PNC Bank 2000 Annual Report Download - page 83

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80
NO T E 2 2 SE G M E N T RE P O R T I N G
PNC operates seven major businesses engaged in communi-
ty banking, corporate banking, real estate finance, asset-
based lending, wealth management, asset management and
global fund services: Community Banking, Corporate
Banking, PNC Real Estate Finance, PNC Business Credit,
PNC Advisors, BlackRock and PFPC.
Business results are presented based on PNC’s man-
agement accounting practices and the Corporation’s
management structure. There is no comprehensive, authori-
tative body of guidance for management accounting equiva-
lent to generally accepted accounting principles; therefore,
PNC’s business results are not necessarily comparable with
similar information for any other financial services institu-
tion. Financial results are presented, to the extent practica-
ble, as if each business operated on a stand-alone basis.
The presentation of business results was changed to
re fl ect the Corporation’s operating stru c t u re during 2000.
Middle market and equipment leasing activities (pre v i o u s l y
included in Community Banking) are re p o r ted in Corporate
Banking. In addition, PNC Real Estate Finance and PNC
Business Credit are re p o r ted separately within PNC Secure d
Finance. Regional real estate lending activities (pre v i o u s l y
included in Community Banking) are re p o rted in PNC Real
Estate Finance. Business financial results for 2000, 1999
and 1998 are presented consistent with this s t ru c t u re.
The management accounting process uses various bal-
ance sheet and income statement assignments and transfers
to measure performance of the businesses. Methodologies
change from time to time as management accounting prac-
tices are enhanced and businesses change. Securities or
borrowings and related net interest income are assigned
based on the net asset or liability position of each business.
Capital is assigned based on management’s assessment of
inherent risks and equity levels at independent companies
providing similar products and services. The allowance for
credit losses is allocated to the businesses based on man-
agement’s assessment of risk inherent in the loan portfolios.
Support areas not directly aligned with the businesses are
allocated primarily based on the utilization of services.
Total business financial results differ from consolidated
results from continuing operations primarily due to differ-
ences between management accounting practices and gen-
erally accepted accounting principles, divested and exited
businesses, equity management activities, minority inter-
ests, residual asset and liability management activities,
eliminations and unassigned items, the impact of which is
reflected in the “Other” category.
BU S I N E S S SE G M E N T PR O D U C T S A N D SE RV I C E S
Community Banking provides deposit, branch-based broker-
age, electronic banking and credit products and services to
retail customers as well as credit, treasury management and
capital markets products and services to small businesses
primarily within PNC’s geographic region.
Corporate Banking provides credit, equipment leasing,
treasury management and capital markets products and
services to large and mid-sized corporations, institutions
and government entities primarily within PNC’s
geographic region.
PNC Real Estate Finance provides credit, capital mar-
kets, treasury management, commercial mortgage loan serv-
icing and other products and services to developers, owners
and investors in commercial real estate.
PNC Business Credit provides asset-based lending,
capital markets and treasury management products and
services to middle market customers on a national basis.
PNC Business Credit’s lending services include loans
secured by accounts receivable, inventory, machinery and
equipment, and other collateral, and its customers include
manufacturing, wholesale, distribution, retailing and service
industry companies.
PNC Advisors provides a full range of tailored invest-
ment products and services to affluent individuals and fami-
lies including full-service brokerage through J.J.B. Hilliard,
W.L. Lyons, Inc. and investment advisory services to the
ultra-affluent through Hawthorn. PNC Advisors also serves
as investment manager and trustee for employee benefit
plans and charitable and endowment assets.
BlackRock is one of the largest publicly traded invest-
ment management firms in the United States with $204 bil-
lion of assets under management at December 31, 2000.
BlackRock manages assets on behalf of institutions and
individuals through a variety of fixed income, liquidity,
equity and alternative investment separate accounts and
mutual funds, including its flagship fund families,
BlackRock Funds and BlackRock Provident Institutional
Funds. In addition, BlackRock provides risk management
and technology services to a growing number of institutional
investors under the BlackRock Solutions name.
Providing a wide range of global fund services to
the investment management industry, PFPC is the largest
full-service mutual fund transfer agent and second largest
provider of mutual fund accounting and administration serv-
ices in the United States. As an extension of its domestic
services, PFPC also provides customized processing servic-
es to the international marketplace through its Dublin,
Ireland and Luxembourg operations.