Why is PNC providing adjusted historical financial information?

PNC is providing this adjusted information to give investors a clearer view of its financial performance as if its majority-owned subsidiary, BlackRock, Inc., had been accounted for under the equity method and deconsolidated from PNC's financial statements since January 1, 2003. This is in anticipation of the upcoming transaction where PNC's ownership in BlackRock will decrease significantly, necessitating a change in accounting treatment.

What is the impact of the BlackRock/MLIM transaction on PNC's ownership?

Following the completion of the transaction where Merrill Lynch will contribute its investment management business to BlackRock, Merrill Lynch is expected to own approximately 49% of the combined company. PNC's ownership interest in this larger entity is expected to be approximately 34%.

Will this adjusted financial information change PNC's previously reported net income?

No, the information furnished in this report does not in any way restate or revise PNC's net income in any previously reported consolidated financial statements. It is provided for informational purposes only to illustrate how PNC's financials would look under the equity method of accounting for its investment in BlackRock.

What accounting method will PNC use for BlackRock after the transaction closes?

After the transaction closes and PNC's ownership stake falls below the threshold requiring consolidation (and due to Merrill Lynch's majority ownership), PNC will deconsolidate BlackRock from its consolidated financial statements. PNC will then account for its investment in BlackRock using the equity method.

PNC 8-K: Regulation FD — Aug 16, 2006

Summary

PNC Financial Services Group, Inc. (PNC) filed an 8-K on August 16, 2006, to provide investors with adjusted historical financial information. This adjustment reflects the anticipated deconsolidation of its majority-owned subsidiary, BlackRock, Inc., from PNC's consolidated financial statements, effective January 1, 2003. Following the previously announced transaction where Merrill Lynch will contribute its investment management business to BlackRock, PNC's ownership stake in the combined entity will be approximately 34%, leading to BlackRock being accounted for under the equity method instead of consolidation. The primary purpose of this filing is informational, presenting historical data as if the equity method of accounting for BlackRock had been applied retroactively. This allows investors to see PNC's financial picture without BlackRock's direct consolidation, providing a clearer view of PNC's core operations and the impact of the upcoming significant change in its relationship with BlackRock. Investors should note that this adjusted information does not incorporate any pro forma adjustments related to the pending BlackRock/MLIM transaction itself.

Key Highlights

1PNC is providing adjusted historical financial information to reflect the anticipated deconsolidation of BlackRock, Inc.
2The adjustments assume BlackRock was deconsolidated and accounted for under the equity method from January 1, 2003.
3This filing is informational and presents historical data without pro forma adjustments for the pending BlackRock/MLIM transaction.
4Upon closing of the BlackRock/MLIM transaction, Merrill Lynch will own approximately 49% of the combined entity, and PNC will own approximately 34%.
5PNC will transition from consolidating BlackRock to accounting for its investment under the equity method.
6Adjusted financial information is provided for various quarterly and annual periods, including Q2 2006, Q1 2006, 2005, 2004, and 2003.
7This adjusted presentation does not restate or revise previously reported net income for PNC.

PNC FINANCIAL SERVICES GROUP, INC. 8-K Report, Regulation FD Disclosure (Aug 16, 2006)

Summary

Key Highlights

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