Capital One 2005 Annual Report Download - page 84

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During 2005, the Company closed on the sale of its Tampa, Florida facilities. The ultimate sales price was greater than the
impaired value of the held-for-sale property, and as such, the Company reversed $18.8 million of its previously recorded
2004 impairment in Occupancy expense. Of this amount, $17.4 million was allocated to the U.S. Card segment, $1.3 million
was allocated to the Global Financial Services segment, and the remainder of the balance was held in the Other category.
During 2005, the Company recognized a $20.6 million prepayment penalty for the refinancing of the McLean Headquarters
facility. Of this amount, $16.8 million was allocated to the U.S. Card segment, $2.7 million was allocated to the Global
Financial Services segment, $0.6 million was allocated to the Auto Finance segment, and the remainder of the balance was
eld in the Other category. h
During 2005, the Company recognized a $28.2 million impairment charge related to the write-off of the Company’ s
insurance brokerage business. The charge was recorded in non-interest expense and fully allocated to the Global Financial
Services segment.
Other
During, 2005, the Company sold previously purchased charged-off loan portfolios resulting in a gain of $34.0 million which
as reported in non-interest income and held in the Other category. w
During 2004, the Company sold its interest in a South African joint venture with a book value of $3.9 million to its joint
venture partner. The Company received $26.2 million in cash, was forgiven $9.2 million in liabilities and recognized a pre-
tax gain of $31.5 million. Also during 2004, the Company sold its French loan portfolio with a book value of $144.8 million
to an external party. The Company received $178.7 million in cash, recorded $7.2 million in notes receivables and recognized
a pre-tax gain of $41.1 million. The respective gains were recorded in non-interest income and reported in the Global
Financial Services segment.
A $15.0 million ($23.9 million pre-tax) charge for the cumulative effect of a change in accounting principle related to the
adoption of FIN 46 was included in non-interest expense and reported in the Other category for segment reporting for the
year ended December 31, 2003.
A
uto Loans
During the years ended December 31, 2005, 2004 and 2003, the Company sold auto loans of $257.7 million, $901.3 million
and $1.9 billion, respectively. These transactions resulted in pre-tax gains allocated to the Auto Finance segment, inclusive of
allocations related to funds transfer pricing of $4.5 million, $41.7 million and $57.3 million in 2005, 2004 and 2003,
respectively. In addition the Company recognized an additional $12.5 million in gains related to the settlement of
ontingencies from prior period sales of auto receivables for the year ended December 31, 2005. c
During the year ended December 31, 2004, the Company changed its practice for charging-off auto loans when notified of a
bankruptcy. Auto loans in bankruptcy are now charged-off at 120 days past due. This change in practice resulted in the
cceleration of $20.4 million in charge-offs for the Auto Finance segment in 2004. a
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