UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q10-Q/A

Amendment No. 1

(Mark One)

For the quarterly period ended March 31, 2007

OR

For the transition period from                        to                        .

Commission file number 001-33099

BlackRock, Inc.

(Exact name of registrant as specified in its charter)

40 East 52nd Street, New York, NY 10022

(Address of principal executive offices)

(Zip Code)

(212) 810-5300

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer          X            Accelerated filer                      Non-accelerated filer                  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes                                                   No              X            

As of April 30, 2007, there were 116,088,158 shares of the registrant’s common stock outstanding.

Explanatory Note

This Form 10-Q/A is being filed to amend the Form 10-Q for the quarter ended March 31, 2007 to correct an error in the condensed consolidated statement of cash flows included in the financial statements of BlackRock, Inc. as of and for the three months ended March 31, 2007. As more fully described in Note 11 to the condensed consolidated financial statements, approximately $188 million of cash flows related to non-controlling interests of consolidated investment funds (which primarily reflect investment funds acquired in the Merrill Lynch Investment Managers transaction) was erroneously classified as cash flows from operating activities instead of cash flows from financing activities on the Condensed Consolidated Statement of Cash Flows for the interim period ended March 31, 2007. This error had no effect on BlackRock’s financial condition, results of operations or margins.

For purposes of this Form 10-Q/A, and in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, each item of the Form 10-Q for the interim period ended March 31, 2007, as originally filed on May 10, 2007, that was affected by the restatement has been amended and restated in its entirety. Unless otherwise indicated, this report speaks only as of the date that the original report was filed. No attempt has been made in this Form 10-Q/A to update other disclosures presented in the original report on Form 10-Q, except as required to reflect the effects of the restatement. This Form 10-Q/A does not reflect events occurring after the filing of the original Form 10-Q or modify or update those disclosures, including the exhibits to the Form 10-Q affected by subsequent events; however, this Form 10-Q/A includes as exhibits 31.1, 31.2 and 32.1 new certifications by the Company’s chief executive officer and chief financial officer as required by Rule 12b-25 promulgated under the Securities Exchange Act of 1934, as amended. This Form 10-Q/A should be read in conjunction with the Company’s filings made with the Securities and Exchange Commission subsequent to the filing of the original Form 10-Q, including any amendments to those filings. The following items have been amended as a result of the restatement:

Part I - Item 1 - Financial Statements

Part I - Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

Part I - Item 4 - Controls and Procedures

BlackRock, Inc.

Index to Form 10-Q10-Q/A

PART I

FINANCIAL INFORMATION

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BlackRock, Inc.

Condensed Consolidated Statements of Financial Condition

(Dollar amounts in thousands)

(unaudited)

See accompanying notes to condensed consolidated financial statements.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Income

(Dollar amounts in thousands, except share data)

(unaudited)

See accompanying notes to condensed consolidated financial statements.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Comprehensive Income

(Dollar amounts in thousands)

(unaudited)

See accompanying notes to condensed consolidated financial statements.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

BlackRock, Inc.

Condensed Consolidated Statements of Cash Flows

(Dollar amounts in thousands)

(unaudited)

See accompanying notes to condensed consolidated financial statements.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

BlackRock, Inc.

Notes to Condensed Consolidated Financial Statements

(Dollar amounts in thousands, except share data)

(unaudited)

BlackRock, Inc. and its subsidiaries (“BlackRock” or the “Company”) provide diversified investment management services to institutional clients and to individual investors through various investment vehicles. Investment management services primarily consist of the active management of fixed income, cash management and equity client accounts, the management of a number of open-end and closed-end mutual fund families and other non-U.S. equivalent retail products serving the institutional and retail markets and the management of alternative funds developed to serve various customer needs. BlackRock also offers risk management, investment system outsourcing and financial advisory services to institutional investors under the BlackRock Solutions^® brand name.

Basis of Presentation

These condensed 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, its controlled subsidiaries and other entities consolidated as required by GAAP. All significant accounts and transactions between consolidated entities have been eliminated.

The preparation of condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions. Certain financial information that is normally included in annual financial statements, including certain financial statement footnotes, prepared in accordance with GAAP, is not required for interim reporting purposes and has been condensed or omitted herein. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes related thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, which was filed with the Securities and Exchange Commission (“SEC”) on March 13, 2007.

The interimcondensed consolidated financial datastatements as of March 31, 2007 and for the three months ended March 31, 2007 and 2006 are unaudited. However, in the opinion of management, the interim data includes all normal recurring adjustments, as well as purchase accounting fair value adjustments related to the Merrill Lynch Investment Managers (“MLIM”) transaction, necessary for a fair presentation of the Company’s results for the periods shown. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year. Certain amounts in the Company’s prior year condensed consolidated financial statements have been reclassified to conform to the 2007 presentation.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

Income Taxes

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation (“FIN”) No. 48,Accounting for Uncertainty in Income Taxes and Related Implementation Issues. FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in a Company’s financial statements in accordance with SFAS No. 109,Accounting for Income Taxes. FIN No. 48 prescribes a threshold and measurement attribute for recognition in the financial statements of an asset or liability resulting from a tax position taken or expected to be taken in a tax return. FIN No. 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

BlackRock adopted the provisions of FIN No. 48 on January 1, 2007. As a result of the adoption, the Company recognized approximately $15,200 in increased income tax reserves related to uncertain tax positions. Approximately $13,600 of this increase related to taxes that would affect the effective tax rate if recognized, and this portion was accounted for as a reduction to the January 1, 2007 balance in retained earnings. The remaining $1,600 balance, if disallowed, would not affect the annual effective tax rate. Total gross unrecognized tax benefits at December 31, 2006 were approximately $52,100. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate at December 31, 2006 were approximately $25,700. As of March 31, 2007, the Company does not anticipate a significant change to the amount of unrecognized tax benefits within the next 12 months.

The Company recognizes interest and penalties related to income tax matters in income tax expense. Interest related to tax matters at December 31, 2006, was approximately $4,600. The Company has not accrued any tax-related penalties.

BlackRock is subject to U.S. federal income tax as well as income tax in multiple jurisdictions. The tax years after 2002 remain open to U.S. federal income tax examination, and the tax years after 2004 remain open to income tax examination in the United Kingdom. Prior to the closing of the MLIM transacton, BlackRock filed New York State and New York City income tax returns on a combined basis with The PNC Financial Services Group, Inc. (“PNC”), and the tax years after 2001 remain open to income tax examination in New York State and New York City.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

Recent Accounting Developments (continued)

In September 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157,Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. SFAS No. 157 requires companies to disclose the fair value of their financial instruments according to a fair value hierarchy (i.e., levels 1, 2, and 3, as defined). Additionally, companies are required to provide enhanced disclosure regarding instruments in the level 3 category (which have inputs to the valuation techniques that are unobservable and require significant management judgment), including a reconciliation of the beginning and ending balances separately for each major category of assets and liabilities. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and all interim periods within those fiscal years. The Company is currently evaluating the impact adoption will have on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 158,Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans–an amendment of FASB Statements No. 87, 88, 106 and 132(R). SFAS No. 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and recognize changes in the funded status in the year in which the changes occur. The statement also requires actuarial valuations to be performed as of the balance sheet date. The balance sheet recognition provisions of SFAS No. 158 were effective for fiscal years ending after December 15, 2006. The valuation date provisions are effective for fiscal years ending after December 15, 2007. The Company adopted the balance sheet recognition provisions of SFAS No. 158 on December 31, 2006 and the impact of adoption was not material to its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure eligible financial instruments at fair value. The unrealized gains and losses on items for which the fair value option has been elected should be reported in earnings. The decision to elect the fair value option is determined on an instrument by instrument basis, it should be applied to an entire instrument, and it is irrevocable. Assets and liabilities measured at fair value pursuant to the fair value option should be reported separately in the balance sheet from those instruments measured using another measurement attribute. SFAS No. 159 is effective as of the beginning of the first fiscal year that begins after November 15, 2007. The Company is currently analyzing the potential impact of adoption of SFAS No. 159 to its consolidated financial statements.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

At March 31, 2007 and December 31, 2006, BlackRock had total investments of $2,194,863 and $2,097,574, respectively. Of the total investments at March 31, 2007, $160,758 were classified as available-for-sale investments, $453,614 were classified as trading investments and $1,580,491 were classified as other investments, which include equity and cost method investments and certain consolidated private equity and other alternative funds.

A summary of the cost and carrying value of investments classified as available-for-sale is as follows:

The Company has reviewed the gross unrealized losses of $393 at March 31, 2007, all of which had been in a loss position for less than 12 months, and determined that these losses were not other than temporary primarily because the Company has the ability and intent to hold the securities for a period of time sufficient to recover such losses. As a result, the Company recorded no impairments on such securities.

During the three months ended March 31, 2007 and 2006, the Company recorded impairments of $393 and $998, respectively, on certain collateralized debt obligations (“CDOs”).

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

A summary of the cost and carrying value of trading and other investments is as follows:

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

Included in other investments at March 31, 2007 is $32,399 of investments accounted for using the cost method. FASB Statement of Position FAS 115-1/124-1 requires that a company review cost method investments for other-than-temporary impairment whenever management estimates a fair value for such investments or when events or changes in circumstances have occurred that may have a significant adverse effect on the fair value of the investment. At March 31, 2007, management reviewed the carrying value of these investments and estimated their aggregate fair value to be $35,138. As such, no impairment was recorded.

The carrying value of investments in debt securities by contractual maturity at March 31, 2007 and December 31, 2006 is as follows:

The Company consolidates certain investments, primarily because it is deemed to control such investments in accordance with GAAP. At March 31, 2007 and December 31, 2006, the following balances related to these entities were consolidated in the condensed consolidated statements of financial position:condition:

Total consolidated net assets of $371,536 and $370,315 at March 31, 2007 and December 31, 2006, respectively, represent the fair value of the Company’s ownership interest in these investments. Valuation changes associated with these investments are reflected in non-operating income and non-controlling interest. Other net liabilities includes $180,811 and $95,815 of debt held by consolidated investments at March 31, 2007 and December 31, 2006, respectively, which are included in other liabilities on the statements of financial condition.

The Company may not be able to access cash and cash equivalents held by consolidated investments to use in its operating activities. In addition, the Company may not be readily able to sell investments held by consolidated investments in order to obtain cash for use in its operations.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

From time to time, the Company may consolidate a sponsored investment product that holds freestanding derivative financial instruments for trading purposes. The Company recognizes derivative instruments at fair value and records the changes in fair value in non-operating income on the condensed consolidated statements of income. BlackRock may also enter into derivative financial instruments to economically hedge market price exposures with respect to seed investments in sponsored products or to hedge foreign currency exchange risk. For the three months ended March 31, 2007 and 2006, the Company did not hold any derivatives designated in a formal hedge relationship under SFAS No. 133,Derivative Instruments and Hedging Activities.

During first quarter 2007, the Company entered into a series of total return swaps to economically hedge against changes in fair value of its investments in certain sponsored investment products. At March 31, 2007, the outstanding total return swaps had an aggregate notional value of approximately $65,000 and resulted in a net loss of approximately $292 for the three months ended March 31, 2007.

During first quarter 2007, the Company also entered into a forward contract to sell 1.2 billion yen in August 2007 as a hedge against the foreign exchange risk associated with a consolidated sponsored investment product in Japan. The change in value in the forward contract is expected to offset the change in the value associated with foreign exchange, related to the Company’s investment in the sponsored investment fund. For the three months ended March 31, 2007, the change in fair value of the forward contract was immaterial to the Company’s condensed consolidated statement of income.

The following table sets forth the computation of basic and diluted earnings per share:

Due to the similarities in terms between BlackRock series A non-voting participating preferred stock and the Company’s common stock, the Company considers the series A non-voting participating preferred stock to be common stock for purposes of earnings per share calculations. As such, the Company has included the outstanding series A non-voting participating preferred stock in the calculation of average basic shares outstanding for the three months ended March 31, 2007.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

BlackRock, Inc. Long-Term Incentive Plan (“LTIP”)

The BlackRock, Inc. 2002 Long-Term Retention and Incentive Plan (“LTIP”) permitted the grant of up to $240,000 in deferred compensation awards (the “LTIP Awards”), of which the Company previously granted approximately $230,300. Approximately $210,000 of the LTIP awards were paid in January 2007. The awards were payable approximately 16.7% in cash and the remainder in BlackRock stock contributed by PNC and distributed to LTIP participants. Under a related share surrender agreement, PNC committed to provide up to 4,000,000 shares of BlackRock common stock to fund compensation programs. The payment of the January 2007 LTIP awards resulted in the surrender by PNC of approximately 1,000,000 shares of BlackRock common stock. The remaining approximately 3,000,000 shares which were committed and are available to support future long-term retention and incentive programs but are not subject to surrender by PNC until the programs are approved by the Management Development and Compensation Committee and awards are made in accordance with the share surrender agreement. The Company granted additional long-term incentive awards in January 2007 which included 1,540,050 restricted stock units that are intended to be settled using these shares.

Under the terms of the LTIP, employees elected to put approximately 95% of the stock portion of the awards back to the Company at a total fair market value of approximately $165,700. On the payment date, the Company recorded a capital contribution from PNC for the amount of shares funded by PNC. For the shares not put back to the Company, no dilution resulted from the delivery of stock pursuant to the awards since they were funded by shares held by PNC and were issued and outstanding at December 31, 2006. Put elections made by employees were accounted for as treasury stock repurchases and are accretive to the Company’s earnings per share. The shares repurchased have been retained as treasury stock.

Share-Based Payment

The Company adopted SFAS No. 123R,Share-Based Payment, on January 1, 2006, using the modified-prospective transition approach, with no cumulative effect on net income. The total stock-based compensation expense before taxes associated with stock-based employee compensation plans was $40,252 and $11,213 for the three months ended March 31, 2007 and 2006, respectively.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

Stock Options

Options outstanding as of March 31, 2007 and changes during the three months ended March 31, 2007 were as follows:

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of fiscal 2007 of $159.75 and the exercise price, multiplied by the number of in-the-money options) that all option holders would have received had they exercised their options on March 31, 2007. This amount changes based on the fair market value of the Company’s stock. Total intrinsic value of options exercised for the three months ended March 31, 2007 and 2006 was $102,255 and $5,769, respectively.

As of March 31, 2007, the Company had 3,597,585 shares under option which were exercisable.

On January 31, 2007, the Company awarded options to purchase 1,545,735 shares of BlackRock common stock to certain executives as long-term incentive compensation. The options vest on September 29, 2011, provided that the Company has actual GAAP earnings per share of at least $5.20 in 2009, $5.52 in 2010 or $5.85 in 2011. An alternative performance hurdle provides for vesting of the awards based on specific targets for the Company’s earnings growth performance to peers over the term of the awards. The options have a strike price of $167.76, which was based upon the closing price of the shares on the grant date. Fair value, as calculated in accordance with a modified Black-Scholes model, was approximately $45.88 per option. The fair value of the options is being amortized over the vesting period as the performance hurdles were deemed to be probable of occurring.

Assumptions used in the calculation of grant-date fair value for the stock options issued in January 2007 were as follows:

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

Stock Options (continued)

The Company’s expected option term was derived using the mathematical average between the earliest vesting date and the option expiration date in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 107. The Company’s expected stock volatility assumption was based upon historical stock price fluctuations of BlackRock’s common stock. The dividend yield assumption was derived using estimated dividends over the expected term and the stock price at date of grant. The risk free interest rate is based on the U.S. Treasury yield at date of grant.

Restricted Stock and Stock Units

Unvested restricted stock and stock unit awards at March 31, 2007 and changes during the three months then ended were as follows:

On January 25, 2007, the Company issued 901,609 restricted stock units (“RSUs”) to employees in conjunction with their annual service awards. The RSU awards vest 33.3% per year through January 2010. The value of the RSUs was calculated using BlackRock’s closing stock price on the date of grant, or $169.70. The grant date fair value of the RSUs is being amortized into earnings on the straight-line method over the requisite service period, net of expected forfeitures, for each separately vesting portion of the award as if the award was, in substance, multiple awards.

On January 31, 2007, the Company issued 1,540,050 restricted stock units (“RSUs”) to employees as long-term incentive compensation. The RSU awards vest on September 29, 2011 provided that BlackRock has actual GAAP earnings per share of at least $5.20 in 2009, $5.52 in 2010 or $5.85 in 2011. An alternative performance hurdle provides for vesting of the awards based on specific targets for the Company’s earnings growth performance to peers over the term of the awards. The value of the RSUs was calculated using BlackRock’s closing stock price on the date of grant, or $167.76. The grant-date fair value of the RSUs is being amortized into earnings over the vesting period, net of expected forfeitures.

At March 31, 2007, there was $487,299 in unrecognized stock-based compensation expense related to nonvested restricted stock and restricted stock unit awards. The Company expects to recognize that cost over a weighted-average period of 4.0 years.

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

During the three months ended March 31, 2007, the Company increased its deferred tax liabilities acquired in the MLIM transaction in the amount of $33,244 as the result of a $68,793 adjustment to the expected state tax rate applicable to such reserves, offset by $35,549 of additional federal income tax compensation deductions expected to be received in the future.

In December 2006, the Company entered into a revolving credit agreement with a syndicate of banking institutions with an initial borrowing capacity of $600,000 (the “Credit Agreement”). The term of the facility is five years and interest currently accrues at the applicable London Interbank Offer Rate (“LIBOR”) plus 0.20%. The Company pays a commitment fee of 0.04% per annum on the undrawn balance. Additionally, for each day that the total amount outstanding is greater than 50% of the total commitments by all lenders, the Company pays a utilization fee of 0.05% per annum on the total amount outstanding. Financial convenants in the Credit Agreement require BlackRock to maintain a maximum debt/EBITDA ratio of 3.0 and a minimum EBITDA/interest expense ratio of 4.0. As of March 31, 2007, the Company was in compliance with such covenants. The facility is intended to fund various investment opportunities as well as BlackRock’s near-term operating cash requirements.

In February 2007, the Company increased the maximum capacity of the facility to $800,000. The Credit Agreement allows BlackRock to request an additional $200,000 of borrowing capacity, subject to lender credit approval, up to a maximum of $1,000,000. At March 31, 2007, the Company had $550,000 outstanding on the facility. During April 2007, the Company repaid $80,000 on the facility and extended the remaining balance into May 2007.

Supplemental disclosure of cash flow information is as follows:

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

Supplemental schedule of non-cash transactions is as follows:

Legal Proceedings

BlackRock has received subpoenas from various U.S. federal and state governmental and regulatory authorities and various information requests from the SEC in connection with industry-wide investigations of U.S. mutual fund matters. BlackRock is continuing to cooperate fully in these matters. From time to time, BlackRock is subject to other regulatory inquiries and proceedings.

The Company, including a number of the legal entities acquired in the MLIM transaction, has been named as a defendant in various legal actions, including arbitrations, class actions, and other litigation and regulatory proceedings arising in connection with BlackRock’s activities. Additionally, the investment funds that the Company manages are subject to lawsuits, any of which could harm the investment returns of the applicable fund or result in managers being liable to the funds for any resulting damages. While Merrill Lynch has agreed to indemnify the Company for certain of the pre-closing liabilities related to legal and regulatory proceedings acquired in the MLIM transaction, entities that BlackRock now owns may be named as defendants in these matters and the Company’s reputation may be negatively impacted.

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

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PART I – FINANCIAL INFORMATION (continued)

Item 1. Financial Statements (continued)

Indemnifications

In the ordinary course of business, BlackRock enters into contracts with third parties pursuant to which the third parties provide services on behalf of BlackRock. In many of the contracts, BlackRock agrees to indemnify the third party service provider under certain circumstances. The terms of the indemnity 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) inaccuracy in or breach of representations or warranties related to the Company’s SEC reports, absence of undisclosed liabilities, litigation and compliance with laws and government regulations, without giving effect to any materiality or material adverse effect qualifiers, (2) 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, (3) any fees or expenses incurred or owed by BlackRock to any brokers, financial advisors or comparable other person retained or employed by BlackRock in connection with the transactions, and (4) certain specified tax covenants.

Merrill Lynch is not entitled to indemnification for any losses arising from the circumstances and events described in (1) above until the aggregate losses (other than individual losses less than $100) of Merrill Lynch exceed $100,000. In the event that such losses exceed $100,000, Merrill Lynch is entitled to be indemnified only for such losses (other than individual losses less than $100) in excess of $100,000. Merrill Lynch is not entitled to indemnification payments pursuant to (1) above in excess of $1,600,000 or for claims made more than 18 months from the closing of the MLIM Transaction. These limitations do not apply to losses arising from the circumstances and events described in (2), (3) and (4) above, which survive indefinitely.

Management believes that the likelihood of any liability arising under these indemnification provisions to be remote and, as such, no liability has been recorded on the consolidated statements of financial condition. 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.

In April 2007, the Company purchased from a subsidiary of PNC rights to receive certain cash flows from sponsored mutual funds without a front-end sales charge (“back-end load shares”). The fair value of these assets will be capitalized and subsequently amortized over periods between one and seven years. The Company also acquired the rights to related distribution and service fees from certain funds and contingent deferred sales commissions (“CDSCs”) upon shareholder redemption of certain back-end load shares. The purchase price of such rights was $33,996.

In April 2007, the State of New York enacted income tax law changes which will impact BlackRock’s income tax expense. The Company is in the process of determining the impact of such changes, which could be material.

On August 10, 2007, the Company filed a Form 8-K reporting that the condensed consolidated statement of cash flows for the three months ended March 31, 2007 should no longer be relied upon. The Company reclassified cash flows related to certain consolidated fund investments, primarily acquired in the MLIM transaction, between operating cash flows and financing cash flows as required by GAAP.

The line items impacted by the restatement on the condensed consolidated statement of cash flows for the three months ended March 31, 2007 are as follows:

In conjunction with the above changes, the supplemental schedule of non-cash transactions included in Note 8 above was also restated. The restatements consisted of a revision of the disclosure of the gross changes in investments due to the consolidation and deconsolidation of certain sponsored investment funds to a net presentation for net deconsolidations, which decreased by $103,306 from the amounts previously reported on a gross basis, and the revision of the disclosure of the gross changes in non-controlling interest for consolidation and deconsolidation of certain sponsored investment funds to a net presentation for net deconsolidations, which increased by $102,669 from the amounts previously reported on a gross basis.

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PART I – FINANCIAL INFORMATION (continued)

Item 2.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 factors previously disclosed in BlackRock’s 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 in political, economic or industry conditions, the interest rate environment or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management; (3) the relative and absolute investment performance of BlackRock’s investment products, including its separately managed accounts and the investments of the former MLIM business: (4) the impact of increased competition; (5) the impact of capital improvement projects; (6) the impact of future acquisitions or divestitures; (7) the unfavorable resolution of legal proceedings; (8) the extent and timing of any share repurchases; (9) the impact, extent and timing of technological changes and the adequacy of intellectual property protection; (10) the impact of legislative and regulatory actions and reforms and regulatory, supervisory or enforcement actions of government agencies relating to BlackRock, Merrill Lynch or PNC; (11) terrorist activities and international hostilities, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries, and BlackRock; (12) the ability to attract and retain highly talented professionals; (13) fluctuations in foreign currency exchange rates, which may adversely affect the value of advisory fees earned by BlackRock and certain investments denominated in foreign currencies; (14) the impact of changes to tax legislation and, generally, the tax position of the Company; (15) BlackRock’s ability to successfully integrate the MLIM business with its existing business; (16) the ability of BlackRock to effectively manage the former MLIM assets along with its historical assets under management; and (17) BlackRock’s success in maintaining the distribution of its products.

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PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

BlackRock, Inc. (“BlackRock” or the “Company”) is one of the largest publicly traded investment management firms in the United States with $1.154 trillion of assets under management (“AUM”) at March 31, 2007. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of fixed income, cash management, equity and alternative investment separate accounts and mutual funds. In addition, BlackRock provides risk management, investment system outsourcing and financial advisory services to institutional investors. On September 29, 2006, BlackRock and Merrill Lynch & Co., Inc. (“Merrill Lynch”) closed a transaction pursuant to which Merrill Lynch contributed its investment management business, Merrill Lynch Investment Managers (“MLIM”), to BlackRock in exchange for an aggregate of 65 million shares of newly issued BlackRock common and non-voting participating preferred stock (the “MLIM Transaction”). Immediately following the closing, Merrill Lynch owned 45% of the voting common stock and approximately 49.3% of the total capital stock on a fully diluted basis of the combined company and The PNC Financial Services Group, Inc. (“PNC”) owned approximately 34% of the combined company (as compared with 69% immediately prior to the closing).

The following table summarizes BlackRock’s operating performance for each of the three months ended March 31, 2007 and 2006 and December 31, 2006. Certain prior year amounts have been reclassified to conform to 2007 presentation:

BlackRock, Inc.

Financial Highlights

(Dollar amounts in thousands, except share data)

(unaudited)

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PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(continued)

Overview (continued)

BlackRock, Inc.

Financial Highlights

(continued)

(a) While BlackRock reports its financial results on a GAAP basis, management believes that evaluating the Company’s ongoing operating results may not be as useful if investors are limited to reviewing only GAAP 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. Certain prior year non-GAAP data has been restated to conform to current year presentation.

Operating margin, as adjusted, equals operating income, as adjusted, divided by revenue used for operating margin measurement, as indicated in the table below. Computations for all periods presented include affiliated and unaffiliated portfolio administration and servicing costs and are derived from the Company’s condensed consolidated financial statements as follows:

Management believes that operating income, as adjusted, and operating margin, as adjusted, are effective indicators of management’s ability to, and useful to management in deciding how to, effectively employ BlackRock’s resources. As such, management believes that operating income, as adjusted, and operating margin, as adjusted, provide useful disclosure to investors. MLIM integration costs consist principally of certain professional fees, rebranding costs and compensation costs related to the integration which were reflected in GAAP net income. MLIM integration costs have been deemed non-recurring by management and have been excluded from operating income, as adjusted, and operating margin per share, as adjusted, to help ensure the comparability of this information to prior periods. The portion of the LTIP expense associated with awards met by the distribution to participants of shares of BlackRock stock held by PNC has been excluded because, exclusive of the impact related to LTIP participants’ put options, these charges do not impact BlackRock’s book value. A fee sharing payment made in the first quarter 2006 has been excluded because it represents a non-recurring payment (based upon a performance fee) pursuant to the SSRM Holdings, Inc. acquisition agreement. Compensation expense associated with appreciation on assets related to BlackRock’s deferred compensation plans has been excluded because investment returns on these assets reported in non-operating income, net of the related impact on compensation expense, result in a nominal impact to net income. The portion of the compensation expense related to incentive awards to be funded by Merrill Lynch has been excluded because it is not expected to impact BlackRock’s book value.

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PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Overview (continued)

BlackRock, Inc.

Financial Highlights

(continued)

(a) (continued)

Portfolio administration and servicing costs have been excluded from revenue used for operating margin, as adjusted, because the Company receives offsetting revenue and expense for these services. Reimbursable property management compensation represents compensation and benefits paid to certain BlackRock Realty Advisors, Inc. (“Realty”) personnel. These employees are retained on Realty’s payroll when certain properties are acquired by Realty’s clients. The related compensation and benefits are fully reimbursed by Realty’s clients and have been excluded from revenue used for operating margin, as adjusted, because they bear no economic cost to BlackRock.

(b) While BlackRock reports its financial results on a GAAP basis, management believes that evaluating the Company’s ongoing operating results may not be as useful if investors are limited to reviewing only 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.

Management believes that net income, as adjusted, and diluted earnings per share, as adjusted, are effective measurements of BlackRock’s profitability and financial performance. MLIM integration costs reflected in GAAP net income have been deemed non-recurring by management and have been excluded from net income, as adjusted, and diluted earnings per share, as adjusted, to help ensure the comparability of this information to prior reporting periods. MLIM integration costs consist principally of compensation costs, professional fees and rebranding costs incurred in conjunction with the MLIM integration. The portion of LTIP expense associated with awards funded by the distribution to participants of shares of BlackRock stock held by PNC has been excluded from net income, as adjusted, and diluted earnings per share, as adjusted, because these charges do not impact BlackRock’s book value. The portion of the current year compensation expense related to incentive awards to be funded by Merrill Lynch has been excluded because it is not expected to impact BlackRock’s book value.

(c) Series A non-voting participating preferred stock is considered to be common stock for purposes of earnings per share calculations.

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PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Overview (continued)

BlackRock has portfolio managers located around the world, including the United States, the United Kingdom, The Netherlands, Japan, Australia and Hong Kong. The Company provides a wide array of taxable and tax-exempt fixed income, equity and balanced mutual funds and separate accounts, as well as a wide assortment of index-based equity and alternative investment products to a diverse global clientele. In addition, BlackRock provides global advisory services for mutual funds and other non-U.S. equivalent retail products. The Company’s non-U.S. mutual funds are based in a number of domiciles and cover a range of asset classes, including cash management, fixed income and equities. The primary retail fund group offered outside the United States is the Merrill Lynch International Investment Funds (“MLIIF”), which is authorized for distribution in more than 30 jurisdictions worldwide. In the United States, the primary retail offerings include a variety of open-end and closed-end funds, including BlackRock Funds and the BlackRock Liquidity Funds. Additional fund offerings include structured products, real estate funds, hedge funds and 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 active and passive strategies covering both equity and fixed income assets.

BlackRock’s client base consists of financial institutions and other corporate clients, pension funds, high net worth individuals and retail investors around the world. BlackRock maintains a significant sales and marketing presence globally that is focused on acquiring and maintaining retail and institutional investment management relationships by marketing its services to retail and institutional investors directly and through financial professionals, pension consultants and third-party distribution relationships. BlackRock also distributes certain of its products and services through Merrill Lynch.

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, in the case of certain real estate equity separate accounts, net operating income generated by the underlying properties, and are affected by changes in AUM, including market appreciation or depreciation, foreign exchange gains or losses 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 purchases and redemptions of mutual fund shares. Market appreciation or depreciation includes current income earned on, and changes in the fair value of, securities held in client accounts.

Investment advisory agreements for certain separate accounts and BlackRock’s alternative investment products provide for performance fees in addition to fees based on AUM. Performance fees generally are earned after a given period of time or when investment performance exceeds a contractual threshold. As such, performance fees may increase the volatility of BlackRock’s revenue and earnings.

BlackRock provides a variety of risk management, investment analytic and investment system 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 nameBlackRock Solutions^® and include a wide array of risk management services and enterprise investment system outsourcing to clients. Fees earned forBlackRock Solutions services are based on a number of factors including pre-determined percentages of the market value of assets subject to the services and the number of individual investment accounts, or fixed fees. Fees earned on risk management, investment analytic and investment system assignments are recorded as other revenue in the consolidated statements of income.

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PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Overview (continued)

Operating expense primarily consists of employee compensation and benefits, portfolio administration and servicing costs, general and administration expense and amortization of intangible assets. Employee compensation and benefits expense includes salaries, deferred and incentive compensation, long-term retention and incentive plans and related benefit costs. Portfolio administration and servicing costs reflect payments made to Merrill Lynch-affiliated entities and PNC-affiliated entities, as well as third parties, primarily associated with the administration and servicing of client investments in certain BlackRock products.

Assets Under Management

BlackRock, Inc.

Assets Under Management Summary

(Dollar amounts in millions)

(unaudited)

NM – Not Meaningful

AUM increased approximately $691.1 billion, or 149.2%, to $1.154 trillion at March 31, 2007, compared with $463.1 billion at March 31, 2006. The growth in AUM was attributable to $589.2 billion acquired in the MLIM Transaction, $53.4 billion in market appreciation, $39.5 billion in net subscriptions and $9.0 billion in foreign exchange gains. Net subscriptions of $39.5 billion for the twelve months ended March 31, 2007 were primarily attributable to net new business of $20.3 billion in cash management products, $11.7 billion in equity and balanced products and $5.2 billion in alternative products. Market appreciation of $53.4 billion largely reflected appreciation in equity and balanced assets of $30.2 billion, as equity markets improved during the period ended March 31, 2007 and market appreciation on fixed income products of $19.3 billion due to current income and changes in market interest rates. Foreign exchange gains of $9.0 billion consisted primarily of $5.9 billion in equity and balanced assets and $2.7 billion in fixed income assets.

AUM increased approximately $29.5 billion, or 2.6%, to $1.154 trillion at March 31, 2007, compared to $1.125 trillion at December 31, 2006. The growth in AUM was attributable to $14.4 billion in net subscriptions, $13.7 billion in market appreciation and $1.4 billion in foreign exchange gains. Net subscriptions of $14.4 billion for the three months ended March 31, 2007 were attributable to net new business of $8.4 billion in cash management products, $3.5 billion in fixed income products, $1.6 billion in equity and balanced products and $0.9 billion in alternative products. Market appreciation of $13.7 billion primarily reflected appreciation in equity and balanced assets of $7.8 billion, as equity markets improved during the period ended March 31, 2007 and market appreciation on fixed income products of $4.5 billion due to current income and changes in market interest rates. Foreign exchange gains of $1.4 billion consisted primarily of $0.9 billion in equity and balanced assets and $0.4 billion in fixed income assets.

* AUM reflects a reclassification of MLIM acquired assets of approximately $7.9 billion from fixed income to cash management.

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PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

Assets Under Management (continued)

The following table presents the component changes in BlackRock’s AUM for the three months ended March 31, 2007.

The following table presents the component changes in BlackRock’s AUM for the twelve months ended March 31, 2007.

- 24 -

PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(continued)

Operating results for the three months ended March 31, 2007 as compared with the three months ended March 31, 2006.

Operating results for the three months ended March 31, 2007 reflect the impact of the MLIM Transaction, which closed on September 29, 2006. The magnitude of the acquired business is the primary driver of most line item variances in the analysis below which compares the three months ended March 31, 2007 to the three months ended March 31, 2006. Certain prior year amounts have been reclassified to conform to 2007 presentation:

Revenue

NM – Not Meaningful

Total revenue for the three months ended March 31, 2007 increased $609.7 million, or 154.1%, to $1,005.4 million, compared with $395.7 million for the three months ended March 31, 2006. Investment advisory and administration fees increased $546.2 million, or 156.2%,to $895.9 million for the three months ended March 31, 2007, compared with $349.7 million for the three months ended March 31, 2006. Other income increased by $63.5 million, or 138.2%, to $109.4 million for the three months ended March 31, 2007, compared with $46.0 million for the three months ended March 31, 2006.

- 25 -

PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(continued)

Operating results for the three months ended March 31, 2007 as compared with the three months ended March 31, 2006. (continued)

Revenue (continued)

Investment advisory and administration fees

The increase in investment advisory and administration fees of $546.2 million, or 156.2%, was the result of an increase in investment advisory and administration base fees of $638.4 million, or 271.5%, to $873.5 million for the three months ended March 31, 2007, compared with $235.1 million for the three months ended March 31, 2006 partially offset by a reduction in performance fees of $92.2 million. Investment advisory and administration base fees increased in the three months ended March 31, 2007 primarily due to increased AUM of $691.1 billion, including $589.2 billion of AUM acquired in the MLIM Transaction.

The increase in base investment advisory and administration fees of $638.4 million for the three months ended March 31, 2007, compared with the three months ended March 31, 2006 consisted of increases of $399.8 million in equity and balanced products, $122.0 million in fixed income products, $85.6 million in cash management products and $31.0 million in alternative products. The increase in investment advisory and administration fees for equity and balanced, fixed income, cash management and alternative investment products was driven by increases in AUM of $362.2 billion, $152.0 billion, $158.4 billion and $18.5 billion, respectively. The AUM growth in equity and balanced, fixed income, cash management and alternative products included assets acquired in the MLIM Transaction of $314.4 billion, $127.7 billion, $135.6 billion and $11.5 billion, respectively.

Performance fees decreased by $92.2 million, or 80.4%, for the three months ended March 31, 2007 primarily due to fees earned on a large institutional real estate equity client account in the first quarter of 2006.

Other Revenue

Other revenue of $109.4 million for the quarter ended March 31, 2007 increased $63.5 million compared with the quarter ended March 31, 2006 and primarily represents fees earned onBlackRock Solutions products and services of $42.3 million, distribution fees earned onBlackRock Funds of $24.8 million, fees for fund accounting services of $12.0 million and property management fees of $9.4 million earned on real estate AUM (which represented direct reimbursement of the salaries of certain Realty employees).

The increase in other revenue of $63.5 million, or 138.2%, for the three months ended March 31, 2007 as compared to the three months ended March 31, 2006 was primarily the result of an increase of $22.3 million in distribution fees earned on mutual funds and $12.0 million in fund accounting services acquired during the MLIM Transaction and an increase of $8.3 million fromBlackRock Solutions products and services driven by new assignments.

- 26 -

PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(continued)

Operating results for the three months ended March 31, 2007 as compared with the three months ended March 31, 2006. (continued)

Expense

NM – Not Meaningful

Total expense, which reflects the impact of the MLIM Transaction on September 29, 2006, increased $437.5 million, or 148.0%, to $733.1 million for the three months ended March 31, 2007, compared with $295.6 million for the three months ended March 31, 2006. The increase was primarily attributable to increases in general and administration expenses and employee compensation and benefits and portfolio and administration and servicing costs. Integration charges related to the MLIM Transaction of $7.1 million and $6.6 million in the first quarter of 2007 and first quarter of 2006, respectively, were recorded in general and administration expense.

Employee Compensation and Benefits

Employee compensation and benefits expense increased by $160.6 million, or 83.7%, to $352.4 million, at March 31, 2007, compared to $191.8 million for the three months ended March 31, 2006. The increase in employee compensation and benefits expense was primarily attributable to increases in salaries and benefits and incentive compensation of $135.2 million and $25.9 million, respectively. The increase of $135.2 million, or 160.3%, in salaries and benefits was primarily attributable to higher staffing levels associated with business growth and the MLIM Transaction. Employees (excluding employees of Metric Management Properties, Inc., “Metric”) at March 31, 2007 totaled 4,766 as compared to 1,832 at March 31, 2006. The $25.9 million increase in incentive compensation was primarily attributable to higher operating income offset by lower incentive compensation associated with lower performance fees earned on the Company’s alternative investment products.

- 27 -

PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(continued)

Operating results for the three months ended March 31, 2007 as compared with the three months ended March 31, 2006. (continued)

Expense (continued)

General and Administration Expense

NM—Not Meaningful

General and administration expense increased $170.8 million, or 327.3%, for the three months ended March 31, 2007 to $223.0 million, compared to $52.2 million for the three months ended March 31, 2006. The increase in general and administration expense was due to increases in marketing and promotional expense of $62.5 million, portfolio services expense of $33.1 million, occupancy expense of $23.0 million, technology expense of $21.9 million, and other general and administration expense of $30.3 million.

Marketing and promotional expense increased $62.5 million, or 479.1%, to $75.6 million for the three months ended March 31, 2007, compared to $13.1 million for the three months ended March 31, 2006 primarily due to increased marketing activities of $42.5 million (which included $23.2 million related to domestic and international marketing efforts, $13.2 million related to fund launch costs of a new closed-end fund in the first quarter, and $6.6 million related to BlackRock’s advertising and rebranding campaign) and $20.0 million of increased amortization of deferred mutual fund commissions assumed in the MLIM Transaction. Portfolio services costs increased by $33.1 million to $37.7 million, related to supporting higher AUM levels and increased trading activities. Occupancy costs for the three months ended March 31, 2007 totaled $33.2 million, representing a $23.0 million, or 224.9%, increase from $10.2 million for the three months ended March 31, 2006. The increase in occupancy costs primarily reflects costs related to the expansion of corporate facilities related to the MLIM Transaction and business growth. Technology expenses increased $21.9 million, or 338.2%, to $28.4 million, compared to $6.5 million for the three months ended March 31, 2006 partially due to $8.6 million in technology consulting expenses associated with operating growth and a $4.9 million increase in depreciation expense. Other general and administration costs increased by $30.3 million to $48.1 million from $17.8 million, including $15.5 million in professional fees.

- 28 -

PART I – FINANCIAL INFORMATION (continued)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(continued)

Operating results for the three months ended March 31, 2007 as compared with the three months ended March 31, 2006. (continued)

Fee Sharing Payment

For the quarter ended March 31, 2006, BlackRock expensed a one-time fee sharing payment of $34.5 million, representing a payment related to a large institutional real estate equity client account acquired in the SSR acquisition in January 2005.

Amortization of Intangible Assets

The $29.0 million increase in amortization of intangible assets to $31.0 million for the three months ended March 31, 2007, compared to $2.0 million for the three months ended March 31, 2006, primarily reflects amortization of finite-lived intangible assets acquired in the MLIM Transaction.

Non-Operating Income and Non-Controlling Interest

Non-operating income, net of non-controlling interest for the three months ended March 31, 2007 and 2006 were as follows:

NM – Not Meaningful

The components of non-operating income, net of non-controlling interest for the three months ended March 31, 2007 and 2006 are as follows:

NM – Not Meaningful