Capital One 2004 Annual Report Download - page 48

With the exception of the American Express civil antitrust lawsuit, the Company and its affiliates are not parties
to the suits described above and therefore will not be directly liable for any amount related to any possible or
known settlements, the suits filed by merchants who have opted out of the settlements of those suits, or the class
action suits pending in state and federal courts. However, the banks are member banks of MasterCard and Visa
and thus may be affected by settlements or suits relating to these issues. In addition, it is possible that the scope
of these suits may expand and that other member banks, including the Company, may be brought into the suits or
future suits. Given the complexity of the issues raised by these suits and the uncertainty regarding: (i) the
outcome of these suits, (ii) the likelihood and amount of any possible judgment against the associations, (iii) the
likelihood and the amount and validity of any claim against the associations’ member banks, including the
Company, and (iv) the effects of these suits, in turn, on competition in the industry, member banks, and
interchange and association fees, we cannot determine at this time the long-term effects of these suits on us.
Fluctuations in Our Expenses and Other Costs May Hurt Our Financial Results
Our expenses and other costs, such as operating and marketing expenses, directly affect our earnings results. In
light of the extremely competitive environment in which we operate, and because the size and scale of many of
our competitors provides them with increased operational efficiencies, it is important that we are able to
successfully manage such expenses. Many factors can influence the amount of our expenses, as well as how
quickly they grow. For example, further increases in postal rates or termination of our negotiated service
arrangement with the United States Postal Service could raise our costs for postal service. As our business
develops, changes or expands, additional expenses can arise from management of outsourced services, asset
purchases, structural reorganization, a reevaluation of business strategies and/or expenses to comply with new or
changing laws or regulations. Other factors that can affect the amount of our expenses include legal and
administrative cases and proceedings, which can be expensive to pursue or defend. In addition, changes in
accounting fluctuations can significantly affect how we calculate expenses and earnings.
Statistical Information
The statistical information required by Item 1 can be found in Item 6 “Selected Financial Data”, Item 7
“Management Discussion and Analysis of Financial Condition and Results of Operations” and in Item 8,
“Financial Statements and Supplementary Data”, as follows:
I. Distribution of Assets, Liabilities and
Stockholders’ Equity; Interest Rates and Interest
Differential pages 36-37
II. Investment Portfolio page 70
III. Loan Portfolio pages 36-37; 40-41; 43-45; 56-57; 64-65
IV. Summary of Loan Loss Experience pages 43-45; 72
V. Deposits pages 48-49; 73-75
VI. Return on Equity and Assets page 27
VII. Other Borrowings pages 47-49; 73-75
Item 2. Properties.
We lease our new, 570,000 square foot, headquarters building at 1680 Capital One Drive, McLean, Virginia. The
building houses our primary executive offices and Northern Virginia staff, and is leased through December 2010,
with the right to purchase at a fixed cost at the end of the lease term.
Additionally, we own approximately 316 acres of land in Goochland County, Virginia purchased for the
construction of an office campus to consolidate certain operations in the Richmond area. In 2002, two office
buildings and a support facility consisting of approximately 365,000 square feet were completed and occupied. In
2003 four office buildings and a training center consisting of approximately 690,000 square feet were completed
and occupied. In 2004, one additional office building consisting of approximately 130,000 square feet was
completed with expected occupancy in the first quarter of 2005.
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