BB&T 2008 Annual Report Download - page 117

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BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31,
2008 2007
(Dollars in millions)
Deferred tax assets:
Allowance for loan and lease losses $ 625 $ 375
Unrealized loss on securities available for sale 193 17
Postretirement plans 273 48
Equity-based compensation 79 48
Other 146 106
Total deferred tax assets 1,316 594
Deferred tax liabilities:
Lease financing (117) (86)
Prepaid pension plan expense (196) (144)
Loan fees & expenses (167) (138)
Depreciation (57) (31)
Identifiable intangible assets (134) (110)
Loan servicing rights (68) (101)
Unamortized FHLB loan prepayment fees (99) (127)
Derivatives & hedging (88) (29)
Other (74) (45)
Total deferred tax liabilities (1,000) (811)
Net deferred tax assets (liabilities) $ 316 $(217)
On a periodic basis, BB&T evaluates its income tax positions based on tax laws and regulations and financial
reporting considerations, and records adjustments as appropriate. This evaluation takes into consideration the status
of current taxing authorities’ examinations of BB&T’s tax returns, recent positions taken by the taxing authorities on
similar transactions, if any, and the overall tax environment in relation to tax-advantaged transactions. Detailed below
is a reconciliation of BB&T’s unrecognized tax benefits for the years ended December 31, 2008 and December 31, 2007.
The amounts presented in the reconciliation are gross of any related tax benefits.
Unrecognized Tax
Benefits
As of December 31,
2008 2007
(Dollars in millions)
Beginning Balance $219 $ 1,257
Current activity:
Additions based on tax positions related to current year 12 14
Reductions for tax positions of prior years (30) (1,013)
Settlements — (39)
Lapse of statute of limitations (4) —
Ending Balance $197 $ 219
As of December 31, 2008 and December 31, 2007, BB&T had recorded $176 million and $168 million,
respectively, of unrecognized federal and state tax benefits, which would have reduced the effective tax rate if
recognized. In addition, the Company had $35 million and $30 million in liabilities for tax-related interest recorded
on its Consolidated Balance Sheets at December 31, 2008 and 2007, respectively. Total interest, net of the federal
benefit, related to unrecognized tax benefits recognized in the 2008 and 2007 Consolidated Statements of Income
was $4 million and $12 million, respectively. BB&T classifies interest and penalties related to income taxes as a
component of the provision for income taxes in the Consolidated Statements of Income.
117