US Bank 2009 Annual Report Download - page 99

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Shareholders’ equity is affected by transactions and valuations of asset and liability positions that require adjustments to
accumulated other comprehensive income (loss). The reconciliation of the transactions affecting accumulated other
comprehensive income (loss) included in shareholders’ equity for the years ended December 31, was as follows:
(Dollars in Millions) Pre-tax Tax-effect Net-of-tax
Balances
Net-of-Tax
Transactions
2009
Changes in unrealized gains and losses on securities available-for-sale . . . . . . . . . . . . . $ 2,131 $ (810) $ 1,321 $ (393)
Other-than-temporary impairment not recognized in earnings on securities
available-for-sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (402) 153 (249) –
Unrealized gain on derivative hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516 (196) 320 (319)
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 (15) 25 (53)
Realized loss on derivative hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – (8)
Reclassification for realized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 (173) 283 –
Change in retirement obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290 (111) 179 (711)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,031 $(1,152) $ 1,879 $(1,484)
2008
Changes in unrealized gains and losses on securities available-for-sale . . . . . . . . . . . . . $(2,729) $ 1,037 $(1,692) $(1,745)
Unrealized loss on derivative hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (722) 274 (448) (639)
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (117) 45 (72) (78)
Realized loss on derivative hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15) 6 (9) (11)
Reclassification for realized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,020 (388) 632 –
Change in retirement obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,357) 519 (838) (890)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(3,920) $ 1,493 $(2,427) $(3,363)
2007
Changes in unrealized gains and losses on securities available-for-sale . . . . . . . . . . . . . $ (482) $ 183 $ (299) $ (659)
Unrealized loss on derivative hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (299) 115 (184) (191)
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 (3) 5 (6)
Realized loss on derivative hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . – – – (28)
Reclassification for realized losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 (38) 58 –
Change in retirement obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 (132) 220 (52)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (325) $ 125 $ (200) $ (936)
Regulatory Capital The measures used to assess capital by
bank regulatory agencies include two principal risk-based
ratios, Tier 1 and total risk-based capital. Tier 1 capital is
considered core capital and includes common shareholders’
equity plus qualifying preferred stock, trust preferred
securities and noncontrolling interests in consolidated
subsidiaries (subject to certain limitations), and is adjusted
for the aggregate impact of certain items included in other
comprehensive income (loss). Total risk-based capital
includes Tier 1 capital and other items such as subordinated
debt and the allowance for credit losses. Both measures are
stated as a percentage of risk-adjusted assets, which are
measured based on their perceived credit risk and include
certain off-balance sheet exposures, such as unfunded loan
commitments, letters of credit, and derivative contracts. The
Company is also subject to a leverage ratio requirement, a non
risk-based asset ratio, which is defined as Tier 1 capital as a
percentage of average assets adjusted for goodwill and other
non-qualifying intangibles and other assets.
For a summary of the regulatory capital requirements
and the actual ratios as of December 31, 2009 and 2008, for
the Company and its bank subsidiaries, see Table 20
included in Management’s Discussion and Analysis, which is
incorporated by reference into these Notes to Consolidated
Financial Statements.
U.S. BANCORP 97