BB&T 2015 Annual Report Download - page 79

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   
    
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Long-term debt and capital leases $ 23,346 $ 5,471 $ 6,044 $ 4,742 $ 7,089
Operating leases 1,592 250 429 322 591
Commitments to fund affordable housing investments 654 354 260 21 19
Private equity commitments (1) 233 55 110 47 21
Time deposits 17,558 11,813 4,263 1,452 30
Contractual interest payments (2) 3,798 784 1,206 878 930
Purchase obligations (3) 341 163 142 25 11
Total contractual cash obligations $ 47,522 $ 18,890 $ 12,454 $ 7,487 $ 8,691
(1) Maturities are based on estimated payment dates.
(2) Includes accrued interest, future contractual interest obligations and the impact of hedges. Non-hedging derivatives are excluded. Variable rate
payments are based upon the rate in effect at December 31, 2015.
(3) Includes purchase obligations for goods and services covered by noncancellable contracts.
The table above excludes the future cash payments associated with the nonqualified pension plans. Refer to Note 13 “Benefit Plans” for information related
to future payments under these plans.
BB&T’s 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,
2015 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.
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Source: BB&T CORP, 10-K, February 25, 2016 Powered by Morningstar® Document Research℠
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