Capital One 2006 Annual Report Download - page 23

5
PART I
Item 1. Business.
Overview
Capital One Financial Corporation (the Corporation) is a diversified financial services company, incorporated in Delaware
on July 21, 1994, whose banking and non-banking subsidiaries market a variety of financial products and services. The
Corporations principal subsidiaries include Capital One Bank (the Bank), a Virginia state chartered bank that currently
offers credit card products and deposit products and also can engage in a wide variety of lending and other financial
activities; Capital One, F.S.B. (the Savings Bank), a federally chartered savings bank that offers consumer and commercial
lending and consumer deposit products; Capital One Auto Finance, Inc. (COAF), which offers automobile and other motor
vehicle financing products; Capital One, N.A. (CONA), a national association that offers a broad spectrum of financial
products and services to consumers, small businesses and commercial clients; and North Fork Bank (North Fork Bank), a
New York state chartered non-member bank that provides a broad range of deposit and lending services for consumer,
commercial and small business customers. Capital One Services, Inc. (COSI), another subsidiary of the Corporation,
provides various operating, administrative and other services to the Corporation and its subsidiaries. The Corporation and its
subsidiaries are collectively referred to as the Company. Unless indicated otherwise, the terms Corporation, we, us,
and our refer to the Corporation and its consolidated subsidiaries.
The Corporation became a financial holding company on May 27, 2005, thereby giving the Corporation the authority to
engage in certain activities that are not permissible for bank holding companies.
As of December 31, 2006, we had $85.8 billion in deposits and $146.2 billion in managed loans outstanding. We are among
the largest issuers of Visa® (Visa) and MasterCard® (MasterCard) credit cards in the United States based on managed
credit card loans outstanding, and we are the 11th largest depository institution in the United States.
We offer our products throughout the United States. We also offer our products outside of the United States principally
through Capital One Bank (Europe) plc, an indirect subsidiary of the Bank organized and located in the United Kingdom (the
U.K. Bank), and through a branch of the Bank in Canada. Our U.K. Bank has authority, among other things, to accept
deposits and provide credit card and installment loans. Important factors underlying the growth of our lending and deposit
activities include strategic acquisitions, industry dynamics, including the level of competition, and our customer oriented
business strategies and brand.
Our common stock is listed on the New York Stock Exchange under the symbol COF. Our principal executive office is
located at 1680 Capital One Drive, McLean, Virginia 22102 (telephone number [phone]). The Corporation maintains
a website at www.capitalone.com. Documents available on our website include (i) Codes of Business Conduct and Ethics for
the Corporation; (ii) the Corporations Corporate Governance Principles; and (iii) charters for the Audit and Risk,
Compensation, Finance and Trust Oversight, and Governance and Nominating Committees. These documents are also
available in print to any shareholder who requests a copy. In addition, we make available free of charge through our website
our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those
reports as soon as reasonably practicable after electronic filing or furnishing of such material with the SEC.
Business Description
Capital One is one of the largest financial services franchises in the United States. We are a diversified financial services
corporation focused primarily on consumer and commercial lending and deposit origination. Our principal business segments
are domestic credit card lending, automobile and other motor vehicle financing, global financial services and banking. For
further discussion of our segments, see pages 41-46 in Item 7 Managements Discussion and Analysis of Financial
Condition and Results of OperationsReportable Segment Summary and pages 78-81 in Item 8 Financial Statements and
Supplementary DataNotes to the Consolidated Financial StatementsNote 3.
U.S. Card Segment. We offer a wide variety of credit card products throughout the United States, which we customize to
appeal to different consumer preferences and needs. Our product offerings are supported by extensive brand advertising. We
routinely test new products to develop ones that appeal to different and changing consumer preferences. Our customized
products include both products offered to a wide range of consumer credit risk profiles, as well as products aimed at special
consumer interests. Our pricing strategies are risk-based; lower risk customers may likely be offered products with more
favorable pricing and we expect these products to yield lower delinquencies and credit losses. On products offered to higher
risk customers, however, we are likely to experience higher delinquencies and losses, and we price these products
accordingly.