Related Party Transactions

MUAH is a financial holding company, bank holding company and intermediate holding company whose principal subsidiaries are MUFG Union Bank, N.A. and MUFG Securities Americas Inc. It is owned by MUFG Bank, Ltd. and MUFG. MUFG Bank, Ltd. is a wholly-owned subsidiary of MUFG.

On July 1, 2016, MUFG designated MUAH as its IHC in accordance with the requirements of the U.S. Federal Reserve Board’s final rules for Enhanced Prudential Standards and transferred interests in substantially all its U.S. subsidiaries to the IHC. On July 1, 2017, MUFG transferred interests in its remaining U.S. subsidiaries to MUAH. The transferred subsidiaries had assets of $1.0 billion, including goodwill and intangibles of $196 million, and liabilities of $601 million, all of which were transferred at carrying value. In consideration for the transferred assets and liabilities, MUAH issued 3,267,433 shares to MUFG Bank, Ltd. and MUFG.

The Company provides various business, banking, financial, administrative and support services, and facilities for MUFG Bank, Ltd. in connection with the operation and administration of MUFG Bank, Ltd.'s business in the U.S. (including MUFG Bank, Ltd.'s U.S. branches). The Bank and MUFG Bank, Ltd. participate in a master services agreement whereby the Bank earns fee income in exchange for services and facilities provided.

In addition to the above, the Company conducts transactions with affiliates which include MUFG Bank, Ltd., MUFG and other entities which are directly or indirectly owned by MUFG. The transactions include capital market transactions, facilitating securities transactions, secured financing transactions, advisory services, clearing and operational support. Under services level agreements the Company provides services to and receives services from various affiliates. The Company also has referral agreements with its affiliates and pays referral fees from investment banking revenue earned.

Related party transactions reflect market-based pricing. These transactions are subject to federal and state statutory and regulatory restrictions and limitations.

The tables and discussion below represent the more significant related party balances and income (expenses) generated by related party transactions.

As of December 31, 2019 and December 31, 2018, assets and liabilities with affiliates consisted of the following:



(Dollars in millions)	December 31, 2019		December 31, 2018
Assets:
Cash and cash equivalents	$	282	$	80
Securities borrowed or purchased under resale agreements	2,415		1,913
Other assets	109		146
Liabilities:
Deposits	$	894	$	451
Securities loaned or sold under repurchase agreements	318		148
Commercial paper and other short-term borrowings	326		1,081
Long-term debt	7,345		7,333
Other liabilities	98		69

Revenues and expenses with affiliates for the years ended 2019, 2018, and 2017 were as follows:



	Years Ended December 31,
(Dollars in millions)	2019			2018		2017
Interest Income
Securities borrowed or purchased under resale agreements	$	66		$	66	$	41
Other	2			2		1
Interest Expense
Deposits	13			3		5
Commercial paper and other short-term borrowings	3			2		15
Long-term debt	237			171		114
Securities loaned or sold under repurchase agreements	25			18		6
Noninterest Income
Trading account activities	34			—		—
Fees from affiliates	1,439			1,213		866
Other, net	(6		)	1		13
Noninterest Expense
Other	96			115		112

During 2019, the Company sold loans to affiliates for gross proceeds of $280 million, resulting in gains on sale of $0.7 million. During 2019, the Company purchased loans from affiliates for $9 million.

For additional information regarding the debt due to affiliates, see Note 9 and Note 10 to our Consolidated Financial Statements included in this Form 10-K.

At December 31, 2019, the Company had $1.5 billion in uncommitted, unsecured borrowing facilities with affiliates.

At December 31, 2019 and December 31, 2018, the Company had derivative contracts with affiliates totaling $4 billion and $4 billion, respectively, in notional balances, with $68 million and $96 million in net unrealized gains at December 31, 2019 and December 31, 2018, respectively.

An affiliate extends guarantees on liabilities arising out of or in connection with agreements with certain counterparties. There was no amount guaranteed at December 31, 2019 and December 31, 2018.