US Bank 2009 Annual Report Download - page 55

capacity. “Well-known seasoned issuers” generally include
those companies with outstanding common securities with a
market value of at least $700 million held by non-affiliated
parties or those companies that have issued at least
$1 billion in aggregate principal amount of non-convertible
securities, other than common equity, in the last three years.
However, the parent company’s ability to issue debt and
other securities under a registration statement filed with the
United States Securities and Exchange Commission under
these rules is limited by the debt issuance authority granted
by the Company’s Board of Directors and/or the ALCO
policy.
At December 31, 2009, parent company long-term debt
outstanding was $14.5 billion, compared with $10.8 billion
at December 31, 2008. Long-term debt activity in 2009
included issuances of $2.7 billion of medium-term notes
guaranteed under the TLGP and $1.8 billion of notes not
guaranteed under this program, and $.5 billion of junior
subordinated debentures. These issuances were partially
offset by $1.0 billion of medium-term note maturities. Total
parent company debt scheduled to mature in 2010 is
$4.8 billion. These debt obligations may be met through
medium-term note and capital security issuances and
dividends from subsidiaries, as well as from parent company
cash and cash equivalents. During 2009, the Company
raised $2.7 billion through the sale of its common stock.
Federal banking laws regulate the amount of dividends
that may be paid by banking subsidiaries without prior
approval. The amount of dividends available to the parent
company from its banking subsidiaries after meeting the
regulatory capital requirements for well-capitalized banks
was approximately $2.8 billion at December 31, 2009. For
further information, see Note 23 of the Notes to
Consolidated Financial Statements.
Off-Balance Sheet Arrangements Off-balance sheet
arrangements include any contractual arrangement to which
an unconsolidated entity is a party, under which the
Company has an obligation to provide credit or liquidity
enhancements or market risk support. Off-balance sheet
arrangements include certain defined guarantees, asset
securitization trusts and conduits. Off-balance sheet
arrangements also include any obligation under a variable
interest held by an unconsolidated entity that provides
financing, liquidity, credit enhancement or market risk
support.
In the ordinary course of business, the Company enters
into an array of commitments to extend credit, letters of
credit and various forms of guarantees that may be
considered off-balance sheet arrangements. The nature and
extent of these arrangements are provided in Note 22 of the
Notes to Consolidated Financial Statements.
The Company has not significantly utilized asset
securitizations or conduits as a source of funding. The
Company sponsors an off-balance sheet conduit to which it
transferred high-grade investment securities in previous
years, initially funded by the conduit’s issuance of
commercial paper. The conduit held assets of $.6 billion at
December 31, 2009, compared with $.8 billion at
December 31, 2008. During 2008, the conduit ceased issuing
commercial paper and began to draw upon a Company-
provided liquidity facility to replace outstanding commercial
paper as it matured. At December 31, 2009, the amount
advanced to the conduit under the liquidity facility was
$.7 billion, compared with $.9 billion at December 31,
2008, and was recorded on the Company’s balance sheet in
commercial loans.
Under accounting rules applicable through 2009, the
Company considered the conduit to be a variable interest
U.S. BANCORP 53
Table 19 Contractual Obligations
December 31, 2009 (Dollars in Millions)
One Year
or Less
Over One
Through
Three Years
Over Three
Through
Five Years
Over Five
Years Total
Payments Due By Period
Contractual Obligations (a)
Long-term debt (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,473 $9,030 $5,076 $12,001 $32,580
Capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 13 9 16 45
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 321 250 379 1,141
Purchase obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 142 38 – 309
Benefit obligations (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 77 82 224 418
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,835 $9,583 $5,455 $12,620 $34,493
(a) Unrecognized tax positions of $440 million at December 31, 2009, are excluded as the Company cannot make a reasonably reliable estimate of the period of cash settlement with the
respective taxing authority.
(b) In the banking industry, interest-bearing obligations are principally utilized to fund interest-bearing assets. As such, interest charges on related contractual obligations were excluded
from reported amounts as the potential cash outflows would have corresponding cash inflows from interest-bearing assets.
(c) Amounts only include obligations related to the unfunded non-qualified pension plans and post-retirement medical plan.