Quarterly report pursuant to Section 13 or 15(d)

Transactions with Bank of America

v2.4.0.6
Transactions with Bank of America
 6 Months Ended
Jun. 30, 2012
Related Party Transactions [Abstract]  
Transactions with Bank of America
Note 2.  
Transactions with Bank of America
Merrill Lynch has entered into various transactions with Bank of America, including transactions in connection with certain sales and trading and financing activities as well as the allocation of certain shared services. Details on amounts receivable from and payable to Bank of America as of June 30, 2012 and December 31, 2011 are presented below.
Receivables from Bank of America are comprised of:
(dollars in millions)
 
June 30, 2012

December 31, 2011
Cash and cash equivalents
$
10,980

 
$
7,491

Cash and securities segregated for regulatory purposes
5,231

 
6,107

Receivables under resale agreements
39,725

 
26,855

Trading assets
828

 
700

Net intercompany funding receivable
3,169

 
3,567

Other receivables
6,435

 
6,252

Total
$
66,368

 
$
50,972

Payables to Bank of America are comprised of:
(dollars in millions)
 
June 30, 2012
 
December 31, 2011
Payables under repurchase agreements
$
666

 
$
22,647

Payables under securities loaned transactions
2,932

 
2,519

Short-term borrowings
1,131

 
1,450

Deposits
114

 
75

Trading liabilities
1,335

 
503

Other payables
2,326

 
1,935

Long-term borrowings(1)
1,287

 
2,650

Total
$
9,791

 
$
31,779

 
 
 
 
(1)
Includes $2,578 of subordinated borrowings from Bank of America as of December 31, 2011 (see Note 12).
Total net revenues and non-interest expenses related to transactions with Bank of America for the three months ended June 30, 2012 were $288 million and $657 million, respectively. Such net revenues and non-interest expenses for the six months ended June 30, 2012 were $497 million and $1,082 million, respectively. Total net revenues and non-interest expenses related to transactions with Bank of America for the three months ended June 30, 2011 were $217 million and $730 million, respectively. Such net revenues and non-interest expenses for the six months ended June 30, 2011 were $535 million and $1,345 million, respectively.
Total net revenues related to transactions with Bank of America for the three and six months ended June 30, 2012 included intercompany service fee revenues of $205 million and $372 million, respectively. Total non-interest expenses related to transactions with Bank of America for the three and six months ended June 30, 2012 included intercompany service fee expenses of $538 million and $932 million, respectively. Total net revenues related to transactions with Bank of America for the three and six months ended June 30, 2011 included intercompany service fee revenues of $169 million and $402 million, respectively. Total non-interest expenses related to transactions with Bank of America for the three and six months ended June 30, 2011 included intercompany service fee expenses of $679 million and $1,232 million, respectively. Intercompany service fee revenue and service fee expense from Bank of America represents the allocations of certain centralized or shared business activities between Merrill Lynch and Bank of America. Such fees are generally determined in accordance with subsidiary transfer pricing agreements.
Bank of America and Merrill Lynch have entered into certain intercompany lending and borrowing arrangements to facilitate centralized liquidity management. Included in these arrangements is a $50 billion extendible one-year revolving credit facility that allows Bank of America to borrow funds from Merrill Lynch at a spread to the London Interbank Offered Rate ("LIBOR") that is reset periodically and is consistent with other intercompany agreements. The credit facility matures on January 1, 2013 and will automatically be extended by one year to the succeeding January 1st unless Merrill Lynch provides written notice not to extend at least 45 days prior to the maturity date. There were no amounts outstanding at both June 30, 2012 and December 31, 2011 under this credit facility. There is also a short-term revolving credit facility that allows Bank of America to borrow up to an additional $25 billion. Interest on borrowings under the credit facility is based on prevailing short-term market rates. The line of credit matures on February 12, 2013. At June 30, 2012, approximately $3.1 billion was outstanding under this credit facility. See Note 12 for further information on intercompany financing agreements with Bank of America. In addition, Bank of America has guaranteed the performance of Merrill Lynch on certain derivative transactions (see Note 6). Bank of America has also guaranteed certain debt securities, warrants and/or other certificates and obligations of certain subsidiaries of ML & Co. (see Note 12).