Capital One 2005 Annual Report Download - page 82

The following unaudited pro forma condensed statements of income assume that the Company and Hibernia were combined
t the beginning of the respective periods presented. a
Years ended
December 31
2005 2004
Net interest income $ 4,338,674 $ 3,696,867
Non-interest income 6,738,549 6,287,583
Provision for loan losses 1,728,864 1,269,102
Non-interest expense 6,402,653 6,030,969
Income taxes 1,060,403 929,379
Minority interest, net of income taxes (92) 76
Net income $ 1,885,395 $ 1,754,924
Basic earnings per share $ 6.55 $ 6.54
Diluted earnings per share $ 6.43 $ 6.21
(1) Pro forma adjustments include the following adjustments: accretion for loan fair value discount, reduction of interest income for amounts used to fund the
acquisition, amortization for interest-bearing deposits fair value premium, accretion for subordinated notes fair value premium, addition of interest expense for
other borrowings used to fund the acquisition, and related amortization for intangibles acquired, net of Hibernia’ s historical intangible amortization expense.
Other 2005 Acquisitions
During 2005, the Company closed acquisitions of Onyx Acceptance Corporation, a specialty auto loan originator; Hfs Group,
a United Kingdom based home equity broker; InsLogic, an insurance brokerage firm and eSmartloan, a U.S. based online
originator of home equity loans and mortgages, in all cash transactions. The acquisitions created approximately $391.4
discussion. These acquisitions when considered individually or in aggregate under relevant disclosure guidance do not
quire the presentation of separate pro forma financial information. re
Note 3
Segments
The Company maintains three distinct operating segments: U.S. Card, Auto Finance, and Global Financial Services. The U.S.
Card segment consists of domestic credit card lending activities. The Auto Finance segment consists of automobile and other
motor vehicle financing activities. The Global Financial Services segment consists of international lending activities, small
business lending, installment loans, home loans, healthcare financing and other diversified activities. The U.S. Card, Auto
Finance and Global Financial Services segments are considered reportable segments based on quantitative thresholds applied
to the managed loan portfolio for reportable segments provided by SFAS No. 131, Disclosures about Segments of an
Enterprise and Related Information, and are disclosed separately. The Other category includes the Company’ s liquidity
portfolio, emerging businesses not included in the reportable segments and the banking business recently added through the
acquisition of Hibernia Corporation, investments in external companies, and various non-lending activities. The Other
category also includes the net impact of transfer pricing, certain unallocated expenses and gains/losses related to the
curitization of assets. se
As management makes decisions on a managed portfolio basis within each segment, information about reportable segments
is provided on a managed basis. An adjustment to reconcile the managed financial information to the reported financial
information in the consolidated financial statements is provided. This adjustment reclassifies a portion of net interest income,
non-interest income and provision for loan losses into non-interest income from servicing and securitizations.
The Company maintains its books and records on a legal entity basis for the preparation of financial statements in conformity
with GAAP. The following tables present information prepared from the Company’ s internal management information
system, which is maintained on a line of business level through allocations from the consolidated financial results.
73
million of goodwill, in the aggregate. See Note 17 “Goodwill and Other Intangible Assets” on page 89 for further