US Bank 2002 Annual Report Download - page 75

The components of the merger and restructuring-related items are shown below:
Piper
(Dollars in Millions) USBM NOVA Restructuring Mercantile Other (a) Total
2002
Severance and employee-related ************************** $ 4.1 $ (3.8) $ — $ — $ 9.1 $ 9.4
Systems conversions and integration*********************** 197.0 29.4 — — 18.1 244.5
Asset write-downs and lease terminations ****************** 104.0 14.2 — — 6.0 124.2
Balance sheet restructurings ****************************** (38.8) ————(38.8)
Other merger-related items ******************************* 4.8 (1.1) — — 3.5 7.2
Total 2002 ********************************************** $ 271.1 $38.7 $ — $ — $ 36.7 $ 346.5
Non-interest expense ************************************ 271.1 34.9 — — 18.1 324.1
Balance sheet recognition ******************************** — 3.8 — — 18.6 22.4
Merger-related items — 2002 ************************** $ 271.1 $38.7 $ — $ — $ 36.7 $ 346.5
2001
Severance and employee-related ************************** $ 268.2 $23.3 $28.8 $ 13.2 $ 4.6 $ 338.1
Systems conversions and integration*********************** 208.1 1.6 — 7.3 18.7 235.7
Asset write-downs and lease terminations ****************** 130.4 34.7 11.9 (.3) 6.0 182.7
Charitable contributions ********************************** 76.0 ————76.0
Balance sheet restructurings ****************************** 457.6 ————457.6
Branch sale gain **************************************** (62.2) ————(62.2)
Branch consolidations ************************************ 20.0 ————20.0
Other merger-related charges ***************************** 69.1 24.2 10.0 2.5 2.3 108.1
Total 2001 ********************************************** $1,167.2 $83.8 $50.7 $ 22.7 $ 31.6 $1,356.0
Provision for credit losses ******************************** $ 382.2 $ — $ — $ — $ — $ 382.2
Non-interest income ************************************* (62.2) ————(62.2)
Non-interest expense ************************************ 847.2 1.6 50.7 22.7 24.2 946.4
Merger-related charges ******************************* 1,167.2 1.6 50.7 22.7 24.2 1,266.4
Balance sheet recognition ******************************** — 82.2 — — 7.4 89.6
Merger-related items — 2001 ************************** $1,167.2 $83.8 $50.7 $ 22.7 $ 31.6 $1,356.0
2000
Severance and employee-related ************************** $ 43.0 $ 16.4 $ 59.4
Systems conversions************************************* 115.2 78.3 193.5
Asset write-downs and lease terminations ****************** 42.7 4.6 47.3
Charitable contributions ********************************** — 2.5 2.5
Other merger-related charges ***************************** 26.1 19.9 46.0
Total 2000 ********************************************** $227.0 $121.7 $ 348.7
(a) In 2002, ‘‘Other’’ primarily included merger and restructuring-related items pertaining to the Bay View acquisition, State Street Corporate Trust and the Lyon Financial acquisition. In
2001 and 2000, ‘‘Other’’ primarily included the 1998 acquisition of the former Firstar Corporation by Star Banc. Star Banc was renamed Firstar Corporation.
The Company determines merger and restructuring- $13.1 million in connection with the USBM merger offset
related items and related accruals based on its integration by net curtailment and settlement gains of $9.0 million
strategy and formulated plans. These plans are established related to changes in certain nonqualified pension plans.
as of the acquisition date and are regularly evaluated during Changes in severance costs for USBM and NOVA primarily
the integration process. reflected a change in estimate in the liability given the mix
Severance and employee-related charges include the cost of employees terminated. Severance and employee-related
of severance, other benefits and outplacement costs costs for identified groups of acquired employees are
associated with the termination of employees primarily in included in the determination of goodwill at closing.
branch offices and centralized corporate support and data Severance and employee-related costs are recorded as
processing functions. The severance amounts are determined incurred for groups of employees not specifically identified
based on the Company’s existing severance pay programs at the time of closing or acquired in business combinations
and are paid out over a benefit period of up to two years accounted for as ‘‘poolings.’’
from the time of termination. The total number of Systems conversion and integration costs are recorded
employees included in severance amounts were as incurred and are associated with the preparation and
approximately 2,860 for USBM, 400 for NOVA, 300 for mailing of numerous customer communications for the
the Piper Restructuring and 2,400 for Mercantile (expense acquisitions and conversion of customer accounts, printing
primarily recognized in 1999 and 2000). In 2002, the and distribution of training materials and policy and
Company recognized additional severance costs of procedure manuals, outside consulting fees, and other
U.S. Bancorp 73