Blackrock, Inc. · NYSE:BLK
Blackrock — Merger or Acquisition (February 2006)
21 slides from Blackrock's merger presentation, Feb 15, 2006
Slide 1: Combination of BlackRock & Merrill Lynch Investment Managers
Combination of BlackRock & Merrill Lynch Investment Managers Investor Presentation February 2006
Slide 2: Forward-Looking Statement
Forward-Looking Statement <Bisie “onto ETS cS vist oo ty aden to tacos iced in Bakes Secure, and Cchange Corian (EC) reper on te dented eaewere tip Gus cane etal eras fo afer Ira proceadngs The entent and oer ‘ny share repurchase: (9) the é Sng a oe a nlc Bop preset he we oe slant Scio nthe ec may a
Slide 3: Overview
Overview BlackRock and Merrill Lynch Investment Managers (MLIM) to combine, forming a leading global investment management firm » Largest publicly traded asset manager* « Strong corporate governance, including majority of independent directors on the Board » Ongoing strategic partnership with Merril
Slide 4: Highlights of the Combined Platform
Highlights of the Combined Platform Top ten investment manager worldwide with approximately $1 trillion of assets under management Diversified product mix, including broad investment and risk management offerings » Largest active fixed income manager » 13th largest equity manager » 4th largest broke
Slide 5: Strategic Rationale
Strategic Rationale New BlackRock will be exceptionally well-positioned to serve individual and institutional investors worldwide » Quality and breadth of products » Expanded global presence » Operating scale and leverage » Depth of talent pool and consistent culture
Slide 6: Quality and Breadth of Products
Quality and Breadth of Products Well-diversified product mix across asset classes Competitive performance across institutional products More than 82 funds with Overall Morningstar Ratings of 4 or 5 stars* $992 Billion AUM by Cla Fixed Income 43% Alternatives % Equity Liquidity a 21%
Slide 7: Expanded Global Presence
Expanded Global Presence Clients in 50 countries Over one-third of employees based outside the U.S. Investment centers in the U.S., U.K., Japan and Australia Extensive non-U.S. fund offerings and distribution network $992 Billion AUM by Client Geograp!
Slide 8: Operating Scale & Leverage
Operating Scale & Leverage Over $280 bil of assets in U.S. mutual funds Operating leverage through BlackRock Solutions Scale to support ongoing reinvestment in the business $123 Bil Lon ‘Mut Global FI 1% US Equity & Balanced 34% Closed-End
Slide 9: Robust Talent Pool & Consistent Culture
Robust Talent Pool & Consistent Culture Over 4,500 employees worldwide Shared values: teamwork, excellence, integrity Culture defined by singular focus on: » Investment process and performance » Consultative client relationships
Slide 10: Deep Management Team
Deep Management Team Marries functional and regional business models, accelerating evolution to a truly global business Capitalizes on experience and expertise of both teams » Rob Kapito remains Head of Portfolio Management. » Keith Anderson continues as Global Fixed Income ClO » Bob Doll to be Glob
Slide 11: Transaction Summary
Transaction Summary Consideration Class A Common Stock Participating Preferred: Pro Forma Ownership Merril PNC: Public & Employees: Estimated Merger Charge: Expected Closing: Approvals: 52.4 million shares (45% voting interest) 12.6 million non-voting share equivalents Basic 50% 35% 15% $200 million
Slide 12: Summary of Key Terms
Summary of Key Terms Board Composition: Governance Supermajority: Veto Rights: Change in Control of Merrill/PNC: Other: 9 independent, 4 management, 2 Merrill, 2 PNC; fully independent Audit, Nominating and Compensation Committees Certain significant matters require approval of 70% of all directors
Slide 13: Summary of Key Terms
Summary of Key Terms Standstill Merrill PNC: Repurchases: Top-Up Rights: Until later of 5 years or ownership falls below 20%: 49.8% fully diluted and 49.8% voting interest 35% voting interest Participate in repurchases pro rata to abide by standstill (for this purpose only, PNC cap at 40%) Subject t
Slide 14: Summary of Key Terms
Summary of Key Terms Change in Control Upon Change in Control within first 5 years: ‘Must sell down to 24,9% or convert all to non-voting If independent directors determine harmful to new BlackRock, must sell down fully Stockholders Agreements to terminate on the later of 5 years or when ownership f
Slide 15: Valuation Summary
Valuation Summary BlackRock Combined Basic Market Cap: $9.3 bil $18.8 bil 2005 Revenue: $1.2 bit $2.9 bil 2005 Net Income, as adjusted: $270 mil $667 mil 12/31/05 AUM: $453 bil $992 bit Fully-Diluted Economic Ownership Merril 0% 49%" PNC: 64% 34% Public & Employees: 36% 17%
Slide 16: Key Assumptions
Key Assumptions 2006 Forecasts: Synergies: Merger-Related Charges: Intangibles: GAAP Tax Rate: Balance Sheet: ey BlackRock manny V/B/E/S mean of $4.84 $476 mil based on per share, as adjusted BlackRock estimates $140 million fully-phased in, $70 million year 1 $200 million, including retention and c
Slide 17: Pro Forma Impact
Pro Forma Impact BLKUB/E/S None Midpoint Full! Pro Forma EPS: As adjusted” $4.84 $5.38 $5.70 $6.02 % Accretion / Dilution 14.1% 18% 24.3% Cashon $4.92 $5.92 $6.24 $6.56 % Accretion / Dilution 20.4% 27% 33.4% (1) Soden 12791705 ae 12} Asses pete sy $7 milo np) an $10 iin) pl te ace eats arts 1} tcc s
Slide 18: 2005 Combined Income Statement (GAAP)
Appendix 2005 Combined Income Statement (GAAP) (S millions) = BLACKROCK
Slide 19: 2005 Combined Balance Sheet
Appendix 2005 Combined Balance Sheet (§ millions)
Slide 20: NYSE: BLK
NYSE: BLK
Slide 21: Morningstar Disclosure
MORNINGSTAR DISCLOSURE Source of data on page 5: Morningstar nc. Fast performance is. no guarantee of ftu fiat lant a Spear sey” Nominate caus 9 hor iat gear ft ased ons Nermingstar Re ajusted Return messure tht accounts for variation in fund's monty perormance (ncludieg the effects of charge, eas a