Quarterly report pursuant to Section 13 or 15(d)

Transactions with Bank of America

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Transactions with Bank of America
 6 Months Ended
Jun. 30, 2013
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, 2013 and December 31, 2012 are presented below.
Receivables from Bank of America are comprised of:
(dollars in millions)
 
June 30, 2013

December 31, 2012
Cash and cash equivalents
$
10,803

 
$
9,446

Cash and securities segregated for regulatory purposes
5,019

 
5,257

Receivables under resale agreements
7,628

 
13,090

Receivables under securities borrowed transactions
865

 
—

Trading assets
849

 
409

Net intercompany funding receivable
7,970

 
16,473

Other receivables
2,836

 
1,155

Total
$
35,970

 
$
45,830

Payables to Bank of America are comprised of:
(dollars in millions)
 
June 30, 2013
 
December 31, 2012
Payables under repurchase agreements
$
748

 
$
556

Payables under securities loaned transactions
5,911

 
3,686

Short-term borrowings
745

 
925

Deposits
131

 
140

Trading liabilities
288

 
509

Other payables
3,243

 
1,780

Long-term borrowings
1,460

 
1,156

Total
$
12,526

 
$
8,752

 
 
 
 

Total net revenues and non-interest expenses related to transactions with Bank of America for the three months ended June 30, 2013 were $546 million and $545 million, respectively. Such net revenues and non-interest expenses for the six months ended June 30, 2013 were $851 million and $1,107 million, respectively. Total net revenues and non-interest expenses related to transactions with Bank of America for the three months ended June 30, 2012 were $349 million and $656 million, respectively. Such net revenues and non-interest expenses for the six months ended June 30, 2012 were $619 million and $1,082 million, respectively.
Total net revenues related to transactions with Bank of America for the three and six months ended June 30, 2013 included intercompany service fee revenues of $294 million and $534 million, respectively. Total non-interest expenses related to transactions with Bank of America for the three and six months ended June 30, 2013 included intercompany service fee expenses of $434 million and $878 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. 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.

During the three and six months ended June 30, 2013, Merrill Lynch acquired certain residential mortgage loans from Bank of America. Such loans had an aggregate unpaid principal balance of $5.3 billion and an aggregate carrying value of $4.2 billion as of June 30, 2013. See Note 10 for further information.
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, 2014 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, 2013 and December 31, 2012 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 11, 2014. At June 30, 2013 and December 31, 2012, approximately $7.8 billion and $16.2 billion, respectively, was outstanding under this line of credit. 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) and in certain instances the return of collateral posted by counterparties.