	by	reference	to	Old	BlackRock's	Current	Report	on	Form	8-K	filed	on	May	24,	2006.

(14) Incorporated	by	reference	to	BlackRock's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	March	31,	2011.

(15) Incorporated	by	reference	to	Old	BlackRock's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	September	30,	2002.

(16) Incorporated	by	reference	to	Old	BlackRock's	Current	Report	on	Form	8-K	filed	on	February	22,	2006.

(17) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	June	15,	2007.

(18) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	July	2,	2007.

(19) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	March	11,	2011.

(20) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	November	17,	2010.

(22) Incorporated	by	reference	to	BlackRock's	Quarterly	Report	on	Form	10-Q	for	the	quarter	ended	June	30,	2009.

(23) Incorporated	by	reference	to	BlackRock's	Current	Report	on	Form	8-K	filed	on	October	20,	2009.

+ Denotes	compensatory	plans	or	arrangements

# SIGNATURES

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its	behalf	by	the	undersigned, thereunto	duly	authorized.

# Laurence	D.	Fink

Chairman,	Chief	Executive	Officer	and	Director

Each	of	the	officers	and	directors	of	BlackRock,	Inc.	whose	signature	appears	below,	in	so	signing,	also	makes,	constitutes	and	appoints	Laurence	D.	Fink,	Ann	Marie	Petach,	Matthew Mallow,	Daniel	R.	Waltcher	and	Harris	Oliner,	his	true	and	lawful	attorneys-in-fact,	with	full	power	and	substitution,	for	him	in	any	and	all	capacities,	to	execute	and	cause	to	be	filed with	the	Securities	and	Exchange	Commission	any	and	all	amendments	to	the	Annual	Report	on	Form	10-K,	with	exhibits	thereto	and	other	documents	connected	therewith	and	to perform	any	acts	necessary	to	be	done	in	order	to	file	such	documents,	and	hereby	ratifies	and	confirms	all	that	said	attorney-in-fact	or	his	substitute	or	substitutes	may	do	or	cause	to be	done	by	virtue	hereof.

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	as	amended,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the	registrant	and	in	the capacities	and	on	the	dates	indicated.

Murry	S.	Gerber

We	have	audited	the	accompanying	consolidated	statements	of	financial	condition	of	BlackRock,	Inc.	and	subsidiaries	(the	"Company")	as	of	December	31,	2011	and	2010,	and	the related	consolidated	statements	of	income,	comprehensive	income,	changes	in	equity,	and	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2011.	These financial	statements	are	the	responsibility	of	the	Company's	management.	Our	responsibility	is	to	express	an	opinion	on	the	financial	statements	based	on	our	audits.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards	require	that	we	plan	and	perform	the audit	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement.	An	audit	includes	examining,	on	a	test	basis,	evidence	supporting	the amounts	and	disclosures	in	the	financial	statements.	An	audit	also	includes	assessing	the	accounting	principles	used	and	significant	estimates	made	by	management,	as	well	as evaluating	the	overall	financial	statement	presentation.	We	believe	that	our	audits	provide	a	reasonable	basis	for	our	opinion.

In	our	opinion,	such	consolidated	financial	statements	present	fairly,	in	all	material	respects,	the	financial	position	of	BlackRock,	Inc.	and	subsidiaries	at	December	31,	2011	and	2010, and	the	results	of	their	operations	and	their	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2011,	in	conformity	with	accounting	principles	generally	accepted in	the	United	States	of	America.

We	have	also	audited,	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States),	the	Company's	internal	control	over	financial	reporting	as of	December	31,	2011,	based	on	criteria	established	in	Internal	Control	—	Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission and	our	report	dated	February	28,	2012	expressed	an	unqualified	opinion	on	the	Company's	internal	control	over	financial	reporting.

# Consolidated	Statements	of	Financial	Condition

|  | December	31,<br>2011 | December	31,<br>2010 |
| :--- | :--- | :--- |
| Assets |  |  |
| Cash\tand\tcash\tequivalents | $3,506 | $3,367 |
| Accounts\treceivable | 1,960 | 2,095 |
| Due\tfrom\trelated\tparties | 142 | 150 |
| Investments | 1,631 | 1,540 |
| Assets\tof\tconsolidated\tvariable\tinterest\tentities: |  |  |
| Cash\tand\tcash\tequivalents | 54 | 93 |
| Bank\tloans\tand\tother\tinvestments | 1,639 | 1,312 |
| Separate\taccount\tassets | 118,871 | 121,137 |
| Collateral\theld\tunder\tsecurities\tlending\tagreements | 20,918 | 17,638 |
| Deferred\tsales\tcommissions,\tnet | 38 | 66 |
| Property\tand\tequipment\t(net\tof\taccumulated\tdepreciation\tof\t$483\tand\t$426\tat\tDecember\t31,\t2011\tand\t2010,\trespectively) | 537 | 428 |
| Intangible\tassets\t(net\tof\taccumulated\tamortization\tof\t$751\tand\t$615\tat\tDecember\t31,\t2011\tand\t2010,\trespectively) | 17,356 | 17,512 |
| Goodwill | 12,792 | 12,805 |
| Other\tassets | 452 | 316 |
| Total\tassets | $179,896 | $178,459 |
| Liabilities |  |  |
| Accrued\tcompensation\tand\tbenefits | $1,383 | $1,520 |
| Accounts\tpayable\tand\taccrued\tliabilities | 923 | 1,068 |
| Due\tto\trelated\tparties | 22 | 57 |
| Short-term\tborrowings | 100 | 100 |
| Liabilities\tof\tconsolidated\tvariable\tinterest\tentities: |  |  |
| Borrowings | 1,574 | 1,278 |
| Other\tliabilities | 9 | 7 |
| Convertible\tdebentures | — | 67 |
| Long-term\tborrowings | 4,690 | 3,192 |
| Separate\taccount\tliabilities | 118,871 | 121,137 |
| Collateral\tliabilities\tunder\tsecurities\tlending\tagreements | 20,918 | 17,638 |
| Deferred\tincome\ttax\tliabilities | 5,323 | 5,477 |
| Other\tliabilities | 721 | 584 |
| Total\tliabilities | 154,534 | 152,125 |
| Commitments\tand\tcontingencies\t(Note\t12) |  |  |
| Temporary\tequity |  |  |
| Redeemable\tnon-controlling\tinterests | 92 | 6 |

# Consolidated	Statements	of	Financial	Condition	(continued)

|  | December	31,<br>2011 | December	31,<br>2010 |
| :--- | :--- | :--- |
| Permanent\tEquity |  |  |
| BlackRock,\tInc.\tstockholders'\tequity |  |  |
| Common\tstock,\t$\t0.01\tpar\tvalue; | 1 | 1 |
| Shares\tauthorized:\t500,000,000\tat\tDecember\t31,\t2011\tand\t2010;\tShares\tissued:\t139,880,380\tand\t131,923,624\tat\tDecember\t31,\t2011 |  |  |
| and\t2010,\trespectively;\tShares\toutstanding:\t138,463,135\tand\t131,216,561\tat\tDecember\t31,\t2011\tand\t2010,\trespectively; |  |  |
| Series\tB\tnon-voting\tparticipating\tpreferred\tstock,\t$0.01\tpar\tvalue; | — | 1 |
| Shares\tauthorized:\t150,000,000\tat\tDecember\t31,\t2011\tand\t2010;\tShares\tissued\tand\toutstanding:\t38,328,737\tand\t57,108,553\tat |  |  |
| December\t31,\t2011\tand\t2010,\trespectively; |  |  |
| Series\tC\tnon-voting\tparticipating\tpreferred\tstock,\t$0.01\tpar\tvalue; | — | — |
| Shares\tauthorized:\t6,000,000\tat\tDecember\t31,\t2011\tand\t2010;\tShares\tissued\tand\toutstanding:\t1,517,237\tand\t2,866,439\tat |  |  |
| December\t31,\t2011\tand\t2010,\trespectively |  |  |
| Additional\tpaid-in\tcapital | 20,275 | 22,502 |
| Retained\tearnings | 5,046 | 3,723 |
| Appropriated\tretained\tearnings | 72 | 75 |
| Accumulated\tother\tcomprehensive\tloss | (127) | (96) |
| Escrow\tshares,\tcommon,\tat\tcost\t(3,603\tshares\theld\tat\tDecember\t31,\t2011\tand\t2010) | (1) | (1) |
| Treasury\tstock,\tcommon,\tat\tcost\t(1,413,642\tand\t703,460\tshares\theld\tat\tDecember\t31,\t2011\tand\t2010,\trespectively) | (218) | (111) |
| Total\tBlackRock,\tInc.\tstockholders'\tequity | 25,048 | 26,094 |
| Nonredeemable\tnon-controlling\tinterests | 184 | 189 |
| Nonredeemable\tnon-controlling\tinterests\tof\tconsolidated\tvariable\tinterest\tentities | 38 | 45 |
| Total\tpermanent\tequity | 25,270 | 26,328 |
| Total\tliabilities,\ttemporary\tequity\tand\tpermanent\tequity | $179,896 | $178,459 |

See	accompanying	notes	to	consolidated	financial	statements.

# Consolidated	Statements	of	Income

|  | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Revenue |  |  |  |
| Investment\tadvisory,\tadministration\tfees\tand\tsecurities\tlending\trevenue |  |  |  |
| Related\tparties | $5,303 | $4,893 | $2,616 |
| Other\tthird\tparties | 2,593 | 2,397 | 1,210 |
| Total\tinvestment\tadvisory,\tadministration\tfees\tand\tsecurities\tlending\trevenue | 7,896 | 7,290 | 3,826 |
| Investment\tadvisory\tperformance\tfees | 371 | 540 | 202 |
| BlackRock\tSolutions\tand\tadvisory | 510 | 460 | 477 |
| Distribution\tfees | 100 | 116 | 100 |
| Other\trevenue | 204 | 206 | 95 |
| Total\trevenue | 9,081 | 8,612 | 4,700 |
| Expenses |  |  |  |
| Employee\tcompensation\tand\tbenefits | 3,199 | 3,097 | 1,802 |
| Distribution\tand\tservicing\tcosts |  |  |  |
| Related\tparties | 5 | 226 | 368 |
| Other\tthird\tparties | 381 | 182 | 109 |
| Amortization\tof\tdeferred\tsales\tcommissions | 81 | 102 | 100 |
| Direct\tfund\texpenses | 563 | 493 | 95 |
| General\tand\tadministration | 1,415 | 1,354 | 779 |
| Restructuring\tcharges | 32 | — | 22 |
| Amortization\tof\tintangible\tassets | 156 | 160 | 147 |
| Total\texpenses | 5,832 | 5,614 | 3,422 |
| Operating\tincome | 3,249 | 2,998 | 1,278 |
| Non-operating\tincome\t(expense) |  |  |  |
| Net\tgain\t(loss)\ton\tinvestments | 46 | 179 | 42 |
| Net\tgain\t(loss)\ton\tconsolidated\tvariable\tinterest\tentities | (18) | (35) | — |
| Interest\tand\tdividend\tincome | 34 | 29 | 20 |
| Interest\texpense | (176) | (150) | (68) |
| Total\tnon-operating\tincome\t(expense) | (114) | 23 | (6) |
| Income\tbefore\tincome\ttaxes | 3,135 | 3,021 | 1,272 |
| Income\ttax\texpense | 796 | 971 | 375 |
| Net\tincome | 2,339 | 2,050 | 897 |
| Less: |  |  |  |
| Net\tincome\t(loss)\tattributable\tto\tredeemable\tnon-controlling\tinterests | — | 3 | 2 |
| Net\tincome\t(loss)\tattributable\tto\tnonredeemable\tnon-controlling\tinterests | 2 | (16) | 20 |
| Net\tincome\tattributable\tto\tBlackRock,\tInc. | $2,337 | $2,063 | $875 |
| Earnings\tper\tshare\tattributable\tto\tBlackRock,\tInc.\tcommon\tstockholders: |  |  |  |
| Basic | $12.56 | $10.67 | $6.24 |
| Diluted | $12.37 | $10.55 | $6.11 |
| Cash\tdividends\tdeclared\tand\tpaid\tper\tshare | $5.50 | $4.00 | $3.12 |
| Weighted-average\tcommon\tshares\toutstanding: |  |  |  |
| Basic | \t 184,265,367 | \t 190,554,510 | \t 136,669,164 |
| Diluted | \t 187,116,410 | \t 192,692,047 | \t 139,481,449 |

# Consolidated	Statements	of	Comprehensive	Income

# (Dollar	amounts	in	millions)

|  |  | Year	ended<br>December	31, |  |
| :--- | :--- | :--- | :--- |
|  | 2011 | 2010 | 2009 |
| Net\tincome | $2,339 | $2,050 | $897 |
| Other\tcomprehensive\tincome: |  |  |  |
| Change\tin\tnet\tunrealized\tgains\t(losses)\tfrom\tavailable-for-sale\tinvestments,\tnet\tof\ttax: |  |  |  |
| Unrealized\tholding\tgains\t(losses),\tnet\tof\ttax | (3) | 3 | (4) |
| Less:\treclassification\tadjustment\tincluded\tin\tnet\tincome | 1 | 1 | (19) |
| Net\tchange\tfrom\tavailable-for-sale\tinvestments,\tnet\tof\ttax^\t(1) | (4) | 2 | 15 |
| Minimum\tpension\tliability\tadjustment | — | (1) | 1 |
| Foreign\tcurrency\ttranslation\tadjustments | (27) | (1) | 74 |
| Other\tcomprehensive\tincome\t(loss) | (31) | — | 90 |
| Comprehensive\tincome | \t 2,308 | \t 2,050 | \t 987 |
| Less:\tComprehensive\tincome\t(loss)\tattributable\tto\tnon-controlling\tinterests | 2 | (13) | 22 |
| Comprehensive\tincome\tattributable\tto\tBlackRock,\tInc. | $2,306 | $2,063 | $965 |

# Consolidated	Statements	of	Changes	in	Equity

|  | Additional<br>Paid-in<br>(1)<br>Capital | Retained<br>Earnings | Accumulated<br>Other<br>Comprehensive<br>Income	(Loss) | Common<br>Shares<br>Held	in<br>Escrow | Treasury<br>Stock<br>Common | Total<br>Stockholders'<br>Equity | Nonredeemable<br>Non-controlling<br>Interests | Total<br>Permanent<br>Equity | controlling<br>Interests	/<br>Temporary<br>Equity |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2008 | $10,474 | $ 1,982 | $(186) | $(143) | $(58) | $12,069 | $225 | $12,294 | $266 |
| Net\tincome | — | 875 | — | — | — | 875 | 20 | 895 | 2 |
| Dividends\tpaid,\tnet\tof\tdividend\texpense\tfor\tunvested |  |  |  |  |  |  |  |  |  |
| RSUs | — | (421) | — | — | — | (421) | — | (421) | — |
| Release\tof\tcommon\tstock\tfrom\tescrow\tagent\tin |  |  |  |  |  |  |  |  |  |
| connection\twith\tQuellos\tTransaction | — | — | — | 6 | — | 6 | — | 6 | — |
| Stock-based\tcompensation | 316 | — | — | — | 1 | 317 | — | 317 | — |
| Issuance\tof\tshares\tto\tBarclays | 8,529 | — | — | — | — | 8,529 | — | 8,529 | — |
| Issuance\tof\tshares\tto\tinstitutional\tinvestors | 2,800 | — | — | — | — | 2,800 | — | 2,800 | — |
| Issuance\tof\tcommon\tshares\tfor\tcontingent\tconsideration | 43 | — | — | — | — | 43 | — | 43 | — |
| PNC\tpreferred\tstock\tcapital\tcontribution | 6 | — | — | — | — | 6 | — | 6 | — |
| Merrill\tLynch\tcash\tcapital\tcontribution | 25 | — | — | — | — | 25 | — | 25 | — |
| Issuance\tof\tcommon\tshares\trelated\tto\temployee\tstock |  |  |  |  |  |  |  |  |  |
| transactions | (78) | — | — | — | 100 | 22 | — | 22 | — |
| Employee\ttax\tbenefit\twithholdings\trelated\tto\temployee |  |  |  |  |  |  |  |  |  |
| stock\ttransactions | — | — | — | — | (46) | (46) | — | (46) | — |
| Net\ttax\tbenefit\t(shortfall)\tfrom\tstock-based |  |  |  |  |  |  |  |  |  |
| compensation | 14 | — | — | — | — | 14 | — | 14 | — |
| Minimum\tpension\tliability\tadjustment | — | — | 1 | — | — | 1 | — | 1 | — |
| Subscriptions/(redemptions/distribution)—non- |  |  |  |  |  |  |  |  |  |
| controlling\tinterest\tholders | — | — | — | — | — | — | (8) | (8) | (247) |
| Net\tconsolidations\t(deconsolidations)\tof\tsponsored |  |  |  |  |  |  |  |  |  |
| investment\tfunds^(2) | — | — | — | — | — | — | (9) | (9) | 28 |
| Other\tchange\tin\tnon-controlling\tinterests | — | — | — | — | — | — | (4) | (4) | — |
| Foreign\tcurrency\ttranslation\tadjustments | — | — | 74 | — | — | 74 | — | 74 | — |
| Change\tin\tnet\tunrealized\tgain\t(loss)\tfrom\tavailable-for- |  |  |  |  |  |  |  |  |  |
| sale\tinvestments,\tnet\tof\ttax | — | — | 15 | — | — | 15 | — | 15 | — |
| December\t31,\t2009 | $22,129 | $ 2,436 | $(96) | $(137) | $(3) | $24,329 | $224 | $24,553 | $49 |

Includes	$12	million	of	redeemable	non-controlling	interests	acquired	in	the	BGI	Transaction	on	December	1,	2009. (2)

|  | Additional<br>Paid-in<br>(1)<br>Capital | Retained<br>Earnings | Appropriated<br>Retained<br>Earnings | Accumulated<br>Other<br>Comprehensive<br>Income	(Loss) | Common<br>Shares<br>Held	in<br>Escrow | Treasury<br>Stock<br>Common | Total<br>Stockholders'<br>Equity | Nonredeemable<br>Non-controlling<br>Interests | Nonredeemable<br>Non-controlling<br>Interests	of<br>Consolidated<br>VIEs | Total<br>Permanent<br>Equity | Redeemable<br>Non-<br>controlling<br>Interests	/<br>Temporary<br>Equity |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2009 | \t$22,129\t\t\t$ 2,436\t\t\t$ | \t$22,129\t\t\t$ 2,436\t\t\t$ | —\t\t\t\t\t$ | (96)\t\t$ | (137)\t\t$ | (3)\t\t$ | 24,329\t\t\t$ | 224\t\t\t$ | —\t\t\t\t\t$ | 24,553\t\t\t$ | 49 |
| January\t1,\t2010\tinitial\trecognition\tof\tASU |  |  |  |  |  |  |  |  |  |  |  |
| 2009-17 | — | — | 114 | — | — | — | 114 | (49) | 49 | 114 | — |
| Net\tincome | — | 2,063 | — | — | — | — | 2,063 | 19 | (35) | 2,047 | 3 |
| Allocation\tof\tlosses\tof\tconsolidated |  |  |  |  |  |  |  |  |  |  |  |
| collateralized\tloan\tobligations | — | — | (39) | — | — | — | (39) | — | 39 | — | — |
| Dividends\tpaid,\tnet\tof\tdividend\texpense\tfor |  |  |  |  |  |  |  |  |  |  |  |
| unvested\tRSUs | — | (776) | — | — | — | — | (776) | — | — | (776) | — |
| Release\tof\tcommon\tstock\tfrom\tescrow |  |  |  |  |  |  |  |  |  |  |  |
| agent\tin\tconnection\twith\tQuellos |  |  |  |  |  |  |  |  |  |  |  |
| Transaction | — | — | — | — | 136 | — | 136 | — | — | 136 | — |
| Stock-based\tcompensation | 444 | — | — | — | — | 1 | 445 | — | — | 445 | — |
| PNC\tpreferred\tstock\tcapital\tcontribution | 5 | — | — | — | — | — | 5 | — | — | 5 | — |
| Merrill\tLynch\tcash\tcapital\tcontribution | 10 | — | — | — | — | — | 10 | — | — | 10 | — |
| Exchange\tof\tcommon\tstock\tfor\tpreferred |  |  |  |  |  |  |  |  |  |  |  |
| shares\tseries\tB | 128 | — | — | — | — | (128) | — | — | — | — | — |
| Issuance\tof\tcommon\tshares\trelated\tto |  |  |  |  |  |  |  |  |  |  |  |
| employee\tstock\ttransactions | (202) | — | — | — | — | 217 | 15 | — | — | 15 | — |
| Employee\ttax\tbenefit\twithholdings\trelated |  |  |  |  |  |  |  |  |  |  |  |
| to\temployee\tstock\ttransactions | — | — | — | — | — | (124) | (124) | — | — | (124) | — |
| Shares\trepurchased | — | — | — | — | — | (140) | (140) | — | — | (140) | — |
| Convertible\tdebt\tconversions,\tnet\tof\ttax | (54) | — | — | — | — | 66 | 12 | — | — | 12 | — |
| Net\ttax\tbenefit\t(shortfall)\tfrom\tstock-based |  |  |  |  |  |  |  |  |  |  |  |
| compensation | 44 | — | — | — | — | — | 44 | — | — | 44 | — |
| Minimum\tpension\tliability\tadjustment | — | — | — | (1) | — | — | (1) | — | — | (1) | — |
| Subscriptions/(redemptions/distribution)— |  |  |  |  |  |  |  |  |  |  |  |
| non-controlling\tinterest\tholders | — | — | — | — | — | — | — | (6) | (8) | (14) | 124 |
| Net\tconsolidations\t(deconsolidations)\tof |  |  |  |  |  |  |  |  |  |  |  |
| sponsored\tinvestment\tfunds | — | — | — | — | — | — | — | — | — | — | (170) |
| Other\tchanges\tin\tnon-controlling\tinterests | — | — | — | — | — | — | — | 1 | — | 1 | — |
| Foreign\tcurrency\ttranslation\tadjustments | — | — | — | (1) | — | — | (1) | — | — | (1) | — |
| Change\tin\tnet\tunrealized\tgains\t(losses) |  |  |  |  |  |  |  |  |  |  |  |
| from\tavailable-for-sale\tinvestments,\tnet |  |  |  |  |  |  |  |  |  |  |  |
| of\ttax | — | — | — | 2 | — | — | 2 | — | — | 2 | — |
| December\t31,\t2010 | \t$22,504\t\t\t$ 3,723\t\t\t$ | \t$22,504\t\t\t$ 3,723\t\t\t$ | 75\t\t\t$ | (96)\t\t$ | (1)\t\t$ | (111)\t\t$ | 26,094\t\t\t$ | 189\t\t\t$ | 45\t\t\t$ | 26,328\t\t\t$ | 6 |

Includes	$1	million	of	common	stock	at	par	value	and	$1	million	of	preferred	stock	at	par	value	at	both	December	31,	2010	and	2009. (1)

|  | Additional<br>Paid-in<br>(1)<br>Capital | Retained<br>Earnings | Appropriated<br>Retained<br>Earnings | Accumulated<br>Other<br>Comprehensive<br>Income	(Loss) | Common<br>Shares<br>Held	in<br>Escrow | Treasury<br>Stock<br>Common | Total<br>Stockholders'<br>Equity | Nonredeemable<br>Non-controlling<br>Interests | Nonredeemable<br>Non-controlling<br>Interests	of<br>Consolidated<br>VIEs | Total<br>Permanent<br>Equity | Redeemable<br>Non-<br>controlling<br>Interests	/<br>Temporary<br>Equity |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2010 | \t$22,504\t\t\t$ | 3,723\t\t\t$ | 75\t\t\t$ | (96)\t\t$ | (1)\t\t$ | (111)\t\t$ | 26,094\t\t\t$ | 189\t\t\t$ | 45\t\t\t$ | 26,328\t\t\t$ | 6 |
| Net\tincome | — | 2,337 | — | — | — | — | 2,337 | 20 | (18) | 2,339 | — |
| Consolidation\tof\ta\tcollateralized\tloan |  |  |  |  |  |  |  |  |  |  |  |
| obligation | — | — | 19 | — | — | — | 19 | — | — | 19 | — |
| Allocation\tof\tlosses\tof\tconsolidated |  |  |  |  |  |  |  |  |  |  |  |
| collateralized\tloan\tobligations | — | — | (22) | — | — | — | (22) | — | 22 | — | — |
| Dividends\tpaid,\tnet\tof\tdividend\texpense\tfor |  |  |  |  |  |  |  |  |  |  |  |
| unvested\tRSUs | — | (1,014) | — | — | — | — | (1,014) | — | — | (1,014) | — |
| Stock-based\tcompensation | 494 | — | — | — | — | 3 | 497 | — | — | 497 | — |
| PNC\tpreferred\tstock\tcapital\tcontribution | 200 | — | — | — | — | — | 200 | — | — | 200 | — |
| Retirement\tof\tpreferred\tstock | (200) | — | — | — | — | — | (200) | — | — | (200) | — |
| Merrill\tLynch\tcash\tcapital\tcontribution | 8 | — | — | — | — | — | 8 | — | — | 8 | — |
| Issuance\tof\tcommon\tshares\trelated\tto |  |  |  |  |  |  |  |  |  |  |  |
| employee\tstock\ttransactions | (208) | — | — | — | — | 228 | 20 | — | — | 20 | — |
| Employee\ttax\tbenefit\twithholdings\trelated |  |  |  |  |  |  |  |  |  |  |  |
| to\temployee\tstock\ttransactions | — | — | — | — | — | (239) | (239) | — | — | (239) | — |
| Shares\trepurchased | (2,545) | — | — | — | — | (100) | (2,645) | — | — | (2,645) | — |
| Convertible\tdebt\tconversions | 4 | — | — | — | — | 1 | 5 | — | — | 5 | — |
| Net\ttax\tbenefit\t(shortfall)\tfrom\tstock-based |  |  |  |  |  |  |  |  |  |  |  |
| compensation | 12 | — | — | — | — | — | 12 | — | — | 12 | — |
| Subscriptions/(redemptions/distribution)— |  |  |  |  |  |  |  |  |  |  |  |
| non-controlling\tinterest\tholders | — | — | — | — | — | — | — | (25) | (11) | (36) | 90 |
| Net\tconsolidations\t(deconsolidations)\tof |  |  |  |  |  |  |  |  |  |  |  |
| sponsored\tinvestment\tfunds | — | — | — | — | — | — | — | — | — | — | (4) |
| Foreign\tcurrency\ttranslation\tadjustments | 7 | — | — | (27) | — | — | (20) | — | — | (20) | — |
| Change\tin\tnet\tunrealized\tgains\t(losses) |  |  |  |  |  |  |  |  |  |  |  |
| from\tavailable-for-sale\tinvestments,\tnet |  |  |  |  |  |  |  |  |  |  |  |
| of\ttax | — | — | — | (4) | — | — | (4) | — | — | (4) | — |
| December\t31,\t2011 | \t$20,276\t\t\t$ | 5,046\t\t\t$ | 72\t\t\t$ | (127)\t\t$ | (1)\t\t$ | (218)\t\t$ | 25,048\t\t\t$ | 184\t\t\t$ | 38\t\t\t$ | 25,270\t\t\t$ | 92 |

# Consolidated	Statements	of	Cash	Flows

|  | 2011 | Year	ended<br>December	31,<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Cash\tflows\tfrom\toperating\tactivities |  |  |  |
| Net\tincome | $2,339 | $2,050 | $897 |
| Adjustments\tto\treconcile\tnet\tincome\tto\tcash\tfrom\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization | 299 | 310 | 239 |
| Amortization\tof\tdeferred\tsales\tcommissions | 81 | 102 | 100 |
| Stock-based\tcompensation | 497 | 445 | 317 |
| Deferred\tincome\ttax\texpense\t(benefit) | (137) | 3 | (89) |
| Net\t(gains)\tlosses\ton\tnon-trading\tinvestments | (40) | (62) | (20) |
| Purchases\tof\tinvestments\twithin\tconsolidated\tfunds | (41) | (26) | (41) |
| Proceeds\tfrom\tsales\tand\tmaturities\tof\tinvestments\twithin\tconsolidated\tfunds | 50 | 54 | 285 |
| Assets\tand\tliabilities\tof\tconsolidated\tVIEs: |  |  |  |
| Change\tin\tcash\tand\tcash\tequivalents | 54 | (45) | — |
| Net\t(gains)\tlosses\twithin\tconsolidated\tVIEs | 18 | 35 | — |
| Net\t(purchases)\tproceeds\twithin\tconsolidated\tVIEs | 82 | 44 | — |
| (Earnings)\tlosses\tfrom\tequity\tmethod\tinvestees | (23) | (141) | (30) |
| Distributions\tof\tearnings\tfrom\tequity\tmethod\tinvestees | 30 | 14 | 18 |
| Other\tadjustments | — | (1) | 3 |
| Changes\tin\toperating\tassets\tand\tliabilities: |  |  |  |
| Accounts\treceivable | 124 | (364) | (223) |
| Due\tfrom\trelated\tparties | (6) | 45 | 159 |
| Deferred\tsales\tcommissions | (53) | (65) | (68) |
| Investments,\ttrading | (116) | (118) | (53) |
| Other\tassets | (122) | 236 | (50) |
| Accrued\tcompensation\tand\tbenefits | (140) | 52 | (218) |
| Accounts\tpayable\tand\taccrued\tliabilities | (152) | 164 | 165 |
| Due\tto\trelated\tparties | (35) | (356) | (10) |
| Other\tliabilities | 117 | 112 | 18 |
| Cash\tflows\tfrom\toperating\tactivities | \t 2,826 | \t 2,488 | 1,399 |
| Cash\tflows\tfrom\tinvesting\tactivities |  |  |  |
| Purchases\tof\tinvestments | (204) | (656) | (73) |
| Proceeds\tfrom\tsales\tand\tmaturities\tof\tinvestments | 213 | 181 | 260 |
| Distributions\tof\tcapital\tfrom\tequity\tmethod\tinvestees | 34 | 53 | 89 |
| Net\tconsolidations\t(deconsolidations)\tof\tsponsored\tinvestment\tfunds | — | (52) | 27 |
| Acquisitions,\tnet\tof\tcash\tacquired,\tand\tcontingent\tpayments | — | (23) | (5,755) |
| Purchases\tof\tproperty\tand\tequipment | (247) | (131) | (65) |
| Other | — | 1 | (2) |
| Cash\tflows\tfrom\tinvesting\tactivities | (204) | (627) | (5,519) |

# Consolidated	Statements	of	Cash	Flows	(continued)

|  | 2011 | December	31,<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Cash\tflows\tfrom\tfinancing\tactivities |  |  |  |
| Repayments\tof\tshort-term\tborrowings | (600) | (2,134) | — |
| Proceeds\tfrom\tshort-term\tborrowings | 600 | — | \t 2,034 |
| Repayments\tof\tconvertible\tdebt | (67) | (176) | (7) |
| Proceeds\tfrom\tlong-term\tborrowings | 1,496 | — | \t 2,495 |
| Cash\tdividends\tpaid | (1,014) | (776) | (422) |
| Proceeds\tfrom\tstock\toptions\texercised | 16 | 10 | 18 |
| Proceeds\tfrom\tissuance\tof\tcommon\tstock | 5 | 6 | \t 2,804 |
| Repurchases\tof\tcommon\tstock | (2,885) | (264) | (46) |
| Merrill\tLynch\tcash\tcapital\tcontribution | 8 | 10 | 25 |
| Repayments\tof\tborrowings\tby\tconsolidated\tVIEs | (125) | — | — |
| Net\t(redemptions/distributions\tpaid)/subscriptions\treceived\tfrom\tnon-controlling\tinterests\tholders | 54 | 110 | (255) |
| Excess\ttax\tbenefit\tfrom\tstock-based\tcompensation | 27 | 44 | 33 |
| Net\tborrowings\t(repayment\tof\tborrowings)\tby\tconsolidated\tsponsored\tinvestment\tfunds | — | — | 70 |
| Cash\tflows\tfrom\tfinancing\tactivities | (2,485) | (3,170) | \t 6,749 |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | 2 | (32) | 47 |
| Net\tincrease\t(decrease)\tin\tcash\tand\tcash\tequivalents | 139 | (1,341) | \t 2,676 |
| Cash\tand\tcash\tequivalents,\tbeginning\tof\tyear | 3,367 | 4,708 | \t 2,032 |
| Cash\tand\tcash\tequivalents,\tend\tof\tyear | $3,506 | $3,367 | $4,708 |
| Supplemental\tdisclosure\tof\tcash\tflow\tinformation: |  |  |  |
| Cash\tpaid\tfor: |  |  |  |
| Interest | $167 | $146 | $52 |
| Interest\ton\tborrowings\tof\tconsolidated\tVIEs | $60 | $53 | $— |
| Income\ttaxes | $962 | $583 | $503 |
| Supplemental\tschedule\tof\tnon-cash\tinvesting\tand\tfinancing\ttransactions: |  |  |  |
| Issuance\tof\tcommon\tstock | $213 | $266 | $767 |
| Issuance\tof\tpreferred\tstock | $— | $— | $7,842 |
| PNC\tpreferred\tstock\tcapital\tcontribution | $200 | $— | $— |
| Increase\t(decrease)\tin\tnon-controlling\tinterests\tdue\tto\tnet\tconsolidation\t(deconsolidation)\tof\tsponsored\tinvestment\tfunds | $(4) | $(170) | $7 |
| Contingent\tcommon\tstock\tpayment\trelated\tto\tQuellos\ttransaction | $— | $— | $43 |
| Increase\t(decrease)\tin\tborrowings\tdue\tto\tconsolidation\tof\tVIEs | $412 | $1,157 | $— |
| Common\tstock\treleased\tfrom\tescrow\tagent\tin\tconnection\twith\tQuellos\ttransaction | $— | $136 | $6 |

# Notes	to	the	Consolidated	Financial	Statements

# 1.	Introduction	and	Basis	of	Presentation

Business.	BlackRock,	Inc.	(together,	with	its	subsidiaries,	unless	the	context	otherwise	indicates,	"BlackRock"	or	the	"Company")	provides	diversified	investment	management	to institutional	clients,	intermediary	and	individual	investors	through	various	investment	vehicles.	Investment	management	services	primarily	consist	of	the	management	of	equity,	fixed income,	multi-asset	class,	alternative	investment	and	cash	management	products.	BlackRock	offers	its	investment	products	in	a	variety	of	vehicles,	including	open-end	and	closed-end mutual	funds,	iShares ®	exchange-traded	funds	("ETFs"),	collective	investment	trusts	and	separate	accounts.	In	addition,	BlackRock	provides	market	risk	management,	financial markets	advisory	and	enterprise	investment	system	services	to	a	broad	base	of	clients.	Financial	markets	advisory	services	include	valuation	services	relating	to	illiquid	securities, dispositions	and	workout	assignments	(including	long-term	portfolio	liquidation	assignments),	risk	management	and	strategic	planning	and	execution.

On	December	31,	2011,	equity	ownership	of	BlackRock	was	as	follows:

|  | Voting | Capital	Stock |
| :--- | :--- | :--- |
|  | Common\tStock | (1) |
| The\tPNC\tFinancial\tServices\tGroup,\tInc.\t("PNC") | 24.0% | 21.0% |
| Barclays\tBank\tPLC\t("Barclays") | 2.2% | 19.7% |
| Other | 73.8% | 59.3% |
|  | 100.0% | 100.0% |

See	Note	17,	Capital	Stock,	for	more	information	on	the	equity	ownership	of	BlackRock.

Basis	of	Presentation.	These	consolidated	financial	statements	have	been	prepared	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	("GAAP")	and include	the	accounts	of	the	Company	and	its	controlled	subsidiaries.	Non-controlling	interests	on	the	consolidated	statements	of	financial	condition	include	the	portion	of	consolidated sponsored	investment	funds	in	which	the	Company	does	not	have	direct	equity	ownership.	Significant	accounts	and	transactions	between	consolidated	entities	have	been	eliminated.

The	preparation	of	financial	statements	in	conformity	with	GAAP	requires	management	to	make	estimates	and	assumptions	that	affect	the	reported	amounts	of	assets	and	liabilities	and disclosure	of	contingent	assets	and	liabilities	at	the	date	of	the	financial	statements	and	the	reported	amounts	of	revenues	and	expenses	during	the	reporting	periods.	Actual	results could	differ	from	those	estimates.

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

# 2.	Significant	Accounting	Policies

Cash	and	Cash	Equivalents.	Cash	and	cash	equivalents	primarily	consists	of	cash,	money	market	funds	and	short-term,	highly	liquid	investments	with	original	maturities,	at	date	of purchase,	of	three	months	or	less	in	which	the	Company	is	exposed	to	market	and	credit	risk.	Cash	and	cash	equivalent	balances	that	are	legally	restricted	from	use	by	the	Company	are recorded	in	other	assets	on	the	consolidated	statements	of	financial	condition.	Cash	balances	maintained	by	consolidated	sponsored	investment	funds	are	not	considered	legally restricted	and	are	included	in	cash	and	cash	equivalents	on	the	consolidated	statements	of	financial	condition.	Cash	balances	maintained	by	consolidated	variable	interest	entities	are included	in	assets	of	consolidated	variable	interest	entities	on	the	consolidated	statements	of	financial	condition.

Investments	in	Debt	and	Marketable	Equity	Securities.	BlackRock	holds	debt	and	marketable	equity	investments	which	pursuant	to	Accounting	Standards	Codification	("ASC")	320- 10,	Investments	–	Debt	and	Equity	Securities,	are	classified	as	trading,	available-for-sale,	or	held-to-maturity	based	on	the	Company's	intent	to	sell	the	security	or,	for	a	debt	security, the	Company's	intent	and	ability	to	hold	the	debt	security	to	maturity.

Trading	securities	are	those	investments	that	are	purchased	principally	for	the	purpose	of	selling	them	in	the	near	term.	Trading	securities	are	carried	at	fair	value	on	the	consolidated statements	of	financial	condition	with	changes	in	fair	value	recorded	in	non-operating	income	(expense)	on	the	consolidated	statements	of	income	in	the	period	of	the	change.

Held-to-maturity	debt	securities	are	purchased	with	the	positive	intent	and	ability	to	be	held	to	maturity	and	are	recorded	at	amortized	cost	on	the	consolidated	statements	of	financial condition.

Available-for-sale	securities	are	those	securities	that	are	not	classified	as	trading	or	held-to-maturity.	Available-for-sale	securities	are	carried	at	fair	value	on	the	consolidated	statements of	financial	condition	with	changes	in	fair	value	recorded	in	the	accumulated	other	comprehensive	income	(loss)	component	of	stockholders'	equity	in	the	period	of	the	change.	Upon the	disposition	of	an	available-for-sale	security,	the	Company	reclassifies	the	gain	or	loss	on	the	security	from	accumulated	other	comprehensive	income	(loss)	to	non-operating income	(expense)	on	the	Company's	consolidated	statements	of	income.

Equity	Method.	For	equity	investments	where	BlackRock	does	not	control	the	investee,	and	where	it	is	not	the	primary	beneficiary	("PB")	of	a	variable	interest	entity	("VIE"),	but	can exert	significant	influence	over	the	financial	and	operating	policies	of	the	investee,	the	Company	follows	the	equity	method	of	accounting	in	accordance	with	ASC	323,	Investments- Equity	Method	and	Joint	Ventures.	Under	the	equity	method	of	accounting,	BlackRock's	share	of	the	investee's	underlying	net	income	or	loss	on	investment	funds	is	recorded	as	net gain	(loss)	on	investments	within	non-operating	income	(expense)	and	as	other	revenue	for	operating	advisory	company	investments	since	such	companies	are	considered	to	be	an extension	of	BlackRock's	core	business.	BlackRock's	share	of	net	income	of	the	investee	is	recorded	based	upon	the	most	current	information	available	at	the	time,	which	may precede	the	date	of	the	consolidated	statement	of	financial	condition.	Distributions	received	from	the	investment	reduce	the	Company's	carrying	value	of	the	investee.

Cost	Method.	For	non-marketable	equity	investments	where	BlackRock	neither	controls	nor	has	significant	influence	over	the	investee,	the	investments	are	accounted	for	using	the	cost method	of	accounting.	Under	the	cost	method,	dividends	received	from	the	investment	are	recorded	as	dividend	income	within	non-operating	income	(expense).

Impairments.	When	the	fair	value	of	available-for-sale	securities	is	lower	than	cost,	the	Company	evaluates	the	securities	to	determine	whether	the	impairment	is	considered	to	be "other-than-temporary."

In	making	this	determination	for	equity	securities,	the	Company	considers,	among	other	factors,	the	length	of	time	the	security	has	been	in	a	loss	position,	the	extent	to	which	the security's	market	value	is	less	than	cost,	the	financial	condition	and	near-term	prospects	of	the	security's	issuer	and	the	Company's	ability	and	intent	to	hold	the	security	for	a	length	of time	sufficient	to	allow	for	recovery	of	such	unrealized	losses.	If	the	impairment	is	considered	other-than-temporary,	an	impairment	charge	is	recorded	in	non-operating	income (expense)	on	the	consolidated	statements	of	income.

In	making	this	determination	for	debt	securities,	the	Company	considers	whether:	(1)	it	has	the	intent	to	sell	the	security,	(2)	it	is	more	likely	than	not	that	it	will	be	required	to	sell	the security	before	recovery	or	(3)	it	expects	to	recover	the	entire	amortized	cost	basis	of	the	security.	If	the	Company	does	not	intend	to	sell	a	security	and	it	is	not	more	likely	than	not that	it	will	be	required	to	sell	the	security,	but	the	security	has	suffered	a	credit	loss,	the	credit	loss	will	be	bifurcated	from	the	total	impairment	and	recorded	in	earnings	with	the remaining	portion	recorded	in	accumulated	other	comprehensive	income.

# 2.	Significant	Accounting	Policies	(continued)

# Consolidation

For	investment	products	in	which	BlackRock's	voting	interest	is	less	than	50%,	an	analysis	is	performed	to	determine	if	the	investment	product	is	a	VIE	or	a	voting	rights	entity.	Upon the	determination	that	the	investment	product	is	a	VIE,	further	analysis,	as	discussed	below,	is	performed	to	determine	if	BlackRock	is	the	PB	of	the	investment	product,	which	would require	consolidation.

Consolidation	of	Variable	Interest	Entities.	Pursuant	to	ASC	810-10,	Consolidation	("ASC	810-10")	certain	investment	products	for	which	the	risks	and	rewards	of	ownership	are	not directly	linked	to	voting	interests	may	be	deemed	VIEs.	BlackRock	reviews	factors,	including	the	rights	of	the	equity	holders	and	obligations	of	equity	holders	to	absorb	losses	or receive	expected	residual	returns,	to	determine	if	the	investment	product	is	a	VIE.	BlackRock	is	required	to	consolidate	a	VIE	when	it	is	deemed	to	be	the	PB,	which	is	evaluated continuously	as	facts	and	circumstances	change.

Accounting	Standards	Update	("ASU")	2010-10,	Amendments	to	Statement	167	for	Certain	Investment	Funds	("ASU	2010-10")	defers	the	application	of	Statement	of	Financial Accounting	Standards	("SFAS")	No.	167	("SFAS	No.	167"),	Amendments	to	FASB	Interpretation	No.	46(R),	for	certain	investment	funds,	including	money	market	funds.

The	PB	of	a	VIE	that	does	not	meet	the	conditions	of	ASU	2010-10	is	the	enterprise	that	has	the	power	to	direct	activities	of	the	entity	that	most	significantly	impact	the	entity's economic	performance	and	has	the	obligation	to	absorb	losses	or	the	right	to	receive	benefits	that	potentially	could	be	significant	to	the	VIE.

The	PB	of	a	VIE	that	meets	the	conditions	of	ASU	2010-10	is	the	enterprise	that	has	a	variable	interest	(or	combination	of	variable	interests,	including	those	of	related	parties)	that absorbs	the	majority	of	the	entity's	expected	losses,	receives	a	majority	of	the	entity's	expected	residual	returns,	or	both.

The	Company,	as	general	partner	or	managing	member	of	certain	sponsored	investment	funds,	generally	is	presumed	to	control	funds	that	are	limited	partnerships	or	limited	liability companies.	Pursuant	to	ASC	810-20,	Control	of	Partnerships	and	Similar	Entities	("ASC	810-20"),	the	Company	reviews	such	investment	vehicles	to	determine	if	such	a	presumption can	be	overcome	by	determining	whether	other	non-affiliated	partners	or	members	of	the	limited	partnership	or	limited	liability	company	have	the	substantive	ability	to	dissolve (liquidate)	the	investment	vehicle,	or	otherwise	to	remove	BlackRock	as	the	general	partner	or	managing	member	without	cause	based	on	a	simple	unaffiliated	majority	vote,	or	have other	substantive	participating	rights.	If	the	investment	vehicle	is	not	a	VIE	and	the	presumption	of	control	is	not	overcome,	BlackRock	will	consolidate	the	investment	vehicle.

Retention	of	Specialized	Accounting	Principles.	Upon	consolidation	of	various	sponsored	investment	funds	on	the	Company's	consolidated	statements	of	financial	condition,	the Company	retains	the	specialized	accounting	principles	of	the	underlying	funds	pursuant	to	ASC	810-10.	All	of	the	underlying	investments	held	by	consolidated	sponsored	investment funds	are	carried	at	fair	value,	with	corresponding	changes	in	the	investments'	fair	values	reflected	in	non-operating	income	(expense)	on	the	Company's	consolidated	statements	of income.	When	the	Company	no	longer	controls	these	funds	due	to	reduced	ownership	percentage	or	other	reasons,	the	funds	are	deconsolidated	and	accounted	for	under	another accounting	method.

Separate	Account	Assets	and	Liabilities.	Separate	account	assets	are	maintained	by	a	wholly	owned	subsidiary	of	the	Company,	which	is	a	registered	life	insurance	company	in	the United	Kingdom	and	represent	segregated	assets	held	for	purposes	of	funding	individual	and	group	pension	contracts.	The	separate	account	assets	are	not	subject	to	general	claims	of the	creditors	of	BlackRock.	These	separate	account	assets	and	the	related	equal	and	offsetting	liabilities	are	recorded	as	separate	account	assets	and	separate	account	liabilities	on	the Company's	consolidated	statements	of	financial	condition	in	accordance	with	the	ASC	944-80,	Financial	Services	–	Separate	Accounts.

The	net	investment	income	attributable	to	separate	account	assets	supporting	individual	and	group	pension	contracts	accrue	directly	to	the	contract	owner	and	are	not	reported	on	the consolidated	statements	of	income.	While	BlackRock	has	no	economic	interest	in	these	separate	account	assets	and	liabilities,	BlackRock	earns	policy	administration	and	management fees	associated	with	these	products,	which	are	included	in	investment	advisory,	administration	fees	and	securities	lending	revenue	on	the	consolidated	statements	of	income.

Collateral	Assets	Held	and	Liabilities	Under	Securities	Lending	Agreements.	The	Company	facilitates	securities	lending	arrangements	whereby	securities	held	by	separate	account assets	maintained	by	the	life	insurance	company	are	lent	to	third	parties.	In	exchange,	the	Company	receives	collateral,	principally	cash	and	securities,	with	minimums	generally ranging	from	approximately	102%	to	112%	of	the	value	of	the	securities	lent	in	order	to	reduce	counterparty	risk.	Under	the	Company's	securities	lending	arrangements,	the	Company can	resell	or	re-pledge	the	collateral	and	the	borrower	can	re-sell	or	re-pledge	the	loaned	securities.	The	securities	lending	transactions	entered	into	by	the	Company	are	accompanied by	an	agreement	that	entitles	the	Company	to	request	the	borrower	to	return	the	securities	at	any	time;	therefore,	these	transactions	are	not	reported	as	sales	under	ASC	860,	Transfers and	Servicing.

As	a	result	of	the	Company's	ability	to	resell	or	re-pledge	the	collateral,	the	Company	records	on	its	consolidated	statements	of	financial	condition	the	collateral	received	under	these arrangements	(both	cash	and	non-cash)	as	its	own	asset	in	addition	to	an	equal	and	offsetting	collateral	liability	for	the	obligation	to	return	the	collateral.	At	December	31,	2011	and 2010,	the	fair	value	of	loaned	securities	held	by	separate	account	assets	was	approximately	$19.5	billion	and	$16.1	billion,	respectively,	and	the	collateral	held	under	these	securities lending	agreements	was	approximately	$20.9	billion	and	$17.6	billion,	respectively.	During	the	years	ended	December	31,	2011	and	2010,	the	Company	had	not	sold	or	re-pledged	any of	the	collateral	received	under	these	arrangements.

Deferred	Sales	Commissions.	The	Company	holds	the	rights	to	receive	certain	cash	flows	from	sponsored	mutual	funds	sold	without	a	front-end	sales	charge	("back-end	load	shares"). The	carrying	value	of	these	deferred	mutual	fund	commissions	is	being	amortized	over	periods	between	one	and	six	years.	The	Company	receives	distribution	fees	from	these	funds and	contingent	deferred	sales	commissions	("CDSCs")	upon	shareholder	redemption	of	certain	back-end	load	shares	that	are	recorded	within	distribution	fees	on	the	consolidated statements	of	income.	Upon	receipt	of	CDSCs,	the	Company	records	revenue	and	the	remaining	unamortized	deferred	sales	commission	is	expensed.

The	Company	periodically	reviews	the	carrying	value	of	deferred	commission	assets	to	determine	whether	a	significant	decline	in	the	equity	or	bond	markets	or	other	events	or circumstances	indicate	that	an	impairment	may	have	occurred.	If	indicators	of	a	potential	impairment	exist,	the	Company	compares	the	carrying	value	of	the	asset	to	the	estimated future	net	undiscounted	cash	flows	related	to	the	asset.	If	such	assessments	indicate	that	the	estimated	future	net	undiscounted	cash	flows	will	not	be	sufficient	to	recover	the	recorded carrying	value,	the	assets	are	adjusted	to	their	estimated	fair	value.	No	such	impairments	were	recorded	for	the	years	ended	December	31,	2011,	2010	or	2009.

Property	and	Equipment.	Property	and	equipment	are	recorded	at	cost	less	accumulated	depreciation.	Depreciation	generally	is	recorded	using	the	straight-line	method	over	the estimated	useful	lives	of	the	various	classes	of	property	and	equipment.	Leasehold	improvements	are	amortized	using	the	straight-line	method	over	the	shorter	of	the	estimated	useful life	or	the	remaining	lease	term.

Software	Costs.	BlackRock	develops	a	variety	of	risk	management,	investment	analytic	and	investment	system	services	for	internal	use,	utilizing	proprietary	software	that	is	hosted	and maintained	by	BlackRock.	The	Company	follows	ASC	350-40,	Internal-Use	Software	("ASC	350-40").	ASC	350-40	requires	the	capitalization	of	certain	costs	incurred	in	connection with	developing	or	obtaining	software	for	internal	use.	Capitalized	software	costs	are	included	within	property	and	equipment	on	the	consolidated	statements	of	financial	condition	and are	amortized,	beginning	when	the	software	project	is	complete	and	put	into	production,	over	the	estimated	useful	life	of	the	software	of	approximately	three	years.

Goodwill	and	Intangible	Assets.	Goodwill	represents	the	excess	cost	of	a	business	acquisition	over	the	fair	value	of	the	net	assets	acquired.	In	its	assessment	of	goodwill	for impairment,	the	Company	considers	such	factors	as	the	book	value	and	market	capitalization	of	the	Company.	On	a	quarterly	basis,	the	Company	considers	if	triggering	events	have occurred	that	may	indicate	a	potential	goodwill	impairment.	If	a	triggering	event	has	occurred,	the	Company	performs	assessments,	which	include	reviews	of	all	significant	valuation assumptions,	to	determine	if	goodwill	may	be	impaired.	The	Company	performs	such	impairment	assessments	of	its	goodwill	at	least	annually,	as	of	July	31st.

Intangible	assets	are	comprised	of	indefinite-lived	intangible	assets	and	finite-lived	intangible	assets	acquired	in	a	business	combination.	The	value	of	contracts	to	manage	assets	in proprietary	open-end	funds,	closed-end	funds	and	collective	trust	funds	and	certain	other	commingled	products	without	a	specified	termination	date	is	generally	classified	as	indefinite- lived	intangible	assets.	The	assignment	of	indefinite	lives	to	such	contracts	primarily	is	based	upon	the	following:	(i)	the	assumption	that	there	is	no	foreseeable	limit	on	the	contract period	to	manage	these	funds;	(ii)	the	Company	expects	to,	and	has	the	ability	to,	continue	to	operate	these	products	indefinitely;	(iii)	the	products	have	multiple	investors	and	are	not reliant	on	a	single	investor	or	small	group	of	investors	for	their	continued	operation;	(iv)	current	competitive	factors	and	economic	conditions	do	not	indicate	a	finite	life;	and	(v)	there is	a	high	likelihood	of	continued	renewal	based	on	historical	experience.	In	addition,	trade	names/trademarks	are	considered	indefinite-lived	intangibles	when	they	are	expected	to generate	cash	flows	indefinitely.

In	accordance	with	ASC	350,	Intangibles	–	Goodwill	and	Other	("ASC	350"),	indefinite-lived	intangible	assets	and	goodwill	are	not	amortized.	The	value	of	contracts	for	separately managed	accounts	and	certain	funds,	which	have	finite	lives,	are	amortized	over	the	expected	lives	of	the	management	contracts.

On	a	quarterly	basis,	the	Company	considers	if	triggering	events	have	occurred	that	may	indicate	that	the	fair	values	have	declined	below	their	respective	carrying	amounts.	Triggering events	may	include	significant	adverse	changes	in	the	Company's	business,	legal	or	regulatory	environment,	loss	of	key	personnel,	or	other	events.	If	a	triggering	event	has	occurred, the	Company	performs	assessments,	which	include	reviews	of	all	significant	valuation	assumptions,	to	determine	if	any	intangible	assets	are	impaired.	The	Company	performs	such impairment	assessments	of	its	intangible	assets	at	least	annually,	as	of	July	31st.

In	its	assessment	of	indefinite-lived	management	contracts	and	trade	names/trademarks,	the	Company	considers	various	factors	including	assets	under	management	("AUM"),	revenue basis	points,	operating	margins,	tax	rates,	discount	rates	and	projected	growth	rates	to	determine	whether	the	values	of	each	asset	are	impaired	and	whether	the	indefinite-life classification	is	still	appropriate.	The	carrying	value	of	finite-lived	management	contracts	and	their	remaining	useful	lives	are	reviewed	at	least	annually	to	determine	if	circumstances exist	which	may	indicate	a	potential	impairment.	In	addition,	if	circumstances	exist,	the	Company	will	perform	an	impairment	test,	using	an	undiscounted	cash	flow	analysis.

If	the	asset	is	determined	to	be	impaired,	the	difference	between	the	book	value	of	the	asset	and	its	current	fair	value	would	be	recognized	as	an	expense	in	the	period	in	which	the impairment	occurs.

Non-controlling	Interests.	According	to	the	requirements	within	ASC	810-10,	the	Company	reports	non-controlling	interests	as	equity,	separate	from	the	parent's	equity,	on	the consolidated	statements	of	financial	condition.	In	addition,	the	Company's	consolidated	net	income	on	the	consolidated	statements	of	income	includes	the	income	(loss)	attributable	to non-controlling	interest	holders	of	the	Company's	consolidated	sponsored	investment	funds	and	collateralized	loan	obligations	("CLOs").	Income	(loss)	attributable	to	non-controlling interests	is	not	adjusted	for	income	taxes	for	consolidated	sponsored	investment	funds	and	CLOs	that	are	treated	as	pass-through	entities	for	tax	purposes.

Classification	and	Measurement	of	Redeemable	Securities.	The	Company	includes	redeemable	non-controlling	interests	related	to	certain	consolidated	sponsored	investment	funds	in temporary	equity	on	the	Company's	consolidated	statements	of	financial	condition.

Appropriated	Retained	Earnings.	Upon	adoption	of	ASU	2009-17,	Improvements	to	Financial	Reporting	by	Enterprises	Involved	with	Variable	Interest	Entities	("ASU	2009-17")	on January	1,	2010,	BlackRock	consolidated	three	CLOs	and	recorded	a	cumulative	effect	adjustment	to	appropriated	retained	earnings	on	the	consolidated	statement	of	financial condition	equal	to	the	difference	between	the	fair	value	of	the	CLOs'	assets	and	the	fair	value	of	their	liabilities.	Such	amounts	are	recorded	as	appropriated	retained	earnings	as	the CLO	noteholders,	not	BlackRock,	ultimately	will	receive	the	benefits	or	absorb	the	losses	associated	with	the	CLOs'	assets	and	liabilities.	Subsequent	to	adoption	of	ASU	2009-17,	the net	change	in	the	fair	value	of	the	CLOs'	assets	and	liabilities	has	been	recorded	as	net	income	(loss)	attributable	to	nonredeemable	non-controlling	interests	and	as	an	adjustment	to appropriated	retained	earnings.	In	addition,	on	September	30,	2011,	BlackRock	consolidated	one	additional	CLO,	resulting	in	$19	million	of	additional	appropriated	retained	earnings upon	the	initial	consolidation.

Treasury	Stock.	The	Company	records	common	stock	purchased	for	treasury	at	cost.	At	the	date	of	subsequent	reissuance,	the	treasury	stock	account	is	reduced	by	the	cost	of	such stock	using	the	average	cost	method.

# Revenue	Recognition

Investment	Advisory,	Administration	Fees	and	Securities	Lending	Revenue.	Investment	advisory	and	administration	fees	are	recognized	as	the	services	are	performed.	Such	fees	are primarily	based	on	pre-determined	percentages	of	the	market	value	of	AUM	or,	in	the	case	of	certain	real	estate	clients,	net	operating	income	generated	by	the	underlying	properties. Investment	advisory	and	administration	fees	are	affected	by	changes	in	AUM,	including	market	appreciation	or	depreciation,	foreign	exchange	translation	and	net	subscriptions	or redemptions.	Investment	advisory	and	administration	fees	for	investment	funds	are	shown	net	of	fees	waived	pursuant	to	contractual	expense	limitations	of	the	funds	or	voluntary waivers.

The	Company	contracts	with	third	parties	and	related	parties	for	various	mutual	fund	distribution	and	shareholder	servicing	to	be	performed	on	behalf	of	certain	funds	managed	by	the Company.	Such	arrangements	generally	are	priced	as	a	portion	of	the	management	fee	paid	by	the	fund.	In	certain	cases,	the	fund	(primarily	international	funds)	takes	on	the	primary responsibility	for	payment	for	services	such	that	BlackRock	bears	no	credit	risk	to	the	third	party.	The	Company	accounts	for	such	retrocession	arrangements	in	accordance	with	ASC 605-45,	Revenue	Recognition	–	Principal	Agent	Considerations,	and	has	recorded	its	management	fees	net	of	retrocessions.	Retrocessions	for	the	years	ended	December	31,	2011, 2010	and	2009	were	$928	million,	$831	million	and	$611	million,	respectively,	and	were	reflected	net	in	investment	advisory,	administration	fees	and	securities	lending	revenue	on	the consolidated	statements	of	income.

The	Company	also	earns	revenue	by	lending	securities	on	behalf	of	clients,	primarily	to	brokerage	institutions.	Such	revenues	are	accounted	for	on	an	accrual	basis.	The	revenue	earned is	shared	between	the	Company	and	the	funds	or	other	third-party	accounts	managed	by	the	Company	from	which	the	securities	are	borrowed.

Performance	Fees.	The	Company	receives	performance	fees	or	an	incentive	allocation	from	certain	actively	managed	investment	funds	and	certain	separately	managed	accounts. These	performance	fees	are	earned	upon	exceeding	specified	relative	and/or	absolute	investment	return	thresholds.	Such	fees	are	recorded	upon	completion	of	the	measurement	period which	varies	by	product	or	account.

The	Company	may	receive	carried	interest	from	certain	alternative	investments	upon	exceeding	performance	thresholds.	BlackRock	may	be	required	to	return	all,	or	part,	of	such carried	interest	depending	upon	future	performance	of	these	investments.	BlackRock	records	carried	interest	subject	to	such	claw-back	provisions	in	investments,	or	cash	on	its consolidated	statements	of	financial	condition	to	the	extent	that	it	is	distributed.	Carried	interest	is	realized	and	recorded	as	performance	fees	revenue	upon	the	earlier	of	the	termination of	the	investment	fund	or	when	the	likelihood	of	claw-back	is	mathematically	improbable.	The	Company	records	a	deferred	carried	interest	liability	to	the	extent	it	receives	cash	or capital	allocations	related	to	carried	interest	prior	to	meeting	the	revenue	recognition	criteria.	At	December	31,	2011	and	2010,	the	Company	had	$33	million	and	$23	million, respectively,	of	deferred	carried	interest	recorded	in	other	liabilities	on	the	consolidated	statements	of	financial	condition.

BlackRock	Solutions	and	Advisory.	BlackRock	provides	a	variety	of	risk	management,	investment	analytic,	enterprise	investment	system	and	financial	markets	advisory	services	to financial	institutions,	pension	funds,	asset	managers,	foundations,	consultants,	mutual	fund	sponsors,	real	estate	investment	trusts	and	government	agencies.	These	services	are	provided under	the	brand	name	BlackRock	Solutions ®	and	include	a	wide	array	of	risk	management	services,	valuation	of	illiquid	securities,	disposition	and	workout	assignments	(including long-term	portfolio	liquidation	assignments),	strategic	planning	and	execution,	and	enterprise	investment	system	outsourcing	to	clients.	Fees	earned	for	BlackRock	Solutions	and advisory	services	are	recorded	as	services	are	performed	and	are	determined	using	some,	or	all,	of	the	following	methods:	(i)	fixed	fees,	(ii)	percentages	of	various	attributes	of advisory	AUM	or	value	of	positions	on	the	Aladdin ®	platform	and	(iii)	performance	fees	if	contractual	thresholds	are	met.	The	fees	earned	for	BlackRock	Solutions	and	advisory services	are	recorded	in	BlackRock	Solutions	and	advisory	on	the	consolidated	statements	of	income.

Other	Revenue.	The	Company	earns	fees	for	transition	management	services	comprised	of	commissions	from	acting	as	an	introducing	broker-dealer	in	buying	and	selling	securities	on behalf	of	the	Company's	customers.	Commissions	related	to	transition	management	services	are	recorded	on	a	trade-date	basis	as	securities	transactions	occur	and	are	reflected	in	other revenue	on	the	consolidated	statements	of	income.

The	Company	earns	commissions	revenue	upon	the	sale	of	unit	trusts	and	Class	A	mutual	funds.	Revenue	is	recorded	at	the	time	of	the	sale	of	the	product.

products,	which	are	related	to	exchange-traded	notes	issued	by	Barclays.

Stock-based	Compensation.	The	Company	applies	ASC	718-10,	Compensation	–	Stock	Compensation	("ASC	718-10"),	which	establishes	standards	for	the	accounting	for	transactions in	which	an	entity	exchanges	its	equity	instruments	for	goods	or	services,	primarily	focusing	on	the	accounting	for	transactions	in	which	an	entity	obtains	employee	services	in	share- based	payment	transactions.	Entities	are	required	to	measure	the	cost	of	employee	services	received	in	exchange	for	an	award	of	equity	instruments	based	on	the	grant-date	fair	value of	the	award.	The	cost	is	recognized	over	the	period	during	which	an	employee	is	required	to	provide	service	(usually	the	vesting	period)	in	exchange	for	the	stock	award.

The	Company	measures	the	grant-date	fair	value	of	restricted	stock	units	("RSUs")	using	the	Company's	share	price	on	the	date	of	grant.	For	employee	share	options	and	similar instruments,	the	Company	uses	option-pricing	models.	If	an	equity	award	is	modified	after	the	grant	date,	incremental	compensation	cost	is	recognized	for	an	amount	equal	to	the excess	of	the	fair	value	of	the	modified	award	over	the	fair	value	of	the	original	award	immediately	before	the	modification.	Awards	under	the	Company's	stock-based	compensation plans	vest	over	various	periods.	Compensation	cost	is	recorded	by	the	Company	on	a	straight-line	basis	over	the	requisite	service	period	for	each	separate	vesting	portion	of	the	award as	if	the	award	is,	in-substance,	multiple	awards.	Compensation	cost	is	reduced	by	the	number	of	awards	expected	to	be	forfeited	prior	to	vesting.	Forfeiture	estimates	generally	are derived	using	historical	forfeiture	information,	where	available,	and	are	reviewed	for	reasonableness	at	least	quarterly.

The	Company	amortizes	the	grant-date	fair	value	of	stock-based	compensation	awards	made	to	retirement-eligible	employees	over	the	requisite	service	period.	Upon	notification	of retirement,	the	Company	accelerates	the	unamortized	portion	of	the	award	over	the	contractually-required	retirement	notification	period,	if	applicable.

The	Company	pays	cash	dividend	equivalents	that	are	not	subject	to	vesting	on	outstanding	RSUs	granted	prior	to	2009.	Dividend	equivalents	on	participating	shares	expected	to	vest are	recorded	in	retained	earnings.

Distribution	and	Servicing	Costs.	Distribution	and	servicing	costs	include	payments	to	third	parties	and	affiliates,	including	Bank	of	America/Merrill	Lynch,	PNC	and	Barclays, primarily	associated	with	distribution	and	servicing	of	client	investments	in	certain	BlackRock	products.	Distribution	and	servicing	costs	are	expensed	when	incurred.

Direct	Fund	Expenses.	Direct	fund	expenses,	which	are	expensed	as	incurred,	primarily	consist	of	third-party	non-advisory	expenses	incurred	by	BlackRock	related	to	certain	funds for	the	use	of	certain	index	trademarks,	reference	data	for	certain	indices,	custodial	services,	fund	administration,	fund	accounting,	transfer	agent	services,	shareholder	reporting services,	audit	and	tax	services	as	well	as	other	fund-related	expenses	directly	attributable	to	the	non-advisory	operations	of	the	fund.

Leases.	The	Company	accounts	for	its	operating	leases,	which	may	include	escalations,	in	accordance	with	ASC	840-10,	Leases.	The	Company	expenses	the	lease	payments	associated with	operating	leases	evenly	during	the	lease	term	(including	rent-free	periods)	beginning	on	the	commencement	of	the	lease	term.

Foreign	Exchange.	Monetary	assets	and	liabilities	of	foreign	subsidiaries	having	non-U.S.	dollar	functional	currencies	are	translated	at	exchange	rates	at	the	date	of	the	consolidated statements	of	financial	condition.	Non-monetary	assets	and	liabilities	of	foreign	subsidiaries	having	non-U.S.	dollar	functional	currencies	are	translated	at	historical	exchange	rates. Revenue	and	expenses	are	translated	at	average	exchange	rates	during	the	period.	Gains	or	losses	resulting	from	translating	foreign	currency	financial	statements	into	U.S.	dollars	are included	in	accumulated	other	comprehensive	income,	a	separate	component	of	stockholders'	equity	on	the	consolidated	statements	of	financial	condition.	Gains	or	losses	resulting from	foreign	currency	transactions	are	included	in	general	and	administration	expense	on	the	consolidated	statements	of	income.	For	the	years	ended	December	31,	2011,	2010	and 2009,	the	Company	recorded	gains	(losses)	from	foreign	currency	transactions	of	$(1)	million,	$6	million	and	$(11)	million,	respectively.

Income	Taxes.	The	Company	accounts	for	income	taxes	under	the	asset	and	liability	method	prescribed	by	ASC	740-10,	Income	Taxes	("ASC	740-10").	Deferred	income	tax	assets and	liabilities	are	recognized	for	the	future	tax	consequences	attributable	to	temporary	differences	between	the	financial	statement	carrying	amounts	of	existing	assets	and	liabilities and	their	respective	tax	bases	using	currently	enacted	tax	rates	in	effect	for	the	year	in	which	the	differences	are	expected	to	reverse.	The	effect	of	a	change	in	tax	rates	on	deferred income	tax	assets	and	liabilities	is	recognized	in	income	in	the	period	that	includes	the	enactment	date.

Management	periodically	assesses	the	recoverability	of	its	deferred	income	tax	assets	based	upon	expected	future	earnings,	taxable	income	in	prior	carryback	years,	future deductibility	of	the	asset,	changes	in	applicable	tax	laws	and	other	factors.	If	management	determines	that	it	is	not	more	likely	than	not	that	the	deferred	tax	asset	will	be	fully recoverable	in	the	future,	a	valuation	allowance	will	be	established	for	the	difference	between	the	asset	balance	and	the	amount	expected	to	be	recoverable	in	the	future.	This	allowance will	result	in	additional	income	tax	expense	on	the	Company's	consolidated	statements	of	income.	Further,	the	Company	records	its	income	taxes	receivable	and	payable	based	upon its	estimated	income	tax	position.

Excess	tax	benefits	related	to	stock-based	compensation	are	recognized	as	additional	paid-in	capital	and	are	reflected	as	financing	cash	flows	on	the	consolidated	statements	of	cash flows.	If	the	Company	does	not	have	additional	paid-in	capital	credits	(cumulative	tax	benefits	recorded	to	additional	paid-in	capital),	the	Company	will	record	an	expense	for	any deficit,	or	shortfall,	between	the	recorded	tax	benefit	and	tax	return	benefit.	At	December	31,	2011	and	2010,	BlackRock	had	excess	additional	paid-in	capital	credits	to	absorb potential	future	deficits	between	recorded	tax	benefits	and	tax	return	benefits.

Earnings	per	Share	("EPS").	EPS	is	calculated	pursuant	to	the	two-class	method	as	defined	in	ASC	260-10,	Earnings	per	Share	("ASC	260-10"),	which	specifies	that	all	outstanding unvested	share-based	payment	awards	that	contain	rights	to	nonforfeitable	dividends	or	dividend	equivalents	are	considered	participating	securities	and	should	be	included	in	the computation	of	EPS	pursuant	to	the	two-class	method.	The	dilutive	effect	of	outstanding	unvested	share-based	payment	awards	that	are	considered	non-participating	securities	are calculated	under	the	treasury	stock	method.

The	Company	presents	both	basic	and	diluted	EPS	amounts.	Basic	EPS	is	calculated	by	dividing	net	distributed	and	undistributed	earnings	allocated	to	shareholders,	excluding participating	securities,	by	the	weighted-average	number	of	shares	outstanding.	The	Company's	participating	securities	consist	of	its	unvested	share-based	payment	awards	that	contain rights	to	non-forfeitable	dividends	or	dividend	equivalents.	Diluted	EPS	includes	the	determinants	of	basic	EPS	and,	in	addition,	reflects	the	impact	of	other	potentially	dilutive	shares outstanding	during	the	period.	The	dilutive	effect	of	participating	securities	is	calculated	under	the	more	dilutive	of	either	the	treasury	stock	method	or	the	two-class	method.

Due	to	the	similarities	in	terms	among	each	series	of	BlackRock's	non-voting	participating	preferred	stock	and	the	Company's	common	stock,	the	Company	considers	each	series	of non-voting	participating	preferred	stock	to	be	common	stock	equivalents	for	purposes	of	earnings	per	common	share	calculations.

In	accordance	with	ASC	260-10,	shares	of	the	Company's	common	stock	are	not	included	in	basic	earnings	per	common	share	until	contingencies	are	resolved	and	the	shares	are released.	Shares	of	the	Company's	common	stock	are	not	included	in	diluted	earnings	per	common	share	unless	the	contingency	has	been	met	assuming	that	the	contingency	period ended	on	the	date	of	the	consolidated	statement	of	financial	condition.

Business	Segments.	The	Company's	management	directs	BlackRock's	operations	as	one	business,	the	asset	management	business.	As	such,	the	Company	operates	in	one	business segment	as	defined	in	ASC	280-10,	Segment	Reporting	("ASC	280-10").

Business	Combinations.	The	Company	accounts	for	business	combinations	in	accordance	with	the	requirements	of	ASC	805,	Business	Combinations	("ASC	805").	The	fundamental requirement	of	ASC	805	is	that	the	acquisition	method	of	accounting	(the	purchase	method)	be	used	for	all	business	combinations	and	for	an	acquirer	to	be	identified	for	each	business combination.	The	provisions	within	ASC	805	further	define	the	acquirer,	establish	the	acquisition	date	and	define	transactions	that	qualify	as	business	combinations.

Additionally,	the	requirements	within	ASC	805	provide	the	guidance	for	measuring	fair	value	of	assets	acquired,	liabilities	assumed	and	any	non-controlling	interest	in	the	acquiree, provide	guidance	for	the	measurement	of	fair	value	in	a	step	acquisition,	provide	guidance	for	recognizing	assets	acquired	and	liabilities	assumed	subject	to	contingencies,	provide guidance	on	recognition	and	measurement	of	contingent	consideration	and	require	that	acquisition-related	costs	of	the	acquirer	generally	be	expensed	as	incurred.	Reversal	of valuation	allowances	related	to	acquired	deferred	tax	assets	and	changes	to	liabilities	for	unrecognized	tax	benefits	related	to	tax	positions	assumed	in	business	combinations subsequent	to	the	adoption	of	the	requirements	within	ASC	805,	will	affect	the	income	tax	provision	in	the	period	of	reversal	or	change.

Hierarchy	of	Fair	Value	Inputs.	The	provisions	of	ASC	820-10,	Fair	Value	Measurements	and	Disclosures	("ASC	820-10"),	establish	a	hierarchy	that	prioritizes	inputs	to	valuation techniques	used	to	measure	fair	value	and	require	companies	to	disclose	the	fair	value	of	their	financial	instruments	according	to	the	fair	value	hierarchy	(i.e.,	Level	1,	2	and	3	inputs,	as defined).	The	fair	value	hierarchy	gives	the	highest	priority	to	quoted	prices	(unadjusted)	in	active	markets	for	identical	assets	or	liabilities	and	the	lowest	priority	to	unobservable inputs.

•Level	1	assets	may	include	listed	mutual	funds	(including	those	accounted	for	under	the	equity	method	of	accounting	as	these	mutual	funds	are	investment companies	that	have	publicly	available	net	asset	values	("NAVs"),	which	in	accordance	with	GAAP,	are	calculated	under	fair	value	measures	and	the	changes are	equal	to	the	earnings	of	such	funds),	ETFs,	equities	and	certain	exchange-traded	derivatives.

•Level	2	assets	in	this	category	may	include	debt	securities,	bank	loans,	short-term	floating	rate	notes	and	asset-backed	securities,	securities	held	within consolidated	hedge	funds,	certain	equity	method	limited	partnership	interests	in	hedge	funds	valued	based	on	NAV	where	the	Company	has	the	ability	to redeem	at	the	measurement	date	or	within	the	near	term	without	redemption	restrictions,	restricted	public	securities	valued	at	a	discount,	as	well	as	over-the- counter	derivatives,	including	interest	and	inflation	rate	swaps	and	foreign	currency	exchange	contracts	that	have	inputs	to	the	valuations	that	generally	can	be corroborated	by	observable	market	data.

Unobservable	inputs	for	the	valuation	of	the	asset	or	liability,	which	may	include	non-binding	broker	quotes.	Level	3	assets	include	investments	for	which	there	is	little, if	any,	market	activity.	These	inputs	require	significant	management	judgment	or	estimation.	Certain	investments	that	are	valued	using	a	NAV	and	are	subject	to	current redemption	restrictions	that	will	not	be	lifted	in	the	near	term	are	included	in	Level	3.

•Level	3	assets	in	this	category	may	include	general	and	limited	partnership	interests	in	private	equity	funds,	funds	of	private	equity	funds,	real	estate	funds, hedge	funds,	and	funds	of	hedge	funds,	direct	private	equity	investments	held	within	consolidated	funds,	bank	loans,	bonds	and	certain	held	for	sale	real	estate disposal	assets.

•Level	3	inputs	include	BlackRock	capital	accounts	for	its	partnership	interests	in	various	alternative	investments,	including	distressed	credit	hedge	funds,	real estate	and	private	equity	funds,	which	may	be	adjusted	by	using	the	returns	of	certain	market	indices.	The	various	partnerships	are	investment	companies, which	record	their	underlying	investments	at	fair	value	based	on	fair	value	policies	established	by	management	of	the	underlying	fund.	Fair	value	policies	at	the underlying	fund	generally	require	the	fund	to	utilize	pricing/valuation	information,	including	independent	appraisals,	from	third-party	sources.	However,	in some	instances,	current	valuation	information	for	illiquid	securities	or	securities	in	markets	that	are	not	active	may	not	be	available	from	any	third-party	source or	fund	management	may	conclude	that	the	valuations	that	are	available	from	third-party	sources	are	not	reliable.	In	these	instances,	fund	management	may perform	model-based	analytical	valuations	that	may	be	used	as	an	input	to	value	these	investments.

•Level	3	liabilities	in	this	category	include	borrowings	of	consolidated	CLOs	valued	based	upon	non-binding	single	broker	quotes.

Fair	Value	Option.	ASC	825-10,	Financial	Instruments	("ASC	825-10"),	provides	a	fair	value	option	election	that	allows	companies	to	irrevocably	elect	fair	value	as	the	initial and	subsequent	accounting	measurement	attribute	for	certain	financial	assets	and	liabilities.	ASC	825-10	permits	entities	to	elect	to	measure	eligible	financial	assets	and liabilities	at	fair	value	on	an	ongoing	basis.	Unrealized	gains	and	losses	on	items	for	which	the	fair	value	option	has	been	elected	are	reported	in	earnings.	The	decision	to	elect the	fair	value	option	is	determined	on	an	instrument-by-instrument	basis,	must	be	applied	to	an	entire	instrument	and	is	irrevocable	once	elected.	Assets	and	liabilities	measured at	fair	value	pursuant	to	ASC	825-10	are	required	to	be	reported	separately	from	those	instruments	measured	using	another	accounting	method.

Derivative	Instruments	and	Hedging	Activities.	ASC	815-10,	Derivatives	and	Hedging	("ASC	815-10"),	establishes	accounting	and	reporting	standards	for	derivative instruments,	including	certain	derivatives	embedded	in	other	contracts	and	for	hedging	activities.	ASC	815-10	generally	requires	an	entity	to	recognize	all	derivatives	as	either assets	or	liabilities	on	the	consolidated	statements	of	financial	condition	and	to	measure	those	investments	at	fair	value.

The	Company	does	not	use	derivative	financial	instruments	for	trading	or	speculative	purposes.	The	Company	uses	derivative	financial	instruments	primarily	for	purposes	of hedging:	(i)	exposures	to	fluctuations	in	foreign	currency	exchange	rates	of	certain	assets	and	liabilities,	(ii)	market	exposures	for	certain	seed	investments	and	(iii)	future	cash flows	on	floating	rate	notes.	The	Company	may	also	use	derivatives	within	separate	account	assets,	which	are	segregated	funds	held	for	purposes	of	funding	individual	and group	pension	contracts,	or	in	connection	with	capital	support	agreements	with	affiliated	investment	companies.	In	addition,	certain	consolidated	sponsored	investment	funds may	also	invest	in	derivatives	as	a	part	of	their	investment	strategy.

Changes	in	the	fair	value	of	the	Company's	derivative	financial	instruments	are	generally	recognized	in	current	earnings	and,	where	applicable,	are	offset	by	the	corresponding gain	or	loss	on	the	related	foreign-denominated	assets	or	liabilities	or	hedged	investments,	on	the	consolidated	statements	of	income.

Amendments	to	Fair	Value	Measurements	and	Disclosures.	In	May	2011,	the	Financial	Accounting	Standards	Board	("FASB")	issued	ASU	2011-04,	Fair	Value Measurement:	Amendments	to	Achieve	Common	Fair	Value	Measurement	and	Disclosure	Requirements	in	U.S.	GAAP	and	IFRSs	("ASU	2011-04"),	which	amends	the	existing fair	value	guidance	within	ASC	820.	The	amendments	include:

Amendments	to	Goodwill	Impairment	Testing.	In	September	2011,	the	FASB	issued	ASU	2011-08,	Testing	Goodwill	for	Impairment	("ASU	2011-08"),	which	amends	the guidance	in	ASC	350	on	testing	goodwill	for	impairment.	Under	the	revised	guidance,	entities	testing	goodwill	for	impairment	have	the	option	of	performing	a	qualitative assessment	before	calculating	the	fair	value	of	the	reporting	unit	(i.e.,	step	1	of	the	goodwill	impairment	test).	If	entities	determine,	on	the	basis	of	qualitative	factors,	that	the fair	value	of	the	reporting	unit	is	more	likely	than	not	to	be	less	than	the	carrying	amount,	the	two-step	impairment	test	would	be	required.	The	amendments	are	effective	for	the Company	for	annual	and	interim	goodwill	impairment	tests	performed	beginning	after	December	15,	2011.	The	provisions	of	ASU	2011-08,	if	elected	to	be	adopted,	are	not expected	to	materially	impact	BlackRock's	consolidated	financial	statements.

A	summary	of	the	carrying	value	of	total	investments	is	as	follows:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 |
| Available-for-sale\tinvestments | $52 | $45 |
| Held-to-maturity\tinvestments | 105 | 100 |
| Trading\tinvestments: |  |  |
| Consolidated\tsponsored\tinvestment\tfunds | 214 | 60 |
| Other\tequity\tand\tdebt\tsecurities | 7 | 22 |
| Deferred\tcompensation\tplan\tmutual\tfunds | 46 | 49 |
| Total\ttrading\tinvestments | 267 | 131 |
| Other\tinvestments: |  |  |
| Consolidated\tsponsored\tinvestment\tfunds | 373 | 337 |
| Equity\tmethod\tinvestments | 457 | 556 |
| Deferred\tcompensation\tplan\thedge\tfund\tequity\tmethod\tinvestments | 19 | 27 |
| Cost\tmethod\tinvestments | 337 | 331 |
| Carried\tinterest | 21 | 13 |
| Total\tother\tinvestments | 1,207 | 1,264 |
| Total\tinvestments | $1,631 | $1,540 |

At	December	31,	2011,	the	Company	consolidated	$587	million	of	investments	held	by	consolidated	sponsored	investment	funds	(non-VIEs)	of	which	$214	million	and	$373 million	were	classified	as	trading	investments	and	other	investments,	respectively.

At	December	31,	2010,	the	Company	consolidated	$397	million	of	investments	held	by	consolidated	sponsored	investment	funds	(non-VIEs)	of	which	$60	million	and	$337 million	were	classified	as	trading	investments	and	other	investments,	respectively.

# Available-for-sale	Investments

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

| December	31,	2011 | Cost | Gross	Unrealized<br>Gains | Losses | Carrying<br>Value |
| :--- | :--- | :--- | :--- | :--- |
| Equity\tsecurities: |  |  |  |  |
| Sponsored\tinvestment\tfunds | $52 | $— | $(2) | $50 |
| Collateralized\tdebt\tobligations\t("CDOs") | 1 | \t — | — | 1 |
| Debt\tsecurities: |  |  |  |  |
| Asset-backed\tdebt | 1 | \t — | — | 1 |
| Total\tavailable-for-sale\tinvestments | $54 | $— | $(2) | $52 |

| December	31,	2010 | Cost | Gross	Unrealized<br>Gains | Losses | Carrying<br>Value |
| :--- | :--- | :--- | :--- | :--- |
| Equity\tsecurities: |  |  |  |  |
| Sponsored\tinvestment\tfunds | $33 | $4 | $(1) | $36 |
| CDOs | 2 | \t — | — | 2 |
| Debt\tsecurities: |  |  |  |  |
| Mortgage\tdebt | 4 | 2 | — | 6 |
| Asset-backed\tdebt | 1 | \t — | — | 1 |
| Total\tavailable-for-sale\tinvestments | $40 | $6 | $(1) | $45 |

Available-for-sale	investments	primarily	include	seed	investments	in	BlackRock	sponsored	investment	funds.

# Available-for-sale	Investments	(continued)

A	summary	of	sale	activity	in	the	Company's	available-for-sale	securities	during	the	years	ended	December	31,	2011,	2010	and	2009	is	shown	below.

# Held-to-Maturity	Investments

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

Held-to-maturity	investments	include	debt	instruments	held	for	regulatory	purposes	and	the	amortized	cost	(the	carrying	value)	of	these	investments	approximates	fair	value.

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

|  |  | After	1 | After	5 |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Year | Years |  |  |
|  | 1\tYear\tor | through\t5 | through\t10 | After\t10 |  |
| (Dollar\tamounts\tin\tmillions) | less | Years | Years | Years | Total |
| December\t31,\t2011 |  |  |  |  |  |
| Foreign\tgovernment\tdebt | $96 | $— | $— | $9 | $105 |

# Trading	Investments

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

|  | December	31,	2011 | December	31,	2011 | December	31,	2010 | December	31,	2010 |
| :--- | :--- | :--- | :--- | :--- |
|  | Carrying | Carrying | Carrying | Carrying |
| (Dollar\tamounts\tin\tmillions) | Cost | Value | Cost | Value |
| Trading\tinvestments: |  |  |  |  |
| Deferred\tcompensation\tplan\tmutual\tfunds | $45 | $46 | $45 | $49 |
| Equity\tsecurities | \t 174 | 169 | 37 | 45 |
| Debt\tsecurities: |  |  |  |  |
| Municipal\tdebt | \t — | — | 10 | 10 |
| Foreign\tdebt | 12 | 12 | \t — | — |
| Corporate\tdebt | 39 | 40 | 25 | 27 |
| Total\ttrading\tinvestments | $270 | $267 | $117 | $131 |

At	December	31,	2011,	trading	investments	included	$163	million	of	equity	securities	and	$51	million	of	debt	securities	held	by	consolidated	sponsored	investment	funds,	$46 million	of	certain	deferred	compensation	plan	mutual	fund	investments	and	$7	million	of	equity	and	debt	securities	held	in	separate	investment	accounts	for	the	purpose	of establishing	an	investment	history	in	various	investment	strategies	before	being	marketed	to	investors.

# Other	Investments

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

|  | December	31,	2011 | December	31,	2011 | December	31,	2010 | December	31,	2010 |
| :--- | :--- | :--- | :--- | :--- |
|  | Carrying | Carrying | Carrying | Carrying |
| (Dollar\tamounts\tin\tmillions) | Cost | Value | Cost | Value |
| Other\tinvestments: |  |  |  |  |
| Consolidated\tsponsored\tinvestment\tfunds | $345 | $373 | $319 | $337 |
| Equity\tmethod | 487 | 457 | 569 | 556 |
| Deferred\tcompensation\tplan\thedge\tfund\tequity\tmethod\tinvestments | 17 | 19 | 20 | 27 |
| Cost\tmethod\tinvestments: |  |  |  |  |
| Federal\tReserve\tBank\tstock | 328 | 328 | 325 | 325 |
| Other | 9 | 9 | 6 | 6 |
| Total\tcost\tmethod\tinvestments | 337 | 337 | 331 | 331 |
| Carried\tinterest | — | 21 | — | 13 |
| Total\tother\tinvestments | $1,186 | $ 1,207 | $1,239 | $ 1,264 |

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

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

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

Cost	method	investments	include	non-marketable	securities,	including	Federal	Reserve	Bank	stock	which	is	held	for	regulatory	purposes	and	is	restricted	from	sale.	As	of December	31,	2011	and	2010,	there	were	no	indicators	of	impairments	on	these	investments.

# 4.	Consolidated	Sponsored	Investment	Funds

The	Company	consolidates	certain	sponsored	investment	funds	primarily	because	it	is	deemed	to	control	such	funds	in	accordance	with	GAAP.	The	investments	that	are	owned by	these	consolidated	sponsored	investment	funds	are	classified	as	other	or	trading	investments.	The	following	table	presents	the	balances	related	to	these	consolidated	funds that	were	included	on	the	consolidated	statements	of	financial	condition	as	well	as	BlackRock's	net	interest	in	these	funds:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 |
| Cash\tand\tcash\tequivalents | $196 | $65 |
| Investments: |  |  |
| Trading\tinvestments | 214 | 60 |
| Other\tinvestments | 373 | 337 |
| Other\tassets | 5 | 3 |
| Other\tliabilities | (37) | (10) |
| Non-controlling\tinterests | (276) | (195) |
| BlackRock's\tnet\tinterests\tin\tconsolidated\tinvestment\tfunds | $475 | $260 |

BlackRock's	total	exposure	to	consolidated	sponsored	investment	funds	of	$475	million	and	$260	million	at	December	31,	2011	and	2010,	respectively,	represents	the	value	of the	Company's	economic	ownership	interest	in	these	sponsored	investment	funds.	Valuation	changes	associated	with	these	consolidated	investment	funds	are	reflected	in	non- operating	income	(expense)	and	partially	offset	in	net	income	(loss)	attributable	to	non-controlling	interests	for	the	portion	not	attributable	to	BlackRock.

In	addition,	at	December	31,	2011	and	2010,	four	and	three	consolidated	CLOs,	respectively,	and	one	other	consolidated	sponsored	investment	fund	which	were	deemed	to	be VIEs,	were	excluded	from	the	balances	in	the	table	above	as	the	balances	for	these	investment	products	are	reported	separately	on	the	consolidated	statements	of	financial condition.	See	Note	6,	Variable	Interest	Entities,	for	further	discussion	on	these	consolidated	products.

The	Company	may	not	be	readily	able	to	access	cash	and	cash	equivalents	held	by	consolidated	sponsored	investment	funds	to	use	in	its	operating	activities.	In	addition,	the Company	may	not	be	readily	able	to	sell	investments	held	by	consolidated	sponsored	investment	funds	in	order	to	obtain	cash	for	use	in	its	operations.

# 5.	Fair	Value	Disclosures

# Fair	Value	Hierarchy

Total	assets	measured	at	fair	value	on	a	recurring	basis	of	$141.6	billion	at	December	31,	2011	were	as	follows:

|  | Quoted |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Prices\tin |  |  |  |  |
|  | Active |  |  |  |  |
|  | Markets | Significant |  |  |  |
|  | for | Other | Significant |  |  |
|  | Identical | Observable | Unobservable | Other\tAssets |  |
|  | Assets | Inputs | Inputs | Not\tHeld\tat | December\t31, |
| (Dollar\tamounts\tin\tmillions) | (Level\t1) | (Level\t2) | (Level\t3) | (1)\nFair\tValue | 2011 |
| Assets: |  |  |  |  |  |
| Investments |  |  |  |  |  |
| Available-for-sale: |  |  |  |  |  |
| Equity\tsecurities\t(funds\tand\tCDOs) | $50 | $— | $1 | $— | $51 |
| Debt\tsecurities | — | 1 | — | — | 1 |
| Total\tavailable-for-sale | 50 | 1 | 1 | — | 52 |
| Held-to-maturity: |  |  |  |  |  |
| Debt\tsecurities | — | — | — | 105 | 105 |
| Trading: |  |  |  |  |  |
| Deferred\tcompensation\tplan\tmutual\tfunds | 46 | — | — | — | 46 |
| Equity\tsecurities | 163 | 6 | — | — | 169 |
| Debt\tsecurities | — | 52 | — | — | 52 |
| Total\ttrading | 209 | 58 | — | — | 267 |
| Other\tinvestments: |  |  |  |  |  |
| Consolidated\tsponsored\tinvestment\tfunds: |  |  |  |  |  |
| Hedge\tfunds\t/\tFunds\tof\tfunds | — | 20 | 22 | — | 42 |
| Private\t/\tpublic\tequity | 18 | — | 313 | — | 331 |
| Total\tconsolidated\tsponsored\tinvestment\tfunds | 18 | 20 | 335 | — | 373 |
| Equity\tmethod: |  |  |  |  |  |
| Hedge\tfunds\t/\tFunds\tof\thedge\tfunds | — | 33 | 193 | 14 | 240 |
| Private\tequity\tinvestments | — | — | 85 | 21 | 106 |
| Real\testate\tfunds | — | — | 88 | 20 | 108 |
| Equity\tmutual\tfunds | 3 | — | — | — | 3 |
| Total\tequity\tmethod | 3 | 33 | 366 | 55 | 457 |
| Deferred\tcompensation\tplan\thedge\tfund\tequity\tmethod\tinvestments | — | 19 | — | — | 19 |
| Cost\tmethod\tinvestments | — | — | — | 337 | 337 |
| Carried\tinterest | — | — | — | 21 | 21 |
| Total\tinvestments | 280 | 131 | 702 | 518 | 1,631 |
| Separate\taccount\tassets: |  |  |  |  |  |
| Equity\tsecurities | \t 74,088 | — | 3 | — | 74,091 |
| Debt\tsecurities | — | 38,596 | 7 | — | 38,603 |
| Derivatives | 8 | 1,487 | — | — | 1,495 |
| Money\tmarket\tfunds | 2,845 | — | — | — | 2,845 |
| Other | — | 920 | — | 917 | 1,837 |
| Total\tseparate\taccount\tassets | \t 76,941 | 41,003 | 10 | 917 | 118,871 |
| Collateral\theld\tunder\tsecurities\tlending\tagreements: |  |  |  |  |  |
| Equity\tsecurities | \t 14,092 | — | — | — | 14,092 |
| Debt\tsecurities | — | 6,826 | — | — | 6,826 |
| Total\tcollateral\theld\tunder\tsecurities\tlending\tagreements | \t 14,092 | 6,826 | — | — | 20,918 |
| Other\tassets^(2) | — | 11 | — | — | 11 |
| Assets\tof\tconsolidated\tVIEs: |  |  |  |  |  |
| Bank\tloans | — | 1,376 | 83 | — | 1,459 |
| Bonds | — | 105 | 40 | — | 145 |
| Private\t/\tpublic\tequity | 4 | 4 | 27 | — | 35 |
| Total\tassets\tof\tconsolidated\tVIEs | 4 | 1,485 | 150 | — | 1,639 |
| Total | $91,317 | $49,456 | $862 | $1,435 | $143,070 |

Amounts	comprised	of	investments	held	at	cost,	amortized	cost,	carried	interest	and	equity	method	investments,	which	include	investment	companies,	and	other	assets	which	in accordance	with	GAAP	are	not	accounted	for	under	a	fair	value	measure.	In	accordance	with	GAAP,	certain	equity	method	investees	do	not	account	for	both	their	financial assets	and	financial	liabilities	under	fair	value	measures;	therefore,	the	Company's	investment	in	such	equity	method	investees	may	not	represent	fair	value. (1)

Amount	includes	company-owned	and	split-dollar	life	insurance	policies. (2)

# 5.	Fair	Value	Disclosures	(continued)

# Fair	Value	Hierarchy	(continued)

Liabilities	measured	at	fair	value	on	a	recurring	basis	at	December	31,	2011	were	as	follows:

|  | Markets | Significant |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | for | Other | Significant |  |
|  | Identical | Observable | Unobservable |  |
|  | Assets | Inputs | Inputs | December\t31, |
| (Dollar\tamounts\tin\tmillions) | (Level\t1) | (Level\t2) | (Level\t3) | 2011 |
| Liabilities: |  |  |  |  |
| Borrowings\tof\tconsolidated\tVIEs | $— | $— | $1,574 | $1,574 |
| Collateral\tliabilities\tunder\tsecurities\tlending\tagreements | \t 14,092 | 6,826 | — | 20,918 |
| Other\tliabilities^(1) | 15 | 11 | — | 26 |
| Total\tliabilities\tmeasured\tat\tfair\tvalue | $14,107 | $6,837 | $1,574 | $22,518 |

Amount	includes	credit	default	swap	(Pillars)	(see	Note	7,	Derivatives	and	Hedging,	for	more	information)	and	securities	sold	short	within	consolidated	sponsored	investment funds	recorded	within	other	liabilities	on	the	consolidated	statement	of	financial	condition. (1)

Total	assets	measured	at	fair	value	on	a	recurring	basis	of	$140.5	billion	at	December	31,	2010	were	as	follows:

|  | Quoted |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Prices\tin |  |  |  |  |
|  | Active |  |  |  |  |
|  | Markets | Significant |  |  |  |
|  | for | Other | Significant |  |  |
|  | Identical | Observable | Unobservable | Other\tAssets |  |
|  | Assets | Inputs | Inputs | Not\tHeld\tat | December\t31, |
| (Dollar\tamounts\tin\tmillions) | (Level\t1) | (Level\t2) | (Level\t3) | (1)\nFair\tValue | 2010 |
| Assets: |  |  |  |  |  |
| Investments |  |  |  |  |  |
| Available-for-sale: |  |  |  |  |  |
| Equity\tsecurities\t(funds\tand\tCDOs) | $36 | $— | $2 | $— | $38 |
| Debt\tsecurities | — | 7 | — | — | 7 |
| Total\tavailable-for-sale | 36 | 7 | 2 | — | 45 |
| Held-to-maturity: |  |  |  |  |  |
| Debt\tsecurities | — | — | — | 100 | 100 |
| Trading: |  |  |  |  |  |
| Deferred\tcompensation\tplan\tmutual\tfunds | 49 | — | — | — | 49 |
| Equity\tsecurities | 36 | 9 | — | — | 45 |
| Debt\tsecurities | — | 37 | — | — | 37 |
| Total\ttrading | 85 | 46 | — | — | 131 |
| Other\tinvestments: |  |  |  |  |  |
| Consolidated\tsponsored\tinvestment\tfunds: |  |  |  |  |  |
| Hedge\tfunds\t/\tFunds\tof\tfunds | — | 1 | 19 | — | 20 |
| Private\t/\tpublic\tequity | 18 | — | 299 | — | 317 |
| Total\tconsolidated\tsponsored\tinvestment\tfunds | 18 | 1 | 318 | — | 337 |
| Equity\tmethod: |  |  |  |  |  |
| Hedge\tfunds\t/\tFunds\tof\thedge\tfunds | — | 44 | 226 | 34 | 304 |
| Private\tequity\tinvestments | — | — | 68 | 20 | 88 |
| Real\testate\tfunds | — | 8 | 36 | 10 | 54 |
| Fixed\tincome\tmutual\tfunds | 103 | — | — | — | 103 |
| Equity\t/\tMulti-asset\tclass\tmutual\tfunds | 7 | — | — | — | 7 |
| Total\tequity\tmethod | 110 | 52 | 330 | 64 | 556 |
| Deferred\tcompensation\tplan\thedge\tfund\tequity\tmethod\tinvestments | — | 27 | — | — | 27 |
| Carried\tinterest | — | — | — | 13 | 13 |
| Cost\tmethod\tinvestments | — | — | — | 331 | 331 |
| Total\tinvestments | 249 | 133 | 650 | 508 | 1,540 |
| Separate\taccount\tassets: |  |  |  |  |  |
| Equity\tsecurities | \t 79,727 | 3 | 4 | — | 79,734 |
| Debt\tsecurities | — | 36,415 | 170 | — | 36,585 |
| Derivatives | 1 | 1,598 | — | — | 1,599 |
| Money\tmarket\tfunds | 2,549 | — | — | — | 2,549 |
| Other | — | — | — | 670 | 670 |
| Total\tseparate\taccount\tassets | \t 82,277 | 38,016 | 174 | 670 | 121,137 |
| Collateral\theld\tunder\tsecurities\tlending\tagreements |  |  |  |  |  |
| Equity\tsecurities | \t 15,237 | — | — | — | 15,237 |
| Debt\tsecurities | — | 2,401 | — | — | 2,401 |
| Total\tcollateral\theld\tunder\tsecurities\tlending\tagreements | \t 15,237 | 2,401 | — | — | 17,638 |
| Other\tassets^(2) | — | 11 | — | — | 11 |
| Assets\tof\tconsolidated\tVIEs: |  |  |  |  |  |
| Bank\tloans | — | 1,130 | 32 | — | 1,162 |
| Bonds | — | 113 | — | — | 113 |
| Private\t/\tpublic\tequity | 4 | 3 | 30 | — | 37 |
| Total\tassets\tof\tconsolidated\tVIEs | 4 | 1,246 | 62 | — | 1,312 |
| Total | $97,767 | $41,807 | $886 | $1,178 | $141,638 |

Amount	comprised	of	investments	held	at	cost,	amortized	cost,	carried	interest	and	equity	method	investments,	which	include	investment	companies,	and	other	assets	which	in accordance	with	GAAP	are	not	accounted	for	under	a	fair	value	measure.	In	accordance	with	GAAP,	certain	equity	method	investees	do	not	account	for	both	their	financial assets	and	financial	liabilities	under	fair	value	measures;	therefore,	the	Company's	investment	in	such	equity	method	investees	may	not	represent	fair	value. (1)

Liabilities	measured	at	fair	value	on	a	recurring	basis	at	December	31,	2010	were	as	follows:

|  | Active | Significant |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Markets\tfor | Other | Significant |  |
|  | Identical | Observable | Unobservable |  |
|  | Assets | Inputs | Inputs | December\t31, |
| (Dollar\tamounts\tin\tmillions) | (Level\t1) | (Level\t2) | (Level\t3) | 2010 |
| Liabilities: |  |  |  |  |
| Borrowings\tof\tconsolidated\tVIEs | $— | $— | $1,278 | $1,278 |
| Collateral\tliabilities\tunder\tsecurities\tlending\tagreements | 15,237 | 2,401 | — | 17,638 |
| Other\tliabilities^(1) | — | 3 | — | 3 |
| Total\tliabilities\tmeasured\tat\tfair\tvalue | $15,237 | $2,404 | $1,278 | $18,919 |

Amount	includes	credit	default	swap	(Pillars)	recorded	within	other	liabilities	on	the	consolidated	statement	of	financial	condition.	See	Note	7,	Derivatives	and	Hedging,	for more	information.

Separate	Account	Assets.	The	separate	account	assets	are	maintained	by	a	wholly	owned	subsidiary	of	the	Company	which	is	a	registered	life	insurance	company	in	the	United Kingdom,	and	represent	segregated	assets	held	for	purposes	of	funding	individual	and	group	pension	contracts.	In	accordance	with	GAAP,	the	Company	records	equal	and	offsetting separate	account	liabilities.	The	separate	account	assets	are	not	available	to	creditors	of	the	Company	and	the	holders	of	the	pension	contracts	have	no	recourse	to	the	Company.	The net	investment	income	attributable	to	separate	account	assets	accrues	directly	to	the	contract	owners	and	is	not	reported	on	the	Company's	consolidated	statements	of	income.	While BlackRock	has	no	economic	interest	in	these	assets	or	liabilities,	BlackRock	earns	an	investment	advisory	fee	for	the	service	of	managing	these	assets	on	behalf	of	the	clients.

Level	3	Assets.	Level	3	assets	recorded	within	investments,	which	include	equity	method	investments	and	consolidated	investments	of	real	estate	funds,	private	equity	funds	and	funds of	private	equity	funds,	are	valued	based	upon	valuations,	including	capital	accounts,	received	from	internal	as	well	as	third-party	fund	managers.	Fair	values	of	the	underlying	funds are	based	on	a	combination	of	methods,	which	may	include	third-party	independent	appraisals	and	discounted	cash	flow	techniques.	Direct	investments	in	private	equity	companies held	by	funds	of	private	equity	funds	are	valued	based	on	an	assessment	of	each	underlying	investment,	incorporating	evaluation	of	additional	significant	third-party	financing,	changes in	valuations	of	comparable	peer	companies,	the	business	environment	of	the	companies	and	market	indices,	among	other	factors.

Level	3	assets	recorded	within	separate	account	assets	include	single	broker	non-binding	quotes	for	fixed	income	securities	and	equity	securities	that	have	unobservable	inputs due	to	certain	corporate	actions.

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

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

Changes	in	Level	3	Assets	and	Liabilities	Measured	at	Fair	Value	on	a	Recurring	Basis	for	the	Year	Ended	December	31,	2011

|  |  | unrealized |  |  |  |  |  |  |  | Total	net | Total	net |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | gains |  |  |  |  |  |  |  | gains | gains |
|  |  | (losses)\tin |  |  | Issuances | Issuances | Transfers | Transfers |  | (losses) | (losses) |
|  | December\t31, | earnings |  | Sales\tand | and\tother | and\tother | into | out\tof | December\t31, | included\tin | included\tin |
| (Dollar\tamounts\tin\tmillions) | 2010 | and\tOCI | Purchases | maturities | settlements | (1) | Level\t3 | Level\t3 | 2011 | earnings | (2) |
| Assets: |  |  |  |  |  |  |  |  |  |  |  |
| Investments: |  |  |  |  |  |  |  |  |  |  |  |
| Available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |
| Equity\tsecurities\t(funds\tand\tCDOs) | $2 | $— | $— | $— | $(1) | $(1) | $— | $— | $1 | $— | $— |
| Consolidated\tsponsored\tinvestment\tfunds: |  |  |  |  |  |  |  |  |  |  |  |
| Hedge\tfunds\t/\tFunds\tof\tfunds | 19 | (1) | 6 | (2) | — | — | — | — | 22 | — | — |
| Private\tequity | 299 | 42 | 17 | (47) | — | — | 2 | — | 313 |  | 35 |
| Equity\tmethod: |  |  |  |  |  |  |  |  |  |  |  |
| Hedge\tfunds\t/\tFunds\tof\thedge\tfunds | 226 | (5) | 5 | (1) |  | (32) | — | — | 193 |  | (5) |
| Private\tequity\tinvestments | 68 | 13 | 7 | — |  | (3) | — | — | 85 |  | 13 |
| Real\testate\tfunds | 36 | 9 | 38 | — |  | (3) | 8 | — | 88 |  | 9 |
| Total\tLevel\t3\tinvestments | 650 | 58 | 73 | (50) |  | (39) | 10 | — | 702 |  | 52 |
| Separate\taccount\tassets: |  |  |  |  |  |  |  |  |  |  |  |
| Equity\tsecurities | 4 | (4) | 16 | (42) | — | — | 38 | (9) | 3 |  |  |
| Debt\tsecurities | 170 | (4) | 96 | (168) | — | — | — | (87) | 7 |  |  |
| Total\tLevel\t3\tseparate\taccount\tassets | 174 | (8) | 112 | (210) | — | — | 38 | (96) | 10 |  | n/a^(3) |
| Assets\tof\tconsolidated\tVIEs: |  |  |  |  |  |  |  |  |  |  |  |
| Bank\tloans | 32 | (2) | 32 | (29) |  | 16 | 85 | (51) | 83 |  |  |
| Bonds | — | 1 | — | — | — | — | 39 | — | 40 |  |  |
| Private\tequity | 30 | 4 | — | (7) | — | — | — | — | 27 |  |  |
| Total\tLevel\t3\tassets\tof\tconsolidated\tVIEs | 62 | 3 | 32 | (36) |  | 16 | 124 | (51) | 150 |  | n/a^(4) |
| Total\tLevel\t3\tassets | $886 | $53 | $217 | $(296) | $(23) | $(23) | $172 | $(147) | $862 |  |  |
| Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
| Borrowings\tof\tconsolidated\tVIEs | $1,278 | $(9) | $— | $— | $287 | $287 | $— | $— | $1,574 |  | n/a^(4) |

# n/a	–	not	applicable

Amount	includes	distributions	from	equity	method	investees,	repayments	of	borrowings	of	consolidated	VIEs,	and	loans	and	borrowings	related	to	the	consolidation	of	one additional	CLO. (1)

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

The	net	investment	income	attributable	to	separate	account	assets	accrues	directly	to	the	contract	owners	and	are	not	reported	on	the	Company's	consolidated	statements	of income. (3)

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

Changes	in	Level	3	Assets	and	Liabilities	Measured	at	Fair	Value	on	a	Recurring	Basis	for	the	Year	Ended	December	31,	2010

|  |  | Realized | sales,	other | Net |  | Total	net |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | and | settlements | transfers |  | gains | gains |
|  |  | unrealized | and | in\tand/or |  | (losses) |  |
|  | December\t31, | gains\t/ | issuances, | out\tof | December\t31, | included\tin | included\tin |
| (Dollar\tamounts\tin\tmillions) | 2009 | (losses),\tnet | net | Level\t3 | 2010 | earnings | (1) |
| Assets: |  |  |  |  |  |  |  |
| Investments: |  |  |  |  |  |  |  |
| Available-for-sale: |  |  |  |  |  |  |  |
| Equity\tsecurities\t(funds\tand\tCDOs) | $— | $1 | $(1) | $2 | $2 | $— | $— |
| Consolidated\tsponsored\tinvestment\tfunds: |  |  |  |  |  |  |  |
| Hedge\tfunds\t/\tFunds\tof\tfunds | 26 | 1 | (8) | — | 19 |  | 1 |
| Private\tequity | 312 | 44 | (54) | (3) | 299 |  | 44 |
| Equity\tmethod: |  |  |  |  |  |  |  |
| Hedge\tfunds\t/\tFunds\tof\thedge\tfunds | 247 | 36 | (26) | (31) | 226 |  | 34 |
| Private\tequity\tinvestments | 47 | 8 | 13 | — | 68 |  | 6 |
| Real\testate\tfunds | 36 | 17 | (17) | — | 36 |  | 10 |
| Deferred\tcompensation\tplan\thedge\tfunds | 15 | — | — | (15) | — | — | — |
| Total\tLevel\t3\tinvestments | 683 | 107 | (93) | (47) | 650 |  | 95 |
| Separate\taccount\tassets: |  |  |  |  |  |  |  |
| Equity\tsecurities | 5 | 29 | (93) | 63 | 4 |  |  |
| Debt\tsecurities | 1,287 | 60 | 284 | (1,461) | 170 |  |  |
| Total\tLevel\t3\tseparate\taccount\tassets | 1,292 | 89 | 191 | (1,398) | 174 |  | n/a^(2) |
| Other\tassets^(3) | 46 | (8) | (38) | — | — | — | — |
| Assets\tof\tconsolidated\tVIEs: |  |  |  |  |  |  |  |
| Bank\tloans | — | — | — | 32 | 32 |  |  |
| Private\tequity | — | 3 | 27 | — | 30 |  |  |
| Total\tLevel\t3\tassets\tof\tconsolidated\tVIEs | — | 3 | 27 | 32 | 62 |  | n/a^(4) |
| Total\tLevel\t3\tassets | $2,021 | $191 | $87 | $(1,413) | $886 |  |  |
| Liabilities: |  |  |  |  |  |  |  |
| Borrowings\tof\tconsolidated\tVIEs | $— | $(121) | $1,157 | $— | $1,278 |  | n/a^(4) |

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

The	net	investment	income	attributable	to	separate	account	assets	accrues	directly	to	the	contract	owner	and	is	not	reported	on	the	Company's	consolidated	statements	of income. (2)

Amounts	include	disposal	group	assets. (3)

The	net	investment	income	(expense)	attributable	to	assets	and	borrowings	of	consolidated	VIEs	are	allocated	to	non-controlling	interests	on	the	Company's	consolidated statements	of	income. (4)

Realized	and	Unrealized	Gains	(Losses)	for	Level	3	Assets	and	Liabilities.	Realized	and	unrealized	gains	(losses)	recorded	for	Level	3	assets	and	liabilities	are	reported	in	non- operating	income	(expense)	on	the	Company's	consolidated	statements	of	income.	A	portion	of	net	income	(loss)	for	consolidated	investments	and	all	of	the	net	income	(loss)	for consolidated	VIEs	is	allocated	to	non-controlling	interests	to	reflect	net	income	(loss)	not	attributable	to	the	Company.

Significant	Transfers	in	and/or	out	of	Levels.	Transfers	in	and/or	out	of	Levels	are	reflected	when	significant	inputs,	including	market	inputs	or	performance	attributes,	used	for	the	fair value	measurement	become	observable	/	unobservable,	or	when	the	Company	determines	it	has	the	ability,	or	no	longer	has	the	ability,	to	redeem	in	the	near	term	certain	investments that	the	Company	values	using	a	NAV	(or	a	capital	account),	or	when	the	book	value	of	certain	equity	method	investments	no	longer	represents	fair	value	as	determined	under	fair	value methodologies.

Separate	Account	Assets.	In	the	year	ended	December	31,	2011,	there	were	$87	million	of	transfers	out	of	Level	3	to	Level	2	related	to	debt	securities	held	within	separate	account assets.	In	addition,	there	were	$9	million	of	transfers	out	of	Level	3	to	Level	1	related	to	equity	securities.	The	transfers	in	and	out	of	Levels	were	primarily	due	to	availability/ unavailability	of	market	inputs,	including	inputs	from	pricing	vendors	and	brokers.

In	the	year	ended	December	31,	2011,	there	were	$38	million	of	transfers	of	equity	securities	into	Level	3	from	Level	1.	The	transfers	into	Level	3	were	primarily	due	to	market	inputs no	longer	being	considered	observable.

In	the	year	ended	December	31,	2010,	there	were	$1.5	billion	of	net	transfers	out	of	Level	3	to	Level	2	related	to	debt	securities.	The	net	transfers	in	Levels	were	primarily	due	to availability	of	observable	market	inputs,	including	additional	inputs	from	pricing	vendors	and	brokers.

In	the	year	ended	December	31,	2010,	there	were	$63	million	of	net	transfers	of	equity	securities	into	Level	3	from	Level	1	and	Level	2.	The	net	transfers	into	Level	3	were	primarily due	to	market	inputs	no	longer	being	considered	observable.

Assets	of	Consolidated	VIEs.	In	the	year	ended	December	31,	2011,	there	were	$51	million	of	transfers	out	of	Level	3	to	Level	2	related	to	loans.	In	addition,	in	the	year	ended December	31,	2011,	there	were	$85	million	and	$39	million	of	transfers	into	Level	3	from	Level	2	related	to	loans	and	bonds,	respectively.	The	transfers	in	and	out	of	Levels	were primarily	due	to	availability/	unavailability	of	observable	market	inputs,	including	inputs	from	pricing	vendors	and	brokers.

Significant	Other	Settlements.	For	the	year	ended	December	31,	2011,	there	were	$38	million	of	distributions	from	equity	method	investees	categorized	in	Level	3.

During	the	year	ended	December	31,	2011,	other	settlements	included	$412	million	of	borrowings	of	consolidated	VIEs	related	to	the	consolidation	of	one	additional	CLO.

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

Additional	Disclosures	of	Fair	Value.	The	methods	and	assumptions	for	fair	value	disclosures	are	set	forth	below:

•Cash	and	cash	equivalents	are	carried	at	either	cost	or	amortized	cost	which	approximates	fair	value	due	to	their	short-term	maturities.	Money	market	funds	are	valued through	the	use	of	quoted	market	prices	(Level	1	input),	or	$1.00,	which	generally	is	the	NAV	of	the	fund.	At	December	31,	2011	and	2010,	approximately	$123	million and	$87	million,	respectively,	of	money	market	funds	were	recorded	within	cash	and	cash	equivalents	on	the	Company's	consolidated	statements	of	financial	condition.

•The	carrying	amounts	of	receivables,	accounts	payable	and	accrued	liabilities	approximate	fair	value	due	to	their	short	maturities.

•The	fair	value	of	marketable	investments	is	based	on	quoted	market	prices	or	broker	quotes.	If	investments	are	not	readily	marketable,	fair	values	primarily	are determined	based	on	NAVs	(or	capital	accounts)	of	investments	in	limited	partnerships/limited	liability	companies	or	by	the	Company	based	on	management's assumptions	or	estimates,	taking	into	consideration	financial	information	of	the	investment,	market	indices	or	valuation	services	from	third-party	service	providers.	At December	31,	2011	and	2010,	with	the	exception	of	certain	equity	and	cost	method	investments	and	carried	interest	investments	that	are	not	accounted	for	under	a	fair value	measure,	the	carrying	value	of	investments	approximated	fair	value.

•Long-term	borrowings	are	recorded	at	amortized	amounts.	See	Note	11,	Borrowings,	for	the	fair	value	of	the	Company's	long-term	borrowings.

# Investments	in	Certain	Entities	that	Calculate	Net	Asset	Value	Per	Share

As	a	practical	expedient	to	value	certain	investments	that	do	not	have	a	readily	determinable	fair	value	and	have	attributes	of	an	investment	company,	the	Company	relies	on	NAV	as the	fair	value	for	certain	investments.	The	following	table	lists	information	regarding	all	investments	that	use	a	fair	value	measurement	to	account	for	both	their	financial	assets	and financial	liabilities	in	their	calculation	of	a	NAV	per	share	(or	its	equivalent).

# n/r	–	not	redeemable

(1) Comprised	of	equity	method	investments,	which	include	investment	companies,	which	in	accordance	with	GAAP	account	for	both	their	financial	assets	and	financial	liabilities under	fair	value	measures;	therefore,	the	Company's	investment	in	such	equity	method	investees	approximates	fair	value.

(a) This	category	includes	consolidated	offshore	feeder	funds	that	invest	in	master	funds	with	multiple	equity	strategies	to	diversify	risks.	The	fair	values	of	the	investments	in	this category	have	been	estimated	using	the	NAV	of	master	offshore	funds	held	by	the	feeder	funds.	Investments	in	this	category	generally	can	be	redeemed	at	any	time,	as	long	as there	are	no	restrictions	in	place	by	the	underlying	master	funds.

(b) This	category	includes	the	underlying	third-party	private	equity	funds	within	consolidated	BlackRock	sponsored	private	equity	funds	of	funds.	The	fair	values	of	the investments	in	the	third-party	funds	have	been	estimated	using	capital	accounts	representing	the	Company's	ownership	interest	in	each	fund	in	the	portfolio	as	well	as	other performance	inputs.	These	investments	are	not	subject	to	redemption;	however,	for	certain	funds	the	Company	may	sell	or	transfer	its	interest,	which	may	need	approval	by	the general	partner	of	the	underlying	funds.	Due	to	the	nature	of	the	investments	in	this	category,	the	Company	reduces	its	investment	by	distributions	that	are	received	through	the realization	of	the	underlying	assets	of	the	funds.	It	is	estimated	that	the	underlying	assets	of	these	funds	will	be	liquidated	over	a	weighted-average	period	of	approximately eight	years	at	both	December	31,	2011	and	2010.	The	total	remaining	unfunded	commitments	to	other	third-party	funds	were	$44	million	and	$62	million	at	December	31,	2011 and	2010,	respectively.	The	Company	was	contractually	obligated	to	fund	only	$33	million	and	$42	million	at	December	31,	2011	and	2010,	respectively,	to	the	consolidated funds,	while	the	remaining	unfunded	balances	in	the	tables	above	are	required	to	be	funded	by	capital	contributions	from	non-controlling	interest	holders.

(c) This	category	includes	consolidated	funds	of	hedge	funds	that	invest	in	multiple	strategies	to	diversify	risks.	The	fair	values	of	the	investments	in	this	category	have	been estimated	using	the	NAV	of	the	fund's	ownership	interest	in	partners'	capital	of	each	fund	in	the	portfolio.	The	majority	of	the	underlying	funds	in	this	category	can	be redeemed	as	long	as	there	are	no	restrictions	in	place.	At	December	31,	2011,	the	underlying	funds	that	are	currently	restricted	from	redemptions	within	one	year	will	be redeemable	in	approximately	12-24	months.

(d) This	category	includes	hedge	funds	and	funds	of	hedge	funds	that	invest	primarily	in	equities,	fixed	income	securities,	distressed	credit	and	mortgage	instruments	and	other third-party	hedge	funds.	The	fair	values	of	the	investments	in	this	category	have	been	estimated	using	the	NAV	of	the	Company's	ownership	interest	in	partners'	capital.	It	was estimated	that	the	investments	in	the	funds	that	are	not	subject	to	redemptions	will	be	liquidated	over	a	weighted-average	period	of	approximately	six	and	seven	years	at December	31,	2011	and	2010,	respectively.

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

(e) This	category	includes	several	private	equity	funds	that	initially	invest	in	non-marketable	securities	of	private	companies,	which	ultimately	may	become	public	in	the	future. The	fair	values	of	these	investments	have	been	estimated	using	capital	accounts	representing	the	Company's	ownership	interest	in	the	funds	as	well	as	other	performance	inputs. The	Company's	investment	in	each	fund	is	not	subject	to	redemption	and	is	normally	returned	through	distributions	as	a	result	of	the	liquidation	of	the	underlying	assets	of	the private	equity	funds.	It	was	estimated	that	the	investments	in	these	funds	will	be	liquidated	over	a	weighted-average	period	of	approximately	six	years	and	five	years	at December	31,	2011	and	2010,	respectively.

(f) This	category	includes	several	real	estate	funds	that	invest	directly	in	real	estate	and	real	estate	related	assets.	The	fair	values	of	the	investments	in	this	category	have	been estimated	using	capital	accounts	representing	the	Company's	ownership	interest	in	the	funds.	The	majority	of	the	Company's	investments	in	this	category	is	not	subject	to redemption	or	currently	not	redeemable	and	is	normally	returned	through	distributions	as	a	result	of	the	liquidation	of	the	underlying	assets	of	the	real	estate	funds.	It	was estimated	that	the	investments	in	these	funds	not	subject	to	redemptions	will	be	liquidated	over	a	weighted-average	period	of	approximately	seven	years	at	both	December	31, 2011	and	2010.

(g) This	category	includes	investments	in	certain	hedge	funds	that	invest	in	energy	and	health	science	related	equity	securities.	The	fair	values	of	the	investments	in	this	category have	been	estimated	using	capital	accounts	representing	the	Company's	ownership	interest	in	partners'	capital	as	well	as	performance	inputs.	The	investments	in	these	funds	will be	liquidated	upon	settlement	of	certain	deferred	compensation	liabilities.

(h) This	category	includes	the	underlying	third-party	private	equity	funds	within	one	consolidated	BlackRock	sponsored	private	equity	fund	of	funds.	The	fair	values	of	the investments	in	the	third-party	funds	have	been	estimated	using	capital	accounts	representing	the	Company's	ownership	interest	in	each	fund	in	the	portfolio	as	well	as	other performance	inputs.	These	investments	are	not	subject	to	redemption;	however,	for	certain	funds	the	Company	may	sell	or	transfer	its	interest,	which	may	need	approval	by	the general	partner	of	the	underlying	third-party	funds.	Due	to	the	nature	of	the	investments	in	this	category,	the	Company	reduces	its	investment	by	distributions	that	are	received through	the	realization	of	the	underlying	assets	of	the	funds.	It	is	estimated	that	the	underlying	assets	of	these	funds	will	be	liquidated	over	a	weighted-average	period	of approximately	four	years	and	five	years	at	December	31,	2011	and	2010,	respectively.	Total	remaining	unfunded	commitments	to	other	third-party	funds	was	$2	million	at	both December	31,	2011	and	2010,	which	are	required	to	be	funded	by	capital	contributions	from	non-controlling	interest	holders.

Fair	Value	Option.	Upon	the	initial	consolidation	of	three	CLOs	on	January	1,	2010	and	one	CLO	on	September	30,	2011,	the	Company	elected	to	adopt	the	fair	value	option provisions	for	eligible	assets	and	liabilities,	including	bank	loans	and	borrowings	of	the	CLOs	to	mitigate	accounting	mismatches	between	the	carrying	value	of	the	assets	and liabilities	and	to	achieve	operational	simplifications.	To	the	extent	there	is	a	difference	between	the	change	in	fair	value	of	the	assets	and	liabilities,	the	difference	will	be	reflected	as net	income	(loss)	attributable	to	nonredeemable	non-controlling	interests	on	the	consolidated	statements	of	income	and	offset	by	a	change	in	appropriated	retained	earnings	on	the consolidated	statements	of	financial	condition.

The	following	table	presents	the	fair	value	of	those	assets	and	liabilities	selected	for	fair	value	accounting	as	of	December	31,	2011	and	2010:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 |
| CLO\tBank\tLoans: |  |  |
| Aggregate\tprincipal\tamounts\toutstanding | $1,522 | $1,245 |
| Fair\tvalue | $1,459 | $1,162 |
| Aggregate\tunpaid\tprincipal\tbalance\tin\texcess\tof\tfair\tvalue | $63 | $83 |
| Unpaid\tprincipal\tbalance\tof\tloans\tmore\tthan\t90\tdays\tpast\tdue | $4 | $3 |
| Aggregate\tfair\tvalue\tof\tloans\tmore\tthan\t90\tdays\tpast\tdue | $— | $1 |
| Aggregate\tunpaid\tprincipal\tbalance\tin\texcess\tof\tfair\tvalue\tfor\tloans |  |  |
| more\tthan\t90\tdays\tpast\tdue | $4 | $2 |
| CLO\tBorrowings: |  |  |
| Aggregate\tprincipal\tamounts\toutstanding | $1,781 | $1,430 |
| Fair\tvalue | $1,574 | $1,278 |

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

During	the	years	ended	December	31,	2011	and	2010,	the	change	in	fair	value	of	the	bank	loans,	along	with	the	bonds	held	at	fair	value,	resulted	in	a	$57	million	gain	and	a	$148 million	gain,	respectively,	which	was	offset	by	a	$68	million	loss	and	a	$175	million	loss,	respectively,	in	the	fair	value	of	the	CLO	borrowings.

The	net	loss	was	recorded	in	net	gain	(loss)	on	consolidated	VIEs	on	the	consolidated	statement	of	income.

The	change	in	fair	value	of	the	assets	and	liabilities	included	interest	income	and	expense,	respectively.

# 6.	Variable	Interest	Entities

In	the	normal	course	of	business,	the	Company	is	the	manager	of	various	types	of	sponsored	investment	vehicles,	including	CDOs/CLOs	and	sponsored	investment	funds,	which	may be	considered	VIEs.	The	Company	receives	advisory	fees	and/or	other	incentive-related	fees	for	its	services	and	may	from	time	to	time	own	equity	or	debt	securities	or	enter	into derivatives	with	the	vehicles,	each	of	which	are	considered	variable	interests.	The	Company	enters	into	these	variable	interests	principally	to	address	client	needs	through	the	launch	of such	investment	vehicles.	The	VIEs	are	primarily	financed	via	capital	contributed	by	equity	and	debt	holders.	The	Company's	involvement	in	financing	the	operations	of	the	VIEs	is generally	limited	to	its	equity	interests.

The	PB	of	a	VIE	that	is	an	investment	fund	that	meets	the	conditions	of	ASU	2010-10	is	the	enterprise	that	has	a	variable	interest	(or	combination	of	variable	interests,	including	those of	related	parties)	that	will	absorb	a	majority	of	the	entity's	expected	losses,	receive	a	majority	of	the	entity's	expected	residual	returns	or	both.	In	order	to	determine	whether	the Company	is	the	PB	of	a	VIE,	management	must	make	significant	estimates	and	assumptions	of	probable	future	cash	flows	of	the	VIEs.	Assumptions	made	in	such	analyses	may include,	but	are	not	limited	to,	market	prices	of	securities,	market	interest	rates,	potential	credit	defaults	on	individual	securities	or	default	rates	on	a	portfolio	of	securities,	pre- payments,	realization	of	gains,	liquidity	or	marketability	of	certain	securities,	discount	rates	and	the	probability	of	certain	other	outcomes.

Effective	January	1,	2010,	the	PB	of	a	CDO/CLO	or	other	entity	that	is	a	VIE	that	does	not	meet	the	conditions	of	ASU	2010-10	is	the	enterprise	that	has	the	power	to	direct	activities of	the	entity	that	most	significantly	impact	the	entity's	economic	performance	and	has	the	obligation	to	absorb	losses	or	the	right	to	receive	benefits	that	potentially	could	be	significant to	the	entity.

# 6.	Variable	Interest	Entities	(continued)

VIEs	in	which	BlackRock	is	the	PB.	At	December	31,	2011	and	2010,	BlackRock	was	the	PB	of	five	VIEs	and	four	VIEs,	respectively.	The	VIEs	included	CLOs	in	which	BlackRock did	not	have	an	investment;	however,	BlackRock,	as	the	collateral	manager,	was	deemed	to	have	both	the	power	to	control	the	activities	of	the	CLOs	and	the	right	to	receive	benefits that	could	potentially	be	significant	to	the	CLOs.	In	addition,	BlackRock	was	the	PB	of	one	sponsored	private	equity	investment	fund	in	which	it	had	a	non-substantive	investment, which	absorbed	the	majority	of	the	variability	due	to	its	de-facto	third-party	relationships	with	other	partners	in	the	fund.	The	assets	of	these	VIEs	are	not	available	to	creditors	of	the Company.	In	addition,	the	investors	in	these	VIEs	have	no	recourse	to	the	credit	of	the	Company.	At	December	31,	2011	and	2010,	the	following	balances	related	to	these	VIEs	were consolidated	on	the	Company's	consolidated	statements	of	financial	condition:

|  | December	31, | December	31, |
| :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 |
| Assets\tof\tconsolidated\tVIEs: |  |  |
| Cash\tand\tcash\tequivalents | $54 | $93 |
| Bank\tloans | 1,459 | 1,162 |
| Bonds | 145 | 113 |
| Other\tinvestments | 35 | 37 |
| Total\tbank\tloans,\tbonds\tand\tother\tinvestments | 1,639 | 1,312 |
| Liabilities\tof\tconsolidated\tVIEs: |  |  |
| Borrowings | (1,574) | (1,278) |
| Other\tliabilities | (9) | (7) |
| Appropriated\tretained\tearnings | (72) | (75) |
| Non-controlling\tinterests\tof\tconsolidated\tVIEs | (38) | (45) |
| Total\tBlackRock\tnet\tinterests\tin\tconsolidated\tVIEs | $— | $— |

For	the	year	ended	December	31,	2011,	the	Company	recorded	a	non-operating	loss	of	$18	million	offset	by	an	$18	million	net	loss	attributable	to	nonredeemable	non-controlling interests	on	the	Company's	consolidated	statements	of	income.

For	the	year	ended	December	31,	2010,	the	Company	recorded	a	non-operating	loss	of	$35	million	offset	by	a	$35	million	net	loss	attributable	to	nonredeemable	non-controlling interests	on	the	Company's	consolidated	statements	of	income.

At	December	31,	2011	and	2010,	the	weighted-average	maturity	of	the	bank	loans	and	bonds	was	approximately	4.2	years.

VIEs	in	which	the	Company	holds	significant	variable	interests	or	is	the	sponsor	that	holds	a	variable	interest	but	is	not	the	PB	of	the	VIE.	At	December	31,	2011	and	2010,	the Company's	carrying	value	of	assets	and	liabilities	and	its	maximum	risk	of	loss	related	to	VIEs	in	which	it	holds	a	significant	variable	interest	or	is	the	sponsor	that	holds	a	variable interest,	but	for	which	it	was	not	the	PB,	were	as	follows:

| (Dollar	amounts	in	millions) |  | Variable	Interests	on	the	Consolidated<br>Statement	of	Financial	Condition |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Investments | Advisory\nFee\nReceivables | Other\tNet\nAssets\n(Liabilities) | Maximum\nRisk\tof\tLoss |
| CDOs/CLOs | $1 | $2 | $(3) | $20 |
| Other\tsponsored\tinvestment\tfunds: |  |  |  |  |
| Collective\ttrusts | — | 184 | — | 184 |
| Other | 18 | 54 | (5) | 72 |
| Total | $19 | $240 | $(8) | $276 |

# VIEs	in	which	the	Company	holds	significant	variable	interests	or	is	the	sponsor	that	holds	a	variable	interest	but	is	not	the	PB	of	the	VIE	(continued)

The	size	of	the	net	assets	of	the	VIEs	that	the	Company	does	not	consolidate	related	to	CDOs/CLOs	and	other	sponsored	investment	funds,	including	collective	trusts,	was	as	follows:

•CDOs/CLOs	–	approximately	($2)	billion,	comprised	of	approximately	$5	billion	of	assets	at	fair	value	and	$7	billion	of	liabilities,	primarily	comprised	of	unpaid principal	debt	obligations	to	CDO/CLO	debt	holders.

•Other	sponsored	investments	funds	–	approximately	$1.2	trillion	to	$1.3	trillion	of	net	assets

•This	amount	includes	approximately	$1.0	trillion	of	collective	trusts.	Each	collective	trust	has	been	aggregated	separately	and	may	include	collective	trusts	that invest	in	other	collective	trusts.

•The	net	assets	of	these	VIEs	primarily	are	comprised	of	cash	and	cash	equivalents	and	investments	offset	by	liabilities	primarily	comprised	of	various	accruals for	the	sponsored	investment	vehicles.

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

|  |  | Variable	Interests	on	the	Consolidated |  |  |
| :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) |  | Statement\tof\tFinancial\tCondition |  |  |
|  | Investments | Advisory\nFee\nReceivables | Other\tNet\nAssets\n(Liabilities) | Maximum\nRisk\tof\tLoss |
| CDOs/CLOs | $2 | $3 | $(3) | $22 |
| Other\tsponsored\tinvestment\tfunds: |  |  |  |  |
| Collective\ttrusts | — | 188 | — | 188 |
| Other | 28 | 52 | (7) | 80 |
| Total | $30 | $243 | $(10) | $290 |

•This	amount	includes	approximately	$1.2	trillion	of	collective	trusts.	Each	collective	trust	has	been	aggregated	separately	and	may	include	collective	trusts	that invest	in	other	collective	trusts.

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

# 7.	Derivatives	and	Hedging

The	Company	entered	into	a	designated	cash	flow	hedge	in	May	2011	consisting	of	a	$750	million	interest	rate	swap	maturing	in	2013	to	hedge	future	cash	flows	on	floating	rate	notes due	in	2013.	Interest	on	this	swap	is	at	a	fixed	rate	of	1.03%	payable	semi-annually	on	May	24	and	November	24	of	each	year	commencing	November	24,	2011.	See	Note	11, Borrowings,	for	more	information.	The	fair	value	of	the	interest	rate	swap	as	of	December	31,	2011	was	not	material	to	the	Company's	consolidated	financial	statements.

For	the	year	ended	December	31,	2010,	the	Company	did	not	hold	any	derivatives	designated	in	a	formal	hedge	relationship	under	ASC	815-10.

The	Company	maintains	a	program	to	enter	into	total	return	swaps	to	economically	hedge	against	market	price	exposures	with	respect	to	certain	seed	investments	in	sponsored investment	products.	At	December	31,	2011	and	2010,	the	Company	had	six	outstanding	total	return	swaps	with	two	counterparties	with	an	aggregate	notional	value	of	approximately $43	million	and	$25	million,	respectively.	The	fair	value	of	the	outstanding	total	return	swaps	as	of	December	31,	2011	and	2010	was	not	material	to	the	Company's	consolidated financial	statements.

The	Company	acts	as	the	portfolio	manager	in	a	series	of	credit	default	swap	transactions,	referred	to	collectively	as	the	Pillars	synthetic	CDO	transaction	("Pillars").	The	Company	has entered	into	a	credit	default	swap	with	Citibank,	N.A.	("Citibank"),	providing	Citibank	credit	protection	of	approximately	$17	million,	representing	the	Company's	maximum	risk	of loss	with	respect	to	the	provision	of	credit	protection.	The	Company's	management	has	performed	an	assessment	of	its	variable	interest	in	Pillars	(a	collateral	management	agreement and	the	credit	default	swap)	under	ASC	810-10	and	has	concluded	the	Company	is	not	Pillars'	PB.	Pursuant	to	ASC	815-10,	the	Company	carries	the	Pillars	credit	default	swap	at	fair value	based	on	the	expected	future	cash	flows	under	the	arrangement.

On	behalf	of	clients	of	the	Company's	registered	life	insurance	company,	that	maintains	separate	accounts	representing	segregated	funds	held	for	the	purpose	of	funding	individual	and group	pension	contracts,	the	Company	invests	in	various	derivative	instruments,	which	may	include	futures,	forward	foreign	currency	exchange	contracts,	interest	rate	swaps	and inflation	rate	swaps.	Net	realized	and	unrealized	gains	and	losses	attributable	to	derivatives	held	by	separate	account	assets	accrue	directly	to	the	contract	owners	and	are	not	reported in	the	Company's	consolidated	statements	of	income.

The	following	table	presents	the	carrying	value	as	of	December	31,	2011	and	2010	of	derivative	instruments	not	designated	as	hedging	instruments:

|  | December	31,	2011 |  | December	31,	2010 |  |
| :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | Assets | Liabilities | Assets | Liabilities |
| Credit\tdefault\tswap\t(Pillars) |  |  |  |  |
| Other\tliabilities | $— | $3 | $— | $3 |
| Separate\taccount\tderivatives |  |  |  |  |
| Separate\taccount\tassets | \t 1,495 | — | \t 1,599 | — |
| Separate\taccount\tliabilities | — | 1,495 | — | 1,599 |
| Total | $1,495 | $1,498 | $1,599 | $1,602 |

The	fair	value	of	the	derivatives	held	by	separate	account	assets	is	equal	and	offset	by	a	separate	account	liability.

# 7.	Derivatives	and	Hedging	(continued)

The	following	table	presents	gains	(losses)	recognized	in	income	on	derivative	instruments	for	the	years	ended	December	31,	2011,	2010	and	2009:

|  |  | Year	Ended |  |
| :--- | :--- | :--- | :--- |
|  |  | December\t31 |  |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | 2009 |
| Foreign\tcurrency\texchange\tcontracts^(1) | $— | $(5) | $— |
| Total\treturn\tswaps^(2) | 4 | (2) | (10) |
| Credit\tdefault\tswaps\t(Pillars)^(2) | \t — | \t — | (2) |
| Capital\tsupport\tagreements^(1) | \t — | \t — | 7 |
| Total | $4 | $(7) | $(5) |

Gains	(losses)	on	foreign	exchange	contracts	and	capital	support	agreements	are	included	in	general	and	administration	expenses.

Gains	(losses)	on	total	return	and	credit	default	swaps	are	included	in	non-operating	income	(expense).

Gains	(losses)	on	the	interest	rate	swap	entered	into	in	2011	were	immaterial	for	the	year	ended	December	31,	2011.

The	Company	consolidates	certain	sponsored	investment	funds,	which	may	utilize	derivative	instruments	as	a	part	of	the	fund's	investment	strategy.	The	fair	value	of	such	derivatives as	of	December	31,	2011	and	2010	was	not	material	to	the	Company's	consolidated	financial	statements.	The	change	in	fair	value	of	such	derivatives,	which	is	recorded	in	non- operating	income	(expense),	was	not	material	to	the	Company's	consolidated	financial	statements	for	the	years	ended	December	31,	2011,	2010	and	2009.

# 8.	Property	and	Equipment

Property	and	equipment	consists	of	the	following:

|  | Estimated	useful | December	31, |  |
| :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | life\t-\tin\tyears | 2011 | 2010 |
| Property\tand\tequipment: |  |  |  |
| Land | N/A | $4 | $4 |
| Building | 39 | 17 | 17 |
| Building\timprovements | 15 | 13 | 13 |
| Leasehold\timprovements | 1-15 | 452 | \t 352 |
| Equipment\tand\tcomputer\tsoftware | 3-5 | 443 | \t 368 |
| Furniture\tand\tfixtures | 2-7 | 90 | 74 |
| Construction\tin\tprogress | N/A | 1 | 26 |
| Gross\tproperty\tand\tequipment |  | \t 1,020 | \t 854 |
| Less:\taccumulated\tdepreciation |  | 483 | \t 426 |
| Property\tand\tequipment,\tnet |  | $537 | $428 |

Qualifying	software	costs	of	approximately	$37	million,	$39	million	and	$31	million	have	been	capitalized	within	equipment	and	computer	software	for	the	years	ended	December	31, 2011,	2010	and	2009,	respectively,	and	are	being	amortized	over	an	estimated	useful	life	of	three	years.

# 9.	Goodwill

Goodwill	activity	during	the	years	ended	December	31,	2011	and	2010	was	as	follows:

|  | 2011 | 2010 |
| :--- | :--- | :--- |
| Beginning\tof\tyear\tbalance | $12,805 | $12,680 |
| Goodwill\tacquired\tduring\tthe\tyear | — | 8 |
| Goodwill\tadjustments\trelated\tto\tQuellos | (13) | 117 |
| End\tof\tyear\tbalance | $12,792 | $12,805 |

The	decrease	in	goodwill	during	the	year	ended	December	31,	2011	primarily	resulted	from	a	decline	related	to	tax	benefits	realized	from	tax-deductible	goodwill	in	excess	of	book goodwill.

During	the	year	ended	December	31,	2010,	goodwill	increased	by	$125	million.	The	increase	resulted	from	a	$136	million	release	of	common	shares	held	in	escrow	in	connection	with the	acquisition	of	certain	assets	and	the	assumption	of	certain	liabilities	of	the	fund	of	funds	business	of	Quellos	Group,	LLC	on	October	1,	2007	(the	"Quellos	Transaction"),	and	the acquisition	of	substantially	all	of	the	net	assets	of	Helix	Financial	Group,	LLC	in	January	2010,	offset	by	a	decline	related	to	tax	benefits	realized	from	tax-deductible	goodwill	in excess	of	book	goodwill	from	the	Quellos	Transaction.

At	December	31,	2011,	the	balance	of	the	Quellos	tax-deductible	goodwill	in	excess	of	book	goodwill	was	approximately	$355	million.	Goodwill	related	to	the	Quellos	Transaction will	continue	to	be	reduced	in	future	periods	by	the	amount	of	tax	benefits	realized	from	tax-deductible	goodwill	in	excess	of	book	goodwill	from	the	Quellos	Transaction.

The	impairment	tests	performed	for	goodwill	as	of	July	31,	2011,	2010	and	2009	indicated	that	no	impairment	charges	were	required.	The	Company	continuously	monitors	its	book value	per	share	as	compared	with	closing	prices	of	its	common	stock	for	potential	indicators	of	impairment.	As	of	December	31,	2011	the	Company's	common	stock	closed	at	$178.24, which	exceeded	its	book	value	per	share	of	approximately	$140.07	after	excluding	appropriated	retained	earnings.

# 10.	Intangible	Assets

Intangible	assets	at	December	31,	2011	and	2010	consisted	of	the	following:

|  | Weighted-Average |  | December	31,	2011 |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Estimated | Gross\tCarrying | Accumulated | Net\tCarrying |
| (Dollar\tamounts\tin\tmillions) | Useful\tLife | Amount | Amortization | Amount |
| Indefinite-lived\tintangible\tassets: |  |  |  |  |
| Management\tcontracts | N/A | $15,188 | $— | $15,188 |
| Trade\tnames\t/\ttrademarks | N/A | 1,403 | — | 1,403 |
| License | N/A | 6 | — | 6 |
| Total\tindefinite-lived\tintangible\tassets |  | 16,597 | — | 16,597 |
| Finite-lived\tintangible\tassets: |  |  |  |  |
| Management\tcontracts | 5.4 | 1,504 | 749 | 755 |
| Other^(1) | 6.6 | 6 | 2 | 4 |
| Total\tfinite-lived\tintangible\tassets | 5.4 | 1,510 | 751 | 759 |
| Total\tintangible\tassets |  | $18,107 | $751 | $17,356 |

|  | Remaining |  |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Weighted-Average |  | December\t31,\t2010 |  |
|  | Estimated | Gross\tCarrying | Accumulated | Net\tCarrying |
| (Dollar\tamounts\tin\tmillions) | Useful\tLife | Amount | Amortization | Amount |
| Indefinite-lived\tintangible\tassets: |  |  |  |  |
| Management\tcontracts | N/A | $15,188 | $— | $15,188 |
| Trade\tnames\t/\ttrademarks | N/A | 1,403 | — | 1,403 |
| License | N/A | 6 | — | 6 |
| Total\tindefinite-lived\tintangible\tassets |  | 16,597 | — | 16,597 |
| Finite-lived\tintangible\tassets: |  |  |  |  |
| Management\tcontracts | 6.3 | 1,524 | 613 | 911 |
| Other^(1) | 7.6 | 6 | 2 | 4 |
| Total\tfinite-lived\tintangible\tassets | 6.3 | 1,530 | 615 | 915 |
| Total\tintangible\tassets |  | $18,127 | $615 | $17,512 |

Other	represents	intellectual	property. (1)

The	impairment	tests	performed	for	intangible	assets	as	of	July	31,	2011,	2010	and	2009	indicated	that	no	impairment	charges	were	required.

Estimated	amortization	expense	for	finite-lived	intangible	assets	for	each	of	the	five	succeeding	years	is	as	follows:

| (Dollar	amounts	in	millions) |  |
| :--- | :--- |
| Year | Amount |
| 2012 | $155 |
| 2013 | 155 |
| 2014 | 148 |
| 2015 | 119 |
| 2016 | 83 |

# 11.	Borrowings

The	carrying	value	of	short-term	borrowings	at	December	31,	2011	and	2010,	included	$100	million	under	the	2011	revolving	credit	facility	and	$100	million	under	the	2007	revolving credit	facility,	respectively.

2007	Revolving	Credit	Facility.	In	August	2007,	the	Company	entered	into	a	five-year	$2.5	billion	unsecured	revolving	credit	facility	(the	"2007	facility"),	which	permitted	the Company	to	request	an	additional	$500	million	of	borrowing	capacity,	subject	to	lender	credit	approval,	up	to	a	maximum	of	$3.0	billion.	On	February	28,	2011,	the	$100	million	was repaid	and	the	2007	facility	was	terminated	in	March	2011.

# Convertible	Debentures

In	February	2005,	the	Company	issued	$250	million	of	convertible	debentures	(the	"Debentures"),	due	in	2035	and	bearing	interest	at	a	rate	of	2.625%	per	annum.	The	excess	of	the initial	proceeds	over	the	amount	allocated	to	the	liability	component	created	a	debt	discount	that	was	amortized	to	interest	expense	over	the	expected	life	of	the	liability.	Interest	was payable	semi-annually	in	arrears	on	February	15	and	August	15	of	each	year.	On	February	15,	2009,	the	Debentures	became	convertible	at	the	option	of	the	holder	into	cash	and	shares of	the	Company's	common	stock	at	any	time	prior	to	maturity	and	on	February	20,	2010	the	convertible	debentures	became	callable	by	the	Company.	On	December	31,	2010,	the carrying	value	and	the	fair	value	of	the	Debentures	were	$67	million	and	$128	million,	respectively.	During	the	years	ended	December	31,	2011	and	2010,	holders	of	$67	million	and $176	million,	respectively,	of	Debentures	converted	their	holdings	into	cash	and	shares.

# 11.	Borrowings	(continued)

# Long-Term	Borrowings

The	carrying	value	and	fair	value	of	long-term	borrowings	estimated	using	market	prices	at	December	31,	2011	included	the	following:

|  | 2.25% | Floating	Rate | 3.50% | 6.25% | 5.00% | 4.25% | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Notes\ndue\t2012 | Notes\ndue\t2013 | Notes\ndue\t2014 | Notes\ndue\t2017 | Notes\ndue\t2019 | Notes\ndue\t2021 | Long-term\nBorrowings |
| Maturity\tamount | $500 | $750 | $1,000 | $700 | $1,000 | $750 | $4,700 |
| Unamortized\tdiscount | — | — | (1) | (3) | (2) | (4) | (10) |
| Carrying\tvalue | $500 | $750 | $999 | $697 | $998 | $746 | $4,690 |
| Fair\tvalue | $507 | $749 | $1,074 | $818 | $1,123 | $786 | $5,057 |

Long-term	borrowings	at	December	31,	2010	had	a	carrying	value	of	$3,192	million	and	a	fair	value	of	$3,381	million.

2013	and	2021	Notes.	In	May	2011,	the	Company	issued	$1.5	billion	in	aggregate	principal	amount	of	unsecured	unsubordinated	obligations.	These	notes	were	issued	as	two	separate series	of	senior	debt	securities	including	$750	million	of	4.25%	notes	and	$750	million	of	floating	rate	notes	maturing	in	May	2021	and	2013,	respectively.	Net	proceeds	of	this offering	were	used	to	fund	the	repurchase	of	BlackRock's	Series	B	Preferred	Stock	from	affiliates	of	Merrill	Lynch.	Interest	on	the	4.25%	notes	due	in	2021	("2021	Notes")	is	payable semi-annually	on	May	24	and	November	24	of	each	year	commencing	November	24,	2011	and	is	approximately	$32	million	per	year.	Interest	on	the	floating	rate	notes	due	in	2013 ("2013	Floating	Rate	Notes")	is	payable	quarterly	on	February	24,	May	24,	August	24	and	November	24	of	each	year.	The	2021	Notes	may	be	redeemed	prior	to	maturity	at	any	time in	whole	or	in	part	at	the	option	of	the	Company	at	a	"make-whole"	redemption	price.	The	2013	Floating	Rate	Notes	may	not	be	redeemed	at	the	Company's	option	before	maturity. The	2021	Notes	were	issued	at	a	discount	of	$4	million	that	is	being	amortized	over	the	term	of	the	notes.	The	Company	incurred	approximately	$7	million	of	debt	issuance	costs	for the	$1.5	billion	note	issuances,	which	are	being	amortized	over	the	respective	terms	of	the	notes.	As	of	December	31,	2011,	$6	million	of	unamortized	debt	issuance	costs	were included	in	other	assets	on	the	consolidated	statement	of	financial	condition.

In	May	2011,	in	conjunction	with	the	issuance	of	the	2013	Floating	Rate	Notes,	the	Company	entered	into	a	$750	million	notional	interest	rate	swap	maturing	in	2013	to	hedge	the future	cash	flows	of	its	obligation	at	a	fixed	rate	of	1.03%	payable	semi-annually	on	May	24	and	November	24	of	each	year	commencing	November	24,	2011.	The	interest	rate	swap effectively	converts	the	2013	Floating	Rate	Notes	to	a	fixed	rate	obligation.

2017	Notes.	In	September	2007,	the	Company	issued	$700	million	in	aggregate	principal	amount	of	6.25%	senior	unsecured	notes	maturing	on	September	15,	2017	(the	"2017	Notes"). Interest	is	payable	semi-annually	in	arrears	on	March	15	and	September	15	of	each	year,	or	approximately	$44	million	per	year.	The	2017	Notes	may	be	redeemed	prior	to	maturity	at any	time	in	whole	or	in	part	at	the	option	of	the	Company	at	a	"make-whole"	redemption	price.	The	2017	Notes	were	issued	at	a	discount	of	$6	million,	which	is	being	amortized	over their	ten-year	term.	The	Company	incurred	approximately	$4	million	of	debt	issuance	costs,	which	are	being	amortized	over	ten	years.	As	of	December	31,	2011,	$2	million	of unamortized	debt	issuance	costs	were	included	in	other	assets	on	the	consolidated	statement	of	financial	condition.

2012,	2014	and	2019	Notes.	In	December	2009,	the	Company	issued	$2.5	billion	in	aggregate	principal	amount	of	unsecured	and	unsubordinated	obligations.	These	notes	were	issued as	three	separate	series	of	senior	debt	securities	including	$0.5	billion	of	2.25%	notes,	$1.0	billion	of	3.50%	notes	and	$1.0	billion	of	5.0%	notes	maturing	in	December	2012,	2014	and 2019,	respectively.	Net	proceeds	of	this	offering	were	used	to	repay	borrowings	under	the	CP	Program,	which	was	used	to	finance	a	portion	of	the	acquisition	of	Barclays	Global Investors	("BGI")	from	Barclays	on	December	1,	2009	(the	"BGI	Transaction"),	and	for	general	corporate	purposes.	Interest	on	these	notes	is	payable	semi-annually	in	arrears	on June	10	and	December	10	of	each	year	in	an	amount	of	approximately	$96	million	per	year.	These	notes	may	be	redeemed	prior	to	maturity	at	any	time	in	whole	or	in	part	at	the	option of	the	Company	at	a	"make-whole"	redemption	price.	These	notes	were	issued	collectively	at	a	discount	of	$5	million,	which	is	being	amortized	over	the	respective	terms	of	the	notes. The	Company	incurred	approximately	$13	million	of	debt	issuance	costs,	which	are	being	amortized	over	the	respective	terms	of	these	notes.	As	of	December	31,	2011,	$8	million	of unamortized	debt	issuance	costs	were	included	in	other	assets	on	the	consolidated	statement	of	financial	condition.

# 12.	Commitments	and	Contingencies

# Operating	Lease	Commitments

The	Company	leases	its	primary	office	space	under	agreements	which	expire	through	2035.	Future	minimum	commitments	under	these	operating	leases	are	as	follows:

Rent	expense	and	certain	office	equipment	expense	under	agreements	amounted	to	$154	million,	$158	million	and	$87	million	for	the	years	ended	December	31,	2011,	2010	and	2009, respectively.

Investment	Commitments.	At	December	31,	2011,	the	Company	had	$112	million	of	various	capital	commitments	to	fund	sponsored	investment	funds,	including	funds	of	private equity	funds,	real	estate	funds	and	distressed	credit	funds.	This	amount	excludes	additional	commitments	made	by	consolidated	funds	of	funds	to	underlying	third-party	funds	as	third- party	non-controlling	interest	holders	have	the	legal	obligation	to	fund	the	respective	commitments	of	such	funds	of	funds.	Generally,	the	timing	of	the	funding	of	these	commitments is	unknown	and	the	commitments	are	callable	on	demand	at	any	time	prior	to	the	expiration	of	the	commitment.	These	unfunded	commitments	are	not	recorded	on	the	Company's consolidated	statements	of	financial	condition.	These	commitments	do	not	include	potential	future	commitments	approved	by	the	Company's	Capital	Committee,	but	which	are	not	yet legally	binding.	The	Company	intends	to	make	additional	capital	commitments	from	time	to	time	to	fund	additional	investment	products	for,	and	with,	its	clients.

# Contingencies

Other	Contingent	Payments.	The	Company	acts	as	the	portfolio	manager	in	a	series	of	credit	default	swap	transactions	and	has	a	maximum	potential	exposure	of	$17	million	under	a credit	default	swap	between	the	Company	and	Citibank.	See	Note	7,	Derivatives	and	Hedging,	for	further	discussion	of	this	transaction	and	the	related	commitment.

Legal	Proceedings.	From	time	to	time,	BlackRock	receives	subpoenas	or	other	requests	for	information	from	various	U.S.	federal,	state	governmental	and	domestic	and	international regulatory	authorities	in	connection	with	certain	industry-wide	or	other	investigations	or	proceedings.	It	is	BlackRock's	policy	to	cooperate	fully	with	such	inquiries.	The	Company	and certain	of	its	subsidiaries	have	been	named	as	defendants	in	various	legal	actions,	including	arbitrations	and	other	litigation	arising	in	connection	with	BlackRock's	activities. Additionally,	certain	of	the	investment	funds	that	the	Company	manages	are	subject	to	lawsuits,	any	of	which	potentially	could	harm	the	investment	returns	of	the	applicable	fund	or result	in	the	Company	being	liable	to	the	funds	for	any	resulting	damages.

Management,	after	consultation	with	legal	counsel,	currently	does	not	anticipate	that	the	aggregate	liability,	if	any,	arising	out	of	regulatory	matters	or	lawsuits	will	have	a	material effect	on	BlackRock's	earnings,	financial	position,	or	cash	flows,	although,	at	the	present	time,	management	is	not	in	a	position	to	determine	whether	any	such	pending	or	threatened matters	will	have	a	material	effect	on	BlackRock's	results	of	operations	in	any	future	reporting	period.

# 12.	Commitments	and	Contingencies	(continued)

# Contingencies	(continued)

Indemnifications.	In	the	ordinary	course	of	business,	BlackRock	enters	into	contracts	pursuant	to	which	it	may	agree	to	indemnify	third	parties	in	certain	circumstances.	The	terms	of these	indemnities	vary	from	contract	to	contract	and	the	amount	of	indemnification	liability,	if	any,	cannot	be	determined.

Under	the	transaction	agreement	in	the	MLIM	Transaction,	the	Company	has	agreed	to	indemnify	Merrill	Lynch	for	losses	it	may	incur	arising	from	(1)	any	alleged	or	actual	breach, failure	to	comply,	violation	or	other	deficiency	with	respect	to	any	regulatory	or	fiduciary	requirements	relating	to	the	operation	of	BlackRock's	business,	(2)	any	fees	or	expenses incurred	or	owed	by	BlackRock	to	any	brokers,	financial	advisors	or	comparable	other	persons	retained	or	employed	by	BlackRock	in	connection	with	the	MLIM	Transaction,	and (3)	certain	specified	tax	covenants.

Under	the	transaction	agreement	in	the	BGI	Transaction,	the	Company	has	agreed	to	indemnify	Barclays	for	losses	it	may	incur	arising	from	(1)	breach	by	the	Company	of	certain representations,	(2)	breach	by	the	Company	of	any	covenant	in	the	agreement,	(3)	liabilities	of	the	entities	acquired	in	the	transaction	other	than	liabilities	assumed	by	Barclays	or	for which	it	is	providing	indemnification,	and	(4)	certain	taxes.

Management	believes	that	the	likelihood	of	any	liability	arising	under	the	MLIM	Transaction	or	the	BGI	Transaction	indemnification	provisions	is	remote.	Management	cannot estimate	any	potential	maximum	exposure	due	both	to	the	remoteness	of	any	potential	claims	and	the	fact	that	items	that	would	be	included	within	any	such	calculated	claim	would	be beyond	the	control	of	BlackRock.	Consequently,	no	liability	has	been	recorded	on	the	consolidated	statements	of	financial	condition.

# 13.	Stock-Based	Compensation

The	components	of	the	Company's	stock-based	compensation	expense	are	as	follows:

| (Dollar	amounts	in	millions) | 2011 | Year	ended<br>December	31,<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Stock-based\tcompensation: |  |  |  |
| Restricted\tstock\tand\tRSUs | $444 | $375 | $246 |
| Long-term\tincentive\tplans\tfunded\tby\tPNC | 44 | 58 | 59 |
| Stock\toptions | 9 | 12 | 12 |
| Total\tstock-based\tcompensation | $497 | $445 | $317 |

Stock	Award	and	Incentive	Plan.	Pursuant	to	the	BlackRock,	Inc.	1999	Stock	Award	and	Incentive	Plan	(the	"Award	Plan"),	options	to	purchase	shares	of	the	Company's	common stock	at	an	exercise	price	not	less	than	the	market	value	of	BlackRock's	common	stock	on	the	date	of	grant	in	the	form	of	stock	options,	restricted	stock	or	RSUs	may	be	granted	to employees	and	non-employee	directors.	A	maximum	of	27,000,000	shares	of	common	stock	were	authorized	for	issuance	under	the	Award	Plan.	Of	this	amount,	7,695,603	shares remain	available	for	future	awards	at	December	31,	2011.	Upon	exercise	of	employee	stock	options,	the	issuance	of	restricted	stock	or	the	vesting	of	RSUs,	the	Company	issues	shares out	of	treasury,	to	the	extent	available.

Restricted	Stock	and	RSUs.	Pursuant	to	the	Award	Plan,	restricted	stock	grants	and	RSUs	may	be	granted	to	certain	employees.	Substantially	all	restricted	stock	and	RSUs	vest	over periods	ranging	from	one	to	five	years	and	are	expensed	using	the	straight-line	method	over	the	requisite	service	period	for	each	separately	vesting	portion	of	the	award	as	if	the	award was,	in-substance,	multiple	awards.	Prior	to	2009,	the	Company	awarded	restricted	stock	and	RSUs	with	nonforfeitable	dividend	equivalent	rights.	Restricted	stock	and	RSUs	awarded beginning	in	2009	are	not	considered	participating	securities	as	the	dividend	equivalents	are	subject	to	forfeiture	prior	to	vesting	of	the	award.

# 13.	Stock-Based	Compensation	(continued)

Restricted	stock	and	RSU	activity	for	the	years	ended	December	31,	2011,	2010	and	2009	is	summarized	below:

|  | Restricted | Average |
| :--- | :--- | :--- |
| Outstanding\tat | Stock\tand\nUnits | Grant\tDate\nFair\tValue |
| December\t31,\t2008 | \t 4,603,953 | $174.24 |
| Granted | \t 1,869,849 | $118.43 |
| Converted | (894,909) | $178.53 |
| Forfeited | (218,430) | $157.21 |
| December\t31,\t2009 | \t 5,360,463 | $154.75 |
| Granted | \t 3,283,321 | $228.77 |
| Converted | \t(1,400,390) | $156.09 |
| Forfeited | (500,925) | $198.86 |
| December\t31,\t2010 | \t 6,742,469 | $187.24 |
| Granted | \t 2,417,650 | $197.34 |
| Converted | \t(3,377,703) | $163.66 |
| Forfeited | (253,635) | $205.50 |
| December\t31,\t2011^\t(1) | \t 5,528,781 | $196.44 |

At	December	31,	2011,	approximately	5.2	million	awards	are	expected	to	vest	and	0.2	million	awards	have	vested	but	have	not	been	converted. (1)

The	Company	values	restricted	stock	and	RSUs	at	their	grant-date	fair	value	as	measured	by	BlackRock's	common	stock	price.

In	2009,	the	Company	granted	1,789,685	RSUs	to	employees	as	part	of	annual	incentive	compensation	under	the	Award	Plan	that	vest	ratably	over	three	years	from	the	date	of	grant.

In	2010,	the	Company	granted	the	following	awards	under	the	Award	Plan:

•846,884	RSUs	to	employees	as	part	of	annual	incentive	compensation	that	vest	ratably	over	three	years	from	the	date	of	grant;

•455,288	RSUs	to	employees	that	cliff	vested	on	January	31,	2012,	the	end	of	the	service	condition,	as	BlackRock	had	actual	GAAP	EPS	in	excess	of	$6.13	in	2010.	The RSUs	may	not	be	sold	before	the	one-year	anniversary	of	the	vesting	date;

•124,575	shares	of	restricted	common	stock	to	employees	that	vested	in	tranches	on	January	31,	2010,	2011	and	2012.	The	restricted	common	stock	may	not	be	sold before	the	one-year	anniversary	of	each	vesting	date.

In	2011,	the	Company	granted	the	following	awards	under	the	Award	Plan:

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

At	December	31,	2011,	there	was	$403	million	in	total	unrecognized	stock-based	compensation	expense	related	to	unvested	RSUs.	The	unrecognized	compensation	cost	is	expected	to be	recognized	over	the	remaining	weighted-average	period	of	1.1	years.

In	January	2012,	the	Company	granted	the	following	awards	under	the	Award	Plan:

•616,117	RSUs,	which	will	primarily	be	funded	by	shares	currently	held	by	PNC	(see	Long-Term	Incentive	Plans	Funded	by	PNC	below).	The	awards	will	vest	on	the fourth,	fifth	or	sixth	anniversaries	of	the	grant	date	subject	to	pre-determined	market	conditions	being	achieved	during	the	six	year	term	of	the	award.

Long-Term	Incentive	Plans	Funded	by	PNC.	Under	a	share	surrender	agreement,	PNC	committed	to	provide	up	to	4,000,000	shares	of	BlackRock	stock,	held	by	PNC,	to	fund	certain BlackRock	long-term	incentive	plans	("LTIP").	In	February	2009,	the	share	surrender	agreement	was	amended	for	PNC	to	provide	BlackRock	series	C	non-voting	participating preferred	stock	to	fund	the	remaining	committed	shares.

On	September	29,	2011,	1.3	million	RSUs	vested	and	were	funded	by	PNC.	During	2007	through	2011,	approximately	2.5	million	shares	were	surrendered.	At	December	31,	2011, approximately	0.2	million	shares	that	vest	in	January	2013	remain	committed	by	PNC.

At	December	31,	2011,	the	remaining	shares	committed	by	PNC,	of	approximately	1.3	million,	are	available	to	fund	future	long-term	incentive	awards,	including	a	portion	of	the awards	granted	in	January	2012.

Stock	Options.	Stock	option	grants	were	made	to	certain	employees	pursuant	to	the	Award	Plan	in	1999	through	2007.	Options	granted	have	a	ten-year	life,	vested	ratably	over	periods ranging	from	two	to	five	years	and	became	exercisable	upon	vesting.	The	Company	has	not	granted	any	stock	options	subsequent	to	the	January	2007	grant	which	vested	on September	29,	2011.	Stock	option	activity	for	the	years	ended	December	31,	2011,	2010	and	2009	is	summarized	below:

|  | Shares | average |
| :--- | :--- | :--- |
| Outstanding\tat | under\noption | exercise\nprice |
| December\t31,\t2008 | \t3,140,517 | $88.82 |
| Exercised | (490,617) | $34.92 |
| Forfeited | (8,064) | $167.76 |
| December\t31,\t2009 | \t2,641,836 | $98.59 |
| Exercised | (288,100) | $39.35 |
| Forfeited | (9,002) | $167.76 |
| December\t31,\t2010 | \t2,344,734 | $105.60 |
| Exercised | (151,574) | $108.59 |
| Forfeited | (2,253) | $167.76 |
| December\t31,\t2011^\t(1) | \t2,190,907 | $105.33 |

At	December	31,	2011,	all	options	were	vested.	The	aggregate	intrinsic	value	of	options	exercised	during	the	years	ended	December	31,	2011,	2010	and	2009	was	$13	million, $46	million	and	$63	million,	respectively. (1)

Stock	options	outstanding	and	exercisable	at	December	31,	2011	were	as	follows:

| Exercise	Prices | Options<br>Outstanding | Weighted<br>Average<br>Remaining<br>Life<br>(years) | Weighted<br>Average<br>Exercise<br>Price | Value	of<br>Exercisable<br>Shares<br>(Dollar	amounts<br>in	millions) |
| :--- | :--- | :--- | :--- | :--- |
| $\t37.36 | \t1,048,933 | 0.79 | $37.36 | $148 |
| $\t167.76 | \t1,141,974 | 5.09 | $167.76 | 12 |
|  | \t2,190,907 | 3.03 | $105.33 | $160 |

As	of	December	31,	2011,	the	Company	had	no	remaining	unrecognized	stock-based	compensation	expense	related	to	unvested	stock	options.

Employee	Stock	Purchase	Plan	("ESPP").	The	ESPP	allows	eligible	employees	to	purchase	the	Company's	common	stock	at	95%	of	the	fair	market	value	on	the	last	day	of	each three-month	offering	period.	In	accordance	with	ASC	718-10,	Compensation	–	Stock	Compensation,	the	Company	does	not	record	compensation	expense	related	to	employees purchasing	shares	under	the	ESPP.

# 14.	Employee	Benefit	Plans

# Deferred	Compensation	Plans

Voluntary	Deferred	Compensation	Plan.	The	Company	adopted	a	Voluntary	Deferred	Compensation	Plan	("VDCP")	that	allows	participants	to	elect	to	defer	between	1%	and	100%	of their	annual	cash	incentive	compensation.	The	participants	must	specify	a	deferral	period	of	one,	three,	five	or	ten	years.	The	Company	funds	the	obligation	through	the	establishment of	a	rabbi	trust	on	behalf	of	the	plan's	participants.

Rabbi	Trust.	The	rabbi	trust	established	for	the	VDCP,	with	assets	totaling	$59	million	and	$66	million	as	of	December	31,	2011	and	2010,	respectively,	is	reflected	in	investments	on the	Company's	consolidated	statements	of	financial	condition.	Such	investments	are	classified	as	trading	and	other	investments.	The	corresponding	liability	balance	of	$59	million	and $66	million	as	of	December	31,	2011	and	2010,	respectively,	is	reflected	on	the	Company's	consolidated	statements	of	financial	condition	as	accrued	compensation	and	benefits. Earnings	in	the	rabbi	trust,	including	unrealized	appreciation	or	depreciation,	are	reflected	as	non-operating	income	(expense)	and	changes	in	the	corresponding	liability	are	reflected	as employee	compensation	and	benefits	expense	on	the	consolidated	statements	of	income.

Other	Deferred	Compensation	Plans.	The	Company	has	additional	compensation	plans	for	the	purpose	of	providing	deferred	compensation	and	retention	incentives	to	certain employees.	For	these	plans,	the	final	value	of	the	deferred	amount	to	be	distributed	upon	vesting	is	associated	with	the	returns	of	certain	investment	funds.	The	liabilities	for	these	plans were	$34	million	and	$23	million	as	of	December	31,	2011	and	2010,	respectively,	and	are	reflected	in	the	Company's	consolidated	statements	of	financial	condition	as	accrued compensation	and	benefits.	In	January	2012,	the	Company	granted	approximately	$60	million	of	additional	deferred	compensation	that	will	fluctuate	with	investment	returns	and	will vest	ratably	over	three	years	from	the	date	of	grant.

# Defined	Contribution	Plans

BlackRock	Retirement	Savings	Plan.	Certain	of	the	Company's	employees	participate	in	the	BlackRock	Retirement	Savings	Plan	("BRSP").	Prior	to	January	1,	2011,	employee contributions	of	up	to	6%	of	eligible	compensation,	as	defined	by	the	plan	and	subject	to	Internal	Revenue	Code	limitations	("IRC"),	were	matched	by	the	Company	at	50%.	As	part	of the	BRSP,	the	Company	also	made	an	annual	retirement	contribution	on	behalf	of	each	eligible	participant	equal	to	no	less	than	3%	of	eligible	compensation,	plus	an	additional amount,	determined	at	the	discretion	of	the	Company,	not	to	exceed	2%	of	eligible	compensation	for	a	total	contribution	of	no	more	than	5%	of	eligible	compensation,	who	has attained	one	year	of	service	and	remain	employed	with	the	Company	through	the	end	of	the	plan	year.	The	BRSP	expense	for	the	Company	was	$43	million,	$35	million	and	$24 million	for	the	years	ended	December	31,	2011,	2010	and	2009,	respectively.	Contributions	to	the	BRSP	are	made	in	cash	and	no	new	investments	in	BlackRock	stock	or	matching contributions	of	stock	are	available	in	the	BRSP.

Effective	January	1,	2011,	all	U.S.	employees,	including	U.S.	legacy	BGI	employees,	became	participants	in	the	BRSP.	All	plan	assets	in	the	two	legacy	BGI	plans,	including	the 401K	Plan	and	Retirement	Plan	(see	below),	were	merged	into	the	BRSP	on	January	1,	2011.	Under	the	combined	BRSP,	employee	contributions	of	up	to	8%	of	eligible compensation,	as	defined	by	the	plan	and	subject	to	IRC	limitations,	were	matched	by	the	Company	at	50%.	In	addition,	the	Company	will	continue	to	make	an	annual	retirement contribution	to	eligible	participants	equal	to	3-5%	of	eligible	compensation.

# 14.	Employee	Benefit	Plans	(continued)

BlackRock	Institutional	Trust	Company	401(k)	Savings	Plan	(formerly	the	BGI	401(k)	Savings	Plan).	The	Company	assumed	a	401(k)	Plan	(the	"BGI	Plan")	covering	employees	of former	BGI	as	a	result	of	the	BGI	Transaction.	As	part	of	the	BGI	Plan,	employee	contributions	for	participants	with	at	least	one	year	of	service	were	matched	at	200%	of	participants' pre-tax	contributions	up	to	2%	of	base	salary	and	overtime,	and	matched	100%	of	the	next	2%	of	base	salary	and	overtime,	as	defined	by	the	plan	and	subject	to	IRC	limitations.	The maximum	matching	contribution	a	participant	would	have	received	is	an	amount	equal	to	6%	of	base	salary	up	to	the	IRC	limitations.	Effective	January	1,	2011,	the	net	assets	of	this plan	merged	into	the	BRSP.	The	BGI	Plan	expense	was	$12	million	and	was	immaterial	for	the	years	ended	December	31,	2010	and	2009,	respectively.

BlackRock	Institutional	Trust	Company	Retirement	Plan	(formerly	the	BGI	Retirement	Plan).	The	Company	assumed	a	defined	contribution	money	purchase	pension	plan	("BGI Retirement	Plan")	as	a	result	of	the	BGI	Transaction.	All	salaried	employees	of	former	BGI	and	its	participating	affiliates	who	were	U.S.	residents	on	the	U.S.	payroll	were	eligible	to participate.	For	participants	earning	less	than	$100,000	in	base	salary,	the	Company	contributed	6%	of	a	participant's	total	compensation	(base	salary,	overtime	and	performance bonus)	up	to	$100,000.	For	participants	earning	$100,000	or	more	in	base	salary,	the	Company	contributed	6%	of	a	participant's	base	salary	and	overtime	up	to	the	IRC	limitation	of $245,000	in	2010.	These	contributions	were	25%	vested	once	the	participant	completed	two	years	of	service	and	then	vested	at	a	rate	of	25%	for	each	additional	year	of	service completed.	Employees	with	five	or	more	years	of	service	under	the	BGI	Retirement	Plan	were	100%	vested	in	their	entire	balance.	Effective	January	1,	2011,	the	net	assets	of	this	plan merged	into	the	BRSP.	The	BGI	Retirement	Plan	expense	was	$13	million	and	was	immaterial	for	the	years	ended	December	31,	2010	and	2009,	respectively.

BlackRock	Group	Personal	Pension	Plan.	BlackRock	Investment	Management	(UK)	Limited	("BIM"),	a	wholly	owned	subsidiary	of	the	Company,	contributes	to	the	BlackRock Group	Personal	Pension	Plan,	a	defined	contribution	plan	for	all	employees	of	BIM.	BIM	contributes	between	6%	and	15%	of	each	employee's	eligible	compensation.	The	expense	for this	plan	was	$26	million,	$22	million	and	$13	million	for	the	years	ended	December	31,	2011,	2010	and	2009,	respectively.

Defined	Benefit	Plans.	In	2009,	prior	to	the	BGI	Transaction,	the	Company	had	several	defined	benefit	pension	plans	in	Japan,	Germany,	Luxembourg	and	Jersey.	All	accrued benefits	under	these	defined	benefit	plans	are	currently	frozen	and	the	plans	are	closed	to	new	participants.	The	participant	benefits	under	the	plans	will	not	change	with	salary	increases or	additional	years	of	service.

In	conjunction	with	the	BGI	Transaction,	the	Company	assumed	defined	benefit	pension	plans	in	Japan	and	Germany,	which	are	closed	to	new	participants.	During	2010,	these	plans merged	into	the	legacy	BlackRock	plans	in	Japan	(the	"Japan	Plan")	and	Germany.	At	December	31,	2011	and	2010,	the	plan	assets	for	these	plans	were	approximately	$21	million and	$19	million,	respectively,	and	the	unfunded	obligations	were	less	than	$3	million	and	$6	million,	respectively,	which	were	recorded	in	accrued	compensation	and	benefits	on	the consolidated	statements	of	financial	condition.	Benefit	payments	for	the	next	five	years	and	in	aggregate	for	the	five	years	thereafter	are	not	expected	to	be	material.

Defined	benefit	plan	assets	for	the	Japan	Plan	of	approximately	$18	million	are	invested	using	a	total	return	investment	approach	whereby	a	mix	of	equity	securities,	debt	securities	and other	investments	are	used	to	preserve	asset	values,	diversify	risk	and	achieve	the	target	investment	return	benchmark.	Investment	strategies	and	asset	allocations	are	based	on consideration	of	plan	liabilities	and	the	funded	status	of	the	plan.	Investment	performance	and	asset	allocation	are	measured	and	monitored	on	an	ongoing	basis.	The	current	target allocations	for	the	plan	assets	are	45-50%	for	U.S.	and	international	equity	securities,	50-55%	for	U.S.	and	international	fixed	income	securities	and	0-5%	for	cash	and	cash equivalents.

# Defined	Benefit	Plans	(continued)

The	table	below	provides	the	fair	value	of	the	defined	benefit	Japan	Plan	assets	at	December	31,	2011	and	2010	by	asset	category.	The	table	also	identifies	the	level	of	inputs	used	to determine	the	fair	value	of	assets	in	each	category.

|  | Quoted	Prices | Significant |  |
| :--- | :--- | :--- | :--- |
|  | in\tActive | Other |  |
|  | Markets\tfor | Observable |  |
|  | Identical\tAssets | Inputs | December\t31, |
| (Dollar\tamounts\tin\tmillions) | (Level\t1) | (Level\t2) | 2011 |
| Cash\tand\tcash\tequivalents | $1 | $— | $1 |
| Equity\tsecurities | 9 | — | 9 |
| Fixed\tincome\tsecurities | — | 8 | 8 |
| Fair\tvalue\tof\tplan\tassets | $10 | $8 | $18 |

|  | Quoted	Prices | Significant |  |
| :--- | :--- | :--- | :--- |
|  | in\tActive | Other |  |
|  | Markets\tfor | Observable |  |
|  | Identical\tAssets | Inputs | December\t31, |
| (Dollar\tamounts\tin\tmillions) | (Level\t1) | (Level\t2) | 2010 |
| Cash\tand\tcash\tequivalents | $9 | $— | $9 |
| Equity\tsecurities | 4 | — | 4 |
| Fixed\tincome\tsecurities | — | 3 | 3 |
| Fair\tvalue\tof\tplan\tassets | $13 | $3 | $16 |

The	assets	and	unfunded	obligation	for	the	defined	benefit	pension	plans	in	Germany	and	Jersey	were	immaterial.

# Post-retirement	Benefit	Plans

The	Company	provides	post-retirement	medical	benefits	to	a	closed	population	of	employees	based	in	the	United	Kingdom.	For	the	years	ended	December	31,	2011,	2010	and	2009, expenses	and	unfunded	obligations	for	these	benefits	were	immaterial.

In	addition,	the	Company	provides	retirement	medical	benefits	to	a	closed	population	of	BGI	employees	in	the	United	States.	At	December	31,	2011	and	2010,	the	accumulated	benefit obligation	for	this	unfunded	plan,	which	is	included	in	accrued	compensation	and	benefits	on	the	consolidated	statements	of	financial	condition,	was	approximately	$8	million	and	$7 million,	respectively.	For	the	years	ended	December	31,	2011,	2010	and	2009,	expenses	for	these	benefits	were	immaterial	to	the	Company's	consolidated	financial	statements.	The post-retirement	medical	plan	costs	are	developed	from	actuarial	valuations	that	include	key	assumptions,	including	the	discount	rate	and	health	care	cost	trends.	Changes	in	retiree medical	plan	benefit	costs	may	occur	in	the	future	due	to	changes	in	these	assumptions,	changes	in	the	number	of	plan	participants	and	increases	in	the	cost	of	healthcare.	Benefit payments	for	the	next	five	years	and	in	aggregate	for	the	five	years	thereafter	are	not	expected	to	be	material.	The	estimated	impact	of	a	one	percentage-point	change	in	the	discount rate	would	be	a	change	of	less	than	$100	thousand	on	the	2011	expense	and	would	change	the	projected	benefit	obligation	by	approximately	$1	million.

# 15.	Related	Party	Transactions

# Determination	of	Related	Parties

Barclays.	The	Company	considers	Barclays,	along	with	its	affiliates,	to	be	related	parties	in	accordance	with	ASC	850-10,	Related	Party	Disclosures	("ASC	850-10"),	based	on	its level	of	capital	stock	ownership.	At	December	31,	2011,	Barclays	owned	approximately	2.2%	of	the	Company's	voting	common	stock	and	held	approximately	19.7%	of	the	total capital	stock.

PNC.	The	Company	considers	PNC,	along	with	its	affiliates,	to	be	related	parties	based	on	the	level	of	its	ownership	of	BlackRock	capital	stock.	At	December	31,	2011,	PNC	owned approximately	24.0%	of	the	Company's	voting	common	stock	and	held	approximately	21.0%	of	the	total	capital	stock.

Merrill	Lynch	/	Bank	of	America.	As	a	result	of	the	MLIM	Transaction	in	2006,	the	Company	considered	Merrill	Lynch	(a	subsidiary	of	Bank	of	America),	along	with	its	affiliates,	to be	related	parties	based	on	its	level	of	ownership.	Subsequent	to	the	secondary	offering	in	November	2010	by	Bank	of	America	of	shares	of	the	Company's	stock,	Merrill	Lynch	and Bank	of	America	were	no	longer	considered	related	parties.	At	December	31,	2011,	Bank	of	America	did	not	own	any	of	the	Company's	capital	stock.

Registered	Investment	Companies	and	Equity	Method	Investments.	The	Company	considers	the	registered	investment	companies	that	it	manages,	which	include	mutual	funds	and exchanged-traded	funds,	to	be	related	parties	as	a	result	of	the	Company's	advisory	relationship.	In	addition,	equity	method	investments	are	considered	related	parties	in	accordance with	ASC	850-10	due	to	the	Company's	influence	over	the	financial	and	operating	policies	of	the	investee.

# 15.	Related	Party	Transactions	(continued)

# Investment	Advisory	and	Administration	Fees	from	Related	Parties

Revenues	for	services	provided	by	the	Company	to	these	and	other	related	parties	are	as	follows:

| (Dollar	amounts	in	millions) | 2011 | Year	ended<br>December	31,<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Investment\tadvisory,\tadministration\tfees\tand\tsecurities\tlending\trevenue: |  |  |  |
| Bank\tof\tAmerica\tand\taffiliates | $— | $37 | $48 |
| PNC\tand\taffiliates | 4 | 4 | 3 |
| Barclays\tand\taffiliates | 14 | 14 | 2 |
| Registered\tinvestment\tcompanies/Equity\tmethod\tinvestees | \t 5,282 | \t 4,833 | \t 2,561 |
| Other | 3 | 5 | 2 |
| Total\tinvestment\tadvisory\tand\tadministration\tfees | \t 5,303 | \t 4,893 | \t 2,616 |
| Investment\tadvisory\tperformance\tfees | 54 | 39 | 35 |
| BlackRock\tSolutions\tand\tadvisory: |  |  |  |
| Bank\tof\tAmerica\tand\taffiliates | — | 1 | 2 |
| PNC\tand\taffiliates | 6 | 9 | 8 |
| Equity\tmethod\tinvestees | 15 | 17 | 21 |
| Total\tBlackRock\tSolutions\tand\tadvisory | 21 | 27 | 31 |
| Other\trevenue: |  |  |  |
| Bank\tof\tAmerica\tand\taffiliates | — | 4 | 13 |
| PNC\tand\taffiliates | 3 | 4 | 3 |
| Barclays\tand\taffiliates | 35 | 35 | 2 |
| Equity\tmethod\tinvestees | 15 | 22 | 15 |
| Other | — | 1 | 1 |
| Total\tother\trevenue | 53 | 66 | 34 |
| Total\trevenue\tfrom\trelated\tparties | $5,431 | $5,025 | $2,716 |

The	Company	provides	investment	advisory	and	administration	services	to	its	open-	and	closed-end	funds	and	other	commingled	or	pooled	funds	and	separate	accounts	in	which related	parties	invest.	In	addition,	the	Company	provides	investment	advisory	and	administration	services	to	Bank	of	America/Merrill	Lynch,	Barclays	and	PNC	and	its	affiliates	for fees	based	on	AUM.	Further,	the	Company	provides	risk	management	services	to	PNC	and	Bank	of	America/Merrill	Lynch.	The	Company	contracts	with	Bank	of	America/Merrill Lynch	for	various	mutual	fund	distribution	and	shareholder	servicing	to	be	performed	on	behalf	of	certain	non-U.S.	funds	managed	by	the	Company.	The	Company	records	its investment	advisory	and	administration	fees	net	of	retrocessions.	Such	retrocession	arrangements	paid	to	Bank	of	America	and	affiliates	during	2010	(prior	to	the	secondary	offering) and	2009	were	$88	million	and	$85	million,	respectively.

# Aggregate	Expenses	for	Transactions	with	Related	Parties

Aggregate	expenses	included	in	the	consolidated	statements	of	income	for	transactions	with	related	parties	are	as	follows:

| (Dollar	amounts	in	millions) | 2011 | Year	ended<br>December	31,<br>2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Expenses\twith\trelated\tparties: |  |  |  |
| Distribution\tand\tservicing\tcosts |  |  |  |
| Bank\tof\tAmerica\tand\taffiliates | $— | $214 | $349 |
| PNC\tand\taffiliates | 3 | 11 | 19 |
| Barclays\tand\taffiliates | 2 | 1 | \t — |
| Total\tdistribution\tand\tservicing\tcosts | 5 | \t 226 | \t 368 |
| Direct\tfund\texpenses |  |  |  |
| Bank\tof\tAmerica\tand\taffiliates | \t — | 10 | \t — |
| Barclays\tand\taffiliates | 8 | 6 | \t — |
| Total\tdirect\tfund\texpenses | 8 | 16 | \t — |
| General\tand\tadministration\texpenses |  |  |  |
| Bank\tof\tAmerica\tand\taffiliates | \t — | 11 | 7 |
| Barclays\tand\taffiliates | 15 | 14 | 3 |
| Anthracite\tCapital,\tInc. | \t — | 14 | 31 |
| Other\tregistered\tinvestment\tcompanies | 42 | 33 | 31 |
| Other | 3 | \t — | 1 |
| Total\tgeneral\tand\tadministration\texpenses | 60 | 72 | 73 |
| Total\texpenses\twith\trelated\tparties | $73 | $314 | $441 |

# Certain	Agreements	and	Arrangements	with	Barclays

In	connection	with	the	completion	of	its	acquisition	of	BGI,	BlackRock	entered	into	a	Stockholder	Agreement,	dated	as	of	December	1,	2009	(the	"Barclays	Stockholder	Agreement"), with	Barclays	and	Barclays	BR	Holdings	S.à.r.l.	("BR	Holdings",	and	together	with	Barclays,	the	"Barclays	Parties").	Pursuant	to	the	terms	of	the	Barclays	Stockholder	Agreement, the	Barclays	Parties	agreed,	among	other	things,	to	certain	transfer	and	voting	restrictions	with	respect	to	shares	of	BlackRock	common	stock	and	preferred	stock	owned	by	them	and their	affiliates,	to	limits	on	the	ability	of	the	Barclays	Parties	and	their	affiliates	to	acquire	additional	shares	of	BlackRock	common	stock	and	preferred	stock	and	to	certain	other restrictions.	In	addition,	the	Barclays	Stockholder	Agreement	contains	certain	provisions	relating	to	the	composition	of	BlackRock's	board	of	directors,	including	a	requirement	that BlackRock's	board	must	consist	of	not	more	than	19	directors,	with	two	directors	designated	by	the	Barclays	Parties.

In	addition,	Barclays	and	certain	of	its	affiliates	have	been	engaged	by	the	Company	to	provide	the	use	of	certain	indices	for	certain	BlackRock	investments	funds	and	for	a	fee	to provide	indemnification	to	clients	related	to	potential	losses	in	connection	with	lending	of	client	securities.	For	the	years	ended	December	31,	2011	and	2010,	fees	incurred	for	these agreements	were	$18	million	and	$14	million	recorded	within	direct	fund	expenses	and	general	and	administration	expenses,	respectively.	Such	amounts	for	the	year	ended December	31,	2009	was	not	material.

# Certain	Agreements	and	Arrangements	with	PNC	and	Merrill	Lynch

PNC.	On	February	27,	2009,	BlackRock	entered	into	an	amended	and	restated	implementation	and	stockholder	agreement	with	PNC,	and	a	third	amendment	to	the	share	surrender agreement	with	PNC.	See	Note	17,	Capital	Stock,	for	further	discussion.

The	changes	contained	in	the	amended	and	restated	stockholder	agreement	with	PNC,	in	relation	to	the	prior	agreement,	among	other	things,	(i)	revised	the	definitions	of	"Fair	Market Value,"	"Ownership	Cap,"	"Ownership	Percentage,"	"Ownership	Threshold"	and	"Significant	Stockholder";	and	(ii)	amended	or	supplemented	certain	other	provisions	therein	to incorporate	series	B	preferred	stock	and	series	C	preferred	stock,	respectively.

The	amendment	to	the	share	surrender	agreement	with	PNC	provided	for	the	substitution	of	series	C	preferred	stock	for	the	shares	of	common	stock	subject	to	the	share	surrender agreement.

In	June	2009,	in	connection	with	the	BGI	Transaction,	certain	additional	amendments	were	made	to	the	amended	and	restated	stockholder	agreement	with	PNC.

The	amended	and	restated	stockholder	agreement	with	PNC	was	changed	to,	among	other	things,	(i)	revise	the	definitions	of	"Ownership	Cap"	and	"Ownership	Threshold,"	(ii)	amend or	supplement	certain	other	definitions	and	provisions	therein	to	incorporate	series	D	participating	preferred	stock,	(iii)	provide	that	none	of	the	transfer	restriction	provisions	set	forth in	the	amended	and	restated	stockholder	agreement	with	PNC	apply	to	the	shares	purchased	by	PNC	as	part	of	the	financing	for	the	BGI	Transaction,	(iv)	amend	the	provision	relating to	the	composition	of	BlackRock's	Board	of	Directors	and	(v)	provide	that	the	amended	and	restated	stockholder	agreement	with	PNC	shall	terminate	upon	the	later	of	(A)	the	five	year anniversary	of	the	amended	and	restated	stockholder	agreement	with	PNC	and	(B)	the	first	date	on	which	PNC	and	its	affiliates	beneficially	own	less	than	5%	of	the	outstanding BlackRock	capital	stock,	subject	to	certain	other	conditions	specified	therein.

Merrill	Lynch.	In	November	2010,	in	connection	with	the	secondary	offering	by	Bank	of	America	of	shares	of	BlackRock's	common	stock,	the	Company	entered	into	an	amended	and restated	stockholder	agreement	and	an	amended	and	restated	global	distribution	agreement	with	Merrill	Lynch.

The	changes	to	the	stockholder	agreement	with	Merrill	Lynch	provides,	among	other	things,	for	the	following:	(i)	a	reduction	in	the	number	of	directors	Merrill	Lynch	is	entitled	to designate	upon	its	holding	falling	below	10%	and	5%	thresholds,	(ii)	a	reduction	of	the	cap	on	total	ownership	of	BlackRock	capital	stock,	(iii)	restrictions	on	Merrill	Lynch transferring	any	shares	until	November	15,	2011	and	(iv)	the	setting	of	a	termination	date	of	the	agreement	to	July	31,	2013.

The	global	distribution	agreement	provides	a	framework	under	which	Merrill	Lynch	provides	distribution	and	servicing	of	client	investments	in	certain	BlackRock	investment	advisory products.	The	amendment	to	the	global	distribution	agreement	clarifies	certain	economic	arrangements	with	respect	to	revenue	neutrality	across	BlackRock	products	distributed	by Merrill	Lynch.

The	total	amount	of	related	party	transactions	expensed	by	BlackRock	through	November	2010,	and	full	year	2009	related	to	Merrill	Lynch	distribution	and	servicing	of	products covered	by	the	global	distribution	agreement,	including	mutual	funds,	separate	accounts,	liquidity	funds,	alternative	investments	and	insurance	products,	was	approximately	$210 million	and	$337	million,	respectively.

In	addition,	in	connection	with	the	MLIM	Transaction,	Merrill	Lynch	agreed	that	it	will	provide	reimbursement	to	BlackRock	for	employee	incentive	awards	issued	to	former	MLIM employees	who	became	BlackRock	employees	subsequent	to	the	MLIM	Transaction.	Reimbursements	amounted	to	50%	of	the	total	amount	of	awards	to	former	MLIM	employees between	$100	million	and	$200	million.	The	Company	invoiced	Merrill	Lynch	following	its	determination	of	the	portion	of	awards	entitled	to	reimbursement	for	a	given	calendar	year. Through	January	2007,	the	Company	had	issued	total	eligible	incentive	compensation	to	qualified	employees	in	excess	of	$200	million.	In	2011,	2010	and	2009,	Merrill	Lynch reimbursed	$8	million,	$10	million	and	$25	million,	respectively,	to	BlackRock	for	employee	incentive	awards	issued	to	former	MLIM	employees	who	became	BlackRock	employees subsequent	to	the	MLIM	Transaction.	Upon	receipt,	the	reimbursements	were	recorded	as	capital	contributions.

Merrill	Lynch	and	certain	of	its	affiliates	have	been	engaged	by	the	Company	to	provide	recordkeeping,	administration	and	trustee	services	to	the	BRSP.	The	compensation	to	Merrill Lynch	and	its	affiliates	for	these	services	paid	by	the	Company	was	not	material.

Receivables	and	Payables	with	Related	Parties.	Due	from	related	parties	was	$142	million	and	$150	million	at	December	31,	2011	and	2010,	respectively,	and	primarily	represented	a tax	indemnification	asset	due	from	Barclays,	receivables	for	investment	advisory	and	administration	services	provided	by	BlackRock,	and	other	receivables	from	certain	investment products	managed	by	BlackRock.	Due	from	related	parties	at	December	31,	2011	included	$56	million	due	from	certain	funds	and	$69	million	of	a	tax	indemnification	asset	due	from Barclays.	Due	from	related	parties	at	December	31,	2010	included	$71	million	due	from	certain	funds,	$69	million	of	a	tax	indemnification	asset	due	from	Barclays	and	$10	million	in receivables	from	PNC	and	Barclays.

Accounts	receivable	at	December	31,	2011	and	2010	included	$540	million	and	$559	million,	respectively,	related	to	receivables	from	BlackRock	mutual	funds	and	iShares	for investment	advisory	and	administration	services.

Due	to	related	parties	was	$22	million	and	$57	million	at	December	31,	2011	and	2010,	respectively,	and	primarily	represented	liabilities	assumed	in	the	BGI	Transaction.	Due	to related	parties	at	December	31,	2011	included	$13	million	and	$9	million	payable	to	certain	investment	products	managed	by	BlackRock	and	Barclays,	respectively.	Due	to	related parties	at	December	31,	2010	included	$41	million	and	$15	million	payable	to	Barclays	and	certain	investment	products	managed	by	BlackRock,	respectively.	The	payable	at December	31,	2010	to	Barclays	included	non-interest	bearing	notes	assumed	by	BlackRock	at	the	close	of	the	BGI	Transaction	related	to	certain	acquired	tax	receivables	and	other contractual	items.

# 16.	Net	Capital	Requirements

The	Company	is	required	to	maintain	net	capital	in	certain	regulated	subsidiaries	within	a	number	of	jurisdictions,	which	is	partially	maintained	by	retaining	cash	and	cash	equivalent investments	in	those	subsidiaries	or	jurisdictions.	As	a	result,	such	subsidiaries	of	the	Company	may	be	restricted	in	their	ability	to	transfer	cash	between	different	jurisdictions	and	to their	parents.	Additionally,	transfers	of	cash	between	international	jurisdictions,	including	repatriation	to	the	United	States,	may	have	adverse	tax	consequences	that	could	discourage such	transfers.

Banking	Regulatory	Requirements.	BlackRock	Institutional	Trust	Company,	N.A.	("BTC"),	a	wholly	owned	subsidiary	of	the	Company,	is	chartered	as	a	national	bank	whose	powers are	limited	to	trust	activities.	BTC	is	subject	to	various	regulatory	capital	requirements	administered	by	the	Federal	banking	agencies.	Failure	to	meet	minimum	capital	requirements can	initiate	certain	mandatory	and	possibly	additional	discretionary	actions	by	regulators	that,	if	undertaken,	could	have	a	direct	material	effect	on	the	Company's	consolidated financial	statements.	Under	the	capital	adequacy	guidelines	and	the	regulatory	framework	for	prompt	corrective	action,	BTC	must	meet	specific	capital	guidelines	that	invoke quantitative	measures	of	BTC's	assets,	liabilities,	and	certain	off-balance	sheet	items	as	calculated	under	the	regulatory	accounting	practices.	BTC's	capital	amounts	and	classification are	also	subject	to	qualitative	judgments	by	the	regulators	about	components,	risk	weightings	and	other	factors.

Quantitative	measures	established	by	regulators	to	ensure	capital	adequacy	require	BTC	to	maintain	a	minimum	Tier	1	capital	and	Tier	1	leverage	ratio,	as	well	as	Tier	1	and	Total risk-based	capital	ratios.	Based	on	BTC's	calculations	as	of	December	31,	2011	and	2010,	it	exceeded	the	applicable	capital	adequacy	requirements.

| (Dollar	amounts	in	millions) | Actual<br>Amount | Ratio | For	Capital<br>Adequacy<br>Purposes<br>Amount | Ratio | To	Be	Well<br>Capitalized	Under<br>Prompt<br>Corrective	Action<br>Provisions<br>Amount | Ratio |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| December\t31,\t2011 |  |  |  |  |  |  |
| Total\tcapital\t(to\trisk\tweighted\tassets) | $720 | \t104.1% | $55 | \t 8.0% | $69 | \t 10.0% |
| Tier\t1\tcapital\t(to\trisk\tweighted\tassets) | $720 | \t104.1% | $28 | \t 4.0% | $42 | 6.0% |
| Tier\t1\tcapital\t(to\taverage\tassets) | $720 | 45.1% | $64 | \t 4.0% | $80 | 5.0% |
| December\t31,\t2010 |  |  |  |  |  |  |
| Total\tcapital\t(to\trisk\tweighted\tassets) | $874 | \t103.3% | $68 | \t 8.0% | $85 | \t 10.0% |
| Tier\t1\tcapital\t(to\trisk\tweighted\tassets) | $874 | \t103.3% | $34 | \t 4.0% | $51 | 6.0% |
| Tier\t1\tcapital\t(to\taverage\tassets) | $874 | 55.1% | $64 | \t 4.0% | $79 | 5.0% |

# 16.	Net	Capital	Requirements	(continued)

Broker-dealers.	BlackRock	Investments,	LLC,	BlackRock	Capital	Markets,	LLC,	BlackRock	Execution	Services	and	BlackRock	Fund	Distribution	Company	are	registered	broker- dealers	and	wholly	owned	subsidiaries	of	BlackRock	that	are	subject	to	the	Uniform	Net	Capital	requirements	under	the	Securities	Exchange	Act	of	1934,	which	requires	maintenance of	certain	minimum	net	capital	levels.

Capital	Requirements.	At	December	31,	2011,	the	Company	was	required	to	maintain	approximately	$1,196	million	in	net	capital	in	certain	regulated	subsidiaries,	including	BTC, entities	regulated	by	the	Financial	Services	Authority	("FSA")	in	the	United	Kingdom,	and	the	broker-dealers	and	was	in	compliance	with	all	applicable	regulatory	minimum	net capital	requirements.

# 17.	Capital	Stock

Common	Shares	Held	in	Escrow.	On	October	1,	2007,	the	Company	acquired	the	fund	of	funds	business	of	Quellos.	The	Company	issued	1,191,785	shares	of	BlackRock	common stock	that	were	placed	into	an	escrow	account.	As	of	December	31,	2011,	1,188,182	common	shares	had	been	released	to	Quellos	in	accordance	with	the	Quellos	asset	purchase agreement,	which	resulted	in	an	adjustment	to	the	recognized	purchase	price	and	had	a	dilutive	effect	subsequent	to	the	release.	The	remaining	3,603	common	shares	may	have	a dilutive	effect	in	future	periods	based	on	the	timing	of	the	release	of	shares	from	the	escrow	account	in	accordance	with	the	Quellos	asset	purchase	agreement.

February	2009	Capital	Exchanges.	On	January	1,	2009,	Bank	of	America	acquired	Merrill	Lynch.	In	connection	with	this	transaction,	BlackRock	entered	into	exchange	agreements with	each	of	Merrill	Lynch	and	PNC	pursuant	to	which	each	agreed	to	exchange	a	portion	of	the	BlackRock	common	stock	it	held	for	an	equal	number	of	shares	of	non-voting participating	preferred	stock.	On	February	27,	2009,	Merrill	Lynch	exchanged	(i)	49,865,000	shares	of	BlackRock's	common	stock	for	a	like	number	of	shares	of	BlackRock's	series B	non-voting	participating	preferred	stock,	and	(ii)	12,604,918	shares	of	BlackRock's	series	A	preferred	stock	for	a	like	number	of	shares	of	series	B	preferred	stock,	and	PNC exchanged	(i)	17,872,000	shares	of	BlackRock's	common	stock	for	a	like	number	of	shares	of	series	B	non-voting	preferred	stock	and	(ii)	2,889,467	shares	of	BlackRock's	common stock	for	a	like	number	of	shares	of	BlackRock's	series	C	non-voting	participating	preferred	stock.

Below	is	a	summary	description	of	the	series	B	and	C	preferred	stock	issued	in	the	exchanges.

The	series	B	non-voting	participating	preferred	stock:

•is	non-voting	except	as	otherwise	provided	by	applicable	law;

•participates	in	dividends	on	a	basis	generally	equal	to	the	common	stock;

•benefits	from	a	liquidation	preference	of	$0.01	per	share;	and

•is	mandatorily	convertible	to	BlackRock	common	stock	upon	transfer	to	an	unrelated	party.

The	series	C	non-voting	participating	preferred	stock:

•benefits	from	a	liquidation	preference	of	$40.00	per	share;	and

•is	only	convertible	to	BlackRock	common	stock	upon	the	termination	of	the	obligations	of	PNC	under	its	share	surrender	agreement	with	BlackRock.

# 17.	Capital	Stock	(continued)

2009	Capital	Stock	Activities	Related	to	BGI	Transaction.	In	June	and	December	2009	the	Company	raised	capital	from	third-party	investors	via	a	private	placement	of	19,914,652 shares	of	capital	stock,	at	an	agreed	upon	fixed	price	of	$140.60	per	share,	to	finance	the	cash	consideration	of	the	BGI	Transaction.	The	issuance	price	of	$140.60	was	based	on	the valuation	of	the	Company's	common	shares	for	a	10-day	period	prior	to	the	announcement	of	the	BGI	Transaction	less	an	agreed	upon	discount.	Subsequent	to	the	determination	of	the issuance	price	the	number	of	shares	to	be	issued	were	fixed.

•In	June	2009,	the	Company	issued	to	an	institutional	investor	2,133,713	shares	of	BlackRock's	common	stock	at	$140.60	per	share.	The	$300	million	in	proceeds	from this	issuance	were	used	to	fund	a	portion	of	the	purchase	of	BGI.

•On	December	1,	2009,	pursuant	to	separate	stock	purchase	agreements	entered	into	on	June	11,	2009	and	June	12,	2009,	as	amended,	BlackRock	sold	an	aggregate	of 8,637,519	shares	of	common	stock,	5,587,232	shares	of	series	B	non-voting	participating	preferred	stock	and	3,556,188	shares	of	series	D	non-voting	participating preferred	stock	(collectively,	the	"Financing	Shares")	to	certain	institutional	investors,	including	the	sale	of	the	3,556,188	shares	of	series	D	non-voting	participating preferred	stock	to	PNC,	each	at	a	price	of	$140.60	per	share.	The	Company	received	approximately	$2.5	billion	in	total	consideration	from	the	sale	of	the	Financing Shares,	which	was	also	used	to	fund	the	cash	portion	of	the	purchase	of	BGI.

At	the	close	of	the	BGI	Transaction	on	December	1,	2009,	the	Company	issued	3,031,516	common	shares,	and	26,888,001	and	7,647,524	of	series	B	and	D	non-voting	participating preferred	stock,	respectively,	to	Barclays	as	part	of	the	consideration	for	the	purchase	of	BGI.

January	2010	Capital	Exchange.	In	January	2010,	600,000	common	shares	were	exchanged	for	Series	B	preferred	stock	and	all	11,203,442	Series	D	preferred	stock	outstanding	at December	31,	2009	were	exchanged	for	Series	B	preferred	stock.

November	2010	Capital	Exchanges.	On	November	15,	2010,	the	Company	announced	the	closing	of	the	secondary	offerings	by	Bank	of	America	and	PNC	of	58,737,122	shares	of BlackRock's	common	stock,	which	included	56,407,040	shares	of	common	stock	issued	upon	the	conversion	of	BlackRock's	series	B	non-voting	participating	preferred	stock. Concurrently	with	the	secondary	offerings,	BlackRock	issued	11,105,000	shares	of	common	stock	to	PNC	in	exchange	for	an	equal	number	of	shares	of	series	B	non-voting participating	preferred	stock.

May	2011	Barclays	Sale	and	Conversion.	In	May	2011,	2,356,750	shares	of	Series	B	Convertible	Preferred	Shares	owned	by	Barclays	were	automatically	converted	to	shares	of common	stock	upon	their	disposition.

June	2011	Stock	Repurchase	Agreement.	On	June	1,	2011,	BlackRock	completed	its	repurchase	of	Bank	of	America's	remaining	ownership	interest	of	13,562,878	Series	B Convertible	Preferred	Shares	for	$2.545	billion,	or	$187.65	per	share.

September	2011	Institutional	Investor	Capital	Exchange.	In	September	2011,	an	institutional	investor	exchanged	2,860,188	shares	of	Series	B	Convertible	Preferred	Shares	for common	shares.

September	2011	PNC	Capital	Contribution.	In	September	2011,	PNC	surrendered	to	BlackRock	approximately	1.3	million	shares	of	BlackRock	Series	C	non-voting	participating preferred	stock	to	fund	certain	LTIP	awards	in	accordance	with	the	share	surrender	agreement	between	PNC	and	BlackRock.

The	Company's	common	and	preferred	shares	issued	and	outstanding	and	related	activity	consist	of	the	following:

|  |  |  |  | Shares	Issued |  |  |  |  | Shares	Outstanding | Shares	Outstanding |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Escrow | Treasury | Preferred | Preferred | Preferred | Preferred |  | Preferred | Preferred | Preferred | Preferred |
|  | Common | Common | Common | Shares | Shares | Shares | Shares | Common | Shares | Shares | Shares | Shares |
|  | Shares | Shares | Shares | Series\tA | Series\tB | Series\tC | Series\tD | Shares | Series\tA | Series\tB | Series\tC | Series\tD |
| December\t31,\t2008 | 118,573,367 | (911,266) | (370,991) | 12,604,918 | — | — | — | 117,291,110 | 12,604,918 | — | — | — |
| Issuance\tof\tshares\tto |  |  |  |  |  |  |  |  |  |  |  |  |
| institutional\tinvestors | 10,771,232 | — | — | — | 5,587,232 | — | 3,556,188 | 10,771,232 | — | 5,587,232 | — | 3,556,188 |
| Issuance\tof\tshares\tto\tBarclays | 3,031,516 | — | — | — | 26,888,001 | — | 7,647,254 | 3,031,516 | — | 26,888,001 | — | 7,647,254 |
| Issuance\tof\tcommon\tshares\tfor |  |  |  |  |  |  |  |  |  |  |  |  |
| contingent\tconsideration | 330,341 | — | — | — | — | — | — | 330,341 | — | — | — | — |
| Release\tof\tcommon\tstock |  |  |  |  |  |  |  |  |  |  |  |  |
| from\tescrow\tagent\tin |  |  |  |  |  |  |  |  |  |  |  |  |
| connection\twith\tQuellos |  |  |  |  |  |  |  |  |  |  |  |  |
| Transaction | — | 42,326 | — | — | — | — | — | 42,326 | — | — | — | — |
| Net\tissuance\tof\tcommon |  |  |  |  |  |  |  |  |  |  |  |  |
| shares\trelated\tto\temployee |  |  |  |  |  |  |  |  |  |  |  |  |
| stock\ttransactions\tand |  |  |  |  |  |  |  |  |  |  |  |  |
| convertible\tdebt |  |  |  |  |  |  |  |  |  |  |  |  |
| conversions | 696,788 | — | 410,789 | — | — | — | — | 1,107,577 | — | — | — | — |
| Exchange\tof\tpreferred\tshares |  |  |  |  |  |  |  |  |  |  |  |  |
| A\tfor\tB | — | — | — | (12,604,918) | 12,604,918 | — | — | — | (12,604,918) | 12,604,918 | — | — |
| Exchange\tof\tcommon\tshares |  |  |  |  |  |  |  |  |  |  |  |  |
| for\tpreferred\tshares\tB | (67,737,000) | — | — | — | 67,737,000 | — | — | (67,737,000) | — | 67,737,000 | — | — |
| Exchange\tof\tcommon\tshares |  |  |  |  |  |  |  |  |  |  |  |  |
| for\tpreferred\tshares\tC | (2,889,467) | — | — | — | — | 2,889,467 | — | (2,889,467) | — | — | 2,889,467 | — |
| PNC\tLTIP\tcapital\tcontribution | — | — | (51,399) | — | — | — | — | (51,399) | — | — | — | — |
| December\t31,\t2009 | 62,776,777 | (868,940) | (11,601) | — | 112,817,151 | 2,889,467 | 11,203,442 | 61,896,236 | — | 112,817,151 | 2,889,467 | 11,203,442 |
| Release\tof\tcommon\tstock |  |  |  |  |  |  |  |  |  |  |  |  |
| from\tescrow\tagent\tin |  |  |  |  |  |  |  |  |  |  |  |  |
| connection\twith\tQuellos |  |  |  |  |  |  |  |  |  |  |  |  |
| Transaction | — | 865,337 | — | — | — | — | — | 865,337 | — | — | — | — |
| Shares\trepurchased | — | — | (896,102) |  |  |  |  | (896,102) |  |  |  |  |
| Exchange\tof\tcommon\tstock |  |  |  |  |  |  |  |  |  |  |  |  |
| for\tpreferred\tshares\tB | — |  | (600,000) | — | 600,000 | — | — | (600,000) | — | 600,000 | — | — |
| Net\tissuance\tof\tcommon |  |  |  |  |  |  |  |  |  |  |  |  |
| shares\trelated\tto\temployee |  |  |  |  |  |  |  |  |  |  |  |  |
| stock\ttransactions\tand |  |  |  |  |  |  |  |  |  |  |  |  |
| convertible\tdebt |  |  |  |  |  |  |  |  |  |  |  |  |
| conversions | 1,634,807 | — | 804,243 | — | — | — | — | 2,439,050 | — | — | — | — |
| Exchange\tof\tpreferred\tshares |  |  |  |  |  |  |  |  |  |  |  |  |
| D\tfor\tB | — | — | — | — | 11,203,442 | — | (11,203,442) | — | — | 11,203,442 | — | (11,203,442) |
| Exchange\tof\tpreferred\tshares |  |  |  |  |  |  |  |  |  |  |  |  |
| B\tfor\tcommon\tshares | 67,512,040 | — | — | — | (67,512,040) | — | — | 67,512,040 | — | (67,512,040) | — | — |
| PNC\tLTIP\tcapital\tcontribution | — | — |  | — | — | (23,028) | — | — | — | — | (23,028) | — |
| December\t31,\t2010 | 131,923,624 | (3,603) | (703,460) | — | 57,108,553 | 2,866,439 | — | 131,216,561 | — | 57,108,553 | 2,866,439 | — |
| Exchange\tof\tpreferred\tshares |  |  |  |  |  |  |  |  |  |  |  |  |
| B\tfor\tcommon\tshares | 5,216,938 | — |  | — | (5,216,938) | — | — | 5,216,938 | — | (5,216,938) | — | — |
| Shares\trepurchased | — | — | (618,000) | — | (13,562,878) | — | — | (618,000) | — | (13,562,878) | — | — |
| Net\tissuance\tof\tcommon |  |  |  |  |  |  |  |  |  |  |  |  |
| shares\trelated\tto\temployee |  |  |  |  |  |  |  |  |  |  |  |  |
| stock\ttransactions\tand |  |  |  |  |  |  |  |  |  |  |  |  |
| convertible\tdebt |  |  |  |  |  |  |  |  |  |  |  |  |
| conversions | 2,739,818 | — | (92,182) | — | — | — | — | 2,647,636 | — | — | — | — |
| PNC\tLTIP\tcapital\tcontribution | — | — | — | — | — | (1,349,202) | — | — | — | — | (1,349,202) | — |
| December\t31,\t2011 | 139,880,380 | (3,603) | (1,413,642) | — | 38,328,737 | 1,517,237 | — | 138,463,135 | — | 38,328,737 | 1,517,237 | — |

# 18.	Restructuring	Charges

During	the	fourth	quarter	of	2011,	the	Company	reduced	its	workforce	globally	by	approximately	3.4%.	This	action	was	the	result	of	a	cost	cutting	initiative	designed	to	streamline operations,	enhance	competitiveness	and	better	position	the	Company	in	the	asset	management	marketplace.	The	Company	recorded	a	pre-tax	restructuring	charge	of	approximately $32	million	($22	million	after-tax)	during	the	year	ended	December	31,	2011.	This	charge	was	comprised	of	$24	million	of	severance	and	associated	outplacement	costs	and	$8	million of	expenses	related	to	the	accelerated	amortization	of	previously	granted	equity-based	compensation	awards.

The	following	table	presents	a	rollforward	of	the	Company's	restructuring	liability,	which	is	included	within	other	liabilities	on	the	Company's	consolidated	statements	of	financial condition:

Liability	amount	as	of	December	31,	2010	related	to	a	pre-tax	restructuring	charge	of	$22	million	recorded	during	the	year	ended	December	31,	2009. (1)

# 19.	Income	Taxes

The	components	of	income	tax	expense	for	the	years	ended	December	31,	2011,	2010	and	2009,	are	as	follows:

|  |  | Year	ended<br>December	31, |  |
| :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | 2009 |
| Current\tincome\ttax\texpense: |  |  |  |
| Federal | $693 | $708 | $342 |
| State\tand\tlocal | 54 | 60 | 36 |
| Foreign | 186 | \t 200 | 86 |
| Total\tnet\tcurrent\tincome\ttax\texpense | 933 | \t 968 | \t 464 |
| Deferred\tincome\ttax\texpense\t(benefit): |  |  |  |
| Federal | 52 | 28 | (7) |
| State\tand\tlocal | (112) | 10 | (60) |
| Foreign | (77) | (35) | (22) |
| Total\tnet\tdeferred\tincome\ttax\texpense\t(benefit) | (137) | 3 | (89) |
| Total\tincome\ttax\texpense | $796 | $971 | $375 |

Income	tax	expense	has	been	based	on	the	following	components	of	income	before	taxes,	less	net	income	(loss)	attributable	to	non-controlling	interests:

|  |  | Year	ended |  |
| :--- | :--- | :--- | :--- |
|  |  | December\t31, |  |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | 2009 |
| Domestic | $2,397 | $2,258 | $899 |
| Foreign | 736 | 776 | 351 |
| Total | $3,133 | $3,034 | $1,250 |

The	foreign	income	before	taxes	includes	countries,	which	have	statutory	tax	rates	that	are	lower	than	the	U.S.	federal	statutory	tax	rate	of	35%,	such	as	the	United	Kingdom, Luxembourg,	Canada	and	the	Netherlands.

A	reconciliation	of	income	tax	expense	with	expected	federal	income	tax	expense	computed	at	the	applicable	federal	income	tax	rate	of	35%	is	as	follows:

|  |  |  | Year	ended	December	31, | Year	ended	December	31, |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) | 2011 | % | 2010 | % | 2009 | % |
| Statutory\tincome\ttax\texpense | $1,097 | 35% | $1,062 | 35% | $438 | \t35% |
| Increase\t(decrease)\tin\tincome\ttaxes\tresulting\tfrom: |  |  |  |  |  |  |
| State\tand\tlocal\ttaxes\t(net\tof\tfederal\tbenefit) | 59 | 2 | 53 | 2 | 21 | 2 |
| Impact\tof\tforeign,\tstate,\tand\tlocal\ttax\trate\tchanges\ton\tdeferred\ttaxes | (188) | (6) | (27) | (1) | (45) | \t(4) |
| Effect\tof\tforeign\ttax\trates | (197) | (6) | (145) | (4) | (81) | \t(6) |
| Other | 25 | \t— | 28 | \t— | 42 | 3 |
| Income\ttax\texpense | $796 | 25% | $971 | 32% | $375 | \t30% |

Deferred	income	taxes	are	provided	for	the	effects	of	temporary	differences	between	the	tax	basis	of	an	asset	or	liability	and	its	reported	amount	in	the	Company's	consolidated financial	statements.	These	temporary	differences	result	in	taxable	or	deductible	amounts	in	future	years.

The	components	of	deferred	income	tax	assets	and	liabilities	are	shown	below:

| (Dollar	amounts	in	millions) | 2011 | 2010 |
| :--- | :--- | :--- |
| Deferred\tincome\ttax\tassets: |  |  |
| Compensation\tand\tbenefits | $304 | $374 |
| Unrealized\tinvestment\tlosses | 110 | 108 |
| Loss\tcarryforwards | 87 | 67 |
| Other | 229 | 186 |
| Gross\tdeferred\ttax\tassets | 730 | 735 |
| Less:\tdeferred\ttax\tvaluation\tallowances | (95) | (78) |
| Deferred\ttax\tassets\tnet\tof\tvaluation\tallowances | 635 | 657 |
| Deferred\tincome\ttax\tliabilities: |  |  |
| Goodwill\tand\tacquired\tindefinite-lived\tintangibles | 5,675 | 5,813 |
| Acquired\tfinite-lived\tintangibles | 208 | 271 |
| Other | 69 | 40 |
| Gross\tdeferred\ttax\tliabilities | 5,952 | 6,124 |
| Net\tdeferred\ttax\t(liabilities) | $(5,317) | $(5,467) |

Deferred	income	tax	assets	and	liabilities	are	recorded	net	when	related	to	the	same	tax	jurisdiction.	At	December	31,	2011,	the	Company	recorded	on	the	consolidated	statement	of financial	condition	deferred	income	tax	assets,	within	other	assets,	and	deferred	income	tax	liabilities	of	$6	million	and	$5,323	million,	respectively.	At	December	31,	2010,	the Company	recorded	on	the	consolidated	statement	of	financial	condition	deferred	income	tax	assets,	within	other	assets,	and	deferred	income	tax	liabilities	of	$10	million	and	$5,477 million,	respectively.

In	the	second	and	third	quarter	of	2011,	an	enacted	state	tax	law	and	a	state	tax	election	went	into	effect,	which	resulted	in	a	revaluation	of	certain	net	deferred	income	tax	liabilities primarily	related	to	acquired	intangible	assets,	which	resulted	in	a	$52	million	and	$91	million	tax	benefit,	respectively.	The	United	Kingdom	in	the	third	quarter	of	2011,	and	Japan	in the	fourth	quarter	of	2011	enacted	legislation	reducing	corporate	income	tax	rates,	which	resulted	in	a	revaluation	of	certain	net	deferred	income	tax	liabilities	primarily	related	to acquired	intangible	assets,	which	resulted	in	a	$60	million	and	$13	million	tax	benefit,	respectively.

The	Company	had	a	deferred	income	tax	asset	related	to	unrealized	investment	losses	of	approximately	$110	million	and	$108	million	as	of	December	31,	2011	and	2010,	respectively, reflecting	the	Company's	conclusion	that	based	on	the	weight	of	available	evidence,	it	is	more	likely	than	not	that	the	deferred	tax	asset	will	be	realized.	Realized	capital	losses	may	be carried	back	three	years	and	carried	forward	five	years	and	offset	against	realized	capital	gains	for	federal	income	tax	purposes.	The	Company	expects	to	be	able	to	carry	back	a	portion of	its	unrealized	capital	losses	when	realized,	hold	certain	fixed	income	securities	over	a	period	sufficient	for	them	to	recover	their	unrealized	losses,	and	to	generate	future	capital	gains sufficient	to	offset	the	unrealized	capital	losses.

At	December	31,	2011	and	2010,	the	Company	had	available	state	net	operating	loss	carry	forwards	of	$388	million	and	$182	million,	respectively,	which	will	expire	on	or	before 2032.	As	of	December	31,	2011,	the	Company	had	foreign	net	operating	loss	carryforwards	of	$132	million	of	which	$45	million	expires	on	or	before	2021	and	the	balance	will	carry forward	indefinitely.	In	addition,	at	December	31,	2011	and	2010,	the	Company	had	U.S.	capital	loss	carryforwards	of	$90	million,	which	were	acquired	in	the	BGI	Transaction	and will	expire	on	or	before	2013.

At	December	31,	2011	and	2010,	the	Company	had	$95	million	and	$78	million	of	valuation	allowances	for	deferred	income	tax	assets,	respectively,	recorded	on	the	consolidated statements	of	financial	condition.	The	year-over-year	increase	in	the	valuation	allowance	primarily	related	to	certain	foreign	deferred	income	tax	assets.

Goodwill	recorded	in	connection	with	the	Quellos	Transaction	has	been	reduced	during	the	period	by	the	amount	of	tax	benefit	realized	from	tax-deductible	goodwill.	See	Note	9, Goodwill,	for	further	discussion.

Current	income	taxes	are	recorded	net	in	the	consolidated	statements	of	financial	condition	when	related	to	the	same	tax	jurisdiction.	As	of	December	31,	2011,	the	Company	had current	income	taxes	receivable	and	payable	of	$108	million	and	$102	million,	respectively,	recorded	in	other	assets	and	accounts	payable	and	accrued	liabilities,	respectively.	As	of December	31,	2010,	the	Company	had	current	income	taxes	receivable	and	payable	of	$57	million	and	$157	million,	respectively,	recorded	in	other	assets	and	accounts	payable	and accrued	liabilities,	respectively.

The	Company	does	not	provide	deferred	taxes	on	the	excess	of	the	financial	reporting	over	tax	basis	on	its	investments	in	foreign	subsidiaries	that	are	essentially	permanent	in duration.	The	excess	totaled	$1,516	million	and	$1,297	million	as	of	December	31,	2011	and	2010,	respectively.	The	determination	of	the	additional	deferred	income	taxes	on	the excess	has	not	been	provided	because	it	is	not	practicable	due	to	the	complexities	associated	with	its	hypothetical	calculation.

The	following	tabular	reconciliation	presents	the	total	amounts	of	gross	unrecognized	tax	benefits:

|  |  | Year	ended |  |
| :--- | :--- | :--- | :--- |
|  |  | December\t31, |  |
| (Dollar\tamounts\tin\tmillions) | 2011 | 2010 | 2009 |
| Balance\tat\tJanuary\t1 | $307 | $285 | $114 |
| Additions\tfor\ttax\tpositions\tof\tprior\tyears | 22 | 10 | 11 |
| Reductions\tfor\ttax\tpositions\tof\tprior\tyears | (1) | (17) | (1) |
| Additions\tbased\ton\ttax\tpositions\trelated\tto\tcurrent\tyear | 46 | 35 | 63 |
| Lapse\tof\tstatute\tof\tlimitations | \t — | (8) | \t — |
| Settlements | (25) | (2) | (16) |
| Foreign\texchange\ttranslation | \t — | \t — | (3) |
| Positions\tassumed\tin\tBGI\tTransaction | \t — | 4 | \t 117 |
| Balance\tat\tDecember\t31 | $349 | $307 | $285 |

Included	in	the	balance	of	unrecognized	tax	benefits	at	December	31,	2011,	2010	and	2009,	respectively,	are	$226	million,	$194	million	and	$184	million	of	tax	benefits	that,	if recognized,	would	affect	the	effective	tax	rate.

The	Company	recognizes	interest	and	penalties	related	to	income	tax	matters	as	a	component	of	income	tax	expense.	Related	to	the	unrecognized	tax	benefits	noted	above,	the Company	accrued	interest	and	penalties	of	$10	million	during	2011	and	in	total,	as	of	December	31,	2011,	had	recognized	a	liability	for	interest	and	penalties	of	$66	million.	The Company	accrued	interest	and	penalties	of	$8	million	during	2010	and	in	total,	as	of	December	31,	2010,	had	recognized	a	liability	for	interest	and	penalties	of	$56	million.	During 2009,	the	Company	accrued	interest	and	penalties	of	$8	million	and	in	total,	as	of	December	31,	2009,	has	recognized	a	liability	for	interest	and	penalties	of	$48	million,	of	which	$28 million	was	assumed	in	the	BGI	Transaction.	Pursuant	to	the	Amended	and	Restated	Stock	Purchase	Agreement,	the	Company	has	been	indemnified	by	Barclays	for	$69	million	of unrecognized	tax	benefits.

BlackRock	is	subject	to	U.S.	federal	income	tax,	state	and	local	income	tax,	and	foreign	income	tax	in	multiple	jurisdictions.	Tax	years	after	2007	remain	open	to	U.S.	federal	income tax	examination,	tax	years	after	2002	remain	open	to	state	and	local	income	tax	examination,	and	tax	years	after	2006	remain	open	to	income	tax	examination	in	the	United	Kingdom. With	few	exceptions,	as	of	December	31,	2011,	the	Company	is	no	longer	subject	to	U.S.	federal,	state,	local	or	foreign	examinations	by	tax	authorities	for	years	before	2003.

The	Internal	Revenue	Service	("IRS")	completed	its	examination	of	BlackRock's	2006	and	2007	tax	years	in	March	2011.	In	November	2011,	the	IRS	commenced	its	examination	of BlackRock's	2008	and	2009	tax	years,	and	while	the	impact	on	the	Company's	consolidated	financial	statements	is	undetermined,	it	is	not	expected	to	be	material.

In	July	2011,	the	IRS	commenced	its	federal	income	tax	audit	of	the	BGI	group,	which	BlackRock	acquired	in	December	2009.	The	tax	years	under	examination	are	2007	through December	1,	2009,	and	while	the	impact	on	the	Company's	consolidated	financial	statements	is	undetermined,	it	is	not	expected	to	be	material.

The	Company	is	currently	under	audit	in	several	state	and	local	jurisdictions.	The	significant	state	and	local	income	tax	examinations	are	in	New	York	State	and	City	for	tax	years 2006	through	2008,	and	New	Jersey	for	tax	years	2003	through	2009.	No	state	and	local	income	tax	audits	cover	years	earlier	than	2006	except	for	New	Jersey.	No	state	and	local income	tax	audits	are	expected	to	result	in	an	assessment	material	to	BlackRock's	consolidated	financial	statements.

In	December	2009,	Her	Majesty's	Revenue	and	Customs	("HMRC")	commenced	its	United	Kingdom	income	tax	audit	of	BlackRock's	2007	through	2010	tax	years.	While	the	impact on	the	Company's	consolidated	financial	statements	is	undetermined,	it	is	not	expected	to	be	material.

As	of	December	31,	2011,	it	is	reasonably	possible	the	total	amounts	of	unrecognized	tax	benefits	will	increase	or	decrease	within	the	next	twelve	months	due	to	completion	of	tax authorities'	exams	or	the	expiration	of	statues	of	limitations.	Management	estimates	that	the	existing	liability	for	uncertain	tax	positions	could	decrease	by	approximately	$35	million	to $50	million	within	the	next	twelve	months.	The	Company	does	not	anticipate	that	any	possible	adjustments	resulting	from	these	audits	would	result	in	a	material	change	to	its consolidated	financial	statements.

# 20.	Earnings	Per	Share

The	following	table	sets	forth	the	computation	of	basic	EPS:

| (Dollar	amounts	in	millions,	except	per	share	data) | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Net\tincome\tattributable\tto\tBlackRock. | $2,337 | $2,063 | $875 |
| Less: |  |  |  |
| Dividends\tdistributed\tto\tcommon\tshares | 1,004 | 764 | 412 |
| Dividends\tdistributed\tto\tparticipating\tRSUs | 10 | 12 | 10 |
| Undistributed\tnet\tincome\tattributable\tto\tBlackRock. | 1,323 | 1,287 | 453 |
| Percentage\tof\tundistributed\tnet\tincome\tallocated\tto\tcommon\tshares^(a) | 99.1% | 98.6% | 97.3% |
| Undistributed\tnet\tincome\tallocated\tto\tcommon\tshares | 1,311 | 1,269 | 441 |
| Plus: |  |  |  |
| Common\tshare\tdividends | 1,004 | 764 | 412 |
| Net\tincome\tattributable\tto\tcommon\tshares | $2,315 | $2,033 | $853 |
| Weighted-average\tshares\toutstanding | \t 184,265,367 | \t 190,554,510 | \t 136,669,164 |
| Basic\tearnings\tper\tshare\tattributable\tto\tBlackRock,\tcommon\nstockholders: | $12.56 | $10.67 | $6.24 |

# 20.	Earnings	Per	Share	(continued)

The	following	table	sets	forth	the	computation	of	diluted	EPS:

| (Dollar	amounts	in	millions,	except	per	share	data) | 2011 | 2010 | 2009 |
| :--- | :--- | :--- | :--- |
| Net\tincome\tattributable\tto\tBlackRock | $2,337 | $2,063 | $875 |
| Less: |  |  |  |
| Dividends\tdistributed\tto\tcommon\tshares | 1,004 | 764 | 412 |
| Dividends\tdistributed\tto\tparticipating\tRSUs | 10 | 12 | 10 |
| Undistributed\tnet\tincome\tattributable\tto\tBlackRock. | 1,323 | 1,287 | 453 |
| Percentage\tof\tundistributed\tnet\tincome\tallocated\tto\tcommon\tshares^(a) | 99.1% | 98.6% | 97.3% |
| Undistributed\tnet\tincome\tallocated\tto\tcommon\tshares | 1,311 | 1,269 | 441 |
| Plus: |  |  |  |
| Common\tshare\tdividends | 1,004 | 764 | 412 |
| Net\tincome\tattributable\tto\tcommon\tshares | $2,315 | $2,033 | $853 |
| Weighted-average\tshares\toutstanding | \t 184,265,367 | \t 190,554,510 | \t 136,669,164 |
| Dilutive\teffect\tof: |  |  |  |
| Non-participating\tRSUs | 2,139,100 | 1,008,682 | 682,412 |
| Stock\toptions | 687,192 | 742,805 | 837,158 |
| Convertible\tdebt | 24,751 | 386,050 | 1,292,715 |
| Total\tdiluted\tweighted-average\tshares\toutstanding | \t 187,116,410 | \t 192,692,047 | \t 139,481,449 |
| Dilutive\tearnings\tper\tshare\tattributable\tto\tBlackRock,\tcommon\nstockholders: | $12.37 | $10.55 | $6.11 |

(a) Allocation	to	common	shareholders	is	based	on	the	total	of	common	and	participating	security	shareholders	(which	represent	unvested	RSUs	that	contain	nonforfeitable	rights to	dividends).	For	the	years	ended,	December	31,	2011,	2010	and	2009,	average	outstanding	participating	securities	were	1.8	million,	2.8	million	and	3.8	million,	respectively.

Due	to	the	similarities	in	terms	between	BlackRock	non-voting	participating	preferred	stock	and	the	Company's	common	stock,	the	Company	considers	participating	preferred	stock	to be	a	common	stock	equivalent	for	purposes	of	EPS	calculations.	As	such,	the	Company	has	included	the	outstanding	non-voting	participating	preferred	stock	in	the	calculation	of average	basic	and	diluted	shares	outstanding.

For	the	years	ended	December	31,	2011	and	2010,	5,125	and	1,198,856	RSUs,	respectively,	were	excluded	from	the	calculation	of	diluted	EPS	because	to	include	them	would	have	an anti-dilutive	effect.	For	the	year	ended	December	31,	2009,	1,240,998	stock	options	were	excluded	from	the	calculation	of	diluted	earnings	per	share	because	to	include	them	would have	an	anti-dilutive	effect.

# 21.	Segment	Information

The	Company's	management	directs	BlackRock's	operations	as	one	business,	the	asset	management	business.	As	such,	the	Company	believes	it	operates	in	one	business	segment	in accordance	with	ASC	280-10.

The	following	table	illustrates	investment	advisory,	administration	fees,	securities	lending	revenue	and	performance	fees,	BlackRock	Solutions	and	advisory,	distribution	fees	and	other revenue	for	the	years	ended	December	31,	2011,	2010	and	2009.

|  |  | Year	ended |  |
| :--- | :--- | :--- | :--- |
| (Dollar\tamounts\tin\tmillions) |  | December\t31, |  |
|  | 2011 | 2010 | 2009 |
| Equity | $4,447 | $4,055 | $1,468 |
| Fixed\tincome | \t 1,659 | \t 1,531 | 921 |
| Multi-asset\tclass | 914 | 773 | 499 |
| Alternatives | 864 | 961 | 515 |
| Cash\tmanagement | 383 | 510 | 625 |
| Total\tinvestment\tadvisory,\tadministration\tfees,\tsecurities\tlending\trevenue\tand\tperformance\tfees | \t 8,267 | \t 7,830 | \t 4,028 |
| BlackRock\tSolutions\tand\tadvisory | 510 | 460 | 477 |
| Distribution\tfees | 100 | 116 | 100 |
| Other\trevenue | 204 | 206 | 95 |
| Total\trevenue | $9,081 | $8,612 | $4,700 |

Americas	primarily	is	comprised	of	the	United	States,	Canada,	Brazil	and	Mexico,	while	Europe	primarily	is	comprised	of	the	United	Kingdom.	Asia-Pacific	primarily	is	comprised	of Japan,	Australia	and	Hong	Kong.

# 22.	Selected	Quarterly	Financial	Data	(unaudited)

| 2011 | 1st<br>	Quarter | 2nd<br>	Quarter | 3rd<br>	Quarter | 4th | Quarter |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Revenue | $2,282 | $2,347 | $2,225 | $2,227 | $2,227 |
| Operating\tincome | $798 | $866 | $777 | $808 | $808 |
| Net\tincome | $564 | $622 | $570 | $583 | $583 |
| Net\tincome\tattributable\tto\tBlackRock | $568 | $619 | $595 | $555 | $555 |
| Earnings\tper\tshare\tattributable\tto\tBlackRock,\tInc.\tcommon |  |  |  |  |  |
| stockholders: |  |  |  |  |  |
| Basic | $2.92 | $3.26 | $3.28 | $3.10 | $3.10 |
| Diluted | $2.89 | $3.21 | $3.23 | $3.05 | $3.05 |
| Weighted-average\tcommon\tshares\toutstanding: |  |  |  |  |  |
| Basic | \t 191,797,365 | \t 187,870,001 | \t 179,034,837 | \t 178,562,187 | \t 178,562,187 |
| Diluted | \t 194,296,504 | \t 190,579,963 | \t 181,825,329 | \t 181,987,669 | \t 181,987,669 |
| Dividend\tdeclared\tper\tshare | $1.375 | $1.375 | $1.375 | $1.375 | $1.375 |
| Common\tstock\tprice\tper\tshare: |  |  |  |  |  |
| High | $209.77 | $207.42 | $199.10 | $179.77 | $179.77 |
| Low | $179.52 | $183.51 | $140.22 | $137.00 | $137.00 |
| Close | $201.01 | $191.81 | $148.01 | $178.24 | $178.24 |
| 2010 | 1st | 2nd | 3rd | 4th |  |

|  | Quarter | Quarter | Quarter | Quarter |
| :--- | :--- | :--- | :--- | :--- |
| Revenue | $1,995 | $2,032 | $2,092 | $2,493 |
| Operating\tincome | $654 | $697 | $707 | $940 |
| Net\tincome | $428 | $389 | $584 | $649 |
| Net\tincome\tattributable\tto\tBlackRock | $423 | $432 | $551 | $657 |
| Earnings\tper\tshare\tattributable\tto\tBlackRock,\tInc.\tcommon |  |  |  |  |
| stockholders: |  |  |  |  |
| Basic | $2.20 | $2.23 | $2.85 | $3.39 |
| Diluted | $2.17 | $2.21 | $2.83 | $3.35 |
| Weighted-average\tcommon\tshares\toutstanding: |  |  |  |  |
| Basic | \t 189,676,023 | \t 190,975,161 | \t 190,494,905 | \t 191,057,374 |
| Diluted | \t 192,152,251 | \t 192,569,539 | \t 192,326,841 | \t 193,478,460 |
| Dividend\tdeclared\tper\tshare | $1.00 | $1.00 | $1.00 | $1.00 |
| Common\tstock\tprice\tper\tshare: |  |  |  |  |
| High | $243.80 | $212.27 | $172.87 | $193.74 |
| Low | $200.56 | $143.01 | $138.42 | $161.53 |
| Close | $217.76 | $143.40 | $170.25 | $190.58 |

•The	fourth	quarter	2011	included	$32	million	of	pre-tax	restructuring	charges,	while	third	quarter	2011	included	$63	million	of	pre-tax	UK	lease	exit	costs	related	to	the Company's	exit	from	two	London	locations.

•The	fourth	quarter	2011	included	a	$20	million	non-cash	tax	benefit	primarily	due	to	tax	legislation	enacted	in	Japan,	while	the	third	quarter	2011	included	a	$129 million	non-cash	tax	benefit	due	to	tax	legislation	enacted	in	the	United	Kingdom	and	a	state	tax	election.

•The	second	quarter	2011	included	a	$52	million	non-cash	tax	benefit	due	to	enacted	state	legislation.

•The	third	quarter	of	2010	included	a	$30	million	non-cash	tax	benefit	associated	with	tax	legislation	enacted	in	the	United	Kingdom.

•The	first,	second	and	third	quarters	of	2010	included	$52	million,	$32	million	and	$6	million	of	pre-tax	BGI	integration	costs,	respectively.

# 23.	Subsequent	Events

Claymore	Investments,	Inc.	In	January	2012,	BlackRock	announced	that	it	has	agreed	to	acquire	Toronto-based	Claymore	Investments,	Inc.,	("Claymore")	subject	to	customary closing	conditions.	Claymore	is	a	wholly	owned	independent	Canadian	subsidiary	of	Guggenheim	Funds	Services	Group,	a	subsidiary	of	Guggenheim	Partners,	LLC.	The	total consideration	estimated	to	be	paid	at	closing	will	be	approximately	$210	million.

Additional	Subsequent	Event	Review.	In	addition	to	the	subsequent	events	included	in	the	notes	to	the	consolidated	financial	statements,	the	Company	conducted	a	review	for additional	subsequent	events	and	determined	that	no	additional	subsequent	events	had	occurred	that	would	require	accrual	or	additional	disclosures.

		10.1(10) BlackRock,	Inc.	Amended	and	Restated	1999	Stock	Award	and	Incentive	Plan.	+

		10.4(5) BlackRock,	Inc.	Voluntary	Deferred	Compensation	Plan,	as	amended	and	restated	as	of	January	1,	2005.+

		10.11(5) Registration	Rights	Agreement,	dated	as	of	September	29,	2006,	among	BlackRock,	Merrill	Lynch	&	Co.,	Inc.	and	the	PNC	Financial	Service	Group,	Inc.

		10.12(15) Share	Surrender	Agreement,	dated	October	10,	2002	(the	"Share	Surrender	Agreement"),	among	Old	BlackRock,	PNC	Asset	Management,	Inc.	and	The	PNC Financial	Services	Group,	Inc.+

		10.18(20) Second	Amended	and	Restated	Global	Distribution	Agreement,	dated	as	of	November	15,	2010,	among	BlackRock	and	Merrill	Lynch	&	Co.,	Inc.

		10.19(3) Amended	and	Restated	Implementation	and	Stockholder	Agreement,	dated	as	of	February	27,	2009,	between	The	PNC	Financial	Services	Group,	Inc.	and BlackRock.

		10.20(21) Amendment	No.	1,	dated	as	of	June	11,	2009,	to	the	Amended	and	Restated	Implementation	and	Stockholder	Agreement	between	The	PNC	Financial	Services Group,	Inc.	and	BlackRock.

		10.21(20) Third	Amended	and	Restated	Stockholder	Agreement,	dated	as	of	November	15,	2010,	among	BlackRock,	Merrill	Lynch	&	Co.,	Inc.	and	Merrill	Lynch	Group, Inc.

		10.25(4) Stockholder	Agreement,	dated	as	of	December	1,	2009,	by	and	among	BlackRock,	Barclays	Bank	PLC	and	Barclays	BR	Holdings	S.à.r.l.

		10.26(4) Registration	Rights	Agreement,	dated	as	of	December	1,	2009,	by	and	among	BlackRock,	Barclays	Bank	PLC	and	Barclays	BR	Holdings	S.à.r.l.

		10.27(24) Lease	Agreement,	dated	as	of	February	17,	2010,	among	BlackRock	Investment	Management	(UK)	Limited	and	Mourant	&	Co	Trustees	Limited	and	Mourant Property	Trustees	Limited	as	Trustees	of	the	Drapers	Gardens	Unit	Trust	for	the	lease	of	Drapers	Gardens,	12	Throgmorton	Avenue,	London,	EC2,	United Kingdom.


what is the percent change in long-term component changes from 12/31/2011 to 12/31/2012?
aum_2012 = 593356
aum_2013 = 752707
change = aum_2013 - aum_2012
percent_change = change / aum_2012
answer = percent_change * 100