BB&T 2013 Annual Report Download - page 79

79
Table 35
Contractual Obligations and Other Commitments
December 31, 2013
Less than 1 to 3 3 to 5 After 5
Total One Year Years Years Years
(Dollars in millions)
Long-term debt $ 21,210 $ 2,143 $ 7,293 $ 4,629 $ 7,145
Operating leases 1,508 214 383 297 614
Commitments to fund affordable housing investments 464 291 153 13 7
Private equity commitments (1) 245 45 139 56 5
Time deposits 24,983 16,775 6,810 1,398 ―
Contractual interest payments (2) 4,014 836 1,331 798 1,049
Total contractual cash obligations $ 52,424 $ 20,304 $ 16,109 $ 7,191 $ 8,820
(1) Maturities are based on estimated payment dates.
(2) Includes accrued interest, future contractual interest obligations and the impact of hedges used to manage interest rate
risk. Variable rate payments are based upon the rate in effect at December 31, 2013.
BB&T’s significant commitments include investments in affordable housing and historic building rehabilitation projects
throughout its market area and private equity funds. Refer to Note 1 “Summary of Significant Accounting Policies” and to
Note 14 “Commitments and Contingencies” in the “Notes to Consolidated Financial Statements” for further discussion of
these commitments.
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, 2013 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
18 “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.
BB&T holds public funds in certain states that do not require 100% collateralization on public fund bank deposits. In these
states, should the failure of another public fund depository institution result in a loss for the public entity, the resulting
shortfall would have to be absorbed on a pro-rata basis by the remaining financial institutions holding public funds in that
state.
As a member of the FHLB, BB&T is required to maintain a minimum investment in capital stock. The board of directors of
the FHLB can increase the minimum investment requirements in the event it has concluded that additional capital is required
to allow it to meet its own regulatory capital requirements. Any increase in the minimum investment requirements outside of
specified ranges requires the approval of the Federal Housing Finance Agency. Because the extent of any obligation to
increase BB&T’s investment in the FHLB depends entirely upon the occurrence of a future event, potential future payments
to the FHLB are not determinable.
In the normal course of business, BB&T is also a party to financial instruments to meet the financing needs of clients and to
mitigate exposure to interest rate risk. Such financial instruments include commitments to extend credit and certain
contractual agreements, including standby letters of credit and financial guarantee arrangements. Further discussion of
BB&T’s commitments is included in Note 14 “Commitments and Contingencies” and Note 17 “Fair Value Disclosures” in
the “Notes to Consolidated Financial Statements.”