BB&T 2008 Annual Report Download - page 122

BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The plan assets included 3.540 million shares valued at $97 million and 1.033 million shares valued at $32
million of BB&T common stock at December 31, 2008 and 2007, respectively. During 2008, the plan purchased an
additional 2.458 million shares in a private placement transaction from BB&T for $53 million.
Postretirement Benefits Other than Pension
BB&T provides certain postretirement benefits. These benefits provide covered employees a subsidy for
purchasing health care and life insurance. During 2004, BB&T changed its postretirement benefit to eliminate the
subsidy for those employees retiring after December 31, 2004. BB&T also reduced the subsidy paid to employees
who retired on or before December 31, 2004, were age 55 years or older, and had at least ten years of service. For
those employees, the subsidy is based upon years of service of the employee at the time of retirement. The effect
of the change in subsidy has been accounted for as a plan amendment and reduced the projected benefit obligation
by $96 million, which is being amortized as a reduction of benefit costs over approximately 17 years. At
December 31, 2008 and 2007, the projected benefit obligation was $34 million and $41 million, respectively. There
are no plan assets assigned to the plan. Employer contributions to the plan are based on benefit payments. The
estimated benefit payments for other postretirement benefits are $5 million, $5 million, $5 million, $4 million and
$3 million for the next five years and $13 million for the years 2014 through 2018.
Defined Contribution Plans
BB&T offers a 401(k) Savings Plan and other defined contribution plans that permit employees to contribute
from 1% to 50% of their cash compensation. For full-time employees who are 21 years of age or older with one
year or more of service, BB&T makes matching contributions of up to 6% of the employee’s compensation.
BB&T’s contribution to the 401(k) Savings Plan and nonqualified defined contribution plans totaled $73 million,
$70 million and $65 million for the years ended December 31, 2008, 2007 and 2006, respectively. BB&T also offers
defined contribution plans to certain employees of subsidiaries who do not participate in the 401(k) Savings Plan.
Other
There are various other employment contracts, deferred compensation arrangements and covenants not to
compete with selected members of management and certain retirees.
NOTE 15. Commitments and Contingencies
BB&T utilizes a variety of financial instruments to meet the financing needs of clients and to reduce
exposure to fluctuations in interest rates. These financial instruments include commitments to extend credit,
standby letters of credit and financial guarantees, interest rate caps, floors and collars, interest rate swaps,
swaptions, when-issued securities, options written and forward and futures contracts. BB&T also has
commitments to fund certain affordable housing investments and contingent liabilities of certain sold loans. The
following table presents the contractual or notional amount of these instruments:
Contract or Notional
Amount at
December 31,
2008 2007
(Dollars in millions)
Financial instruments whose contract amounts represent credit risk:
Commitments to extend, originate or purchase credit $35,144 $34,295
Standby letters of credit and financial guarantees written 5,861 3,367
Commercial letters of credit 34 41
Financial instruments whose notional or contract amounts exceed the amount of credit risk:
Derivative financial instruments 74,177 47,197
Commitments to fund low income housing investments 412 444
Residential mortgage loans sold with recourse 822 170
All other loans sold with recourse 3,259 2,140
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