US Bank 2011 Annual Report Download - page 104

Options and warrants outstanding at December 31,
2011, 2010 and 2009, to purchase 54 million, 56 million and
70 million common shares, respectively, were not included in
the computation of diluted earnings per share for the years
ended December 31, 2011, 2010 and 2009, respectively,
because they were antidilutive. Convertible senior debentures
that could potentially be converted into shares of the
Company's common stock pursuant to specified formulas,
were not included in the computation of dilutive earnings per
share because they were antidilutive.
NOTE 17 Employee Benefits
Employee Retirement Savings Plan The Company has a
defined contribution retirement savings plan that covers
substantially all its employees. Qualified employees are
allowed to contribute up to 75 percent of their annual
compensation, subject to Internal Revenue Service limits,
through salary deductions under Section 401(k) of the Internal
Revenue Code. Employee contributions are invested, at the
employees’ direction, among a variety of investment
alternatives. Employee contributions are 100 percent matched
by the Company, up to four percent of an employee’s eligible
annual compensation. The Company’s matching contribution
vests immediately. Although the matching contribution is
initially invested in the Company’s common stock, an
employee can reinvest the matching contribution among
various investment alternatives. Total expense for the
Company’s matching contributions was $103 million, $96
million and $78 million in 2011, 2010 and 2009, respectively.
Pension Plans The Company has tax qualified
noncontributory defined benefit pension plans that provide
benefits to substantially all its employees. Pension benefits are
provided to eligible employees based on years of service,
multiplied by a percentage of their final average pay. As a
result of plan mergers, pension benefits may also be provided
using two cash balance benefit formulas where only
investment or interest credits continue to be credited to
participants’ accounts. Effective January 1, 2010, the
Company established a new cash balance formula for certain
current and all future eligible employees. Participants receive
annual pay credits based on eligible pay multiplied by a
percentage determined by their age and years of service.
Participants also receive an annual interest credit. Employees
become vested upon completing three years of vesting service.
In general, the Company’s qualified pension plans’
objectives include maintaining a funded status sufficient to
meet participant benefit obligations over time while reducing
long-term funding requirements and pension costs. The
Company has an established process for evaluating all of the
plans, their performance and significant plan assumptions,
including the assumed discount rate and the long-term rate of
return (“LTROR”). Annually, the Company’s Compensation
and Human Resources Committee (the “Committee”),
assisted by outside consultants, evaluates plan objectives,
funding policies and plan investment policies considering its
long-term investment time horizon and asset allocation
strategies. The process also evaluates significant plan
assumptions. Although plan assumptions are established
annually, the Company may update its analysis on an interim
basis in order to be responsive to significant events that occur
during the year, such as plan mergers and amendments.
The Company’s funding policy is to contribute amounts
to its plans sufficient to meet the minimum funding
requirements of the Employee Retirement Income Security Act
of 1974, as amended by the Pension Protection Act, plus such
additional amounts as the Company determines to be
appropriate. The Company made no contributions to the
qualified pension plans in 2011 or 2010, and anticipates no
contributions in 2012. Any contributions made to the
qualified plans are invested in accordance with established
investment policies and asset allocation strategies.
In addition to the funded qualified pension plans, the
Company maintains non-qualified plans that are unfunded
and provide benefits to certain employees. The assumptions
used in computing the accumulated benefit obligation, the
projected benefit obligation and net pension expense are
substantially consistent with those assumptions used for the
funded qualified plans. In 2012, the Company expects to
contribute $21 million to its non-qualified pension plans
which equals the 2012 expected benefit payments.
Postretirement Welfare Plan In addition to providing
pension benefits, the Company provides health care and death
benefits to certain retired employees. Generally, all active
employees may become eligible for subsidized retiree health
care benefits by meeting defined age and service requirements.
The medical plan contains other cost-sharing features such as
deductibles and coinsurance. The estimated cost of these
retiree benefit payments is accrued during the employees’
active service. Contributions have previously been made to the
plan, and in 2012, the Company anticipates no contributions
to its postretirement welfare plan.
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