SunTrust 2008 Annual Report Download - page 73

CONTRACTUAL COMMITMENTS
In the normal course of business, we enter into certain contractual obligations, including obligations to make future payments
on debt and lease arrangements, contractual commitments for capital expenditures, and service contracts. Table 17
summarizes our significant contractual obligations at December 31, 2008, except for pension and other postretirement benefit
plans, included in Note 16, “Employee Benefit Plans,” to the Consolidated Financial Statements.
Table 17 – Contractual Commitments
As of December 31, 2008
(Dollars in millions) 1 year or less 1-3 years 3-5 years After 5 years Total
Time deposit maturities1$29,059 $7,538 $1,721 $71 $38,389
Short-term borrowings19,480 - - - 9,480
Long-term debt 11,536 10,078 7,311 7,871 26,796
Operating lease obligations 208 375 313 728 1,624
Capital lease obligations11321016
Purchase obligations2104 282 226 640 1,252
Total $40,388 $18,276 $9,573 $9,320 $77,557
1Amounts do not include accrued interest.
2Includes contracts with a minimum annual payment of $5 million.
As of December 31, 2008, our cumulative UTBs amounted to $330.0 million. Interest related to UTBs was $70.9 million as
of December 31, 2008. We are under continuous examination by various tax authorities. We are unable to make a reasonable
estimate of the periods of cash settlement because it is not possible to reasonably predict, with respect to periods for which
the statutes of limitations are open, the amount of tax and interest (if any) that might be assessed by a tax authority or the
timing of an assessment or payment. It is also not possible to reasonably predict whether or not the applicable statutes of
limitations might expire without us being examined by any particular tax authority.
CRITICAL ACCOUNTING POLICIES
Our significant accounting policies are described in detail in Note 1, “Accounting Policies,” to the Consolidated Financial
Statements and are integral to understanding MD&A. We have identified certain accounting policies as being critical because
(1) they require our judgment about matters that are highly uncertain and (2) different estimates that could be reasonably
applied would result in materially different assessments with respect to ascertaining the valuation of assets, liabilities,
commitments, and contingencies. A variety of factors could affect the ultimate value that is obtained either when earning
income, recognizing an expense, recovering an asset, valuing an asset or liability, or reducing a liability. Our accounting and
reporting policies are in accordance with U.S. GAAP, and they conform to general practices within the financial services
industry. We have established detailed policies and control procedures that are intended to ensure these critical accounting
estimates are well controlled and applied consistently from period to period. In addition, the policies and procedures are
intended to ensure that the process for changing methodologies occurs in an appropriate manner. The following is a
description of our current critical accounting policies.
Allowance for Loan and Lease Losses
The ALLL represents our estimate of probable losses inherent in the existing loan portfolio. The ALLL is increased by the
provision for loan losses and reduced by loans charged off, net of recoveries. The ALLL is determined based on our review
and evaluation of larger loans that meet our definition of impairment and the size and current risk characteristics of pools of
homogeneous loans (i.e., loans having similar characteristics) within the loan portfolio and our assessment of internal and
external influences on credit quality that are not fully reflected in the historical loss or risk-rating data.
Larger nonaccrual loans are individually evaluated to determine the amount of specific allowance required using the most
probable source of repayment, including the present value of the loan’s expected future cash flows, the fair value of the
underlying collateral less costs of disposition, or the loan’s estimated market value. In these measurements, we use
assumptions and methodologies that are relevant to estimating the level of impaired and unrealized losses in the portfolio. To
the extent that the data supporting such assumptions has limitations, our judgment and experience play a key role in
enhancing the specific ALLL estimates.
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