BB&T 2007 Annual Report Download - page 93

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BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
NOTE 6. Premises and Equipment
A summary of premises and equipment is presented in the accompanying table:
December 31,
2007 2006
(Dollars in millions)
Land and land improvements $ 416 $ 373
Buildings and building improvements 989 937
Furniture and equipment 951 907
Leasehold improvements 328 279
Construction in progress 71 52
Capitalized leases on premises and equipment 3 3
Total 2,758 2,551
Less—accumulated depreciation and amortization (1,229) (1,141)
Net premises and equipment $ 1,529 $ 1,410
Useful lives for premises and equipment are as follows: buildings and building improvements—40 years;
furniture and equipment—5 to 10 years; leasehold improvements—estimated useful life or lease term, including
certain renewals which were deemed probable at lease inception, whichever is less; and capitalized leases on
premises and equipment—estimated useful life or remaining term of tenant lease, whichever is less. Certain
properties are pledged to secure mortgage indebtedness totaling $2 million at December 31, 2007 and 2006.
BB&T has noncancelable leases covering certain premises and equipment. Many of the leases have one or
more renewal options, generally for periods of two to five years. Total rent expense applicable to operating leases
was $159 million, $146 million and $151 million for 2007, 2006 and 2005, respectively. Rental income from owned
properties and subleases was $8 million, $9 million and $9 million for 2007, 2006 and 2005, respectively. Future
minimum lease payments for operating leases for years subsequent to 2007 are $126 million, $115 million, $105
million, $92 million, and $76 million for the next five years. The payments for 2013 and later years total $488
million.
NOTE 7. Goodwill and Other Intangible Assets
The changes in the carrying amounts of goodwill attributable to each of BB&T’s operating segments for the
years ended December 31, 2007 and 2006 are as follows:
Goodwill Activity by Operating Segment
Banking
Network
Residential
Mortgage
Banking Sales
Finance Specialized
Lending Insurance
Services Financial
Services All
Other Total
(Dollars in millions)
Balance, January 1, 2006 $3,391 $ 7 $— $ 32 $640 $160 $26 $4,256
Acquired goodwill, net 490 — — 13 31 4 — 538
Contingent consideration — — — 1 22 7 — 30
Other adjustments (3) — — 6 (3) 3 — 3
Reclassification of goodwill (93) — 93 — — — — —
Balance December 31, 2006 3,785 7 93 52 690 174 26 4,827
Acquired goodwill, net 246 — — 47 37 — — 330
Contingent consideration — — — 1 22 18 — 41
Divestiture — — — — (8) — — (8)
Other adjustments 4 — — — — — — 4
Balance, December 31, 2007 $4,035 $ 7 $ 93 $100 $741 $192 $26 $5,194
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