Capital One 2006 Annual Report Download - page 116

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98
Securities of approximately 4,538,000, 1,862,000 and 218,000 during 2006, 2005 and 2004, respectively, were not included
in the computation of diluted earnings per share because their inclusion would be antidilutive.
Note 16
Cumulative Other Comprehensive Income
The following table presents the cumulative balances of the components of other comprehensive income, net of deferred tax
of $45.1 million, $22.2 million and $8.7 million as of December 31, 2006, 2005, and 2004, respectively:
As of December 31 2006 2005 2004
Unrealized losses on securities $ (47,134) $ (71,253) $ (16,377)
Net unrecognized elements of defined benefit plans 3,439
Foreign currency translation adjustments 291,759 45,693 158,882
Unrealized gains on cash flow hedging instruments 18,116 31,689 2,254
Total cumulative other comprehensive income $ 266,180 $ 6,129 $ 144,759
During 2006, 2005 and 2004, the Company reclassified $10.1 million, $32.2 million and $(118.0) million, respectively of net
gains (losses), after tax, on derivative instruments from cumulative other comprehensive income into earnings.
During 2006, 2005 and 2004, the Company reclassified $(81.9) million, $(3.0) million and $2.6 million, respectively of net
(losses) gains on sales of securities, after tax, from cumulative other comprehensive income into earnings.
Note 17
Goodwill and Other Intangible Assets
The following table provides a summary of goodwill.
U.S. Card
Auto
Finance
Global
Financial
Services Banking Other Total
Balance at December 31, 2004 $  $ 218,957 $ 133,200 $  $  $ 352,157
Additions 109,235 291,588 3,188,334 3,589,157
Impairment Loss (25,490) (25,490)
Foreign Currency Translation (9,425) (9,425)
Balance at December 31, 2005 $  $ 328,192 $ 389,873 $  $ 3,188,334 $ 3,906,399
Transfers 762,284 431,661 352,048 1,642,341 (3,188,334)
Additions 9,732,627 9,732,627
Adjustments 3,795 (18,413) (14,618)
Foreign Currency Translation 11,027 11,027
Balance at December 31, 2006 $ 762,284 $ 763,648 $ 752,948 $ 1,623,928 $ 9,732,627 $ 13,635,435
During 2006, the Company acquired North Fork Bancorporation, Inc., a commercial and retail bank in New York, which
created $9.7 billion of goodwill, in the aggregate. The goodwill associated with the acquisition of North Fork is being held in
the Other category at December 31, 2006. In addition, purchase accounting adjustments of $(18.4) million associated with the
acquisition of Hibernia Corporation in 2005 were allocated to the Banking segment and $3.8 million associated with the
acquisition of Onyx Acceptance Corporation were allocated to the Auto Finance segment.
Goodwill associated with the 2005 acquisition of Hibernia was allocated during 2006 across the operating segments. This
allocation was based on the increased relative fair value of the segments post-acquisition.
Goodwill impairment is tested at the reporting unit level on an annual basis according to SFAS 142. For the year 2006, there
was no impairment recognized.
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; eSmartloan, a U.S. based online
originator of home equity loans and mortgages; and Hibernia Corporation, a retail bank in Louisiana, which created
approximately $3.6 billion of goodwill, in the aggregate. The goodwill associated with the acquisition of Hibernia