BB&T 2010 Annual Report Download - page 83

Contractual Obligations, Commitments, Contingent Liabilities, Off-Balance Sheet
Arrangements, and Related Party Transactions
The following table presents, as of December 31, 2010, 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 16 “Commitments and Contingencies” in the “Notes to Consolidated Financial
Statements.”
Table 26
Contractual Obligations and Other Commitments
December 31, 2010
Total Less than
One Year 1to3 Years 3to5 Years After 5 Years
(Dollars in millions)
Contractual Cash Obligations
Long-term debt $21,730 $ 2,143 $ 3,166 $2,191 $14,230
Operating leases 1,232 149 259 220 604
Commitments to fund affordable housing
investments 334 155 131 47 1
Venture capital commitments 185 83 72 30 —
Time deposits 33,182 21,883 8,820 2,239 240
Total contractual cash obligations $56,663 $24,413 $12,448 $4,727 $15,075
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, 2010,
BB&T’s investments in such projects totaled $1.2 billion, which includes outstanding commitments of $334
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, 2010, BB&T had $135 million in loan
commitments outstanding related to these projects, of which $36 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,
2010 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 20
“Derivative Financial Instruments” in the “Notes to Consolidated Financial Statements.”
In the ordinary course of business, BB&T indemnifies its officers and directors to the fullest extent
permitted by law against liabilities arising from litigation. BB&T also issues standard representation and
warranties in underwriting agreements, merger and acquisition agreements, loan sales, brokerage activities and
other similar arrangements. Counterparties in many of these indemnifications provide similar indemnifications to
BB&T. Although these agreements often do not specify limitations, BB&T does not believe that any payments
related to these guarantees would materially change the financial condition or results of operations of BB&T.
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