This excerpt taken from the PNC 10-K filed Feb 29, 2008.
On September 29, 2006, Merrill Lynch contributed its investment management business (MLIM) to BlackRock in exchange for 65 million shares of newly issued BlackRock common and preferred stock. BlackRock accounted for the MLIM transaction under the purchase method of accounting.
Immediately following the closing, PNC continued to own 44 million shares of BlackRock common stock representing an ownership interest of 34% of the combined company (as compared with 69% immediately prior to the closing). Although PNC's share ownership percentage declined, PNCs investment in BlackRock increased due to the increase in total equity recorded by BlackRock as a result of the MLIM transaction.
Upon the closing of the BlackRock/MLIM transaction, the carrying value of our investment in BlackRock increased by $3.1 billion to $3.8 billion, primarily reflecting PNC's portion of the increase in BlackRocks equity resulting from the value of shares issued in the transaction.
We also recorded a liability at September 30, 2006 for deferred taxes of $.9 billion, related to the excess of the book value over the tax basis of our investment in BlackRock, and a liability of
This excerpt taken from the PNC 8-K filed Apr 18, 2007.
As further described in our Annual Report on Form 10-K for the year ended December 31, 2006, during 2006 BlackRock, Inc. (BlackRock), formerly a majority-owned subsidiary of The PNC Financial Services Group, Inc., and Merrill Lynch entered into a definitive agreement pursuant to which Merrill Lynch agreed to contribute its investment management business (MLIM) to BlackRock in exchange for 65 million shares of newly issued BlackRock common and preferred stock. This transaction closed on September 29, 2006.
For the quarters ended September 30, 2006, June 30, 2006 and March 31, 2006 presented in this Financial Supplement, our Consolidated Income Statement reflects our former majority ownership interest in BlackRock. However, our Consolidated Income Statement for the quarters ended March 31, 2007 and December 31, 2006 and our Consolidated Balance Sheet as of March 31, 2007, December 31, 2006 and September 30, 2006 reflect the deconsolidation of BlackRocks balance sheet amounts and recognize our approximately 34% ownership interest in BlackRock as of those dates as an investment accounted for under the equity method.
We have also provided, for information purposes only, adjusted results in this document to reflect BlackRock as if it had been accounted for under the equity method for all periods presented.
THE PNC FINANCIAL SERVICES GROUP, INC.