US Bank 2003 Annual Report Download - page 78

The following table presents a summary of activity with respect to the merger and restructuring-related accruals:
(Dollars in Millions) USBM NOVA Other (a) Total
Balance at December 31, 2000 ****************************************** $ — $ — $ 46.6 $ 46.6
Provision charged to operating expense ******************************* 1,327.1 1.6 36.1 1,364.8
Additions related to purchase acquisitions ***************************** — 82.2 7.4 89.6
Cash outlays ******************************************************* (532.2) (32.4) (66.3) (630.9)
Noncash write-downs and other ************************************** (670.6) (3.0) (11.0) (684.6)
Balance at December 31, 2001 ****************************************** 124.3 48.4 12.8 185.5
Provision charged to operating expense ******************************* 269.0 34.9 17.3 321.2
Additions related to purchase acquisitions ***************************** — 3.8 18.6 22.4
Cash outlays ******************************************************* (325.8) (36.2) (24.6) (386.6)
Noncash write-downs and others ************************************* (48.9) (35.8) (5.7) (90.4)
Balance at December 31, 2002 ****************************************** 18.6 15.1 18.4 52.1
Provision charged to operating expense ******************************* — 33.5 12.7 46.2
Additions (adjustments) related to purchase acquisitions***************** — — (1.4) (1.4)
Cash outlays ******************************************************* (16.2) (29.1) (14.1) (59.4)
Noncash write-downs and others ************************************* — (1.4) (11.5) (12.9)
Balance at December 31, 2003 ****************************************** $ 2.4 $ 18.1 $ 4.1 $ 24.6
(a) In 2003 and 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, ‘‘Other’’ primarily included the 1999 merger of Firstar and Mercantile Bancorporation, Inc. and the 1998 acquisition of the former Firstar Corporation by Star
Banc. Star Banc was renamed Firstar Corporation.
The adequacy of the accrued liabilities is reviewed lower utilization of benefits by affected staff, changes in
regularly taking into consideration actual and projected initial assumptions as a result of subsequent mergers and
payments. Adjustments are made to increase or decrease alterations of business plans.
these accruals as needed. Reversals of expenses can reflect a
The components of the merger and restructuring-related accruals for all acquisitions were as follows:
December 31, December 31,
(Dollars in Millions) 2003 2002
Severance**************************************************************************************** $ 3.4 $30.2
Other employee-related costs*********************************************************************** 1.1 3.1
Lease termination and facility costs ***************************************************************** 14.4 17.2
Contracts and system write-offs********************************************************************* 2.4 .5
Other ******************************************************************************************** 3.3 1.1
Total ****************************************************************************************** $24.6 $52.1
The merger and restructuring-related accruals by significant acquisition or business restructuring was as follows:
December 31, December 31,
(Dollars in Millions) 2003 2002
NOVA******************************************************************************************** $18.1 $15.1
State Street Corporate Trust************************************************************************ 4.1 7.8
USBM ******************************************************************************************* 2.4 18.6
Bay View ***************************************************************************************** — 5.8
Other acquisitions ********************************************************************************* — 4.8
Total ****************************************************************************************** $24.6 $52.1
At December 31, 2002, the integration of Firstar and business processes of U.S. Bank National Association and
USBM was completed, and no additional merger and NOVA, as well as systems conversions for the acquisitions
restructuring related charges occurred in 2003. The only of the State Street Corporate Trust business and Bay View
activity in the USBM accrual during 2003 was related to were completed. The Company does not anticipate any
severance costs that continue to be paid through the period merger or restructuring-related expenses in 2004 related to
provided for in the Company’s severance plans. In 2003, completed acquisitions.
the integration of merchant processing platforms and
76 U.S. Bancorp