US Bank 2005 Annual Report Download - page 73

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DISCONTINUED OPERATIONS
On December 31, 2003, the Company completed the with the December 31, 2003, distribution, the results of
distribution of all the outstanding shares of common stock Piper Jaffray Companies are reported in the Company’s
of Piper Jaffray Companies to its shareholders. This non- Consolidated Statement of Income separately as
cash distribution was tax-free to the Company, its discontinued operations.
shareholders and Piper Jaffray Companies. In connection
The following table represents the condensed results of operations for discontinued operations:
Year Ended December 31 (Dollars in Millions) 2003
Revenue ********************************************************************************************************************* $ 783
Noninterest expense*********************************************************************************************************** 716
Income from discontinued operations ******************************************************************************************** 67
Costs of disposal (a)*********************************************************************************************************** 27
Income taxes ***************************************************************************************************************** 17
Discontinued operations, net of tax ******************************************************************************************* $23
(a) The $27 million of disposal costs related to discontinued operations primarily represents legal, investment banking and other costs directly related to the distribution.
The distribution was treated as a dividend to amount up to $18 million with respect to certain specified
shareholders for accounting purposes and, as such, reduced liabilities resulting from third-party claims relating to
the Company’s retained earnings by $685 million. research analyst independence and from certain regulatory
Following the distribution, the Company’s wholly-owned investigations, as defined in the separation and distribution
subsidiary, USB Holdings, Inc. holds a $180 million agreement entered into with Piper Jaffray Companies at the
subordinated debt facility with Piper Jaffray & Co., a time of the distribution. Through December 31, 2005, the
broker-dealer subsidiary of Piper Jaffray Companies. In Company has paid approximately $4 million to Piper
addition, the Company provides an indemnification in an Jaffray Companies under this indemnification agreement.
RESTRICTIONS ON CASH AND DUE FROM BANKS
Bank subsidiaries are required to maintain minimum The amount of those reserve balances was approximately
average reserve balances with the Federal Reserve Bank. $164 million at December 31, 2005.
INVESTMENT SECURITIES
The detail of the amortized cost, gross unrealized holding gains and losses, and fair value of held-to-maturity and
available-for-sale securities at December 31 was as follows:
2005 2004
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
(Dollars in Millions) Cost Gains Losses Value Cost Gains Losses Value
Held-to-maturity (a)
Mortgage-backed securities ******************* $8 $— $—$8$11 $— $—$11
Obligations of state and political subdivisions **** 84 5 (1) 88 98 7 (2) 103
Other debt securities ************************* 17——17 18——18
Total held-to-maturity securities ************* $ 109 $ 5 $ (1) $ 113 $ 127 $ 7 $ (2) $ 132
Available-for-sale (b)
U.S. Treasury and agencies******************** $ 496 $ 2 $ (9) $ 489 $ 684 $ 3 $ (8) $ 679
Mortgage-backed securities ******************* 38,161 86 (733) 37,514 39,809 65 (337) 39,537
Asset-backed securities *********************** 12——12 64——64
Obligations of state and political subdivisions **** 640 3 (6) 637 205 6 — 211
Other securities and investments *************** 1,012 2 (7) 1,007 863 11 (11) 863
Total available-for-sale securities ************ $40,321 $93 $(755) $39,659 $41,625 $85 $(356) $41,354
(a) Held-to-maturity securities are carried at historical cost adjusted for amortization of premiums and accretion of discounts.
(b) Available-for-sale securities are carried at fair value with unrealized net gains or losses reported within other comprehensive income in shareholders’ equity.
U.S. BANCORP 71
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