US Bank 2007 Annual Report Download - page 9

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U.S. BANCORP 7
The financial highlights charts on page 4 and the financial summary on page 5 provide you with a
snapshot of our 2007 performance, but I would like to note two significant items that had an impact
on our results for 2007. We recorded a $107 million asset valuation loss in the fourth quarter related
to the purchase of certain asset-backed commercial paper holdings from several money market funds
managed by our subsidiary FAF Advisors. We also reported charges totaling $330 million representing
our proportionate share of litigation expense involving Visa®and a number of other Visa®banks.
These Visa®-related charges should be more than offset by the Company’s proportionate share of the
gains that will be recognized from Visa’s initial public offering, anticipated to be completed during
2008. Neither the valuation losses nor Visa®charges reflected the fundamental performance of our
businesses. Together, these items reduced 2007 earnings per share by $.17.
As we manage through these uncertain times, you may be assured that I, the board of directors and
senior leaders of our Company will continue to manage U.S. Bancorp with transparency, the highest
levels of risk management and the long-term future of the Company as our priorities. We are not
exiting businesses; we are expanding them. We are not pulling back investments in our Company;
we are increasing resources to grow revenue, build relationships, innovate and expand.
To lead our investments in growth initiatives, in 2007 we established a new division, the Enterprise
Revenue Office or ERO, reporting to me. The ERO focuses on developing new ways to build deeper
customer relationships, including new product design, and revenue sharing and incentives within
the Company. We expect these to add hundreds of millions of dollars of incremental revenue over
the next several years.
I believe that the long-term success of our Company lies in our ability to leverage the skill, attitude and
common sense of purpose of our extraordinary employees — all 54,000 of us. I want to ensure that each
employee has everything he or she needs to excel, by creating a professional, stimulating and challenging
workplace focused on employees and their personal and professional growth and performance.
We are investing in the talent and technology that will create competitive advantages. We are building our
communities. We are expanding our capabilities while holding fast to a corporate culture that values
integrity, transparency, people and performance. I believe that’s the kind of company that will best increase
the value of your investment in U.S. Bancorp and the kind of company you can be most proud of.
Our goal is to deliver earnings and a return on your investment that are consistent, predictable and repeatable.
Sincerely,
Richard K. Davis
Chairman, President and Chief Executive Officer
February 25, 2008