Fifth Third Bank 2008 Annual Report Download - page 55

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fifth Third Bancorp 53
CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS
The Bancorp has certain obligations and commitments to make
future payments under contracts. The aggregate contractual
obligations and commitments at December 31, 2008 are shown in
Table 42. As of December 31, 2008, the Bancorp has
unrecognized tax benefits that, if recognized, would impact the
effective tax rate in future periods. Due to the uncertainty of the
amounts to be ultimately paid as well as the timing of such
payments, all uncertain tax liabilities that have not been paid have
been excluded from the Contractual Obligations and Other
Commitments table. Further detail on the impact of income taxes
is located in Note 22 of the Notes to Consolidated Financial
Statements.
(a) Includes demand, interest checking, savings, money market and foreign office deposits. For additional information, see the Deposits discussion in the Balance Sheet Analysis section
of Management’s Discussion and Analysis.
(b) Includes other time and certificates $100,000 and over. For additional information, see the Deposits discussion in the Balance Sheet Analysis section of Management’s Discussion
and Analysis.
(c) In the banking industry, interest-bearing obligations are principally used to fund interest-earning assets. As such, interest charges on contractual obligations were excluded from
reported amounts, as the potential cash outflows would have corresponding cash inflows from interest-earning assets. See Note 14 of the Notes to Consolidated Financial Statements
for additional information on these debt instruments.
(d) Includes federal funds purchased and borrowings with an original maturity of less than one year. For additional information, see Note 13 of the Notes to Consolidated Financial
Statements.
(e) See Note 11 of the Notes to Consolidated Financial Statements for additional information on forward contracts to sell mortgage loans.
(f) Includes both operating and capital leases.
(g) Includes low-income housing, historic tax and venture capital partnership investments.
(h) See Note 23 of the Notes to Consolidated Financial Statements for additional information on pension obligations.
(i) Includes commitments to various general contractors for work related to banking center construction.
(j) Represents agreements to purchase goods or services.
(k) Commitments to extend credit are agreements to lend, typically having fixed expiration dates or other termination clauses that may require payment of a fee. Many of the commitments
to extend credit may expire without being drawn upon. The total commitment amounts do not necessarily represent future cash flow requirements.
(l) Letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party.
TABLE 42: CONTRACTUAL OBLIGATIONS AND OTHER COMMITMENTS
As of December 31, 2008 ($ in millions)
Less than
1 year 1-3 years 3-5 years
Greater than
5 years Total
Contractually obligated payments due by period:
Deposits without a stated maturity (a) $52,412 - - - 52,412
Time deposits (b) 19,054 816 55 6,276 26,201
Long-term debt (c) 2,785 855 2,336 7,609 13,585
Short-term borrowings (d) 10,246 - - - 10,246
Forward contracts to sell mortgage loans (e) 3,235 - - - 3,235
Noncancelable lease obligations (f) 90 161 143 543 937
Partnership investment commitments (g) 302 - - - 302
Pension obligations (h) 21 38 36 78 173
Capital expenditures (i) 68 - - - 68
Purchase obligations (j) 27 43 11 - 81
Total contractually obligated payments due by period $88,240 1,913 2,581 14,506 107,240
Other commitments by expiration period:
Commitments to extend credit (k) $18,233 31,237 - - 49,470
Letters of credit (l) 3,303 4,066 1,178 404 8,951
Total other commitments by expiration period $21,536 35,303 1,178 404 58,421