Bank of America 2007 Annual Report Download - page 66

Included in purchase obligations are vendor contracts of $4.9 billion,
commitments to purchase securities of $3.7 billion and commitments to
purchase loans of $27.1 billion. The most significant of our vendor con-
tracts include communication services, processing services and software
contracts. Other long-term liabilities include our contractual funding obliga-
tions related to the Qualified Pension Plans, Nonqualified Pension Plans
and Postretirement Health and Life Plans (the Plans). Obligations to the
Plans are based on the current and projected obligations of the Plans,
performance of the Plans’ assets and any participant contributions, if
applicable. During 2007 and 2006, we contributed $243 million and $2.6
billion to the Plans, and we expect to make at least $206 million of con-
tributions during 2008. The following table does not include UTBs of $3.1
billion associated with FIN 48 and tax-related interest and penalties of
$573 million.
Debt, lease, equity and other obligations are more fully discussed in
Note 12 – Short-term Borrowings and Long-term Debt and Note 13 –
Commitments and Contingencies to the Consolidated Financial State-
ments. The Plans and UTBs are more fully discussed in Note 16 –
Employee Benefit Plans and Note 18 – Income Taxes to the Consolidated
Financial Statements.
Table 9 presents total long-term debt and other obligations at
December 31, 2007.
Table 9 Long-term Debt and Other Obligations
December 31, 2007
(Dollars in millions)
Due in 1 year
or less
Due after 1 year
through 3 years
Due after 3 years
through 5 years
Due
after 5
years Total
Long-term debt and capital leases $30,435 $50,693 $28,115 $88,265 $197,508
Purchase obligations
(1)
12,266 21,994 624 842 35,726
Operating lease obligations 2,049 3,405 2,480 8,151 16,085
Other long-term liabilities 493 694 432 480 2,099
Total long-term debt and other obligations $45,243 $76,786 $31,651 $97,738 $251,418
(1) Obligations that are legally binding agreements whereby we agree to purchase products or services with a specific minimum quantity defined at a fixed, minimum or variable price over a specified period of time are defined as
purchase obligations.
Many of our lending relationships contain funded and unfunded
elements. The funded portion is reflected on our balance sheet. For lend-
ing relationships carried at historical cost, the unfunded component of
these commitments is not recorded on our balance sheet until a draw is
made under the credit facility; however, a reserve is established for prob-
able losses. For lending commitments for which we have elected to
account for under SFAS 159, the fair value of the commitment is recorded
in accrued expenses and other liabilities. The Corporation also manages
certain concentrations of commitments (e.g., bridge financing) through its
established “originate to distribute” strategy.
For more information on these commitments and guarantees, includ-
ing equity commitments, see Note 13 – Commitments and Contingencies
to the Consolidated Financial Statements. For more information on the
adoption of SFAS 159, see Note 19 – Fair Value Disclosures to the Con-
solidated Financial Statements.
We enter into commitments to extend credit such as loan commit-
ments, SBLCs and commercial letters of credit to meet the financing
needs of our customers. The table below summarizes the total unfunded,
or off-balance sheet, credit extension commitment amounts by expiration
date. At December 31, 2007, the unfunded lending commitments related
to charge cards (nonrevolving card lines) to individuals and government
entities guaranteed by the U.S. Government in the amount of $9.9 billion
(related outstandings of $193 million) were not included in credit card line
commitments in the table below.
Other Commitments
We provided support to cash funds managed within GWIM by purchasing
certain assets at fair value and by committing to provide a limited amount
of capital to the funds. For more information, see Note 13 – Commitments
and Contingencies to the Consolidated Financial Statements.
Table 10 Credit Extension Commitments
December 31, 2007
(Dollars in millions)
Expires in 1
year or less
Expires after 1
year through
3 years
Expires after 3
years through
5 years
Expires after
5 years Total
Loan commitments $ 178,931 $ 92,153 $106,904 $ 27,902 $ 405,890
Home equity lines of credit 8,482 1,828 2,758 107,055 120,123
Standby letters of credit and financial guarantees 31,629 14,493 7,943 8,731 62,796
Commercial letters of credit 3,753 50 33 717 4,553
Legally binding commitments
(1)
222,795 108,524 117,638 144,405 593,362
Credit card lines 876,393 17,864 – – 894,257
Total credit extension commitments $1,099,188 $126,388 $117,638 $144,405 $1,487,619
(1) Includes commitments of $47.3 billion to corporation-sponsored multi-seller conduits, $2.3 billion to CDOs, $6.1 billion to municipal bond trusts and $1.7 billion to customer-sponsored conduits at December 31, 2007.
64 Bank of America 2007