Capital One 2005 Annual Report Download - page 83

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See Note 1, Significant Accounting Policies, for the accounting policies of the reportable segments.
Year Ended December 31, 2005
U.S. Card Auto
Finance
Global
Financial
Services Other Total
Managed Securitization
Adjustments Total
Reported
Net interest income $ 4,793,956 $ 1,149,377 $ 1,680,522 $ 31,599 $ 7,655,454 $ (3,975,212) $ 3,680,242
Non-interest income 3,321,457 19,951 1,022,756 195,234 4,559,398 1,798,707 6,358,105
Provision for loan loss s e
Non-interest expenses 2,279,109 459,513 925,777 3,178 3,667,577 (2,176,505) 1,491,072
3,356,600 506,480 1,496,678 358,515 5,718,273 — 5,718,273
Income tax provision (benefit)
870,351 71,268 94,796 (16,560) 1,019,855 — 1,019,855
Net income (loss) $ 1,609,353 $ 132,067 $ 186,027 $ (118,300) $ 1,809,147 $ — $ 1,809,147
Loans receivable $ 49,463,522 $ 16,372,019 $ 23,386,490 $ 16,305,460 $ 105,527,491 $ (45,679,810) $ 59,847,681
Year Ended December 31, 2004
U.S. Card Auto
Finance
Global
Financial
Services Other Total
Managed Securitization
Adjustments Total
Reported
Net interest income $ 4,655,897 $ 797,936 $ 1,421,508 $ (240,599) $ 6,634,742 $ (3,631,764) $ 3,002,978
Non-interest income 3,219,567 80,712 844,192 80,115 4,224,586
3,177,045 1,675,571 5,900,157
Provision for loan loss s e
Non-interest expenses 2,207,888 279,981 683,612 5,564 (1,956,193) 1,220,852
3,499,918 342,761 1,265,549 213,991 5,322,219 — 5,322,219
Income tax provision (benefit)
780,357 92,126 103,459 (159,360) 816,582 — 816,582
Net income (loss) $ 1,387,301 $ 163,780 $ 213,080 $ (220,679) $ 1,543,482 $ — $ 1,543,482
Loans receivable $ 48,609,571 $ 9,997,497 $ 21,240,325 $ 13,906 $ 79,861,299 $ (41,645,708) $ 38,215,591
Year Ended December 31, 2003
U.S. Card Auto
Finance
Global
Financial
Services Other Total
Managed Securitization
Adjustments Total
Reported
Net interest income $ 4,287,814 $ 727,987 $ 1,072,098 $ (49,985) $ 6,037,914 $ (3,252,825) $ 2,785,089
Non-interest income 3,583,357 101,984 605,821 (90,536) 4,200,626
3,555,024 1,215,298 5,415,924
Provision for loan loss s e
Non-interest expenses 2,647,406 382,952 595,543 (70,877) (2,037,527) 1,517,497
3,348,894 289,414 988,321 253,963 4,880,592 — 4,880,592
Income tax provision (benefit)
693,702 58,314 29,216 (114,150) 667,082 — 667,082
Net income (loss) $ 1,181,169 $ 99,291 $ 64,839 $ (209,457) $ 1,135,842 $ — $ 1,135,842
oans receivable $ 46,278,750 $ 8,466,873 $ 16,507,937 $ (8,764) $ 71,244,796 $ (38,394,527) $ 32,850,269 L
S
ignificant Segment Adjustments
he Gulf Coast Hurricanes’ Impacts T
As a result of the Gulf Coast Hurricanes of 2005, the Company recorded a $28.5 million allowance for loan losses and
recognized a $15.6 million write-down on retained interests related to its loan securitization programs. Of the additional
allowance build, $10.0 million was allocated to the U.S. Card segment, $2.5 million was allocated to the Global Financial
Services segment, and $16.0 million was allocated to the Auto Finance segment. The $15.6 million write-down of retained
interests was held in the Other category. The impact of the hurricanes on Hibernia was reflected in Hibernia’ s results prior to
the acquisition.
Bankruptcy Legislation Impacts
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“new bankruptcy legislation”) became effective in
October 2005. As a result, the Company experienced a significant increase in bankruptcy related charge-offs during 2005
hich is reflected in the provision for loan losses. The majority of the increase was allocated to the U.S. Card segment. w
N
on-recurring Operating Expense Items
During the year ended December 31, 2005 and 2004, the Company recognized non-interest expense of $76.3 million and
$161.2 million, respectively, for employee termination and facility consolidation charges related to continued cost reduction
initiatives and other less material one-time charges. Of these amounts, $41.7 million and $109.6 million was allocated to the
U.S. Card segment, $24.9 million and $45.4 million was allocated to the Global Financial Services segment, $8.5 million and
$4.5 million was allocated to the Auto Finance segment and the remainder was held in the Other category for the years ended
December 31, 2005 and 2004, respectively.
74