SunTrust 2015 Annual Report Download - page 131

Notes to Consolidated Financial Statements, continued
103
December 31, 2014
Commercial Residential Consumer Total
(Dollars in millions)
Carrying
Value ALLL
Carrying
Value ALLL
Carrying
Value ALLL
Carrying
Value ALLL
Individually evaluated $92 $11 $2,563 $300 $126 $8 $2,781 $319
Collectively evaluated 73,300 975 35,940 477 20,819 166 130,059 1,618
Total evaluated 73,392 986 38,503 777 20,945 174 132,840 1,937
LHFI at fair value — — 272 — — — 272 —
Total LHFI $73,392 $986 $38,775 $777 $20,945 $174 $133,112 $1,937
NOTE 8 - PREMISES AND EQUIPMENT
Premises and equipment at December 31 consisted of the
following:
(Dollars in millions)
Useful Life
(in years) 2015 2014
Land Indefinite $330 $334
Buildings and improvements 1 - 40 1,073 1,051
Leasehold improvements 1 - 30 636 628
Furniture and equipment 1 - 20 1,463 1,426
Construction in progress 249 201
Total premises and equipment 3,751 3,640
Less: Accumulated depreciation and amortization 2,249 2,132
Premises and equipment, net $1,502 $1,508
None of the Company's premises and equipment was subject to
mortgage indebtedness (included in long-term debt) at
December 31, 2015. At December 31, 2014, premises and
equipment subject to mortgage indebtedness was immaterial.
Net premises and equipment included $3 million and $4 million
related to net capital leases at December 31, 2015 and 2014,
respectively. Aggregate rent expense (principally for offices),
including contingent rent expense and sublease income, totaled
$200 million, $206 million, and $220 million for the years ended
December 31, 2015, 2014, and 2013, respectively. Depreciation
and amortization expense for the years ended December 31,
2015, 2014, and 2013 totaled $175 million, $176 million, and
$185 million, respectively.
The Company previously completed sale leaseback
transactions consisting of branch properties and various
individual office buildings. Upon completion of these
transactions, the Company recognized a portion of the resulting
gains and deferred the remainder to be recognized ratably over
the expected term of the lease, predominantly 10 years, as an
offset to net occupancy expense. To the extent that terms on these
leases are extended, the remaining deferred gain would be
amortized over the new lease term. Amortization of deferred
gains on sale leaseback transactions was $54 million, $53
million, and $58 million for the years ended December 31, 2015,
2014, and 2013, respectively. At December 31, 2015 and 2014,
the remaining deferred gain associated with sale leaseback
transactions was $108 million and $162 million, respectively.
The Company has various obligations under capital leases
and noncancelable operating leases for premises and equipment.
The leases predominantly expire over the next 10 years, with the
longest expiring in 2081. Many of these leases provide for
periodic adjustment of rentals based on changes in various
economic indicators, while others also include a renewal option.
The following table presents future minimum payments
under noncancelable operating leases, net of sublease rentals,
with initial terms in excess of one year at December 31, 2015.
Capital leases were immaterial at December 31, 2015.
(Dollars in millions) Operating Leases
2016 $207
2017 192
2018 122
2019 103
2020 81
Thereafter 307
Total minimum lease payments $1,012
NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
The Company conducts a goodwill impairment test at the
reporting unit level at least annually, or more frequently as events
occur or circumstances change that would more-likely-than-not
reduce the fair value of a reporting unit below its carrying
amount. In the third quarter of 2015, the Company elected to
prospectively change the date of its annual goodwill impairment
test from September 30 to October 1 to better align the timing
of the test with the availability of key inputs.
The Company performed goodwill impairment analyses for
its Wholesale Banking reporting unit as of October 1, 2015,
September 30, 2015, December 31, 2014, and September 30,
2014, as well as for its Consumer Banking and Private Wealth
Management reporting unit as of October 1, 2015, September
30, 2015, and September 30, 2014. Based on the results of the
impairment analyses, the Company concluded that the fair values
of the reporting units exceeded their respective carrying values;
therefore, there was no goodwill impairment. The Company