US Bank 2001 Annual Report Download - page 42

Debt Ratings
Standard &
At December 31, 2001 Moody's Poors Fitch
U.S. Bancorp
Short-term borrowings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F1
Senior debt and medium-term notes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A1 A A°
Subordinated debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A2 A¿ A
Preferred stock ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A3 BBB° A
Commercial paper ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ P-1 A-1 F1
U.S. Bank National Association
Short-term time deposits ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ P-1 A-1 F1°
Long-term time depositsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Aa3 A° AA¿
Bank notes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Aa3/P-1 A°/A-1 A°/F1°
Subordinated debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ A1 A A
The parent company's routine funding requirements per quarter to $.1875 per quarter. Excluding merger and
consist primarily of operating expenses, dividends to restructuring-related charges, the dividend payout ratio for
shareholders, debt service and funds used for acquisitions. 2001 increased to 57.0 percent compared with payout ratios
The parent company obtains funding to meet its obligations of 40.1 percent in 2000 and 31.7 percent in 1999.
from dividends collected from its subsidiaries and the Management has established Ñnancial objectives which
issuance of debt securities. Subsidiary management fees provide a framework to monitor future capital needs. The
fund operating expenses, while shareholder dividends and Company's dividend policy is inÖuenced by the belief that
debt service are satisÑed primarily through dividends from most shareholders are interested in long-term performance
its subsidiaries. as well as current dividend yields. The current dividend
At December 31, 2001, parent company long-term debt payout level is considered reasonable given the Company's
outstanding was $6.1 billion, compared with $6.6 billion at present cash Öow position, level of earnings and the
December 31, 2000. In 2001, the parent company issued strength of its subsidiary banks' capital ratios. Future
$1.1 billion of senior contingent convertible debt, oÅset by dividends will be determined based on results of operations,
$1.6 billion of maturities and other repayments of long- growth expectations, Ñnancial condition, regulatory
term debt. Total parent company debt maturing in 2002 is constraints and other factors deemed relevant by the Board
$1.5 billion. These debt obligations are expected to be met of Directors.
through medium-term note issuances and dividends from On July 17, 2001, the Company's Board of Directors
subsidiaries, as well as from the approximately $3.2 billion authorized the repurchase of up to 56.4 million shares of
of parent company cash and cash equivalents at the Company's common stock in connection with the
December 31, 2001. Federal banking laws regulate the July 24, 2001, acquisition of NOVA. During 2001, the
amount of dividends that may be paid by banking Company repurchased 19.7 million shares of common stock
subsidiaries without prior approval. The amount of in both public and private transactions in connection with
dividends available to the parent company from its banking this authorization. The Company had forward contracts to
subsidiaries was $1.2 billion at December 31, 2001. For purchase 26.7 million shares within this authorization.
further information, see Note 23 of the Notes to These contracts were settled in January 2002. On
Consolidated Financial Statements. December 18, 2001, the Board of Directors approved an
authorization to repurchase an additional 100 million shares
CAPITAL MANAGEMENT of common stock through 2003.
On February 16, 2000, the Board of Directors of
The Company is committed to managing capital for
USBM authorized the repurchase of up to $2.5 billion of its
maximum shareholder beneÑt and maintaining strong
common stock over a two year period ending March 31,
protection for depositors and creditors. Total shareholders'
2002. On April 11, 2000, Firstar's Board of Directors
equity was $16.5 billion at December 31, 2001, compared
approved a common stock repurchase program of
with $15.2 billion at December 31, 2000. The increase was
100 million shares. The stock repurchase programs of both
primarily the result of corporate earnings and the issuance
Firstar and USBM were rescinded on October 4, 2000, and
of stock in connection with the NOVA acquisition, oÅset
January 17, 2001, respectively, in connection with the
by dividend payments, merger and restructuring-related
planned merger of the formerly separate companies. For a
items and share repurchases.
complete analysis of activities impacting shareholders' equity
On February 27, 2001, the Company increased its
dividend rate per common share 15.4 percent from $.1625
U.S. Bancorp
Table 18
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