The company’s fourth quarter 2006 adjusted operating margin of 35.6% was essentially flat with third quarter of 2006 and fourth quarter 2005.

Fourth quarter results include $29 million of incremental intangible amortization, which was partially offset by realized expense synergies.

Assets under management (AUM) totaled $1.125 trillion at December 31, 2006, up $49.6 billion or 4.6% since third quarter-end and $133 billion or 13.4% year-over-year.

Net new business totaled $17.1 billion during the fourth quarter, including $12.3 billion from U.S. investors and $4.8 billion from international clients. For the year, net new business totaled $60.5 billion, including $27.7 billion of net inflows in MLIM prior to the
September 29, 2006 closing of the BlackRock/MLIM merger. BlackRock Solutions also maintained robust momentum, adding five net new assignments during the quarter and 17 throughout the year. New business activity since year-end continues to be very robust, including $20 billion of wins funded or to be funded and active searches in process across all products and regions.

Significantly, these new business flows were well diversified across regions and client segments. Specifically, the firm realized $12.3 billion of net inflows from U.S. investors and $4.8 billion from international clients. Institutional flows were robust globally, led by $4.7 billion of net fundings from U.S. tax-exempt investors and $2.7 billion from clients based in EMEA (Europe, Middle East and Africa). The firm also had positive flows in its retail channels, including $4.9 billion and $1.5 billion in U.S. and international products, respectively.

Fixed income assets increased $4.4 billion during the fourth quarter to $455.9 billion.

Net new business was mixed across products, with $3.8 billion of net inflows in core and global strategies offset by $4.8 billion of outflows in targeted duration and sector specialty portfolios due to maturities, client mergers and internalization. An additional $0.9 billion of AUM were reclassified as cash management mandates. The outflows were concentrated among taxable institutions principally based in the U.S. Flows from international institutional and retail investors remained positive, favorably impacted by growing brand recognition. Although a number of the firm’s products struggled during the year, the company ended the year on a positive note. Ninety-two percent or more of
institutional composites outperformed their benchmarks, and 52% or more of bond fund assets were ranked in the top two peer group quartiles, for the 1-, 3- and 5-year periods ended December 31, 2006.

Equity and balanced mandates grew $34.6 billion during the fourth quarter to $392.7 billion at year-end.

The increase reflected strong net new business of $9.3 billion and robust equity markets. Flows were positive from both U.S. and international clients, including strong contributions across the full array of institutional clients and from U.S. retail investors. Investment performance remained competitive, with 66% or more of equity fund AUM in the top two peer group quartiles for the 1-, 3- and 5-year periods ended December 31, 2006.

Cash management AUM at December 31, 2006 was $227.8 billion, $4.6 billion below December average of $232.4 billion as a result of cyclical year-end outflows.

Net inflows during the quarter totaled $6.2 billion, including $4.1 billion from institutional clients and $2.1 billion from retail investors. A continued neutral stance by the Federal Reserve Bank and a flat U.S. yield curve have contributed to favorable flows in institutional liquidity products, but flows remain highly sensitive to yields. U.S. institutional money market funds continued to deliver competitive performance, with 89% of assets ranked in the top two peer group quartiles for the year-ended December 31,
2006.

Alternative investment AUM increased $4.3 billion to $48.1 billion at year-end.

Real estate debt and equity, which represent $20.6 billion of total AUM in alternatives, increased $3.9 billion, including $3.3 billion of net inflows during the quarter. In addition, the firm added $807 million in collateralized debt obligations (CDOs), raising a new vehicle during the quarter and reaching maturity on its first CDO. The net inflows in CDOs were fully offset by outflows in a number of other alternative investment products.

BlackRock Solutions maintained strong new business momentum, adding two new Aladdin and three net new advisory and outsourcing assignments during the fourth quarter.

In addition, the firm added two and completed five short-term advisory assignments. As of year-end, three very sizable Aladdin implementations were in process. In addition, the BlackRock Solutions team finished converting legacy MLIM’s U.S. equity portfolios to our platform and commenced the international equity conversion targeted for completion in late-2007.

New business momentum has remained strong since year-end.

As of January 19, 2007, the pipeline of wins funded or to be funded totaled $20 billion, including $15.8 billion in long-dated products and $4.2 billion in liquidity assets. In addition, BlackRock has been invited to participate in a record number of searches for fixed income, equity, balanced and alternative investment offerings.

The pipeline of BlackRock Solutions opportunities is also quite robust, including several assignments in contract negotiation and numerous others in various stages of development. The firm continues to seek opportunities to leverage BlackRock’s larger, more diversified platform to help its clients address their investment challenges and to create value for its shareholders.

The company adopted the 2002 Long-Term Retention and Incentive Plan to attract and retain qualified professionals.

Prior to 2006, the company granted LTIP awards of approximately $230 million, of which approximately $208 million is payable on January 29, 2007. The awards are payable approximately 16.7% in cash and the remainder in BlackRock stock to be contributed by PNC and distributed to LTIP participants. Under the terms of the plan, employees elected to put approximately 89% of the stock portion of the awards back to the company. Stock repurchased by the company will be retained as treasury stock. In connection with the MLIM transaction, the company awarded 1 million restricted stock units in October 2006 under the company’s 1999 Stock Award and Incentive Plan that cliff vest on September 29, 2011. The company intends to grant approximately an additional 1.6 million RSUs and 1.6 million stock options in January 2007, all of which are subject to achieving earnings performance goals prior to the vesting date of September 29, 2011.