Bank of America Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Derivatives (Tables)

Derivatives (Tables)

3 Months Ended

Mar. 31, 2023

The following tables present derivative instruments included on the Consolidated Balance Sheet in derivative assets and liabilities at March 31, 2023 and December 31, 2022. Balances are presented on a gross basis, prior to the application of counterparty and cash collateral netting. Total derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements and have been reduced by cash collateral received or paid.



			March 31, 2023
			Gross Derivative Assets						Gross Derivative Liabilities
(Dollars in billions)	Contract/ Notional (1)		Trading and Other Risk Management Derivatives		Qualifying Accounting Hedges		Total		Trading and Other Risk Management Derivatives		Qualifying Accounting Hedges		Total
Interest rate contracts
Swaps	$	22,832.3	$	149.7	$	8.8	$	158.5	$	129.0	$	28.1	$	157.1
Futures and forwards	4,314.7		7.8		—		7.8		8.0		—		8.0
Written options (2)	1,869.5		—		—		—		34.9		—		34.9
Purchased options (3)	1,751.5		36.5		—		36.5		—		—		—
Foreign exchange contracts
Swaps	1,636.0		36.5		1.1		37.6		33.7		1.1		34.8
Spot, futures and forwards	4,876.0		39.3		0.1		39.4		39.5		0.4		39.9
Written options (2)	444.1		—		—		—		6.6		—		6.6
Purchased options (3)	402.4		6.7		—		6.7		—		—		—
Equity contracts
Swaps	423.9		12.7		—		12.7		13.9		—		13.9
Futures and forwards	140.6		2.4		—		2.4		1.2		—		1.2
Written options (2)	884.7		—		—		—		46.4		—		46.4
Purchased options (3)	767.8		39.2		—		39.2		—		—		—
Commodity contracts
Swaps	59.3		4.0		—		4.0		5.0		—		5.0
Futures and forwards	196.8		4.3		—		4.3		4.0		0.2		4.2
Written options (2)	70.8		—		—		—		3.9		—		3.9
Purchased options (3)	79.1		3.4		—		3.4		—		—		—
Credit derivatives (4)
Purchased credit derivatives:
Credit default swaps	386.9		2.8		—		2.8		1.9		—		1.9
Total return swaps/options	133.3		0.7		—		0.7		2.9		—		2.9
Written credit derivatives:
Credit default swaps	358.7		1.4		—		1.4		2.4		—		2.4
Total return swaps/options	124.4		3.3		—		3.3		0.8		—		0.8
Gross derivative assets/liabilities			$	350.7	$	10.0	$	360.7	$	334.1	$	29.8	$	363.9
Less: Legally enforceable master netting agreements							(290.8)						(290.8)
Less: Cash collateral received/paid							(29.0)						(32.9)
Total derivative assets/liabilities							$	40.9					$	40.2

(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.

(2)Includes certain out-of-the-money purchased options that have a liability amount primarily due to the deferral of option premiums to the end of the contract.

(3)Includes certain out-of-the-money written options that have an asset amount primarily due to the deferral of option premiums to the end of the contract.

(4)The net derivative asset (liability) and notional amount of written credit derivatives for which the Corporation held purchased credit derivatives with identical underlying referenced names were $(1.0) billion and $336.3 billion at March 31, 2023.



			December 31, 2022
			Gross Derivative Assets						Gross Derivative Liabilities
(Dollars in billions)	Contract/ Notional (1)		Trading and Other Risk Management Derivatives		Qualifying Accounting Hedges		Total		Trading and Other Risk Management Derivatives		Qualifying Accounting Hedges		Total
Interest rate contracts
Swaps	$	18,285.9	$	138.2	$	20.7	$	158.9	$	120.3	$	36.7	$	157.0
Futures and forwards	2,796.3		8.6		—		8.6		7.8		—		7.8
Written options (2)	1,657.9		—		—		—		41.4		—		41.4
Purchased options (3)	1,594.7		42.4		—		42.4		—		—		—
Foreign exchange contracts
Swaps	1,509.0		44.0		0.3		44.3		43.3		0.4		43.7
Spot, futures and forwards	4,159.3		59.9		0.1		60.0		62.1		0.6		62.7
Written options (2)	392.2		—		—		—		8.1		—		8.1
Purchased options (3)	362.6		8.3		—		8.3		—		—		—
Equity contracts
Swaps	394.0		10.8		—		10.8		12.2		—		12.2
Futures and forwards	114.6		3.3		—		3.3		1.0		—		1.0
Written options (2)	746.8		—		—		—		45.0		—		45.0
Purchased options (3)	671.6		40.9		—		40.9		—		—		—
Commodity contracts
Swaps	56.0		5.1		—		5.1		5.3		—		5.3
Futures and forwards	157.3		3.0		—		3.0		2.3		0.8		3.1
Written options (2)	59.5		—		—		—		3.3		—		3.3
Purchased options (3)	61.8		3.6		—		3.6		—		—		—
Credit derivatives (4)
Purchased credit derivatives:
Credit default swaps	319.9		2.8		—		2.8		1.6		—		1.6
Total return swaps/options	71.5		0.7		—		0.7		3.0		—		3.0
Written credit derivatives:
Credit default swaps	295.2		1.2		—		1.2		2.4		—		2.4
Total return swaps/options	85.3		4.4		—		4.4		0.9		—		0.9
Gross derivative assets/liabilities			$	377.2	$	21.1	$	398.3	$	360.0	$	38.5	$	398.5
Less: Legally enforceable master netting agreements							(315.9)						(315.9)
Less: Cash collateral received/paid							(33.8)						(37.8)
Total derivative assets/liabilities							$	48.6					$	44.8

(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.

(2)Includes certain out-of-the-money purchased options that have a liability amount primarily due to the deferral of option premiums to the end of the contract.

(3)Includes certain out-of-the-money written options that have an asset amount primarily due to the deferral of option premiums to the end of the contract.

Gains and Losses on Derivatives Designated as Fair Value Hedges

The table below summarizes information related to fair value hedges for the three months ended March 31, 2023 and 2022.



Gains and Losses on Derivatives Designated as Fair Value Hedges

	Three Months Ended March 31
	2023				2022

(Dollars in millions)	Derivative		Hedged Item		Derivative		Hedged Item
Interest rate risk on long-term debt (1)	$	3,308	$	(3,305)	$	(11,034)	$	11,219
Interest rate and foreign currency risk on long-term debt (2)	8		(8)		(9)		8
Interest rate risk on available-for-sale securities (3)	(3,027)		3,016		9,817		(9,905)
Price risk on commodity inventory (4)	(519)		519		(232)		237
Total	$	(230)	$	222	$	(1,458)	$	1,559

(1)Amounts are recorded in interest expense in the Consolidated Statement of Income.

(2)For the three months ended March 31, 2023 and 2022, the derivative amount includes gains (losses) of $8 million and $(21) million in interest expense, $1 million and $14 million in market making and similar activities, and $(1) million and $(2) million in accumulated other comprehensive income (OCI). Line item totals are in the Consolidated Statement of Income and on the Consolidated Balance Sheet.

(3)Amounts are recorded in interest income in the Consolidated Statement of Income.

(4)Amounts are recorded in market making and similar activities in the Consolidated Statement of Income.

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The table below summarizes the carrying value of hedged assets and liabilities that are designated and qualifying in fair value hedging relationships along with the cumulative amount of fair value hedging adjustments included in the carrying value that have been recorded in the current hedging relationships. These fair value hedging adjustments are open basis adjustments that are not subject to amortization as long as the hedging relationship remains designated.



Designated Fair Value Hedged Assets and Liabilities

	March 31, 2023				December 31, 2022
(Dollars in millions)	Carrying Value		Cumulative Fair Value Adjustments (1)		Carrying Value		Cumulative Fair Value Adjustments (1)

Long-term debt (2)	$	187,097	$	(12,629)	$	187,402	$	(21,372)
Available-for-sale debt securities (2, 3, 4)	107,422		(4,283)		167,518		(18,190)
Trading account assets (5)	8,295		487		16,119		146

(1)Increase (decrease) to carrying value.

(2)At March 31, 2023 and December 31, 2022, the cumulative fair value adjustments remaining on long-term debt and available-for-sale debt securities from discontinued hedging relationships resulted in a decrease of $4.6 billion and an increase of $137 million in the related liability and a decrease in the related asset of $8.3 billion and $4.9 billion, which are being amortized over the remaining contractual life of the de-designated hedged items.

(3)These amounts include the amortized cost of the financial assets in closed portfolios used to designate hedging relationships in which the hedged item is a stated layer that is expected to be remaining at the end of the hedging relationship (i.e. portfolio layer hedging relationship). At March 31, 2023 and December 31, 2022, the amortized cost of the closed portfolios used in these hedging relationships was $21.1 billion and $21.4 billion, of which $9.3 billion and $9.2 billion were designated in a portfolio layer hedging relationship. At March 31, 2023 and December 31, 2022, the cumulative adjustment associated with these hedging relationships was a decrease of $329 million and $451 million.

(4)Carrying value represents amortized cost.

(5)Represents hedging activities related to certain commodities inventory.

Cash Flow and Net Investment Hedges

The table below summarizes certain information related to cash flow hedges and net investment hedges for the three months ended March 31, 2023 and 2022. Of the $9.9 billion after-tax net loss ($13.2 billion pretax) on derivatives in accumulated OCI at March 31, 2023, losses of $4.4 billion after-tax ($5.9 billion pretax) related to both open and terminated cash flow hedges are expected to be reclassified into earnings in the next 12 months. These net losses reclassified into earnings are expected to primarily decrease net interest income related to the respective hedged items. For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately seven years. For terminated cash flow hedges, the time period over which the forecasted transactions will be recognized in interest income is approximately five years, with the aggregated amount beyond this time period being insignificant.



Gains and Losses on Derivatives Designated as Cash Flow and Net Investment Hedges

					Three Months Ended March 31
					2023				2022
(Dollars in millions, amounts pretax)	Gains (Losses) Recognized in Accumulated OCI on Derivatives	Gains (Losses) in Income Reclassified from Accumulated OCI	Gains (Losses) Recognized in Accumulated OCI on Derivatives	Gains (Losses) in Income Reclassified from Accumulated OCI

Cash flow hedges
Interest rate risk on variable-rate portfolios (1)					$	2,550	$	(160)	$	(6,774)	$	(8)
Price risk on forecasted MBS purchases (1)					2		—		(90)		3
Price risk on certain compensation plans (2)					17		5		(27)		12
Total					$	2,569	$	(155)	$	(6,891)	$	7
Net investment hedges
Foreign exchange risk (3)					$	(377)	$	—	$	219	$	—

(1)Amounts reclassified from accumulated OCI are recorded in interest income in the Consolidated Statement of Income.

(2)Amounts reclassified from accumulated OCI are recorded in compensation and benefits expense in the Consolidated Statement of Income.

(3)Amounts reclassified from accumulated OCI are recorded in other income in the Consolidated Statement of Income. For the three months ended March 31, 2023 and 2022, amounts excluded from effectiveness testing and recognized in market making and similar activities were gains (losses) of $33 million and $(74) million.

Other Risk Management Derivatives

The table below presents gains (losses) on these derivatives for the three months ended March 31, 2023 and 2022. These gains (losses) are largely offset by the income or expense recorded on the hedged item.



Gains and Losses on Other Risk Management Derivatives

	Three Months Ended March 31
(Dollars in millions)	2023		2022
Interest rate risk on mortgage activities (1, 2)	$	26	$	(147)
Credit risk on loans (2)	(28)		(3)
Interest rate and foreign currency risk on asset and liability management activities (3)	(122)		1,310
Price risk on certain compensation plans (4)	195		(335)

(1)Includes hedges of interest rate risk on mortgage servicing rights (MSRs) and interest rate lock commitments (IRLCs) to originate mortgage loans that will be held for sale.

(2)Gains (losses) on these derivatives are recorded in other income.

(3)Gains (losses) on these derivatives are recorded in market making and similar activities.

(4)Gains (losses) on these derivatives are recorded in compensation and benefits expense.

Schedule of Derivative Instruments Included in Trading Activities

The table below, which includes both derivatives and non-derivative cash instruments, identifies the amounts in the respective income statement line items attributable to the Corporation’s sales and trading revenue in Global Markets, categorized by primary risk, for the three months ended March 31, 2023 and 2022. This table includes debit valuation adjustment (DVA) and funding valuation adjustment (FVA) gains (losses). Global Markets results in Note 17 – Business Segment Information are presented on a fully taxable-equivalent (FTE) basis. The table below is not presented on an FTE basis.



Sales and Trading Revenue

		Market making and similar activities		Net Interest Income		Other (1)		Total
(Dollars in millions)	Three Months Ended March 31, 2023
Interest rate risk		$	1,244	$	99	$	86	$	1,429
Foreign exchange risk		402		49		24		475
Equity risk		2,000		(838)		460		1,622
Credit risk		480		666		115		1,261
Other risk (2)		272		(78)		(4)		190
Total sales and trading revenue		$	4,398	$	(102)	$	681	$	4,977

	Three Months Ended March 31, 2022
Interest rate risk		$	589	$	452	$	69	$	1,110
Foreign exchange risk		507		(17)		1		491
Equity risk		1,564		(60)		501		2,005
Credit risk		239		476		14		729
Other risk (2)		291		(33)		33		291
Total sales and trading revenue		$	3,190	$	818	$	618	$	4,626

(1)Represents amounts in investment and brokerage services and other income that are recorded in Global Markets and included in the definition of sales and trading revenue. Includes investment and brokerage services revenue of $529 million and $531 million for the three months ended March 31, 2023 and 2022.

(2)Includes commodity risk.

Disclosure of Credit Derivatives

Credit derivative instruments where the Corporation is the seller of credit protection and their expiration at March 31, 2023 and December 31, 2022 are summarized in the table below.



Credit Derivative Instruments

	Less than One Year		One to Three Years		Three to Five Years		Over Five Years		Total
	March 31, 2023
(Dollars in millions)	Carrying Value
Credit default swaps:
Investment grade	$	6	$	32	$	105	$	42	$	185
Non-investment grade	54		395		919		863		2,231
Total	60		427		1,024		905		2,416
Total return swaps/options:
Investment grade	85		282		—		—		367
Non-investment grade	269		8		109		10		396
Total	354		290		109		10		763
Total credit derivatives	$	414	$	717	$	1,133	$	915	$	3,179
Credit-related notes:
Investment grade	$	—	$	—	$	2	$	824	$	826
Non-investment grade	—		3		4		1,032		1,039
Total credit-related notes	$	—	$	3	$	6	$	1,856	$	1,865
	Maximum Payout/Notional
Credit default swaps:
Investment grade	$	32,823	$	67,196	$	123,896	$	37,078	$	260,993
Non-investment grade	17,361		30,171		36,112		14,108		97,752
Total	50,184		97,367		160,008		51,186		358,745
Total return swaps/options:
Investment grade	73,449		11,240		—		—		84,689
Non-investment grade	35,946		783		2,088		906		39,723
Total	109,395		12,023		2,088		906		124,412
Total credit derivatives	$	159,579	$	109,390	$	162,096	$	52,092	$	483,157

	December 31, 2022
	Carrying Value
Credit default swaps:
Investment grade	$	2	$	25	$	133	$	34	$	194
Non-investment grade	120		516		870		697		2,203
Total	122		541		1,003		731		2,397
Total return swaps/options:
Investment grade	55		336		—		—		391
Non-investment grade	332		9		132		10		483
Total	387		345		132		10		874
Total credit derivatives	$	509	$	886	$	1,135	$	741	$	3,271
Credit-related notes:
Investment grade	$	—	$	—	$	19	$	1,017	$	1,036
Non-investment grade	—		7		6		1,035		1,048
Total credit-related notes	$	—	$	7	$	25	$	2,052	$	2,084
	Maximum Payout/Notional
Credit default swaps:
Investment grade	$	34,670	$	66,170	$	93,237	$	18,677	$	212,754
Non-investment grade	15,229		29,629		30,891		6,662		82,411
Total	49,899		95,799		124,128		25,339		295,165
Total return swaps/options:
Investment grade	38,722		10,407		—		—		49,129
Non-investment grade	32,764		500		2,054		897		36,215
Total	71,486		10,907		2,054		897		85,344
Total credit derivatives	$	121,385	$	106,706	$	126,182	$	26,236	$	380,509

Additional Collateral Required to be Posted Upon Downgrade

The following table presents the amount of additional collateral that would have been contractually required by derivative contracts and other trading agreements at March 31, 2023 if the rating agencies had downgraded their long-term senior debt ratings for the Corporation or certain subsidiaries by

one incremental notch and by an additional second incremental notch. The table also presents derivative liabilities that would be subject to unilateral termination by counterparties upon downgrade of the Corporation's or certain subsidiaries' long-term senior debt ratings.



Additional Collateral Required to be Posted and Derivative Liabilities Subject to Unilateral Termination Upon Downgrade at March 31, 2023

(Dollars in millions)	One Incremental Notch		Second Incremental Notch
Additional collateral required to be posted upon downgrade
Bank of America Corporation	$	162	$	908
Bank of America, N.A. and subsidiaries (1)	70		647

Derivative liabilities subject to unilateral termination upon downgrade
Derivative liabilities	$	79	$	600
Collateral posted	60		306

(1)Included in Bank of America Corporation collateral requirements in this table.

Derivative Liability Subject to Unilateral Termination Upon Downgrade



Additional Collateral Required to be Posted and Derivative Liabilities Subject to Unilateral Termination Upon Downgrade at March 31, 2023

(Dollars in millions)	One Incremental Notch		Second Incremental Notch
Additional collateral required to be posted upon downgrade
Bank of America Corporation	$	162	$	908
Bank of America, N.A. and subsidiaries (1)	70		647

Derivative liabilities subject to unilateral termination upon downgrade
Derivative liabilities	$	79	$	600
Collateral posted	60		306

(1)Included in Bank of America Corporation collateral requirements in this table.

Valuation Adjustments on Derivatives

The table below presents credit valuation adjustment (CVA), DVA and FVA gains (losses) on derivatives (excluding the effect of any related hedge activities), which are recorded in market making and similar activities, for the three months ended March 31, 2023 and 2022. For more information on the valuation adjustments on derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2022 Annual Report on Form 10-K.



Valuation Adjustments Gains (Losses) on Derivatives (1)

	Three Months Ended March 31
(Dollars in millions)	2023		2022
Derivative assets (CVA)	$	12	$	(59)
Derivative assets/liabilities (FVA)	(43)		35
Derivative liabilities (DVA)	2		121

(1)At March 31, 2023 and December 31, 2022, cumulative CVA reduced the derivative assets balance by $506 million and $518 million, cumulative FVA reduced the net derivative balance by $97 million and $54 million, and cumulative DVA reduced the derivative liabilities balance by $508 million and $506 million.

Derivative

Derivative [Line Items]

Offsetting Assets

The following table presents derivative instruments included in derivative assets and liabilities on the Consolidated Balance Sheet at March 31, 2023 and December 31, 2022 by primary risk (e.g., interest rate risk) and the platform, where applicable,

on which these derivatives are transacted. Balances are presented on a gross basis, prior to the application of counterparty and cash collateral netting. Total gross derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements, which include reducing the balance for counterparty netting and cash collateral received or paid.

For more information on offsetting of securities financing agreements, see Note 9 – Securities Financing Agreements, Collateral and Restricted Cash.



Offsetting of Derivatives (1)

	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
(Dollars in billions)	March 31, 2023				December 31, 2022
Interest rate contracts
Over-the-counter	$	130.0	$	125.0	$	138.4	$	132.3
Exchange-traded	0.3		0.2		0.4		0.1
Over-the-counter cleared	73.8		72.8		71.4		71.1
Foreign exchange contracts
Over-the-counter	81.8		79.2		109.7		110.6
Over-the-counter cleared	0.9		0.9		1.3		1.2
Equity contracts
Over-the-counter	23.8		27.3		21.5		22.6
Exchange-traded	29.9		31.9		33.0		33.8
Commodity contracts
Over-the-counter	8.2		10.3		8.3		9.3
Exchange-traded	2.5		2.3		2.4		1.9
Over-the-counter cleared	0.2		0.3		0.3		0.3
Credit derivatives
Over-the-counter	8.1		7.6		8.9		7.5
Over-the-counter cleared	—		—		—		—
Total gross derivative assets/liabilities, before netting
Over-the-counter	251.9		249.4		286.8		282.3
Exchange-traded	32.7		34.4		35.8		35.8
Over-the-counter cleared	74.9		74.0		73.0		72.6
Less: Legally enforceable master netting agreements and cash collateral received/paid
Over-the-counter	(214.4)		(218.2)		(243.8)		(248.2)
Exchange-traded	(31.7)		(31.7)		(33.5)		(33.5)
Over-the-counter cleared	(73.7)		(73.8)		(72.4)		(72.0)
Derivative assets/liabilities, after netting	39.7		34.1		45.9		37.0
Other gross derivative assets/liabilities (2)	1.2		6.1		2.7		7.8
Total derivative assets/liabilities	40.9		40.2		48.6		44.8
Less: Financial instruments collateral (3)	(15.8)		(8.8)		(18.5)		(7.4)
Total net derivative assets/liabilities	$	25.1	$	31.4	$	30.1	$	37.4

(1)Over-the-counter derivatives include bilateral transactions between the Corporation and a particular counterparty. Over-the-counter cleared derivatives include bilateral transactions between the Corporation and a counterparty where the transaction is cleared through a clearinghouse. Exchange-traded derivatives include listed options transacted on an exchange.

(2)Consists of derivatives entered into under master netting agreements where the enforceability of these agreements is uncertain under bankruptcy laws in some countries or industries.

(3)Amounts are limited to the derivative asset/liability balance and, accordingly, do not include excess collateral received/pledged. Financial instruments collateral includes securities collateral received or pledged and cash securities held and posted at third-party custodians that are not offset on the Consolidated Balance Sheet but shown as a reduction to derive net derivative assets and liabilities.

Offsetting Liabilities

For more information on offsetting of securities financing agreements, see Note 9 – Securities Financing Agreements, Collateral and Restricted Cash.



Offsetting of Derivatives (1)

	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
(Dollars in billions)	March 31, 2023				December 31, 2022
Interest rate contracts
Over-the-counter	$	130.0	$	125.0	$	138.4	$	132.3
Exchange-traded	0.3		0.2		0.4		0.1
Over-the-counter cleared	73.8		72.8		71.4		71.1
Foreign exchange contracts
Over-the-counter	81.8		79.2		109.7		110.6
Over-the-counter cleared	0.9		0.9		1.3		1.2
Equity contracts
Over-the-counter	23.8		27.3		21.5		22.6
Exchange-traded	29.9		31.9		33.0		33.8
Commodity contracts
Over-the-counter	8.2		10.3		8.3		9.3
Exchange-traded	2.5		2.3		2.4		1.9
Over-the-counter cleared	0.2		0.3		0.3		0.3
Credit derivatives
Over-the-counter	8.1		7.6		8.9		7.5
Over-the-counter cleared	—		—		—		—
Total gross derivative assets/liabilities, before netting
Over-the-counter	251.9		249.4		286.8		282.3
Exchange-traded	32.7		34.4		35.8		35.8
Over-the-counter cleared	74.9		74.0		73.0		72.6
Less: Legally enforceable master netting agreements and cash collateral received/paid
Over-the-counter	(214.4)		(218.2)		(243.8)		(248.2)
Exchange-traded	(31.7)		(31.7)		(33.5)		(33.5)
Over-the-counter cleared	(73.7)		(73.8)		(72.4)		(72.0)
Derivative assets/liabilities, after netting	39.7		34.1		45.9		37.0
Other gross derivative assets/liabilities (2)	1.2		6.1		2.7		7.8
Total derivative assets/liabilities	40.9		40.2		48.6		44.8
Less: Financial instruments collateral (3)	(15.8)		(8.8)		(18.5)		(7.4)
Total net derivative assets/liabilities	$	25.1	$	31.4	$	30.1	$	37.4

(2)Consists of derivatives entered into under master netting agreements where the enforceability of these agreements is uncertain under bankruptcy laws in some countries or industries.