My Fellow Shareholders (continued)

Serving the needs of our clients

Our clients continue to face challenges even as the world recovers from the global financial crisis. The United States has proven more dynamic and resilient than many expected, while the Eurozone is struggling under the weight of debt in the periphery. China appears to be successfully balancing growth and inflation, while engineering a gradual transition from an investment- to a consumption-led economy. Markets remain skittish about geopolitical uncertainty and the slew of elections and leadership changes around the world that will occur this year. The Federal Reserve has already declared its intent to leave interest rates low into 2014, extending the financial repression that is a tremendous challenge for investors seeking appropriate returns.

Markets – and our clients – are further hindered by the lack of clarity around new rules and regulations for the financial services industry. We have taken an active role with policymakers in major financial centers to debate proposed regulations that will impact our clients' investments, including the Volcker Rule, Foreign Account Tax Compliance Act ("FATCA"), OTC derivatives clearing, Markets in Financial Instruments Directive ("MiFID"), Alternative Investment Fund Managers Directive ("AIFMD") and money market fund reform. Our approach has been educational and our aim has been to make sure that the voice of the investor is heard. Similarly, we have pursued a policy of constructive engagement with the Boards and senior management of companies in which we invest on behalf of our clients, inviting consultation on proxy issues at an early stage.

We are supporting our clients' priorities with investments in alternatives, retirement and multi-asset class solutions, income strategies, BlackRock Solutions, and iShares. We are also investing in our people as a strategic priority, expanding our talent development programs and shaping an environment that supports continuous learning and robust career paths. We expect these efforts to support critical work with our clients and fuel our future growth.

During 2011, we launched the BlackRock Investment Institute to facilitate information sharing among our portfolio managers worldwide, fostering debate and dialogue that our investors find valuable as they shape their investment strategies. The very first forum spawned the BlackRock Sovereign Risk Index, an innovative framework for gauging sovereign credit risk. Since that time, the Institute has tackled issues as wide ranging as U.S. consumers, China's savers, the European debt crisis, banking regulation, corporate profit margins and dividend investing. Our portfolio managers are also using an internal social media platform to share insights and collaborate with colleagues around the world. Their enthusiasm has been infectious.

Finally, we are investing in the BlackRock brand and helping clients move from short-term saving to long-term investing through our "Investing for a New World" campaign. Launched earlier this year, it complements our efforts to advocate for more transparent markets and to create the capabilities needed to serve our clients by providing real answers to their concerns amid the unprecedented challenges in today's environment.

Continuing to deliver on our promises

As pleased as I am with BlackRock's performance in 2011, I believe shareholder value is derived primarily from our ability to grow the business through time by meeting our clients' needs and earning their trust. I am extremely proud of our long-term growth record. Since our initial public offering in 1999, markets have swung wildly. Yet, we have consistently improved BlackRock's financial results, achieving growth in 11 of the past 12 years (the only exception was 2008 in the depth of the financial crisis). Importantly, we have done so without putting our shareholders' capital at risk via balance sheet leverage or proprietary trading. Our focus is exclusively on our clients' investment objectives and challenges. BlackRock's income stream is certainly affected by market movements, but our business is well diversified and supported by strong growth engines.

I believe that BlackRock is well positioned to continue to deliver on our promise to clients and shareholders thanks to the tireless work and unwavering drive for excellence of our 10,100 employees around the world. In 2011, we asked our people to raise the bar, to ensure we have the very best talent and a dynamic culture in which they can thrive. More than 900 colleagues joined the BlackRock family this past year, including leaders like Mark McCombe, Chairman of Asia-Pacific, and Linda Robinson, Head of Global Marketing and Communications, who are already making tremendous contributions to the firm.

Our goal is to build a better financial future for our clients, and I would like to thank them for their continued trust and confidence in BlackRock. I would also like to express my gratitude to our Board of Directors for their wise counsel and devotion to our Company. I know they are as proud as I am of the great work BlackRock is doing to guide our clients in these uncertain times. This work would not be possible without the support of our shareholders, and I thank you for your continued interest in the success of our Company.

Sincerely,
signature for Larry Fink
Laurence D. Fink
Chairman and Chief Executive Officer

© Copyright 2012 BlackRock, Inc. All rights reserved.

This is an interactive electronic version of the BlackRock 2011 Annual Report to Shareholders. The contents of this version are qualified in their entirety by reference to the printed version. A reproduction of the printed version is available in PDF here.

*IMPORTANT NOTES
Opinions

Opinions expressed throughout this annual report are those of BlackRock, Inc. as of March 2012 and are subject to change.

BGI Transaction

On December 1, 2009, BlackRock acquired from Barclays Bank PLC all of the outstanding equity interests of subsidiaries of Barclays conducting the business of Barclays Global Investors ("BGI") (the "BGI Transaction").

Adjusted and As Adjusted Results

Diluted earnings per share, operating income, operating margin, operating cash flow and net income are presented on an "as adjusted" basis. See pages 28-30 of the PDF for Explanation of Use of Non-GAAP Financial Measures.

Other Revenue

On the Financial Highlights page Other Revenue includes BlackRock Solutions and advisory, Cash management base fees, Investment advisory performance fees, Distribution fees and Other revenue.

Operating Margin Peer Average

Source: SNL, as of December 31, 2011; Market-cap weighted peer average includes: BEN, IVZ, TROW, LM, AMG, FII, EV, WDR, JNS, CLMS, CNS, GBL and PZN.

Performance Data

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 does not consider these differences to be 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. S&P 500® Index is a widely recognized, unmanaged index of common stock prices of industrial, utility, transportation and financial companies in U.S. markets.

Barclays Capital U.S. Aggregate Index is an unmanaged index considered representative of the U.S. investment-grade, fixed rate bond market.

Net New Business and Net Inflows

Unless stated otherwise, 2011 net new business and net inflows figures are before giving effect to a total of $28.3 billion in BGI merger-related outflows. These outflows reflect manager concentration considerations prior to third quarter 2011 and outflows from scientific active equity performance prior to second quarter 2011. BGI merger-related outflows totaled $121.0 billion in 2010 and $2.9 billion in 2009. Total merger-related outflows since the December 2009 BGI transaction represent less than 9% of acquired assets under management.

Market Share of U.S. Long-Term Mutual Fund Flows

Source: SimFund, as of December 31, 2011; Data is for U.S. long-term open-end mutual funds and excludes ETFs and funds of funds.

BlackRock Data Points

Debt ratings, AUM, ETPs offered, number of countries and employee data as of December 31, 2011. All other data reflect full-year 2011 results unless otherwise noted. BLK Total Return Performance vs. Peers - Source: SNL. Reflects full year 2011 results and assumes reinvestment of all dividends. Market-cap weighted peer average includes: BEN, IVZ, TROW, LM, AMG, FII, EV, WDR, JNS, CL MS, CN S, GBL and PZN.