US Bank 2006 Annual Report Download - page 88

Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to
Accumulated Other Comprehensive Income. The reconciliation of the transactions affecting Accumulated Other
Comprehensive Income included in shareholders’ equity for the years ended December 31, is as follows:
Transactions Balances
(Dollars in Millions) Pre-tax Tax-effect Net-of-tax Net-of-Tax
2006
Unrealized gain on securities available-for-sale **************************************** $ 67 $ (25) $ 42 $(370)
Unrealized gain on derivatives ***************************************************** 35 (14) 21 (6)
Foreign currency translation adjustment ********************************************* (30) 11 (19) (12)
Realized loss on derivatives ******************************************************* (199) 75 (124) (77)
Reclassification adjustment for losses realized in net income **************************** 33 (12) 21 –
Change in retirement obligation **************************************************** (398) 150 (248) (271)
Total ********************************************************************** $(492) $185 $(307) $(736)
2005
Unrealized loss on securities available-for-sale **************************************** $(539) $205 $(334) $(402)
Unrealized loss on derivatives ***************************************************** (58) 22 (36) (27)
Foreign currency translation adjustment ********************************************* 3(1)27
Realized loss on derivatives ******************************************************* (74) 28 (46) 16
Reclassification adjustment for losses realized in net income **************************** 39 (15) 24 –
Minimum pension liability adjustment *********************************************** (38) 15 (23) (23)
Total ********************************************************************** $(667) $254 $(413) $(429)
2004
Unrealized loss on securities available-for-sale **************************************** $(123) $ 47 $ (76) $(135)
Unrealized loss on derivatives ***************************************************** (43) 16 (27) 9
Foreign currency translation adjustment ********************************************* (17) 6 (11) 5
Realized gain on derivatives******************************************************* 16 (6) 10 105
Reclassification adjustment for losses realized in net income **************************** 32 (12) 20 –
Total ********************************************************************** $(135) $ 51 $ (84) $ (16)
Regulatory Capital The measures used to assess capital The following table provides the components of the
include the capital ratios established by bank regulatory Company’s regulatory capital:
agencies, including the specific ratios for the ‘‘well December 31
capitalized’’ designation. Capital adequacy for the Company (Dollars in Millions) 2006 2005
and its banking subsidiaries is measured based on two risk- TIER 1 CAPITAL
based measures, Tier I and total risk-based capital. Tier I Common shareholders’ equity **************** $ 20,197 $ 20,086
capital is considered core capital and includes common Qualifying preferred stock******************** 1,000 –
shareholders’ equity plus qualifying preferred stock, trust Qualifying trust preferred securities ************ 3,639 3,057
preferred securities and minority interests in consolidated Minority interests ************************** 694 215
subsidiaries (included in other liabilities and subject to Less intangible assets
certain limitations), and is adjusted for the aggregate impact Goodwill ****************************** (7,423) (7,005)
of certain items included in other comprehensive income. Other disallowed intangible assets********** (1,640) (1,508)
Total risk-based capital includes Tier I capital and other Other(a) ********************************** 569 300
items such as subordinated debt and the allowance for Total Tier 1 Capital******************* 17,036 15,145
credit losses. Both measures are stated as a percentage of TIER 2 CAPITAL
risk-adjusted assets, which are measured based on their Allowance for credit losses******************* 2,256 2,251
perceived credit risk and include certain off-balance sheet Eligible subordinated debt ******************* 5,199 5,659
exposures, such as unfunded loan commitments, letters of Other ************************************ 41
credit, and derivative contracts. The Company is also
Total Tier 2 Capital ******************* 7,459 7,911
subject to a leverage ratio requirement, a non risk-based
asset ratio, which is defined as Tier I capital as a percentage Total Risk Based Capital*************** $ 24,495 $ 23,056
of average assets adjusted for goodwill and other non- RISK-WEIGHTED ASSETS *********************** $194,659 $184,353
qualifying intangibles and other assets. (a) Includes the impact of items included in other comprehensive income, such as
unrealized gains(losses) on available-for-sale securities, accumulated net gains on cash
flow hedges, pension liability adjustments, etc.
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