Attached files
| file | filename |
|---|---|
| EX-12 - EXHIBIT 12 - MERRILL LYNCH PREFERRED CAPITAL TRUST V | ml-9302013xtoprsvxex12.htm |
| EX-32.1 - EXHIBIT 32.1 - MERRILL LYNCH PREFERRED CAPITAL TRUST V | ml-9302013xtoprsvxex321.htm |
| EX-31.1 - EXHIBIT 31.1 - MERRILL LYNCH PREFERRED CAPITAL TRUST V | ml-9302013xtoprsvxex311.htm |
| EXCEL - IDEA: XBRL DOCUMENT - MERRILL LYNCH PREFERRED CAPITAL TRUST V | Financial_Report.xls |
| EX-99 - EXHIBIT 99 - MERRILL LYNCH PREFERRED CAPITAL TRUST V | ml-9302013xtoprsvxex99.htm |
| EX-32.2 - EXHIBIT 32.2 - MERRILL LYNCH PREFERRED CAPITAL TRUST V | ml-9302013xtoprsvxex322.htm |
| EX-31.2 - EXHIBIT 31.2 - MERRILL LYNCH PREFERRED CAPITAL TRUST V | ml-9302013xtoprsvxex312.htm |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended September 30, 2013
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to
COMMISSION FILE NO.: 1-7182-10
MERRILL LYNCH PREFERRED CAPITAL TRUST V
(Exact name of Registrant as specified in its certificate of trust)
Delaware (State or other jurisdiction of incorporation or organization) | 13-7140866 (I.R.S. Employer Identification No.) | |
4 World Financial Center New York, New York (Address of principal executive offices) | 10080 (Zip Code) | |
Registrant’s telephone number, including area code: (704) 386-5861
COMMISSION FILE NO.: 1-7182-09
MERRILL LYNCH PREFERRED FUNDING V, L.P.
(Exact name of Registrant as specified in its certificate of limited partnership)
Delaware (State or other jurisdiction of incorporation or organization) | 13-3983474 (I.R.S. Employer Identification No.) | |
4 World Financial Center New York, New York (Address of principal executive offices) | 10080 (Zip Code) | |
Registrant’s telephone number, including area code: (704) 386-5681
Indicate by check mark whether the Registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports), and (2) have been subject to such requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the Registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files). Yes þ No o
Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, non-accelerated filers, or smaller reporting companies. See definition of "accelerated filer", "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) | ||||||
Indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ
The Registrants meet the conditions set forth in General Instruction H (1) (a) and (b) of Form 10-Q and are therefore filing this Quarterly Report on Form 10-Q (the "Report") with a reduced disclosure format.
TABLE OF CONTENTS
Exhibit 12 | |
Exhibit 31.1 | |
Exhibit 31.2 | |
Exhibit 32.1 | |
Exhibit 32.2 | |
Exhibit 99 | |
Exhibit 101 | |
2
PART I - FINANCIAL INFORMATION
ITEM 1. | FINANCIAL STATEMENTS (Unaudited) | |
MERRILL LYNCH PREFERRED CAPITAL TRUST V
CONDENSED BALANCE SHEETS (Unaudited)
(dollars in thousands, except per security amounts)
September 30, 2013 | December 31, 2012 | |||||||
ASSETS | ||||||||
Investment in affiliate partnership preferred securities | $ | 876,300 | $ | 876,300 | ||||
Total Assets | $ | 876,300 | $ | 876,300 | ||||
STOCKHOLDERS’ EQUITY | ||||||||
Preferred securities (7.28% Trust Originated Preferred Securities; 34,000,000 authorized, issued, and outstanding; $25 liquidation amount per security) | $ | 850,000 | $ | 850,000 | ||||
Common securities (7.28% Trust Common Securities; 1,052,000 authorized, issued, and outstanding; $25 liquidation amount per security) | 26,300 | 26,300 | ||||||
Total Stockholders’ Equity | $ | 876,300 | $ | 876,300 | ||||
See Note to Condensed Financial Statements
3
MERRILL LYNCH PREFERRED CAPITAL TRUST V
CONDENSED STATEMENTS OF EARNINGS (Unaudited)
(dollars in thousands)
FOR THE THREE MONTHS ENDED | ||||||||
September 30, 2013 | September 30, 2012 | |||||||
EARNINGS | ||||||||
Interest on affiliate partnership preferred securities | $ | 15,949 | $ | 15,949 | ||||
FOR THE NINE MONTHS ENDED | ||||||||
September 30, 2013 | September 30, 2012 | |||||||
EARNINGS | ||||||||
Interest on affiliate partnership preferred securities | $ | 47,846 | $ | 47,846 | ||||
See Note to Condensed Financial Statements
4
MERRILL LYNCH PREFERRED CAPITAL TRUST V
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)
(dollars in thousands)
FOR THE NINE MONTHS ENDED | ||||||||
September 30, 2013 | September 30, 2012 | |||||||
PREFERRED SECURITIES | ||||||||
Balance, beginning and end of period | $ | 850,000 | $ | 850,000 | ||||
COMMON SECURITIES | ||||||||
Balance, beginning and end of period | 26,300 | 26,300 | ||||||
UNDISTRIBUTED EARNINGS | ||||||||
Balance, beginning of period | — | — | ||||||
Earnings | 47,846 | 47,846 | ||||||
Distributions | (47,846 | ) | (31,897 | ) | ||||
Distributions payable | — | (15,949 | ) | |||||
Balance, end of period | — | — | ||||||
Total Stockholders’ Equity | $ | 876,300 | $ | 876,300 | ||||
See Note to Condensed Financial Statements
5
MERRILL LYNCH PREFERRED CAPITAL TRUST V
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(dollars in thousands)
FOR THE NINE MONTHS ENDED | ||||||||
September 30, 2013 | September 30, 2012 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Earnings | $ | 47,846 | $ | 47,846 | ||||
Change in interest receivable from affiliate | — | (15,949 | ) | |||||
Cash provided by operating activities | 47,846 | 31,897 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Distributions | (47,846 | ) | (31,897 | ) | ||||
Cash used for financing activities | (47,846 | ) | (31,897 | ) | ||||
NET CHANGE IN CASH | — | — | ||||||
CASH, BEGINNING OF PERIOD | — | — | ||||||
CASH, END OF PERIOD | $ | — | $ | — | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
Distributions accrued but not paid at September 30, 2012 were $15,949.
See Note to Condensed Financial Statements
6
MERRILL LYNCH PREFERRED CAPITAL TRUST V
NOTE TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
September 30, 2013
Merrill Lynch Preferred Capital Trust V (the "Trust") is a statutory business trust formed under the Delaware Business Trust Act, as amended. Bank of America Corporation (the “Company” or "Bank of America") is the sole owner of the Trust common securities. Prior to October 1, 2013, Merrill Lynch & Co., Inc. ("ML&Co."), a wholly-owned subsidiary of the Company, was the sole owner of the Trust common securities. On October 1, 2013, the Company merged ML&Co. into the Company pursuant to Section 253 of the General Corporation Law of the State of Delaware, with the Company continuing as the surviving corporation of such merger (the "Merger") and assuming all obligations of ML&Co., including ML&Co.’s obligations under the guarantees and the ML&Co.-issued debentures held by the Partnership (as defined below).
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For a complete discussion of significant accounting policies, refer to the audited financial statements included in the Trust's Annual Report on Form 10-K for the year ended December 31, 2012.
BASIS OF PRESENTATION
These unaudited condensed financial statements should be read in conjunction with the audited financial statements included in the Annual Report on Form 10-K of the Trust for the year ended December 31, 2012. The interim condensed financial statements for the three- and nine-month periods are unaudited; however, all adjustments necessary for a fair presentation of the condensed financial statements have been included.
INVESTMENTS
The Trust's investment in Merrill Lynch Preferred Funding V, L.P. (the "Partnership") Preferred Securities represents a limited partnership interest in the Partnership and is recorded at cost. Income on the Partnership Preferred Securities is accrued when earned. At September 30, 2013 and December 31, 2012, the estimated fair value of the Partnership Preferred Securities, which are classified as Level 2 in the fair value hierarchy under applicable accounting guidance, was $887 million, which approximated their carrying value. The principal input for the fair value is the exchange traded price of the Preferred Securities issued by the Trust. During the three months ended September 30, 2013, the Company determined that the valuation methodology used in previous reporting periods to estimate the fair value of the Partnership Preferred Securities, for disclosure purposes only, did not fully consider the issuer’s call feature, the inclusion of which resulted in a decrease to the estimated fair value. This revised disclosure had no effect on the Trust’s financial statements or results of operations in the current or prior-year periods.
7
MERRILL LYNCH PREFERRED FUNDING V, L.P.
CONDENSED BALANCE SHEETS (Unaudited)
(dollars in thousands)
September 30, 2013 | December 31, 2012 | |||||||
ASSETS | ||||||||
Investments: | ||||||||
Affiliate debentures | $ | 1,020,640 | $ | 1,020,640 | ||||
U.S. Government and agencies | 10,309 | 10,314 | ||||||
Total investments | 1,030,949 | 1,030,954 | ||||||
Total Assets | $ | 1,030,949 | $ | 1,030,954 | ||||
PARTNERS’ CAPITAL | ||||||||
Limited partnership interest | $ | 876,300 | $ | 876,300 | ||||
General partnership interest | 154,649 | 154,654 | ||||||
Total Partners’ Capital | $ | 1,030,949 | $ | 1,030,954 | ||||
See Note to Condensed Financial Statements
8
MERRILL LYNCH PREFERRED FUNDING V, L.P.
CONDENSED STATEMENTS OF EARNINGS (Unaudited)
(dollars in thousands)
FOR THE THREE MONTHS ENDED | ||||||||
September 30, 2013 | September 30, 2012 | |||||||
EARNINGS | ||||||||
Interest income: | ||||||||
Affiliate debentures | $ | 18,576 | $ | 18,576 | ||||
U.S. Government and agencies | 4 | 2 | ||||||
Earnings | $ | 18,580 | $ | 18,578 | ||||
FOR THE NINE MONTHS ENDED | ||||||||
September 30, 2013 | September 30, 2012 | |||||||
EARNINGS | ||||||||
Interest income: | ||||||||
Affiliate debentures | $ | 55,727 | $ | 55,727 | ||||
U.S. Government and agencies | 13 | 7 | ||||||
Earnings | $ | 55,740 | $ | 55,734 | ||||
See Note to Condensed Financial Statements
9
MERRILL LYNCH PREFERRED FUNDING V, L.P.
CONDENSED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (Unaudited)
(dollars in thousands)
FOR THE NINE MONTHS ENDED | ||||||||
September 30, 2013 | September 30, 2012 | |||||||
LIMITED PARTNER’S CAPITAL | ||||||||
Balance, beginning of period | $ | 876,300 | $ | 876,300 | ||||
Earnings allocated to limited partner | 47,846 | 47,846 | ||||||
Distributions | (47,846 | ) | (31,897 | ) | ||||
Distributions payable | — | (15,949 | ) | |||||
Balance, end of period | 876,300 | 876,300 | ||||||
GENERAL PARTNER’S CAPITAL | ||||||||
Balance, beginning of period | 154,654 | 154,652 | ||||||
Earnings allocated to general partner | 7,894 | 7,888 | ||||||
Distributions | (7,899 | ) | (5,263 | ) | ||||
Distributions payable | — | (2,627 | ) | |||||
Balance, end of period | 154,649 | 154,650 | ||||||
TOTAL PARTNERS’ CAPITAL | $ | 1,030,949 | $ | 1,030,950 | ||||
See Note to Condensed Financial Statements
10
MERRILL LYNCH PREFERRED FUNDING V, L.P.
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(dollars in thousands)
FOR THE NINE MONTHS ENDED | ||||||||
September 30, 2013 | September 30, 2012 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Earnings | $ | 55,740 | $ | 55,734 | ||||
Accretion of interest on securities issued by U.S. Government and agencies | (13 | ) | (7 | ) | ||||
Change in interest receivable from affiliates | — | (18,576 | ) | |||||
Cash provided by operating activities | 55,727 | 37,151 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of investment securities | (10,309 | ) | (10,310 | ) | ||||
Maturities of investment securities | 10,327 | 10,319 | ||||||
Cash provided by investing activities | 18 | 9 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Distributions to limited partner | (47,846 | ) | (31,897 | ) | ||||
Distributions to general partner | (7,899 | ) | (5,263 | ) | ||||
Cash used for financing activities | (55,745 | ) | (37,160 | ) | ||||
NET CHANGE IN CASH | — | — | ||||||
CASH, BEGINNING OF PERIOD | — | — | ||||||
CASH, END OF PERIOD | $ | — | $ | — | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
Distributions accrued but not paid at September 30, 2012 were $18,576.
See Note to Condensed Financial Statements
11
MERRILL LYNCH PREFERRED FUNDING V, L.P.
NOTE TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
September 30, 2013
Merrill Lynch Preferred Funding V, L.P. (the "Partnership") is a limited partnership formed under the Delaware Revised Uniform Limited Partnership Act, as amended. Bank of America Corporation (the “Company” or "Bank of America") is the sole general partner of the Partnership. Prior to October 1, 2013, Merrill Lynch & Co., Inc. (“ML&Co.”), a wholly-owned subsidiary of the Company, was the sole general partner of the Partnership. On October 1, 2013, the Company merged ML&Co. into the Company pursuant to Section 253 of the General Corporation Law of the State of Delaware, with the Company continuing as the surviving corporation of such merger (the "Merger") and assuming all obligations of ML&Co., including ML&Co.’s obligations under the guarantees and the ML&Co.-issued debentures held by the Partnership.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
For a complete discussion of significant accounting policies, refer to the audited financial statements included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2012.
BASIS OF PRESENTATION
These unaudited condensed financial statements should be read in conjunction with the audited financial statements included in the Annual Report on Form 10-K of the Partnership for the year ended December 31, 2012. The interim condensed financial statements for the three- and nine-month periods are unaudited; however, all adjustments necessary for a fair presentation of the condensed financial statements have been included.
INVESTMENTS
The Partnership’s investment in affiliate debentures is recorded at cost. Its investment in U.S. Government and agency securities is recorded at accreted cost and matures within one year. At September 30, 2013 and December 31, 2012, the estimated fair value of the investment in affiliate debentures, which are classified as Level 2 in the fair value hierarchy under applicable accounting guidance, was $1,033 million, which approximated their carrying value. The principal input for the fair value is the exchange traded price of the Preferred Securities issued by the Trust. During the three months ended September 30, 2013, the Company determined that the valuation methodology used in previous reporting periods to estimate the fair value of the Partnership Preferred Securities, for disclosure purposes only, did not fully consider the issuer’s call feature, the inclusion of which resulted in a decrease to the estimated fair value. This revised disclosure had no effect on the Trust’s financial statements or results of operations in the current or prior-year periods. At September 30, 2013 and December 31, 2012, the fair value of the investment in U.S. Government and agency securities, which are classified as Level 1 in the fair value hierarchy under applicable accounting guidance, approximated their carrying value.
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ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | |
No disclosure is required for this Item pursuant to General Instruction H of Form 10-Q. There were no material changes in the amount of revenue and expense items between the most recent calendar year-to-date period presented and the corresponding period in the preceding year.
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | |
No disclosure is required for this Item pursuant to General Instruction H of Form 10-Q.
ITEM 4. | CONTROLS AND PROCEDURES | |
The Trust
The person who functions as the equivalent of the Chief Executive Officer and the Chief Financial Officer of the Trust has evaluated the effectiveness of the Trust's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of the end of the period covered by this Form 10-Q. Based on that evaluation, the person who functions as the equivalent of the Chief Executive Officer and the Chief Financial Officer of the Trust has concluded that the Trust's disclosure controls and procedures are effective, as of the end of the period covered by this report, in recording, processing, summarizing and reporting information required to be disclosed by the Trust in reports that it files or submits under the Exchange Act, within the time periods specified in the Securities and Exchange Commission's ("SEC") rules and forms.
In addition, no change in the Trust's internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the three months ended September 30, 2013 that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
The Partnership
The person who functions as the equivalent of the Chief Executive Officer and the Chief Financial Officer of the Partnership has evaluated the effectiveness of the Partnership's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. Based on that evaluation, the person who functions as the equivalent of the Chief Executive Officer and the Chief Financial Officer of the Partnership has concluded that the Partnership's disclosure controls and procedures are effective, as of the end of the period covered by this report, in recording, processing, summarizing and reporting information required to be disclosed by the Partnership in reports that it files or submits under the Exchange Act, within the time periods specified in the SEC's rules and forms.
In addition, no change in the Partnership's internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the three months ended September 30, 2013 that has materially affected, or is reasonably likely to materially affect, the Partnership's internal control over financial reporting.
13
PART II - OTHER INFORMATION
ITEM 1A. | RISK FACTORS | |
The assets of the Trust consist solely of the Partnership Preferred Securities. The assets of the Partnership consist principally of the ML&Co.-issued debt securities assumed by the Company in the Merger and debt securities of a wholly-owned subsidiary of the Company that, following the Merger, are guaranteed by the Company. Consequently, the risk factors that are applicable to the Company also are applicable to the Partnership and the Trust. A discussion of the most significant factors that could affect the Company’s businesses, operations and financial condition is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and is incorporated by reference from Exhibit 99 to this report. Supplemental information relating to certain of such factors is included the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 and also is incorporated by reference from Exhibit 99 to this report.
ITEM 6. | EXHIBITS | |
An exhibit index has been filed as part of this Report and is incorporated herein by reference.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this Report to be signed on their behalf by the undersigned, thereunto duly authorized.
MERRILL LYNCH PREFERRED CAPITAL TRUST V* | |||
By: | /s/ Angela C. Jones | ||
Name: | Angela C. Jones | ||
Title: | Regular Trustee | ||
MERRILL LYNCH PREFERRED FUNDING V, L.P. | |||
By: BANK OF AMERICA CORPORATION, as General Partner | |||
By: | /s/ Neil A. Cotty | ||
Name: | Neil A. Cotty | ||
Title: | Chief Accounting Officer | ||
Bank of America Corporation | |||
Date: November 8, 2013
* | There is no principal executive officer(s), principal financial officer, controller, principal accounting officer or board of directors of the Registrant. The Trustees of the Trust (which include the Regular Trustees, the Property Trustee and the Delaware Trustee) together exercise all powers and perform all functions with respect to the Trust. |
15
INDEX TO EXHIBITS
EXHIBITS | |||
12 | Statement re: Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Securities Distributions (Unaudited).(1) | ||
31.1 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1) | ||
31.2 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.(1) | ||
32.1 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1) | ||
32.2 | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(1) | ||
99 | Excerpts of Bank of America Corporation Annual Report on Form 10-K for the year ended December 31, 2012 - Part I, Item 1A. "Risk Factors" and Quarterly Report on Form 10-Q for the quarterly period September 30, 2013 - Part II, Item 1A. "Risk Factors".(1) | ||
101 | The following materials from Merrill Lynch Preferred Capital Trust V and Merrill Lynch Preferred Funding V, L.P. Quarterly Reports on Form 10-Q for the three- and nine-months ended September 30, 2013 and September 30, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Balance Sheets, (ii) the Condensed Statements of Earnings, (iii) the Condensed Statements of Changes in Stockholders' Equity / Partners' Capital, (iv) the Condensed Statements of Cash Flows, and (v) the Note to Condensed Financial Statements.(1) | ||
(1) Filed herewith. | ||
16