Bank of America 2010 Annual Report Download - page 188

Other Variable Interest Entities
Other consolidated VIEs primarily include investment vehicles, a collective investment fund, leveraged lease trusts and asset acquisition conduits. Other
unconsolidated VIEs primarily include investment vehicles and real estate vehicles.
The table below summarizes select information related to other VIEs in which the Corporation held a variable interest at December 31, 2010 and 2009.
(Dollars in millions) Consolidated Unconsolidated Total Consolidated Unconsolidated Total
2010 2009
December 31
Maximum loss exposure $19,248 $ 8,796 $28,044 $12,073 $11,290 $23,363
On-balance sheet assets
Trading account assets
$8,900 $ – $8,900 $269 $ –$269
Derivative assets
– 228 228 1,096 83 1,179
Available-for-sale debt securities
1,832 73 1,905 1,822 – 1,822
Loans and leases
7,690 1,122 8,812 7,820 1,200 9,020
Allowance for loan and lease losses
(27) (22) (49) (29) (10) (39)
Loans held-for-sale
262 949 1,211 197 – 197
All other assets
937 6,440 7,377 1,285 8,777 10,062
Total $19,594 $ 8,790 $28,384 $12,460 $10,050 $22,510
On-balance sheet liabilities
Derivative liabilities
$– $9$9 $– $80$80
Commercial paper and other short-term borrowings
1,115 – 1,115 965 – 965
Long-term debt
229 – 229 33 – 33
All other liabilities
8,683 1,657 10,340 3,123 1,466 4,589
Total $10,027 $ 1,666 $11,693 $4,121 $1,546 $5,667
Total assets of VIEs
$19,594 $13,416 $33,010 $12,460 $14,819 $27,279
Investment Vehicles
The Corporation sponsors, invests in or provides financing to a variety of
investment vehicles that hold loans, real estate, debt securities or other
financial instruments and are designed to provide the desired investment
profile to investors. At December 31, 2010 and 2009, the Corporation’s
consolidated investment vehicles had total assets of $5.6 billion and $5.7 bil-
lion. The Corporation also held investments in unconsolidated vehicles with
total assets of $7.9 billion and $8.8 billion at December 31, 2010 and 2009.
The Corporation’s maximum exposure to loss associated with both consol-
idated and unconsolidated investment vehicles totaled $8.7 billion and
$10.7 billion at December 31, 2010 and 2009.
On January 1, 2010, the Corporation consolidated $2.5 billion of invest-
ment vehicles. This amount included a real estate investment fund with
assets of $1.5 billion which is designed to provide returns to clients through
limited partnership holdings. At that time, the Corporation was the general
partner and also had a limited partnership interest in the fund. The Corpo-
ration provided support to the fund and therefore considers the fund to be a
VIE. In late 2010, the Corporation transferred its general partnership interest
to a third party, conveying all ongoing management responsibilities to that
third party. As a result, the Corporation deconsolidated the fund because it no
longer has a controlling financial interest. The Corporation continues to retain
a limited partnership interest, which is included in the table above.
Collective Investment Funds
The Corporation is trustee for certain common and collective investment
funds that provide investment opportunities for eligible clients of GWIM.
These funds, which had total assets of $21.2 billion at December 31,
2010, hold a variety of cash, debt and equity investments. The Corporation
does not have a variable interest in these funds, except as described below.
In 2010, the governing documents of a stable value collective investment
fund with total assets of $8.1 billion at December 31, 2010 were modified to
facilitate the planned liquidation of the fund. The modifications resulted in the
termination of third-party insurance contracts which were replaced by a
guarantee from the Corporation of the net asset value of the fund, which
principally holds short-term U.S. Treasury and agency securities. In addition,
the Corporation acquired the unilateral ability to replace the fund’s asset
manager. As a result of these changes, the Corporation acquired a controlling
financial interest in and consolidated the fund. Consolidation did not have a
significant impact on the Corporation’s 2010 results of operations. This fund
was not previously consolidated because the Corporation did not have the
unilateral power to replace the asset manager, nor did it have a variable
interest in the fund that was more than insignificant. Liquidation of the fund
will be finalized in 2011.
186 Bank of America 2010