US Bank 2015 Annual Report Download - page 65

The Company’s diversified deposit base provides a
sizeable source of relatively stable and low-cost funding, while
reducing the Company’s reliance on the wholesale markets.
Total deposits were $300.4 billion at December 31, 2015,
compared with $282.7 billion at December 31, 2014. Refer to
Table 14 and “Balance Sheet Analysis” for further information
on the Company’s deposits.
Additional funding is provided by long-term debt and
short-term borrowings. Long-term debt was $32.1 billion at
December 31, 2015, and is an important funding source
because of its multi-year borrowing structure. Refer to Note
13 of the Notes to Consolidated Financial Statements for
information on the terms and maturities of the Company’s
long-term debt issuances and “Balance Sheet Analysis” for
discussion on long-term debt trends. Short-term borrowings
were $27.9 billion at December 31, 2015, and supplement
the Company’s other funding sources. Refer to Note 12 of the
Notes to Consolidated Financial Statements and “Balance
Sheet Analysis” for information on the terms and trends of the
Company’s short-term borrowings.
The Company’s ability to raise negotiated funding at
competitive prices is influenced by rating agencies’ views of
the Company’s credit quality, liquidity, capital and earnings.
Table 21 details the rating agencies’ most recent
assessments.
In addition to assessing liquidity risk on a consolidated
basis, the Company monitors the parent company’s liquidity.
The parent company’s routine funding requirements consist
primarily of operating expenses, dividends paid to
shareholders, debt service, repurchases of common stock
and funds used for acquisitions. The parent company obtains
funding to meet its obligations from dividends collected from
its subsidiaries and the issuance of debt and capital
securities. The Company maintains sufficient funding to meet
expected parent company obligations, without access to the
wholesale funding markets or dividends from subsidiaries, for
12 months when forecasted payments of common stock
dividends are included and 24 months assuming dividends
were reduced to zero. The parent company currently has
available funds considerably greater than the amounts
required to satisfy these conditions.
Under United States Securities and Exchange Commission
rules, the parent company is classified as a “well-known
seasoned issuer,” which allows it to file a registration
statement that does not have a limit on issuance 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, 2015, parent company long-term debt
outstanding was $11.5 billion, compared with $13.2 billion at
December 31, 2014. The decrease was primarily due to the
maturity of $1.7 billion of medium-term notes. At
December 31, 2015, there was $1.9 billion of parent
company debt scheduled to mature in 2016. Future debt
maturities 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.
TABLE 22 CONTRACTUAL OBLIGATIONS
Payments Due By Period
At December 31, 2015 (Dollars in Millions)
One Year
or Less
Over One
Through
Three Years
Over Three
Through
Five Years
Over Five
Years Total
Contractual Obligations(a)
Long-term debt(b) .......................................... $ 6,359 $12,930 $3,552 $ 9,237 $32,078
Operating leases ........................................... 265 445 292 471 1,473
Benefit obligations(c) ........................................ 22 45 48 156 271
Time deposits ............................................. 25,158 5,182 2,495 3 32,838
Contractual interest payments(d) ............................... 841 990 657 1,015 3,503
Equity investment commitments .............................. 1,948 512 25 36 2,521
Other(e) ................................................... 199 243 70 130 642
Total .................................................. $34,792 $20,347 $7,139 $11,048 $73,326
(a) Unrecognized tax positions of $243 million at December 31, 2015, are excluded as the Company cannot make a reasonably reliable estimate of the period of cash settlement with the
respective taxing authority.
(b) Includes obligations under capital leases.
(c) Amounts only include obligations related to the unfunded non-qualified pension plans.
(d) Includes accrued interest and future contractual interest obligations.
(e) Primarily includes purchase obligations for goods and services covered by noncancellable contracts and contracts including cancellation fees.
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