BB&T 2009 Annual Report Download - page 74

Contractual Obligations, Commitments, Contingent Liabilities, Off-Balance Sheet
Arrangements, and Related Party Transactions
The following table presents, as of December 31, 2009, BB&T’s significant fixed and determinable contractual
obligations by payment date. The payment amounts represent those amounts contractually due to the recipient. The
table excludes liabilities recorded where management cannot reasonably estimate the timing of any payments that
may be required in connection with these liabilities. Further discussion of the nature of each obligation is included in
Note 15 “Commitments and Contingencies” in the “Notes to Consolidated Financial Statements.”
Table 26
Contractual Obligations and Other Commitments
December 31, 2009
Total Less than One Year 1to3 Years 3to5 Years After 5 Years
(Dollars in millions)
Contractual Cash Obligations
Long-term debt $21,376 $ 326 $ 3,702 $2,672 $14,676
Operating leases (1) 1,199 172 280 208 539
Commitments to fund affordable housing
investments 371 286 64 20 1
Venture capital commitments 183 68 105 10 —
Tax assessment (2) 890 890 — — —
Purchase of premises and equipment from
FDIC (3) 200 200 — — —
Time deposits 45,691 32,905 11,084 1,373 329
Total contractual cash obligations $69,910 $34,847 $15,235 $4,283 $15,545
(1) Excludes leases associated with the Colonial acquisition that were assumed in February 2010. Annual lease
payments of approximately $30 million are expected.
(2) Disputed tax payment expected to be made in first quarter 2010 for which BB&T plans to file a lawsuit
seeking a refund.
(3) Estimated value of premises and equipment to be purchased from FDIC in connection with the Colonial
acquisition.
BB&T’s significant commitments include certain investments in affordable housing and historic building
rehabilitation projects throughout its market area. BB&T enters into such arrangements as a means of
supporting local communities and recognizes tax credits relating to these investments. At December 31, 2009,
BB&T’s investments in such projects totaled $1.1 billion, which includes outstanding commitments of $371
million. BB&T typically acts as a limited partner in these investments and does not exert control over the
operating or financial policies of the partnerships. Branch Bank typically provides financing during the
construction and development of the properties; however, permanent financing is generally obtained from
independent third parties upon completion of a project. As of December 31, 2009, BB&T had $165 million in loan
commitments outstanding related to these projects, of which $73 million had been funded. BB&T’s risk exposure
relating to such commitments is generally limited to the amount of investments and loan commitments made.
Please refer to Note 1 “Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial
Statements” for further discussion of these investments in limited partnerships.
In addition, BB&T enters into derivative contracts to manage various financial risks. A derivative is a
financial instrument that derives its cash flows, and therefore its value, by reference to an underlying instrument,
index or referenced interest rate. Derivative contracts are carried at fair value on the Consolidated Balance
Sheets with the fair value representing the net present value of expected future cash receipts or payments based
on market interest rates as of the balance sheet date. Derivative contracts are written in amounts referred to as
notional amounts, which only provide the basis for calculating payments between counterparties and are not a
measure of financial risk. Therefore, the derivative liabilities recorded on the balance sheet as of December 31,
2009 do not represent the amounts that may ultimately be paid under these contracts. Further discussion of
derivative instruments is included in Note 1 “Summary of Significant Accounting Policies” and Note 19
“Derivative Financial Instruments” in the “Notes to Consolidated Financial Statements.”
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