Capital One 2002 Annual Report Download - page 29

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Year Ended December 31
(In Thousands) 2002 2001 2000 1999 1998
Year-End Balances:
Reported consumer loans:
Domestic $ 25,044,101 $ 18,546,426 $ 12,591,561 $ 7,783,535 $ 4,569,664
International 2,809,551 2,374,588 2,521,151 2,130,014 1,587,447
Total 27,853,652 20,921,014 15,112,712 9,913,549 6,157,111
Off-balance sheet consumer loans:
Domestic 29,371,895 22,747,293 13,961,714 10,013,424 10,933,984
International 2,520,990 1,595,656 449,600 309,615 304,031
Total 31,892,885 24,342,949 14,411,314 10,323,039 11,238,015
Managed consumer loan portfolio:
Domestic 54,415,996 41,293,719 26,553,275 17,796,959 15,503,648
International 5,330,541 3,970,244 2,970,751 2,439,629 1,891,478
Total $ 59,746,537 $ 45,263,963 $ 29,524,026 $ 20,236,588 $ 17,395,126
Average Balances:
Reported consumer loans:
Domestic $ 22,711,141 $ 14,648,298 $ 9,320,165 $ 5,784,662 $ 4,336,757
International 2,828,855 2,636,008 2,167,611 1,882,693 1,011,802
Total 25,539,996 17,284,306 11,487,776 7,667,355 5,348,559
Off-balance sheet consumer loans:
Domestic 25,348,865 17,718,683 10,804,845 10,062,771 9,773,284
International 1,910,705 609,328 342,241 316,787 87,694
Total 27,259,570 18,328,011 11,147,086 10,379,558 9,860,978
Managed consumer loan portfolio:
Domestic 48,060,006 32,366,981 20,125,010 15,847,433 14,110,041
International 4,739,560 3,245,336 2,509,852 2,199,480 1,099,496
Total $ 52,799,566 $ 35,612,317 $ 22,634,862 $ 18,046,913 $ 15,209,537
The Company actively engages in off-balance sheet consumer loan
securitization transactions. Securitizations involve the transfer of a pool of
loan receivables by the Company to an entity created for securitizations,
generally a trust or other special purpose entity (“the trusts”). The credit
quality of the receivables is supported by credit enhancements, which may be
in various forms including interest-only strips, subordinated interests in the
pool of receivables, cash collateral accounts, and accrued interest and fees on
the investor’s share of the pool of receivables. Securities ($31.9 billion
outstanding as of December 31, 2002) representing undivided interests in
the pool of consumer loan receivables are sold to the public through an
underwritten offering or to private investors in private placement
transactions. The Company receives the proceeds of the sale as payment for
the receivables transferred. In certain securitizations, the Company retains an
interest in the entity to which it transferred receivables (“seller’s interest”)
equal to the amount of the outstanding receivables transferred to the trust in
excess of the principal balance of the securities outstanding. For
securitizations backed by a revolving pool of assets, the Company’s seller’s
interest varies as the amount of the excess receivables in the trusts fluctuates
as the accountholders make principal payments and incur new charges on the
selected accounts. A securitization backed by non-revolving amortizing assets,
such as auto loans, generally does not include a seller’s interest, as obligor
principal payments are generally paid to investors on a monthly basis. A
securitization accounted for as a sale in accordance with SFAS 140 results in
the removal of the receivables, other than any applicable seller’s interest, from
the Company’s balance sheet for financial and regulatory accounting
purposes and recording of any additional retained interests.
Table 3 summarizes the Company’s managed consumer loan portfolio.
Table 3: Managed Consumer Loan Portfolio