This excerpt taken from the PNC 8-K filed Jul 19, 2007.
Net income for first six months up 20 percent compared with first half of 2006
PITTSBURGH, July 19, 2007 The PNC Financial Services Group, Inc. (NYSE: PNC) today reported net income of $423 million, or $1.22 per diluted share, for the second quarter of 2007 compared with net income of $381 million, or $1.28 per diluted share, in the second quarter of 2006 and net income of $459 million, or $1.46 per diluted share, in the prior quarter.
For the first six months of 2007, the company earned net income of $882 million, or $2.67 per diluted share, compared with net income of $735 million, or $2.47 per diluted share, for the first six months of 2006, an increase of 20 percent and 8 percent, respectively.
Our businesses delivered solid results in the second quarter, while private equity and trading revenues were weaker, said PNC Chairman and Chief Executive Officer James E. Rohr. We generated quality revenue growth and effectively managed our expenses while maintaining excellent credit quality. PNCs diversified business mix, combined with strong risk management and capital flexibility, positions us well for what will continue to be a challenging environment.
PNC earned adjusted net income of $434 million, or $1.25 per diluted share, for the quarter. Adjusted net income for the second quarter of 2007 excludes integration costs of $11 million after tax, or $.03 per diluted share. Adjusted net income was $386 million, or $1.30 per diluted share, for the second quarter of 2006 and $434 million, or $1.38 per diluted share, for the prior quarter. Second quarter 2007 net income was impacted by a higher provision for credit losses and lower equity management gains and trading revenue. Second quarter 2007 results also were reduced by $13 million after tax, or $.04 per diluted share, related to tax exposure on cross-border lease transactions.
- more -
PNC Reports Second Quarter Net Income of $423 Million and EPS of $1.22 Page 2
PNC earned adjusted net income of $868 million, or $2.63 per diluted share, for the first six months of 2007 compared with adjusted net income of $743 million, or $2.50 per diluted share, for the first six months of 2006. Adjusted net income for the 2007 period excludes the net effects of our BlackRock long-term incentive plan (LTIP) shares obligation and integration costs, and adjusted net income for the 2006 period excludes integration costs.
Some of the comparisons between 2006 and 2007 on a reported basis are affected by the change in accounting methodology for BlackRock, which did not impact net income, and by certain other items. To help to better understand trends at PNC, we show these comparisons on an adjusted basis. References to adjusted amounts in this news release include, as applicable, adjustments for the following types of items: BlackRock deconsolidation by adjusting as if we had recorded our BlackRock investment on the equity method for all periods in the comparison; BlackRock LTIP shares obligation; and integration costs. Details of all adjustments, including reconciliations to reported results, are included in the Consolidated Financial Highlights section of this news release. This section also includes a reconciliation of taxable-equivalent net interest income to net interest income as reported under generally accepted accounting principles (GAAP).