PNC Bank 2008 Annual Report Download - page 104

The following table presents the unaudited pro forma
combined results of operations of PNC and National City as if
the acquisition had been completed as of the beginning of
2008 or 2007. The unaudited pro forma results of operations
are presented solely for information purposes and are not
intended to represent or be indicative of the consolidated
results of operations that PNC would have reported had this
transaction been completed as of the dates and for the periods
presented, nor are they necessarily indicative of future results.
Unaudited Pro Forma Combined Results
(In millions, except per share data) 2008 2007
Total revenue $15,397 $16,709
Net income (loss) (3,742) 3,695
Per share data
Earnings (loss) – basic $ (9.58) $ 7.66
Earnings (loss) – diluted (9.60) 7.55
Average common shares outstanding – basic 439 426
Average common shares outstanding – diluted 439 431
The unaudited pro forma combined results of operations
include the effect of the net amortization/accretion of purchase
accounting fair value adjustments based on asset and liability
valuations as of the acquisition date. They also reflect the
receipt of $7.6 billion from the sale of preferred securities and
issuance of a warrant to purchase 16.9 million shares of PNC
common stock under the TARP Capital Purchase Program
(See Note 19 Shareholders’ Equity for additional
information). During 2008, National City recorded $2.4
billion of nonrecurring charges for goodwill impairments
which are included in these pro forma results. These
adjustments have been consistently applied to each period
presented in the table above.
S TERLING F INANCIAL C ORPORATION
On April 4, 2008, we acquired Lancaster, Pennsylvania-based
Sterling Financial Corporation (“Sterling”). Sterling
shareholders received an aggregate of approximately
4.6 million shares of PNC common stock and $224 million of
cash.
J.J.B. H ILLIARD , W.L. L YONS , LLC
On March 31, 2008, we sold J.J.B. Hilliard, W.L. Lyons, LLC
(“Hilliard Lyons”), a Louisville, Kentucky-based wholly-
owned subsidiary of PNC and a full-service brokerage and
financial services provider, to Houchens Industries, Inc. We
recognized an after-tax gain of $23 million in the first quarter
of 2008 in connection with this divestiture.
2007
A LBRIDGE S OLUTIONS I NC .
On December 7, 2007, we acquired Albridge Solutions Inc.
(“Albridge”), a Lawrenceville, New Jersey-based provider of
portfolio accounting and enterprise wealth management
services. Albridge extends PNC Global Investment
Servicing’s capabilities into the delivery of knowledge-based
information services through its relationships with financial
institutions and financial advisors.
C OATES A NALYTICS ,LP
Also on December 7, 2007, we acquired Coates Analytics, LP
(“Coates Analytics”), a Chadds Ford, Pennsylvania-based
provider of web-based analytic tools that help asset managers
identify wholesaler territories and financial advisor targets,
promote products in the marketplace and strengthen
competitive intelligence. Coates Analytics complements PNC
Global Investment Servicing’s business strategy.
Y ARDVILLE N ATIONAL B ANCORP
On October 26, 2007 we acquired Hamilton, New Jersey-
based Yardville National Bancorp (“Yardville”). Yardville
shareholders received an aggregate of approximately
3.4 million shares of PNC common stock and $156 million in
cash. Total consideration paid was approximately $399
million in stock and cash.
ARCS C OMMERCIAL M ORTGAGE C O ., L.P.
On July 2, 2007, we acquired ARCS Commercial Mortgage
Co., L.P. (“ARCS”), a Calabasas Hills, California-based
lender with 10 origination offices in the United States. ARCS
has been a leading originator and servicer of agency
multifamily loans for the past decade.
M ERCANTILE B ANKSHARES C ORPORATION
Effective March 2, 2007, we acquired Mercantile Bankshares
Corporation (“Mercantile”). Mercantile shareholders received
an aggregate of approximately 53 million shares of PNC
common stock and $2.1 billion in cash. Total consideration
paid was approximately $5.9 billion in stock and cash.
2006
B LACK R OCK /MLIM T RANSACTION
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).
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 $.6 billion related to our obligation to provide
shares of BlackRock common stock to help fund certain
BlackRock long-term incentive plan (“LTIP”) programs.
100