US Bank 2006 Annual Report Download - page 28

Note 16 of the Notes to Consolidated Financial Statements provides a summary of the significant pension plan assumptions.
Because of the subjective nature of plan assumptions, a sensitivity analysis to hypothetical changes in the LTROR and the
discount rate is provided below:
Base
LTROR (Dollars in Millions) 6.9% 7.9% 8.9% 9.9% 10.9%
Incremental benefit (cost)******************************************************************** $ (45) $ (22) $ – $ 22 $ 45
Percent of 2006 net income ****************************************************************** (.59)% (.29)% –% .29% .59%
Base
DISCOUNT RATE (Dollars in Millions) 4.0% 5.0% 6.0% 7.0% 8.0%
Incremental benefit (cost)******************************************************************** $ (111) $ (50) $ – $ 40 $ 71
Percent of 2006 net income ****************************************************************** (1.45)% (.65)% –% .52% .93%
Due to the complexity of forecasting pension plan Included in 2006 was a reduction of income tax
activities, the accounting method utilized for pension plans, expense of $61 million related to the resolution of federal
management’s ability to respond to factors impacting the income tax examinations covering substantially all of the
plans and the hypothetical nature of this information, the Company’s legal entities for all years through 2004 and
actual changes in periodic pension costs could be different $22 million related to certain state examinations. Included
than the information provided in the sensitivity analysis. in the determination of income taxes for 2005 and 2004
were reductions of income tax expense of $94 million and
Income Tax Expense The provision for income taxes was $106 million, respectively, related to the resolution of
$2,112 million (an effective rate of 30.8 percent) in 2006, income tax examinations. The Company anticipates that its
compared with $2,082 million (an effective rate of effective tax rate for the foreseeable future will approximate
31.7 percent) in 2005 and $2,009 million (an effective rate 32 percent of pretax earnings.
of 32.5 percent) in 2004. The decrease in the effective tax For further information on income taxes, refer to
rate from 2005 primarily reflected higher tax exempt Note 18 of the Notes to Consolidated Financial Statements.
income from investment securities and insurance products
as well as incremental tax credits from affordable housing
and other tax-advantaged investments.
LOAN PORTFOLIO DISTRIBUTION
2006 2005 2004 2003 2002
Percent Percent Percent Percent Percent
At December 31 (Dollars in Millions) Amount of Total Amount of Total Amount of Total Amount of Total Amount of Total
COMMERCIAL
Commercial************************************ $ 40,640 28.3% $ 37,844 27.7% $ 35,210 28.2% $ 33,536 28.7% $ 36,584 31.8%
Lease financing ******************************** 5,550 3.9 5,098 3.7 4,963 4.0 4,990 4.3 5,360 4.7
Total commercial **************************** 46,190 32.2 42,942 31.4 40,173 32.2 38,526 33.0 41,944 36.5
COMMERCIAL REAL ESTATE
Commercial mortgages ************************** 19,711 13.7 20,272 14.9 20,315 16.3 20,624 17.6 20,325 17.7
Construction and development ******************** 8,934 6.2 8,191 6.0 7,270 5.8 6,618 5.7 6,542 5.7
Total commercial real estate ******************* 28,645 19.9 28,463 20.9 27,585 22.1 27,242 23.3 26,867 23.4
RESIDENTIAL MORTGAGES
Residential mortgages *************************** 15,316 10.7 14,538 10.7 9,722 7.8 7,332 6.3 6,446 5.6
Home equity loans, first liens ********************* 5,969 4.1 6,192 4.5 5,645 4.5 6,125 5.2 3,300 2.9
Total residential mortgages ******************** 21,285 14.8 20,730 15.2 15,367 12.3 13,457 11.5 9,746 8.5
RETAIL
Credit card ************************************ 8,670 6.0 7,137 5.2 6,603 5.3 5,933 5.1 5,665 4.9
Retail leasing ********************************** 6,960 4.9 7,338 5.4 7,166 5.7 6,029 5.2 5,680 4.9
Home equity and second mortgages**************** 15,523 10.8 14,979 11.0 14,851 11.9 13,210 11.3 13,572 11.8
Other retail
Revolving credit***************************** 2,563 1.8 2,504 1.8 2,541 2.0 2,540 2.2 2,650 2.3
Installment********************************* 4,478 3.1 3,582 2.6 2,767 2.2 2,380 2.0 2,258 2.0
Automobile ******************************** 8,693 6.1 8,112 6.0 7,419 5.9 7,165 6.1 6,343 5.5
Student *********************************** 590 .4 675 .5 469 .4 329 .3 180 .2
Total other retail ************************* 16,324 11.4 14,873 10.9 13,196 10.5 12,414 10.6 11,431 10.0
Total retail ********************************* 47,477 33.1 44,327 32.5 41,816 33.4 37,586 32.2 36,348 31.6
Total loans ***************************** $143,597 100.0% $136,462 100.0% $124,941 100.0% $116,811 100.0% $114,905 100.0%
26 U.S. BANCORP
Table 6