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BANK OF AMERICA CORP /DE/

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BANK OF AMERICA CORP /DE/

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1.0.0.3 false Merger and Restructuring Activity false 1 $ false false iso4217_USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 iso4217_USD_per_shares Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares 0 shares Standard http://www.xbrl.org/2003/instance shares 0 5 Merger and Restructuring Activity 3 us-gaap_BusinessCombinationDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0 <div> NOTE 2 – Merger and Restructuring Activity Merrill Lynch On January 1, 2009, the Corporation acquired Merrill Lynch through its merger with a subsidiary of the Corporation in exchange for common and preferred stock with a value of $29.1 billion, creating a financial services franchise with significantly enhanced wealth management, investment banking and international capabilities. Under the terms of the merger agreement, Merrill Lynch common shareholders received 0.8595 of a share of Bank of America Corporation common stock in exchange for each share of Merrill Lynch common stock. In addition, Merrill Lynch non-convertible preferred shareholders received Bank of America Corporation preferred stock having substantially identical terms. Merrill Lynch convertible preferred stock remains outstanding and is convertible into Bank of America common stock at an equivalent exchange ratio. With the acquisition, the Corporation has one of the largest wealth management businesses in the world with approximately 15,000 financial advisors and more than $2.1 trillion in client assets. Global investment management capabilities include an economic ownership interest of approximately 34 percent in BlackRock, Inc. (BlackRock), a publicly traded investment management company. In addition, the acquisition adds strengths in debt and equity underwriting, sales and trading, and merger and acquisition advice, creating significant opportunities to deepen relationships with corporate and institutional clients around the globe. Merrill Lynch’s results of operations were included in the Corporation’s results beginning January 1, 2009. The purchase price was allocated to the acquired assets and liabilities based on their estimated fair values at the Merrill Lynch acquisition date as summarized in the following table. Goodwill of $5.1 billion was calculated as the purchase premium after adjusting for the fair value of net assets acquired and represents the value expected from the synergies created from combining the Merrill Lynch wealth management and corporate and investment banking businesses with the Corporation’s capabilities in consumer and commercial banking as well as the economies of scale expected from combining the operations of the two companies. No goodwill is expected to be deductible for federal income tax purposes. The goodwill was allocated principally to the Global Wealth & Investment Management (GWIM) and Global Markets business segments.     Merrill Lynch Purchase Price Allocation   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="91%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom">(Dollars in billions, except per share amounts)</td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> </tr> <tr> <td valign="top"> Purchase price </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Merrill Lynch common shares exchanged (in millions) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,600</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Exchange ratio </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">0.8595</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> The Corporation’s common shares issued (in millions) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,375</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Purchase price per share of the Corporation’s common stock (1) </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">14.08</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Total value of the Corporation’s common stock and cash exchanged for fractional shares </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">19.4</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Merrill Lynch preferred stock </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">8.6</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Fair value of outstanding employee stock awards </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">1.1</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Total purchase price </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">29.1</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Allocation of the purchase price </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Merrill Lynch stockholders’ equity </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19.9</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Merrill Lynch goodwill and intangible assets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2.6</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Pre-tax adjustments to reflect acquired assets and liabilities at fair value: </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Derivatives and securities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1.9</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Loans </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6.1</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Intangible assets (2) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5.4</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Other assets/liabilities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(0.8</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Long-term debt </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">16.0</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Pre-tax total adjustments </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">12.6</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Deferred income taxes </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(5.9</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> After-tax total adjustments </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">6.7</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Fair value of net assets acquired </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">24.0</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Goodwill resulting from the Merrill Lynch acquisition </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">5.1</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="1%" align="left">(1)</td> <td valign="top" align="left"> The value of the shares of common stock exchanged with Merrill Lynch shareholders was based upon the closing price of the Corporation’s common stock at December 31, 2008, the last trading day prior to the date of acquisition. </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="1%" align="left">(2)</td> <td valign="top" align="left"> Consists of trade name of $1.5 billion and customer relationship and core deposit intangibles of $3.9 billion. The amortization life is 10 years for the customer relationship and core deposit intangibles which are primarily amortized on a straight-line basis. </td> </tr> </table>     Condensed Statement of Net Assets Acquired The following condensed statement of net assets acquired reflects the values assigned to Merrill Lynch’s net assets as of the acquisition date.     <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="73%"></td> <td valign="bottom" width="21%"></td> <td></td> <td></td> </tr> <tr> <td height="10"></td> <td height="10" colspan="3"></td> </tr> <tr> <td valign="bottom">(Dollars in billions)</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">January 1, 2009</td> </tr> <tr> <td valign="top"> Assets </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Federal funds sold and securities borrowed or purchased under agreements to resell </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">138.8</td> </tr> <tr> <td valign="top"> Trading account assets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">87.9</td> </tr> <tr> <td valign="top"> Derivative assets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">96.4</td> </tr> <tr> <td valign="top"> Investment securities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">70.5</td> </tr> <tr> <td valign="top"> Loans and leases </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">55.9</td> </tr> <tr> <td valign="top"> Intangible assets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5.4</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Other assets </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">195.3</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Total assets </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">650.2</td> </tr> <tr> <td valign="top"> Liabilities </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Deposits </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">98.1</td> </tr> <tr> <td valign="top"> Federal funds purchased and securities loaned or sold under agreements to repurchase </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">111.6</td> </tr> <tr> <td valign="top"> Trading account liabilities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">18.1</td> </tr> <tr> <td valign="top"> Derivative liabilities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">72.0</td> </tr> <tr> <td valign="top"> Commercial paper and other short-term borrowings </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">37.9</td> </tr> <tr> <td valign="top"> Accrued expenses and other liabilities </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">99.6</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Long-term debt </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">188.9</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Total liabilities </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">626.2</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Fair value of net assets acquired </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">24.0</td> </tr> </table> Contingencies The fair value of net assets acquired includes certain contingent liabilities that were recorded as of the acquisition date. Merrill Lynch has been named as a defendant in various pending legal actions and proceedings arising in connection with its activities as a global diversified financial services institution. Some of these legal actions and proceedings include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. Merrill Lynch is also involved in investigations and/or proceedings by governmental and self-regulatory agencies. Due to the number of variables and assumptions involved in assessing the possible outcome of these legal actions, sufficient information did not exist to reasonably estimate the fair value of these contingent liabilities. As such, these contingences have been measured in accordance with accounting guidance on contingencies which states that a loss is recognized when it is probable of occurring and the loss amount can be reasonably estimated. For further information, see Note 14 – Commitments and Contingencies. In connection with the Merrill Lynch acquisition, on January 1, 2009, the Corporation recorded certain guarantees, primarily standby liquidity facilities and letters of credit, with a fair value of approximately $1 billion. At the time of acquisition, the maximum amount that could be drawn from these guarantees was approximately $20 billion. Countrywide On July 1, 2008, the Corporation acquired Countrywide through its merger with a subsidiary of the Corporation. Under the terms of the merger agreement, Countrywide shareholders received 0.1822 of a share of Bank of America Corporation common stock in exchange for each share of Countrywide common stock. The acquisition of Countrywide significantly expanded the Corporation’s mortgage originating and servicing capabilities, making it a leading mortgage originator and servicer. As provided by the merger agreement, 583 million shares of Countrywide common stock were exchanged for 107 million shares of the Corporation’s common stock. Countrywide’s results of operations were included in the Corporation’s results beginning July 1, 2008. The Countrywide purchase price was allocated to the assets acquired and liabilities assumed based on their fair values at the Countrywide acquisition date as summarized in the following table. No goodwill is deductible for federal income tax purposes. All the goodwill was allocated to the Home Loans & Insurance business segment.     Countrywide Purchase Price Allocation   <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="83%"></td> <td valign="bottom" width="15%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom">(Dollars in billions)</td> <td valign="bottom"> </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> </tr> <tr> <td valign="top"> Purchase price (1) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4.2</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Allocation of the purchase price </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Countrywide stockholders’ equity (2) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">8.4</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Pre-tax adjustments to reflect assets acquired and liabilities assumed at fair value: </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Loans </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(9.8</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Investments in other financial instruments </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(0.3</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Mortgage servicing rights </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1.5</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Other assets </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(0.8</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Deposits </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(0.2</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Notes payable and other liabilities </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(0.9</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Pre-tax total adjustments </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(13.5</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Deferred income taxes </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">4.9</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> After-tax total adjustments </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(8.6</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Fair value of net assets acquired </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(0.2</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Goodwill resulting from the Countrywide acquisition </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">4.4</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="10" align="left">(1)</td> <td valign="top" align="left"> The value of the shares of common stock exchanged with Countrywide shareholders was based upon the average of the closing prices of the Corporation’s common stock for the period commencing two trading days before and ending two trading days after January 11, 2008, the date of the Countrywide merger agreement. </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="10" align="left">(2)</td> <td valign="top" align="left"> Represents the remaining Countrywide shareholders’ equity as of the acquisition date after the cancellation of the $2.0 billion of Series B convertible preferred shares owned by the Corporation. </td> </tr> </table> The Corporation acquired certain loans for which there was, at the time of the merger, evidence of deterioration of credit quality since origination and for which it was probable that all contractually required payments would not be collected. For more information, see the Countrywide purchased impaired loan discussion in Note 6 – Outstanding Loans and Leases. Other Acquisitions On October 1, 2007, the Corporation acquired all the outstanding shares of LaSalle, for $21.0 billion in cash. LaSalle’s results of operations were included in the Corporation’s results beginning October 1, 2007. On July 1, 2007, the Corporation acquired all the outstanding shares of U.S. Trust Corporation for $3.3 billion in cash. U.S. Trust Corporation’s results of operations were included in the Corporation’s results beginning July 1, 2007. Unaudited Pro Forma Condensed Combined Financial Information If the Merrill Lynch and Countrywide acquisitions had been completed on January 1, 2008, total revenue, net of interest expense would have been $66.8 billion, net loss from continuing operations would have been $26.0 billion, and basic and diluted loss per common share would have been $5.37 for 2008. These results include the impact of amortizing certain purchase accounting adjustments such as intangible assets as well as fair value adjustments to loans, securities and debt. The pro forma financial information does not include the impact of possible business model changes nor does it consider any potential impacts of current market conditions or revenues, expense efficiencies, asset dispositions, share repurchases or other factors. For 2009, Merrill Lynch contributed $23.3 billion in revenue, net of interest expense, and $4.7 billion in net income. These amounts exclude the impact of intercompany transfers of businesses and are before the consideration of certain merger-related costs, revenue opportunities and certain consolidating tax benefits that were recognized in legacy Bank of America legal entities.     Merger and Restructuring Charges Merger and restructuring charges are recorded in the Consolidated Statement of Income and include incremental costs to integrate the operations of the Corporation and its recent acquisitions. These charges represent costs associated with these one-time activities and do not represent ongoing costs of the fully integrated combined organization. On January 1, 2009, the Corporation adopted new accounting guidance, on a prospective basis, that requires that acquisition-related transaction and restructuring costs be charged to expense as incurred. Previously, these expenses were recorded as an adjustment to goodwill. The following table presents severance and employee-related charges, systems integrations and related charges, and other merger-related charges.     <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="58%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td valign="bottom" width="11%"></td> <td></td> <td></td> <td valign="bottom" width="11%"></td> <td></td> <td></td> </tr> <tr> <td height="12"></td> <td height="12" colspan="3"></td> <td height="12" colspan="3"></td> <td height="12" colspan="3"></td> </tr> <tr> <td valign="bottom">(Dollars in millions)</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">2009</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">2008</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">2007</td> </tr> <tr> <td valign="top"> Severance and employee-related charges </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,351</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">138</td> <td valign="bottom">    </td> <td valign="bottom">$</td> <td valign="bottom" align="right">106</td> </tr> <tr> <td valign="top"> Systems integrations and related charges </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,155</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">640</td> <td valign="bottom">    </td> <td valign="bottom"> </td> <td valign="bottom" align="right">240</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Other </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">215</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">157</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">64</td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Total merger and restructuring charges </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">2,721</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">935</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">     </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">410</td> </tr> </table> Included for 2009 are merger-related charges of $1.8 billion related to the Merrill Lynch acquisition, $843 million related to the Countrywide acquisition, and $97 million related to the LaSalle acquisition. Included for 2008 are merger-related charges of $623 million related to the LaSalle acquisition, $205 million related to the Countrywide acquisition, and $107 million related to the U.S. Trust Corporation acquisition. Included for 2007 are merger-related charges of $233 million related to the 2006 MBNA Corporation (MBNA) acquisition, $109 million related to the U.S. Trust Corporation acquisition and $68 million related to the LaSalle acquisition. During 2009, the $1.8 billion merger-related charges for the Merrill Lynch acquisition included $1.2 billion for severance and other employee-related costs, $480 million of system integration costs, and $129 million in other merger-related costs. Merger-related Exit Cost and Restructuring Reserves The following table presents the changes in exit cost and restructuring reserves for 2009 and 2008. Exit cost reserves were established in purchase accounting resulting in an increase in goodwill. Restructuring reserves are established by a charge to merger and restructuring charges. Exit costs were not recorded in purchase accounting for the Merrill Lynch acquisition in accordance with amendments to the accounting guidance for business combinations which were effective January 1, 2009.     <table border="0" cellspacing="0" cellpadding="0" width="100%" align="center"> <tr> <td width="54%"></td> <td valign="bottom" width="12%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td height="12"></td> <td height="12" colspan="8"></td> <td height="12" colspan="2"></td> <td height="12" colspan="8"></td> </tr> <tr> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="6" align="center">Exit Cost Reserves</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="6" align="center">Restructuring Reserves</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="bottom">(Dollars in millions)</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">2009</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">2008</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">   </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">2009</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" colspan="2" align="right">2008</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Balance, January 1 </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">523</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">377</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">86</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">108</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Exit costs and restructuring charges: </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Merrill Lynch </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">n/a</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">n/a</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">949</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">n/a</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Countrywide </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">–</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">588</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">191</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">71</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> LaSalle </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(24</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">31</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">25</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> U.S. Trust Corporation </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">–</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(3</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">40</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> MBNA </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">–</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(6</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">–</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(3</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Cash payments </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(387</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(464</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(816</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">(155</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="top"> Balance, December 31 </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">112</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">523</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">403</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom">  </td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom"> $</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" align="right">86</td> <td style="BORDER-BOTTOM: #b23040 1px solid" valign="bottom" nowrap="nowrap">  </td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="10" align="left">n/a</td> <td valign="top" align="left"> = not applicable </td> </tr> </table> At December 31, 2008, there were $523 million of exit cost reserves related principally to the Countrywide acquisition, including $347 million for severance, relocation and other employee-related costs and $176 million for contract terminations. During 2009, $24 million of exit cost reserve adjustments were recorded for the LaSalle acquisition primarily due to lower than expected contract terminations. Cash payments of $387 million during 2009 consisted of $271 million in severance, relocation and other employee-related costs and $116 million in contract terminations. At December 31, 2009, exit cost reserves of $112 million related principally to Countrywide. At December 31, 2008, there were $86 million of restructuring reserves related to the Countrywide, LaSalle and U.S. Trust Corporation acquisitions related to severance and other employee-related costs. During 2009, $1.1 billion was added to the restructuring reserves related to severance and other employee-related costs primarily associated with the Merrill Lynch acquisition. Cash payments of $816 million during 2009 were all related to severance and other employee-related costs. As of December 31, 2009, restructuring reserves of $403 million included $328 million for Merrill Lynch and $74 million for Countrywide. Payments under exit cost and restructuring reserves associated with the U.S. Trust Corporation acquisition were completed in 2009 while payments associated with the LaSalle, Countrywide and Merrill Lynch acquisitions will continue into 2010.   </div> NOTE 2 – Merger and Restructuring Activity Merrill Lynch On January 1, 2009, the Corporation acquired Merrill Lynch through its merger with false false No definition available. No authoritative reference available. false false 1 1 false UnKnown UnKnown UnKnown false true