PNC Financial Services (PNC)

BLACKROCK

Our BlackRock business segment earned $23 million in the first three months of 2009 and $60 million in the first three months of 2008. These results reflect our approximately 31.5% share of BlackRock’s reported GAAP earnings for the first quarter of 2009 and our approximately 33% share of BlackRock’s reported GAAP earnings for the first quarter of 2008 and the additional income taxes on these earnings incurred by PNC.

PNC’s investment in BlackRock was $4.0 billion at March 31, 2009 and $4.2 billion at December 31, 2008. The book value per common share was $100.11 at March 31, 2009.

BLACKROCK

Our BlackRock business segment earned $207 million in 2008 and $253 million in 2007. These results reflect our approximately 33% share of BlackRock’s reported GAAP earnings and the additional income taxes on these earnings incurred by PNC.

PNC’s investment in BlackRock was $4.2 billion at December 31, 2008 and $4.1 billion at December 31, 2007. The book value per share was $98.32 at December 31, 2008.

BLACKROCK

Our BlackRock business segment earned $185 million in the first nine months of 2008 and $176 million in the first nine months of 2007. These results reflect our approximately 33% share of BlackRock’s reported GAAP earnings and the additional income taxes on these earnings incurred by PNC.

Our investment in BlackRock was $4.3 billion at September 30, 2008 and $4.1 billion at December 31, 2007. Based upon BlackRock’s closing market price of $194.50 per common share at September 30, 2008, the market value of our investment in BlackRock was $8.4 billion at that date. As such, an additional $4.1 billion of pretax value was not recognized in our equity investment or shareholders’ equity account at that date.

BLACKROCK

Our BlackRock business segment earned $129 million in the first six months of 2008 and $110 million in the first six months of 2007. These results reflect our approximately 33.3% share of BlackRock’s reported GAAP earnings and the additional income taxes on these earnings incurred by PNC.

Our investment in BlackRock was $4.3 billion at June 30, 2008 and $4.1 billion at December 31, 2007. Based upon BlackRock’s closing market price of $177.00 per common share at June 30, 2008, the market value of our investment in BlackRock was $7.6 billion at that date. As such, an additional $3.3 billion of pretax value was not recognized in our equity investment or shareholders’ equity account at that date.

BLACKROCK

Our BlackRock business segment earned $60 million in the first three months of 2008 and $52 million in the first three months of 2007. These results reflect our approximately 33.4% share of BlackRock’s reported GAAP earnings and the additional income taxes on these earnings incurred by PNC.

PNC’s investment in BlackRock was $4.2 billion at March 31, 2008 and $4.1 billion at December 31, 2007. Based upon BlackRock’s closing market price of $204.18 per common share at March 31, 2008, the market value of our investment in BlackRock was $8.8 billion at that date. As such, an additional $4.6 billion of pretax value was not recognized in our equity investment or shareholders’ equity account at that date.

BLACKROCK

Our BlackRock business segment earned $253 million in 2007 and $187 million in 2006. Subsequent to the September 29, 2006 deconsolidation of BlackRock, these business segment earnings are determined by taking our proportionate share of BlackRock’s earnings and subtracting our additional income taxes recorded on our share of BlackRock’s earnings. Also, for this business segment presentation, after-tax BlackRock/MLIM transaction integration costs totaling $3 million and $65 million in 2007 and 2006, respectively, have been reclassified from BlackRock to “Other.” In addition, the 2006 business segment earnings have been reduced by minority interest in income of BlackRock, excluding MLIM transaction integration costs, totaling $65 million and additional income taxes recorded on our share of BlackRock’s earnings totaling $7 million.

PNC’s investment in BlackRock was $4.1 billion at December 31, 2007 and $3.9 billion at December 31, 2006. Based upon BlackRock’s closing market price of $216.80 per common share at December 31, 2007, the market value of our investment in BlackRock was $9.4 billion at that date. As such, an additional $5.3 billion of pretax value was not recognized in our equity investment account at that date.

On October 1, 2007, BlackRock acquired the fund of funds business of Quellos Group, LLC (“Quellos”). The combined fund of funds platform operates under the name BlackRock Alternative Advisors and is comprised one of the largest fund of funds platforms in the world, with over $25 billion in assets under management. In connection with the acquisition, BlackRock paid $562 million in cash to Quellos and placed 1.2 million shares of BlackRock common stock into an escrow account. The shares of BlackRock common stock will be held in the escrow account for up to three years and will be available to satisfy certain indemnification obligations of Quellos under the acquisition agreement.

Therefore, any gain to be recognized by PNC resulting from the issuance of these shares and corresponding increase in PNC’s investment in BlackRock will be deferred pending the release of shares from the escrow account. In addition, Quellos may receive up to an additional $969 million in cash and BlackRock common stock through December 31, 2010 contingent on certain measures.

BLACKROCK

Our BlackRock business segment earned $176 million for the first nine months of 2007 and $137 million for the first nine months of 2006. Subsequent to the September 29, 2006 deconsolidation of BlackRock, these business segment earnings are determined by taking our proportionate share of BlackRock’s earnings and subtracting our additional income taxes recorded on our share of BlackRock’s earnings. Also, for this business segment presentation, after-tax BlackRock/MLIM transaction integration costs totaling $4 million and $56 million for the nine months ended September 30, 2007 and September 30, 2006 have been reclassified from BlackRock to “Other.” In addition, these business segment earnings for the first nine months of 2006 have been reduced by minority interest in income of BlackRock, excluding MLIM transaction integration costs, totaling $65 million and additional income taxes recorded on our share of BlackRock’s earnings totaling $7 million.

We have modified the presentation of historical BlackRock business segment results as described above to conform with the current business segment reporting presentation in this Financial Review.

PNC’s investment in BlackRock was $4.0 billion at September 30, 2007 and $3.9 billion at December 31, 2006. Based upon BlackRock’s closing market price of $173.41 per common share at September 30, 2007, the market value of our investment in BlackRock was approximately $7.5 billion at that date. As such, an additional $3.5 billion of pretax value was not recognized in our investment account at that date.

On October 1, 2007, BlackRock acquired the fund of funds business of Quellos Group, LLC (“Quellos”). The combined fund of funds platform will operate under the name BlackRock Alternative Advisors and will comprise one of the largest fund of funds platforms in the world, with over $25 billion in assets under management. Products, including hedge, private equity and real asset fund of funds, as well as specialty and hybrid offerings, are managed on behalf of institutional and individual investors worldwide.

In connection with the acquisition, BlackRock paid approximately $562 million in cash to Quellos and placed 1.2 million shares of BlackRock common stock into an escrow account. The shares of BlackRock common stock will be held in the escrow account for up to three years and will be available to satisfy certain indemnification obligations of Quellos under the acquisition agreement. Therefore, any gain to be recognized by PNC resulting from the issuance of these shares and corresponding increase in our investment in BlackRock will be deferred pending the release of shares from the escrow account. In addition, Quellos may receive up to an additional $970 million in cash and BlackRock common stock over 3.5 years contingent on certain measures.

(Unaudited)

Our BlackRock business segment earned $110 million for the first six months of 2007 and $95 million for the first six months of 2006. Subsequent to the September 29, 2006 deconsolidation of BlackRock, these business segment earnings are determined by taking our proportionate share of BlackRock’s earnings and subtracting our additional income taxes recorded on our share of BlackRock’s earnings. Also, for this business segment presentation, we reclassify our after-tax share of BlackRock/MLIM integration costs ($2 million in 2007 and $8 million in 2006) from BlackRock to “Other.” In addition, these business segment earnings for the first half of 2006 have been reduced by minority interest in income of BlackRock, excluding MLIM transaction integration costs, totaling $45 million.

We have modified the presentation of historical BlackRock business segment results as described above to conform with the current business segment reporting presentation in this Financial Review.

PNC’s investment in BlackRock was $4.0 billion at June 30, 2007 and $3.9 billion at December 31, 2006. Based upon BlackRock’s closing market price of $156.59 per common share at June 30, 2007, the market value of our investment in BlackRock was approximately $6.8 billion at that date. As such, an additional $2.8 billion of pretax value was not recognized in our investment account at that date.

In June 2007, BlackRock and Quellos Group, LLC (“Quellos”) announced that they had entered into a definitive agreement under which BlackRock will acquire the fund of funds business of Quellos for up to $1.7 billion. The combined business will comprise one of the largest fund of funds platforms in the world, with over $25 billion in assets under management. Products, including hedge, private equity and real asset fund of funds, as well as specialty and hybrid offerings, are managed on behalf of institutional and individual investors worldwide.

BlackRock’s acquisition of Quellos’ fund of funds business is expected to close on or about October 1, 2007, pending regulatory approvals and satisfaction of other customary closing conditions. Upon closing, Quellos will receive $562 million in cash and $188 million in BlackRock common stock. PNC expects to recognize a pretax gain in the mid-$20 million range during the fourth quarter of 2007 resulting from BlackRock’s issuance of shares at closing. In addition, Quellos may receive up to an additional $970 million in cash and BlackRock common stock over 3.5 years contingent on certain measures.

BLACKROCK

Our BlackRock business segment earned $52 million for the first quarter of 2007 and $49 million for the first quarter of 2006. For this PNC business segment presentation, our share of MLIM transaction integration costs for both periods has been reclassified from BlackRock to “Other.” In addition, these business segment earnings for the first three months of 2006 have been reduced by minority interest in income of BlackRock, excluding MLIM transaction integration costs, totaling $23 million. Also, these business segment earnings are net of additional PNC income taxes recorded on PNC’s share of BlackRock’s earnings.

We have modified the presentation of historical BlackRock business segment results as described above to conform with the current business segment reporting presentation in this Financial Review.

PNC’s investment in BlackRock was $3.8 billion at March 31, 2007 compared with $3.9 billion at December 31, 2006. Based upon BlackRock’s closing market price of $156.31 per common share at March 31, 2007, the market value of our investment in BlackRock was approximately $6.7 billion at that date. As such, an additional $2.9 billion of value was not recognized in our investment account at that date.

BLACKROCK

Our BlackRock business segment earned $187 million in 2006 and $152 million in 2005. For this PNC business segment presentation, our share of MLIM transaction integration costs for 2006 have been reclassified from BlackRock to “Other.” In addition, these business segment earnings have been reduced by minority interest in income of BlackRock, excluding MLIM transaction integration costs, totaling $65 million and $71 million in 2006 and 2005, respectively. Also, these business segment earnings are net of additional PNC income taxes recorded on PNC’s share of BlackRock’s earnings.

PNC’s BlackRock business segment earnings increased $35 million, or 23%, compared with 2005. We have modified the presentation of historical BlackRock business segment results as described above to conform with the current business segment reporting presentation in this Item 7. Higher earnings in 2006 reflected higher investment advisory and administrative fees due to an increase in assets under management, including BlackRock’s acquisition of MLIM at the end of the third quarter of 2006 as further discussed below.

PNC’s investment in BlackRock was $3.9 billion at December 31, 2006. Based upon BlackRock’s closing market price of $151.90 per common share at December 31, 2006, the market value of our investment in BlackRock was approximately $6.7 billion at that date. As such, an additional $2.8 billion of value was not recognized in our investment account at that date.