Capital One 2008 Annual Report Download - page 128

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Premises and equipment were as follows:
December 31
2008
2007
Land ....................................................................................................................................................... $ 424,409 $ 402,422
Buildings and improvements ................................................................................................................. 1,529,827 1,392,666
Furniture and equipment........................................................................................................................ 1,144,606 1,067,299
Computer software................................................................................................................................. 836,465 745,061
In process............................................................................................................................................... 257,333 335,755
4,192,640
3,943,203
Less: Accumulated depreciation and amortization ................................................................................ (1,879,534) (1,643,600)
Total premises and equipment, net ........................................................................................................ $ 2,313,106 $ 2,299,603
Depreciation and amortization expense from continuing operations was $331.2 million, $308.8 million, and $269.6 million, for the
years ended December 31, 2008, 2007 and 2006, respectively.
In 2007, the Company discontinued operations for the majority of the GreenPoint Mortgage business. As a result, the loss on
discontinued operations for 2007 includes the write-off of premises and equipment of $34.6 million (includes $63.3 million of write-
off in premises and equipment net of $28.7 million of accumulated depreciation and amortization write-off).
Lease Commitments
Certain premises and equipment are leased under agreements that expire at various dates through 2035, without taking into
consideration available renewal options. Many of these leases provide for payment by the lessee of property taxes, insurance
premiums, cost of maintenance and other costs. In some cases, rentals are subject to increases in relation to a cost of living index.
Total rent expense from continuing operations amounted to $163.8 million, $136.1 million and $58.7 million for the years ended
December 31, 2008, 2007 and 2006, respectively.
Future minimum rental commitments as of December 31, 2008, for all non-cancelable operating leases with initial or remaining terms
of one year or more are as follows:
2009.................................................................................................................................................................
.
$ 132,780
2010.................................................................................................................................................................
.
124,581
2011.................................................................................................................................................................
.
117,092
2012.................................................................................................................................................................
.
113,816
2013.................................................................................................................................................................
.
109,119
Thereafter ........................................................................................................................................................
.
634,441
Total ................................................................................................................................................................
.
$ 1,231,829
Minimum sublease rental income of $23.5 million, due in future years under noncancelable leases, has not been included in the table
above as a reduction to minimum lease payments.
Note 7
Goodwill and Other Intangible Assets
In 2006, the Company acquired North Fork Bancorporation, Inc., (North Fork) a commercial and retail bank in New York, which
created $9.7 billion of goodwill. The goodwill associated with the acquisition of North Fork was held in the Other category at the end
of 2006. The North Fork acquisition goodwill was allocated across the reportable segments during 2007. Goodwill associated with the
2005 acquisition of Hibernia Corporation of $3.2 billion was allocated across the reportable segments during 2006. Goodwill was
reallocated as part of our segment reorganization in the first quarter of 2008.
Goodwill impairment is tested at the reporting unit level, which is an operating segment or one level below on an annual basis in
accordance with SFAS No. 142, Goodwill and Other Intangible Assets. The Companys reporting units are Local Banking, U.S. Card,
Auto Finance, and International. The goodwill impairment analysis is a two-step test. The first step, used to identify potential
impairment, involves comparing each reporting units fair value to its carrying value including goodwill. If the fair value of a
reporting unit exceeds its carrying value, applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value,
there is an indication of impairment and the second step is performed to measure the amount of impairment.