Consolidated Bank Bolding Company Report of Equity Investments in Nonfinancial Companies

Board of Governors of the Federal Reserve System

Instructions for Preparation of

Consolidated Bank Holding Company
Report of Equity Investments
in Nonfinancial Companies
Reporting Form FR Y-12
Effective December 31, 2006

General Instructions for Preparation
of Consolidated Bank Holding Company
Report of Equity Investments in
Nonfinancial Companies
FR Y-12
Purpose of Report
The information collected on the FR Y-12 allows the
Federal Reserve to monitor the growth of domestic bank
holding company (BHC) investments in nonfinancial
companies and their contributions to capital, profitability,
risk, and volatility. The FR Y-12 provides more timely
information than can be obtained through periodic supervisory reviews of this business line and serves to identify
institutions that are significantly changing their risk profiles in this business line or devoting significant resources
to this line of business.

GENERAL INSTRUCTIONS
Scope of the Information
Consolidation rules for the FR Y-12 are the same as the
FR Y 9C/SP. That is, for a BHC meeting the reporting
criteria described below, the bank holding company
should consolidate its subsidiaries on the same basis as it
does for its annual reports to the SEC or, for those bank
holding companies that do not file reports with the SEC,
on the same basis as described in generally accepted
accounting principles (GAAP). Generally, under the rules
for consolidation established by the SEC and by GAAP,
bank holding companies should consolidate any company in which it owns more than 50 percent of the
outstanding voting stock. The report should include all
nonfinancial equity investments, regardless of where they
are reflected on the balance sheet, but exclude equity
securities held in a trading account. In a multi-tiered
organization with one or more BHCs, only the top-tier
BHC should complete the FR Y-12, which would be
prepared on a consolidated basis. However, if a lowertier BHC is functioning as the consolidated top-tier reporter for other financial reports (for example, when the
top-tier is a non-U.S. BHC, ESOP, or limited partnerInstructions for Preparation of Reporting Form FR Y-12
General Instructions March 2005

ship), this lower-tier BHC should file the FR Y-12 on a
consolidated basis.

Who Must Report
The FR Y-12 reporting form must be filed by each
top-tier domestic BHC that files an FR Y-9C and has
aggregate nonfinancial equity investments (as defined
below) that equal or exceed the lesser of $100 million
(on an acquisition cost basis), or 10 percent of the BHC’s
consolidated Tier 1 capital as of the report date.
The FR Y-12 reporting form also must be filed by each
top-tier domestic BHC that files an FR Y-9SP and has
aggregate nonfinancial equity investments (as defined
below) that equal or exceed 10 percent of the BHC’s
total capital (as reported in item 16(f) of the balance
sheet on the FR Y-9SP) as of the report date.
A domestic BHC is a BHC that is incorporated in one of
the 50 States of the United States, the District of Columbia, Puerto Rico, or any U.S. territory or possession.

What is a Nonfinancial Equity
Investment?
This report collects information on nonfinancial equity
investments held by a BHC on a consolidated basis. For
the purposes of this report, a nonfinancial equity investment means an equity investment made by the BHC or
any of its subsidiaries (see the Scope of the Information
section above):
• pursuant to the merchant banking authority of section 4(k)(4)(H) of the BHC Act (12 U.S.C. 1843
(k)(4)(H)) and subpart J of the Board’s Regulation Y,
• under section 4(c)(6) or 4(c)(7) of the BHC Act
(12 U.S.C. 1843(c)(6) and (c)(7)) in a nonfinancial
company (as defined in the glossary) or in a company
that makes investments in nonfinancial companies,
GEN-1

General Instructions

including mutual funds that hold equity investments.
• investments made through a SBIC that is consolidated
with the BHC or subsidiary, or in an SBIC that is not
consolidated, under section 302(b) of the Small Business Investment Act of 1958,
• in a nonfinancial company under the portfolio investment provisions of the Board’s Regulation K (12 CFR
211.8(c)(3), or
• in a nonfinancial company under section 24 of the
Federal Deposit Insurance Act (12 U.S.C. 1831a).
This report does not collect information on equity investments that a BHC or any of its subsidiaries may make
under other legal authorities. For example, this report
does not collect information on nonfinancial investments
made by an insurance company subsidiary of a financial
holding company under section 4(k)(4)(I) of the BHC
Act (12 U.S.C. 1843(k)(4)(I)). Also, this report does not
collect information on DPC investments.

signed and attested printout of the data submitted. Holding companies should use the cover page of the report
form to fulfill the signature requirement and attach it to
the data printout or declaration page.

Reporting in Dollars
All dollar amounts should be converted to U.S. dollars
using the spot exchange rate on the report date, regardless of the currencies in which the transactions reported
are denominated. The translations should be made on the
same basis as used by the reporter to prepare its FR Y-9C
and FR Y-9SP. If the BHC has no activity to report, enter
a zero where appropriate.

Rounding
Round all dollar amounts reported on this form to the
nearest million dollars.

Negative Entries
Filing of Reports
The report is to be prepared quarterly for BHCs that file
the FR Y-9C, as of the end of March, June, September,
and December, and semi-annually for those BHCs that
file the FR Y-9SP, as of the end of June and December.
The report must be submitted within 45 calendar days of
the reporting date. Reporting BHCs should submit an
original and one copy of the report to the appropriate
Federal Reserve Bank. Each report submitted should be
signed and certified by an executive officer of the BHC.
‘‘Executive Officer’’ is defined in 12 CFR 215.2(d).

Alternative Report Forms
In lieu of using the printed FR Y-12 report form, the
respondent may report the required data on computer
print-outs that are in the identical format and size as the
printed form, including line items and columns in the
order in which they appear on the printed form. The form
must be signed by an executive officer of the reporting
institution.
Electronic submission of report for - Any holding company interested in submitting the FR Y-12 electronically
should contact the appropriate Federal Reserve Bank.
Holding companies choosing to submit these reports
electronically must maintain in their files a manually

GEN-2

Any negative entries should be recorded in parentheses
rather than with a minus (-) sign.

Confidentiality
The completed version of this report generally is available to the public upon request on an individual basis.
However, a reporting BHC may request confidential
treatment for certain portions of the FR Y-12 if the BHC
is of the opinion that disclosure of specific commercial
or financial information in the report would likely result
in substantial harm to its competitive position, or that
disclosure of the submitted information would result in
an unwarranted invasion of personal privacy.
A request for confidential treatment must be submitted in
writing concurrently with the submission of the report.
The request must discuss in writing the justification for
which confidentiality is requested and must demonstrate
the specific nature of the harm that would result from
public release of the information. Merely stating that
competitive harm would result or that information is
personal is not sufficient. The Federal Reserve System
may subsequently release information for which confidential treatment is requested, if the Board of Governors
determines that the disclosure of such information is in
the public interest.

Instructions for Preparation of Reporting Form FR Y-12
General Instructions March 2005

LINE ITEM INSTRUCTIONS FOR

Preparation of Consolidated Bank Holding
Company Report of Equity Investments in
Nonfinancial Companies
FR Y-12

Column Instructions
Column A: Acquisition Cost (Schedules A,
B, and C)
Report in column A the aggregate acquisition cost of the
nonfinancial equity investments of the BHC. For purposes of this report, acquisition cost represents the
amount paid by the BHC for the nonfinancial equity
investment when it was acquired. This value should only
be adjusted to reflect permanent write-downs taken, as
well as any partial returns of capital received.

Column B: Net Unrealized Holding Gains
Not Recognized as Income (Schedules A
and C)
Report in column B the net unrealized holding gains, net
of applicable taxes; on all nonfinancial equity investments that are reported in accumulated other comprehensive income on the FR Y-9C or FR Y-9SP. For example,
for nonfinancial equity investments treated as availablefor-sale securities under FAS 115, report the unrealized
gains reported in other comprehensive income. When
calculating unrealized holding gains on nonfinancial
equity investments, the amount should be reduced by any
unrealized holding losses. If unrealized holding losses
are greater than unrealized gains (i.e. net unrealized
holding losses), record the net loss in parentheses rather
than with a minus (−) sign.

Column C: Carrying Value (Schedules A, B
(Col. B), and C)
Report in column C (and schedule B, column B) the
carrying value of all nonfinancial equity investments as
of the end of the reporting period. For the purposes of
Instructions for Preparation of Reporting Form FR Y-12
Line Item Instructions March 2005

this report, carrying value refers to the amount of the
investment as reflected in the BHC’s consolidated financial statements prepared in accordance with GAAP.
For example:
• Equity securities accounted for under FAS 115 as
available- for-sale are accounted for under FAS 115
at fair value on the balance sheet. Therefore the fair
values would be considered the carrying value of
these securities.
• For nonfinancial equity investments that are accounted for under the equity method of accounting,
the carrying value is the acquisition cost adjusted for
pro-rata share of earnings/losses and decreased by
cash dividends or similar distributions.
• For nonfinancial equity investments that do not have
readily determinable fair values, carrying value
should be reported at historical cost.

(Schedule A only)
Column D: Publicly Quoted Value
Report in column D the publicly quoted market value of
all publicly traded nonfinancial equity investments as of
the end of the reporting period (e.g., the number of
shares held times the closing market price per share on
the last business day of the reporting period). For purposes of this report, a public company is a company that
has one or more issues of publicly traded stock. If no
quoted market price is available, enter zero.

(Schedule D only)
Column A and Column C: Acquisition Cost
Report in column A the aggregate acquisition cost of all
direct investments subject to the listed transactions
INST-1

Line Item Instructions

during the reporting period. Report in column C the
aggregate acquisition cost of all indirect investments
subject to the listed transactions during the reporting
period. For purposes of this report, acquisition cost represents the amount paid by the BHC for the nonfinancial
equity investment when it was acquired, adjusted for any
permanent write-downs taken in prior reporting periods,
or any partial returns of capital received in prior reporting periods.

Report in column B net unrealized holding gains not
recognized as income. Report in column C the carrying
value of these investments. When a company ‘‘goes
public’’ the items previously included in Line item 2
should be moved to Line item 1 at the next reporting date
after the event has occurred. The acquisition cost should
remain unchanged but should be reported in Line item 1.

Column B and Column D: Carrying Value

Report in column A the acquisition cost of the BHC’s
nonfinancial equity investments in these funds or other
entities. See the glossary for a definition of indirect
investments. Report in column B net unrealized holding
gains not recognized as income. Report in column C the
carrying value of these investments. For purposes of this
report, the total amount of the equity investment in the
fund is reportable even if only a portion of the funds
investments is made in nonfinancial companies. Also, if
a mezzanine debt fund owns any securities convertible
into an equity investment, the entire value of the fund
should be reported.

Report in column B the carrying value of all direct
investments subject to the listed transactions during the
reporting period. Report in column D the carrying value
of all indirect investments subject to the listed transactions during the reporting period. For the purposes of
this report, carrying value refers to the amount of the
investment as reflected in the BHC’s consolidated financial statements prepared in accordance with GAAP. For
example, available-for-sale equity securities generally
are accounted for under FAS 115 at fair value on the
balance sheet. Therefore fair value would be considered
the carrying value of these securities.

Instructions for Specific Lines of
Schedule A: Type of Investments
Line item 1

Direct investments in public entities

For purposes of this report, a public entity is an entity
that has one or more issues of publicly traded stock.
Report in column A the acquisition cost of the BHC’s
nonfinancial equity investment in public entities. Report
in column B net unrealized holding gains not recognized
as income. Report in column C the carrying value of the
BHC’s investments in public entities. The carrying value
should reflect both publicly quoted and non-publicly
quoted values of an individual issuer’s securities (e.g., a
public issuer with different classes of equity securities).
Report in column D the publicly quoted value of the
BHC’s investments in public entities.
Line item 2
entities

Direct investments in nonpublic

For purposes of this report, a nonpublic entity is one that
does not have any issue of publicly traded stock. Report
in column A the acquisition cost of these investments.
INST-2

Line item 3

All indirect investments

Line item 4

Total portfolio

Report in columns A through C the totals of items 1, 2,
and 3 for Schedule A.

Memoranda
Line item M1

Total portfolio

Check the box that represents the total number of companies in which the BHC has nonfinancial equity investments. For indirect investments, count the number of
investment funds or similar entities in which the BHC
has an indirect investment.
Line item M2 Investments held under merchant
banking authority (FHCs only)
This item only applies to FHCs. Report in column A the
acquisition cost of investments held by the FHC (on
a consolidated basis) under the merchant banking
authority of the Gramm−Leach−Bliley Act (12 U.S.C.
1843(k)(4)(H)) and Federal Reserve regulation. Report
in column B net unrealized holding gains of these investments not recognized as income. Report in column C the
carrying value as defined above. The carrying value
Instructions for Preparation of Reporting Form FR Y-12
Line Item Instructions March 2005

Line Item Instructions

should be reported using the same valuation method used
in preparing the FR Y-9C or FR Y-9SP.
Line item M3 Pre-tax impact on net income from
items 1, 2, and 3 above (FR Y-9C filers only)
For direct or indirect investments reported in items 1, 2,
and 3 above, report the impact that these investments had
on the bank holding company’s consolidated net income
(loss). The information reported for this line item should
reflect the pre-tax year-to-date net gain (loss) that the
nonfinancial equity investments reported on lines 1, 2,
and 3 of the form had on the filer’s net income (loss)
reported in Schedule HI, item 8 of the FR Y-9C. Filers
should not include overhead or other expense related
items when calculating the net gain (loss) produced by
the nonfinancial equity investments captured on the form.
This item should not be reported by bank holding companies that file the FR Y-9SP report. If the impact on net
income is a loss, report in parentheses. Include the net
gain (loss) of all nonfinancial equity investments not
held in the trading account, regardless of where such
investments are reflected in the financial statements of
the reporting bank holding company.

voting and non-voting common stock. Report in column B the carrying value of all such voting and nonvoting common stock held by the BHC.
Line item 2 Convertible debt and convertible
preferred stock
Report in column A the acquisition cost of the BHC’s
nonfinancial equity investments that are in the form of
convertible debt and convertible preferred stock. Report
in column B the carrying value of such convertible bonds
and convertible preferred stock held by the BHC. This
item would include mezzanine debt that is convertible
into equity.
Line item 3

Report in column A the acquisition cost of all of the
BHC’s other nonfinancial equity investments not specified in items 1 and 2. The acquisition cost of a warrant
should be its initial valuation. Report in column B the
carrying value of these nonfinancial equity investments.
See the glossary definition of equity investment for what
types of securities to include in this item.
Line item 4

Line item M4

Investments managed for others

This item applies to all BHCs that manage nonfinancial
equity investments for others by serving as a general
partner in a limited partnership or performing a similar
function in a private equity fund. These investments are
not owned by the BHC and are not consolidated in the
BHC’s financial statements. While this is an off-balance
sheet item, report the carrying value of all investments
managed for others, as established by the general partner
(in the case of a fund) or as established by the BHC in its
investment management capacity. Exclude investments
managed through a bank trust department in a fiduciary
capacity. If the BHC does not manage nonfinancial
equity investments for others, proceed to Schedule B.

Other equity instruments

Total portfolio

Report the sum of items 1 through 3 for columns A and
B. Item 4, columns A and C of Schedule A must equal
item 4, columns A and B of Schedule B, respectively.

Memoranda
Line item M1

Unused equity commitments

Report any unused portion of legally binding commitments to make a nonfinancial equity investment.
Line item M2

Warrants

Does the BHC hold any Warrants or similar instruments
received in connection with equity investment activity?
(See the glossary definition) Enter ‘‘1’’ if yes, ‘‘0’’ if no.

Instructions for Specific Lines of
Schedule B: Type of Security
Line item 1

Common stock

Report in column A the acquisition cost of the BHC’s
nonfinancial equity investments that are in the form of
Instructions for Preparation of Reporting Form FR Y-12
Line Item Instructions March 2005

INST-3

Line Item Instructions

Instructions for Specific Lines of Schedule
C: Type of Entity Within the Banking
Organization1
Line item 1

Depository institutions

Line item 1(a)

SBICs

Report in columns A, B, and C, the acquisition cost, net
unrealized holding gains not recognized as income, and
carrying value, respectively, of the nonfinancial equity
investments held by all SBICs that are consolidated in
the financial statements of a subsidiary depository
institution of the BHC. Also include the acquisition cost
and carrying value of any nonfinancial equity investment
made by a subsidiary depository institution in a SBIC
that is not consolidated with the depository institution for
accounting purposes.
Line item 1(b)

Edge and agreement corporations

Report in columns A, B, and C, the acquisition cost, net
unrealized holding gains not recognized as income, and
carrying value, respectively, of the direct and indirect
nonfinancial equity investments of all Edge or agreement
corporations that are owned or controlled by subsidiary
depository institutions of the BHC. Edge corporations
are formed under Section 25A of the Federal Reserve
Act and agreement corporations are formed under Section 25 of the Federal Reserve Act.
Line item 1(c)

All other

Report in columns A, B, and C, the acquisition cost, net
unrealized holding gains not recognized as income, and
carrying value, respectively, of the direct and indirect
nonfinancial equity investments of the subsidiary depository institutions of the BHC that are not reported in
items 1(a) or 1(b). All other nonfinancial equity investments owned or controlled directly or indirectly through
a depository institution should be reported on this line
item.

Line item 2(a)

SBICs

Report in columns A, B, and C, the acquisition cost, net
unrealized holding gains not recognized as income, and
carrying value, respectively, of the direct and indirect
nonfinancial equity investments (including nonfinancial
equity investments held under Merchant Banking
Authority) of all SBICs that are consolidated with the
BHC for accounting purposes and that are not owned or
controlled by the BHC through a depository institution.
Also include any nonfinancial equity investment made
directly or indirectly by the BHC or a nondepository
subsidiary in a SBIC that is not consolidated for accounting purposes.
Line item 2(b)

Edge and agreement corporations

Report in columns A, and B, and C, the acquisition cost,
net unrealized holding gains not recognized as income,
and carrying value, respectively, of the direct and indirect nonfinancial equity investments of all Edge or agreement corporations that are not owned or controlled by
the BHC through a depository institution. Edge corporations are formed under Section 25A of the Federal
Reserve Act and agreement corporations are formed
under Section 25 of the Federal Reserve Act.
Line item 2(c)

Broker-Dealers

Report in columns A, B, and C, the acquisition cost, net
unrealized holding gains not recognized as income, and
carrying value, respectively, of the direct and indirect
nonfinancial equity investments (including nonfinancial
equity investments held under Merchant Banking
Authority) of subsidiaries of the BHC that are registered
with the Securities and Exchange Commission as a
broker-dealer. Exclude any nonfinancial equity investment held in a trading account in accordance with
applicable accounting principles and as part of an underwriting, market making or dealing activity. Also, exclude
nonfinancial equity investments of broker−dealers that
are controlled by the BHC through a depository
institution.

Line item 2 Parent holding company and other
nonbank subsidiaries

Line item 2(d)

1. Line Items 1 and 2: If the BHC reclassifies an investment (e.g., from
a SBIC investment to a merchant banking investment), reports filed after
the reclassification should use the line item that reflects the new authority
on which the BHC relies in holding the investment.

Report in columns A, B, and C, the acquisition cost, net
unrealized holding gains not recognized as income, and
carrying value, respectively, of the all direct and indirect
nonfinancial equity investments held in a nonbank

INST-4

Private Equity subsidiaries

Instructions for Preparation of Reporting Form FR Y-12
Line Item Instructions March 2005

Line Item Instructions

subsidiary predominantly engaged in investing and managing nonfinancial equity investments authorized under
section 4(c)(6) or 4(c)(7) of the BHC Act, or under
Merchant Banking authority of GLBA (excluding investments held by SBICs, Edge/agreement corps, and
Broker-Dealers reported in 2(a), 2(b), and 2(c) above. If
the BHC manages private equity funds on behalf of other
investors, the BHC should report only its ownership
position.
Line item 2(e) All other
Report in columns A, B, and C, the acquisition cost, net
unrealized holding gains not recognized as income, and
carrying value, respectively, of all other direct and indirect nonfinancial equity investments of the BHC and
its nondepository institution subsidiaries that are not
reported in items 2(a) through 2(d).
Line item 3

Total portfolio

Columns A, B, and C must equal the sum of items 1 and
2 of Schedule C, and item 4, columns A, B, and C of
Schedule A.

Memoranda
Line item M1

Domestic investments

Report in columns A, B, and C, the acquisition cost, net
unrealized holding gains not recognized as income, and
carrying value, respectively, of the direct and indirect
nonfinancial equity investments of the consolidated BHC
in companies domiciled in the 50 States of the United
States, the District of Columbia, Puerto Rico, and U.S.
territories and possessions. The sum of memoranda
items 1 and 2, columns A, B, and C, should equal
Schedule A, item 4, columns A, B, and C.
Line item M2

Foreign investments

Report in columns A, B, and C, the acquisition cost, net
unrealized holding gains not recognized as income, and
carrying value, respectively, of the direct and indirect
nonfinancial equity investments of the consolidated BHC
in companies domiciled outside the 50 States of the
United States, the District of Columbia, Puerto Rico, and
U.S. territories and possessions. The sum of memorandum item 1 and memorandum item 2, columns A, B, and
C, should equal Schedule A, item 4, columns A, B, and
C.
Instructions for Preparation of Reporting Form FR Y-12
Line Item Instructions March 2005

Instructions for Specific Lines of
Schedule D: Nonfinancial Investment
Transactions During Reporting Period
Line item 1

Purchases

Report in columns A and B for direct investments, and
columns C and D for indirect investments, the aggregate
acquisition cost and carrying value, respectively, of all
nonfinancial equity investments made during the reporting period. In most cases carrying value will equal acquisition cost. This item is reported as a net addition to the
portfolio.
Line item 2

Less: Return of Capital

Report in columns A and B for direct investments, and
columns C and D for indirect investments, the aggregate
acquisition cost and carrying value of all investments
that realized returns of capital (exclusive of realized
gains/losses) during the reporting period. This item is
reported as a net reduction to the portfolio. There should
be no returns of capital against outstanding warrants.
Line item 3 Net Valuation Changes
Report in column B for direct investments, and column D for indirect investments, the aggregate net change
to the portfolio carrying value since the last reporting period. Changes should include adjustments to all
nonfinancial equity investments reflecting write-ups,
write-downs, or write-offs during the reporting period. If
the aggregate change is a negative value enclose in
parentheses.
Line item 4

Other

Report in columns A and B for direct investments, and
columns C and D for indirect investments, any other
transactions affecting the aggregate acquisition cost or
carrying value of the portfolio during the reporting
period. (e.g., write-downs for permanent impairment or
investments acquired through mergers. BHCs have the
option of including permanent impairment write-downs
to carrying value in net valuation changes in line item 3).
If negative value enclose in parentheses.
Line item 5

Total Transactions

Report the sum of items 1 through 4, for columns A, B,
C, and D.
INST-5

General Instructions

including mutual funds that hold equity investments.
• investments made through a SBIC that is consolidated
with the BHC or subsidiary, or in an SBIC that is not
consolidated, under section 302(b) of the Small Business Investment Act of 1958,
• in a nonfinancial company under the portfolio investment provisions of the Board’s Regulation K (12 CFR
211.8(c)(3), or
• in a nonfinancial company under section 24 of the
Federal Deposit Insurance Act (12 U.S.C. 1831a).
This report does not collect information on equity investments that a BHC or any of its subsidiaries may make
under other legal authorities. For example, this report
does not collect information on nonfinancial investments
made by an insurance company subsidiary of a financial
holding company under section 4(k)(4)(I) of the BHC
Act (12 U.S.C. 1843(k)(4)(I)). Also, this report does not
collect information on DPC investments.

signed and attested printout of the data submitted. Holding companies should use the cover page of the report
form to fulfill the signature requirement and attach it to
the data printout or declaration page.

Reporting in Dollars
All dollar amounts should be converted to U.S. dollars
using the spot exchange rate on the report date, regardless of the currencies in which the transactions reported
are denominated. The translations should be made on the
same basis as used by the reporter to prepare its FR Y-9C
and FR Y-9SP. If the BHC has no activity to report, enter
a zero where appropriate.

Rounding
Round all dollar amounts reported on this form to the
nearest million dollars.

Negative Entries
Filing of Reports
The report is to be prepared quarterly for BHCs that file
the FR Y-9C, as of the end of March, June, September,
and December, and semi-annually for those BHCs that
file the FR Y-9SP, as of the end of June and December.
The report must be submitted within 45 calendar days of
the reporting date. Reporting BHCs should submit an
original and one copy of the report to the appropriate
Federal Reserve Bank. Each report submitted should be
signed and certified by an executive officer of the BHC.
‘‘Executive Officer’’ is defined in 12 CFR 215.2(d).

Alternative Report Forms
In lieu of using the printed FR Y-12 report form, the
respondent may report the required data on computer
print-outs that are in the identical format and size as the
printed form, including line items and columns in the
order in which they appear on the printed form. The form
must be signed by an executive officer of the reporting
institution.
Electronic submission of report for - Any holding company interested in submitting the FR Y-12 electronically
should contact the appropriate Federal Reserve Bank.
Holding companies choosing to submit these reports
electronically must maintain in their files a manually

GEN-2

Any negative entries should be recorded in parentheses
rather than with a minus (-) sign.

Confidentiality
The completed version of this report generally is available to the public upon request on an individual basis.
However, a reporting BHC may request confidential
treatment for certain portions of the FR Y-12 if the BHC
is of the opinion that disclosure of specific commercial
or financial information in the report would likely result
in substantial harm to its competitive position, or that
disclosure of the submitted information would result in
an unwarranted invasion of personal privacy.
A request for confidential treatment must be submitted in
writing concurrently with the submission of the report.
The request must discuss in writing the justification for
which confidentiality is requested and must demonstrate
the specific nature of the harm that would result from
public release of the information. Merely stating that
competitive harm would result or that information is
personal is not sufficient. The Federal Reserve System
may subsequently release information for which confidential treatment is requested, if the Board of Governors
determines that the disclosure of such information is in
the public interest.

Instructions for Preparation of Reporting Form FR Y-12
General Instructions March 2005

Glossary

For the definition of Appropriate Federal Reserve Bank,
Bank Holding Company, BHC Act, Company, Control,
Depository Institution, Edge Corporation, Financial
Holding Company, and Foreign Investment, please refer
to the glossary of the FR Y-10.
Acquisition Cost: For purposes of this report, acquisition cost refers to the aggregate acquisition cost of nonfinancial equity investments currently held. This value
should be adjusted to reflect permanent write-downs as
well as any partial returns of capital. Exclude adjustments for temporary impairment write- downs, amortization of discounts or premiums (e.g., on convertible debt),
and fair value adjustments.
Carrying Value: For the purposes of this report, carrying value refers to the amount of the investment as
reflected in the BHC’s consolidated financial statements
prepared in accordance with GAAP. Carrying value
includes adjustments for return of capital as well as
impairment write-downs, amortization of discounts or
premiums (e.g., convertible debt), and fair value adjustments that are reflected on the balance sheet.
Convertible Bonds and Convertible Preferred Stock:
For the purposes of this report, bonds or preferred stock
that can be converted into or redeemed for a company’s
common stock at a prearranged price are considered
convertible.
Direct Investment: Direct Investment: For the purposes
of this report, a direct investment is any nonfinancial
equity investment that the BHC or any of its consolidated subsidiaries holds directly in a nonfinancial entity.
Equity Investment: For purposes of this report, an
equity investment refers to common stock, partnership
interests, convertible preferred stock, convertible debt,
and warrants, options, and other rights that give the
Instructions for Preparation of Reporting Form FR Y-12
Glossary March 2005

holder the right to acquire common stock or instruments
convertible into common stock. An equity investment
does not include any position or security held in a trading
account in accordance with applicable accounting principles and as part of an underwriting, market making or
dealing activity.
Indirect Investment: For the purposes of this report, an
indirect investment is a nonfinancial equity investment
that the BHC or any of its consolidated subsidiaries has
in an investment fund or similar entity that is engaged in
the business of making equity investments in nonfinancial companies. An investment fund can be organized in
any form, including as a partnership, corporation, or
limited liability company. An example of an indirect
investment is an investment in a private equity fund that
makes merchant banking investments under section
4(k)(4)(H) of the BHC Act (12 U.S.C. 1843(k)(4)(H)).
Mezzanine Financing: Mezzanine generally refers to
that subordinated layer of financing between a company’s senior debt and equity. This type of financing combines the characteristics of debt and equity funding, and,
in many instances, is convertible into equity securities or
comes with warrants attached. Mezzanine debt is often
used to finance acquisitions and buyouts, and is viewed
as an attractive investment because of its higher returns
that are unavailable to senior lenders. However, in a
liquidation situation mezzanine lenders’ repayment status is only better than that of the equity holders.
Nonfinancial Company: A nonfinancial company is a
company that is engaged in any activity that has not been
determined to be financial in nature or incidental to a
financial activity under section 4(k) of the BHC Act (12
U.S.C. 1843(k)). Examples of activities that are considered nonfinancial in nature are: Telecommunications,
Health Care, Entertainment, Transportation, and Manufacturing.
GL-1

Glossary

Subsidiary: For purposes of this report, subsidiary
means any company in which the BHC, directly or
indirectly, owns or controls more than 50 percent of the
outstanding voting stock and which is consolidated under
GAAP in the parent holding company’s financial statements. Accordingly, if a BHC owns 50 percent or less of
a joint venture, there is no need to report non-financial
equity investments held by that joint venture.

entitles the holder to buy (exercise) a proportionate
amount of common stock at a specified price, for a
period of years or to perpetuity. The acquisition cost of a
warrant should be its initial valuation. In a case where
the banking organization ‘‘paid nothing’’ for the warrants, there is value associated with such warrants for
which the bank must be compensated.

Warrant: A type of security, usually issued together
with a subordinated debt instrument (Mezzanine Debt),
restructured debt, or a bond or preferred stock offer, that

GL-2

Instructions for Preparation of Reporting Form FR Y-12
Glossary March 2005