Key questions and answers from the fourth quarter fiscal 2006 earnings call conducted by BlackRock on January 17, 2007.

William Katz (Buckingham Research): On the fixed income business, if you look back over the last several quarters, it does seem like the growth rate has slowed sharply. Are we at the end of this cycle? Could there be a more decisive rotation to equities and are you fully prepared to capture if that were to happen?

Laurence D. Fink: The 3.70% whatever for the 10-year we are going to see, and this is why in the long run we are very constructive on equities. You're going to see a very large rotation into equities, be it from cash or intermediate bonds. With the bond market rallying so much and the equity market falling, you're going to see some significant rebalancing from qualified pension plans. We still see a lot of growth build in the global area. In the domestic side, we're going to see a big rotation over the course of the next few years.

In terms of are we going to be able to take advantage of it, I would say not fully yet, but we're very well prepared and we're going to get prepared for that rotation. Our performance in equities as we noted in our release was very strong. Our global equity product had an extraordinary year last year, and if we continue to do that we will be very prepared to take on some very large flows in terms of global equities. We are enhancing our new team in European equities. Our U.S. equity teams also had some very good years. Our Global Opportunity Fund had one of the most remarkable years ever on a $40 billion platform. Though, we're not fully prepared yet but we're certainly a lot more prepared than we've ever been before. But I don't think it will be that dire. I still believe a lot of people will need to be in fixed income. It’s going to be this gigantic rotation, but the trends will be a rotation from fixed to equities.

William Katz (Buckingham Research): You are out marketing an array of Closed-End Funds. Can you provide an assessment of how successful that is and what the appetite is for that product right now?

Laurence D. Fink: It's in the marketing period now and I don't think I'm allowed to talk about it. I can't talk about it for SEC reasons. It is in the market, it's going to be small, but we expect it to be small. Closed-End market is digesting huge flows in 2007 and one should expect the digestion will take some quarters. I don't think we are going to see the huge inflows of money in Closed-End Funds as we did last year.

Christopher Spahr (Deutsche Bank): Can you comment on how we should think about the performance fees going forward, both on a year-over-year basis and on quarterly basis?

Laurence D. Fink: I never ask anyone to do any monetization of performance fees. We had an extraordinary year in performance fees. Our fixed income hedge funds navigated very carefully in this credit crisis. We had one fund that was up extraordinarily well. If you look at some of our hedge funds products, they are heavily oriented towards energy and commodities. I don't have to tell you what energy and commodities have done. We benefited because of the type of hedge fund products that we have. In addition, we had some extra ordinary performance fees in real estate because we sold a bunch of real estate in the third and fourth quarter on behalf of our clients and we took some performance fees when we wanted to take some of the risk down in our real estate platform. We expect we are well positioned again in 2008 to take advantage of these global opportunities in terms of our hedge funds. We raised a lot more hedge funds and products in the fourth quarter. We don't forecast on what is going to happen in 2008 related to hedge funds, but we are growing out our alternative platform we are certainly building on a more diversified base of alternative products that have performance-based fees.

Christopher Spahr (Deutsche Bank): Advisory revenues by asset class appeared to be higher across all asset classes. Can you give color about the sustainability of those?

Paul L. Audet: The revenues were up as you probably saw across all asset classes, largely because we've had sizable organic growth across all asset classes. You also had sizable market contributions. The key here is, if you look at the equities and in certain of the alternative products, some of those market contributions are sub-sizable. If you look at the various ratios, a $130 billion of organic growth versus about $70 billion of market, that you can automatically look at those percentages and you can apply those same ratios to try to see what was the revenue growth ex-market or on a quarter basis.

Douglas Sipkin (Wachovia): Did you have any revenue impact from liquidity funds this quarter for supporting some of your money market products?

Paul L. Audet: No, there was no impact. We have been waiving fees on those products for the last six months.

Thomas Gallagher (Credit Suisse): On your strong equity of retail flows this quarter, it is not an area where we expect strength in this market, and we've seen peer flows decline here. What strategies are driving these flows? Is it life cycle presence, is it simply magic counts, or is this mostly traditional mutual funds?

Laurence D. Fink: It's traditionally mutual funds, heavily weighted two global products. Our global opportunity funds continue to have very large flows and some of our specialty products. Tom Callan and team have had an extraordinary record being with the top noted portfolio managers in the international small cap space for the last five years. We continue to see flows there. We still see a lot of flows in terms of our commodity-based products. It's specialty product that also with these global opportunity products.

Craig Siegenthaler (Credit Suisse): The minority interest line items declined two quarters here. What JVs or investments make this up and why has the cash flow you are paying to minority owners been declining here?

Paul L. Audet: This is gross-up issues, so the non-operating income saw great declines too. This is any private equity related activities that we have to consolidate on our books and records. You have a gross-up with respect to non-operating income and a gross-up with respect to minority interest. The simple reason why they declined was as markets here have realigned a little bit a lot of the revenues that were being generated by our private equity related funds and/or real estate related activities has shown mark-to-market declines. Obviously, non-operating income comes down, but in many instances we have very minor ownership in terms of our investment in these underlying entities and therefore most of that increase or decrease is basically netted out as minority interest.

Prashant Bhatia (Citigroup): We have seen some big write-downs here by the major brokers on the structured product. Looking at some of the pension fund and other investment complexes, do you think they have taken appropriate marks as far as you can tell as a lot of these firms are your clients?

Laurence D. Fink: Probably not, because a lot of them they have held a maturity account. You could say that about banks too when they put things and held the maturity accounts. The security firms have those assets in trading accounts and therefore they are required for SEC reasons to mark them for accounting reasons. There are a lot of assets being held worldwide that are held to maturity and so they are going to have to take some periodic hits on that impairment. I can't tell you the specifics of any institution, be it a pension plan or a bank or an insurance company, who has these products and when are they going to take these in periodic impairments.

Prashant Bhatia (Citigroup): I guess a lot of that was driven by a thirst for yield. How are you seeing that shift? What are clients turning to now to satisfy that thirst for yield because it not structured product anymore? How does that impact you?

Laurence D. Fink: The clients are looking at subordinated debt in the corporate market. They are looking at high yield securities. They are not looking at the lowest grade high yield, but worldwide people are shying away from risk. Yet, those two alternative products we raise, there was a good example of clients were clamoring to take on more systematic risk in specified products that other people are liquidating or buying on behalf of our other clients. It depends on the clients. We are recommending the clients by the way. With this chaos, it is you are being paid to take on more risk. We are not saying overall, but in some of these asset categories, as these products melt down we are suggesting to take on more risk. We're trying to work with them on doing that and explaining why you're been paid to take on more risk.