US Bank 2004 Annual Report Download - page 82
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Please find page 82 of the 2004 US Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.The minimum future lease payments to be received from sales-type and direct financing leases were as follows at
December 31, 2004:
(Dollars in Millions)
2005 ********************************************************************************************************************* $2,272
2006 ********************************************************************************************************************* 2,468
2007 ********************************************************************************************************************* 3,192
2008 ********************************************************************************************************************* 2,893
2009 ********************************************************************************************************************* 1,394
Thereafter***************************************************************************************************************** 217
the liquidity facility provider is recorded on the balance
Accounting for Transfers and
sheet in other liabilities. The liability is adjusted downward
Servicing of Financial Assets and
over time as the underlying assets pay down with the offset
Extinguishments of Liabilities
recognized as other noninterest income. The liability for the
FINANCIAL ASSET SALES liquidity facility was $32.4 million at December 31, 2004
When the Company sells financial assets, it may retain and $47.3 million at December 31, 2003. In addition, the
interest-only strips, servicing rights, residual rights to a cash Company recorded at fair value its retained residual interest
reserve account, and/or other retained interests in the sold in the investment securities conduit of $56.8 million at
financial assets. The gain or loss on sale depends in part on December 31, 2004 and $89.5 million at December 31,
the previous carrying amount of the financial assets 2003. The Company recorded $24.9 million from the
involved in the transfer and is allocated between the assets conduit during 2004 and $30.5 million during 2003, for
sold and the retained interests based on their relative fair revenues related to the conduit including fees for servicing,
values at the date of transfer. Quoted market prices are management, administration and accretion income from
used to determine retained interest fair values when readily retained interests.
available. Since quotes are generally not available for The Company also has an asset-backed securitization
retained interests, the Company estimates fair value based to fund an unsecured small business credit product. The
on the present value of future expected cash flows using unsecured small business credit securitization trust held
management’s best estimates of the key assumptions assets of $375.3 million at December 31, 2004, of which
including credit losses, prepayment speeds, forward yield the Company retained $85.0 million of subordinated
curves, and discount rates commensurate with the risks securities and a residual interest-only strip of $36.1 million.
involved. Retained interests and liabilities are recorded at This compared with $497.5 million in assets at
fair value using a discounted cash flow methodology at December 31, 2003, of which the Company retained
inception and are evaluated at least quarterly thereafter. $112.4 million of subordinated securities and a residual
Conduits and Securitization The Company sponsors an off- interest-only strip of $34.4 million. The qualifying special
balance sheet conduit to which it transferred high-grade purpose entity issued asset-backed variable funding notes in
investment securities, funded by the issuance of commercial various tranches. The Company provides credit
paper. The conduit, a qualifying special purpose entity, held enhancement in the form of subordinated securities and
assets of $5.7 billion at December 31, 2004 and reserve accounts. The Company’s risk, primarily from losses
$7.3 billion in assets at December 31, 2003. These in the underlying assets, was considered in determining the
investment securities include primarily (i) private label asset- fair value of the Company’s retained interests in this
backed securities, which are insurance ‘‘wrapped’’ by securitization. The Company recognized income from
AAA/Aaa-rated monoline insurance companies and subordinated securities, an interest-only strip and servicing
(ii) government agency mortgage-backed securities and fees from this securitization of $33.2 million during 2004
collateralized mortgage obligations. The conduit had and $29.8 million during 2003. The unsecured small
commercial paper liabilities of $5.7 billion at December 31, business credit securitization held average assets of
2004 and $7.3 billion at December 31, 2003. The Company $438.9 million in 2004, and $571.4 million in 2003.
benefits by transferring the investment securities into a During 2003, the Company undertook several actions
conduit that provides diversification of funding sources in a with respect to off-balance sheet structures. In January
capital-efficient manner and the generation of income. 2003, the Company exercised a cleanup call option on an
The Company provides a liquidity facility to the indirect automobile loan securitization, with the remaining
conduit. Utilization of the liquidity facility would be assets from the securitization recorded on the Company’s
triggered if the conduit is unable to, or does not, issue balance sheet at fair value. The indirect automobile
commercial paper to fund its assets. A liability for the securitization held $156.1 million in assets at December 31,
estimate of the potential risk of loss the Company has as 2002.
80 U.S. BANCORP
Note 10