Capital One 2008 Annual Report Download - page 61

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 Moderate deposit decrease attributable to deliberate funding decisions including a shift from higher cost brokered deposits
and public funds to lower cost funding options. Deposits were $83.0 billion at December 31, 2007, down $2.8 billion, or
3% from December 31, 2006.
2007 Summary of Significant Events
Shut Down of Mortgage Origination Operations of Wholesale Mortgage Banking Unit
Additional information can be found in Item 8 Financial Statements and Supplementary DataNotes to the Consolidated Financial
StatementsNote 2.
Restructuring Charges Associated with Cost Initiative
During the second quarter of 2007, we announced a broad-based initiative to reduce expenses and improve our competitive cost
position. We recognized $138.2 million in restructuring charges in 2007. Additional information can be found in Item 8 Financial
Statements and Supplementary DataNotes to the Consolidated Financial StatementsNote 14.
Share Repurchase
During 2007, we executed a $3.0 billion stock repurchase program, resulting in a net share retirement of 43,717,110 shares. Additional
information can be found in Item 8 Financial Statements and Supplementary DataNotes to the Consolidated Financial
StatementsNote 10.
Litigation Settlements and Reserves
During the fourth quarter of 2007, we recognized a pre-tax charge of $79.8 million for liabilities in connection with the antitrust
lawsuit settlement with American Express. Additionally, we recorded a legal reserve of $59.1 million for estimated possible damages
in connection with other pending Visa litigation, reflecting our share of such potential damages as a Visa member. Additional
information can be found in Item 8 Financial Statements and Supplementary DataNotes to the Consolidated Financial
StatementsNote 19 and Part 1, Item 3. Legal Proceedings.
Sale of Interest in Spain
During 2007, the Company completed the sale of its interest in a relationship agreement to develop and market consumer credit
products in Spain and recorded a net gain related to this sale of $31.3 million consisting of a $41.6 million increase in non-interest
income partially offset by a $10.3 million increase in non-interest expense.
Gain on Sale of MasterCard Shares
As a result of MasterCards IPO in 2006, Capital One owned class B shares of MasterCard common stock, with sale restrictions that
were originally scheduled to expire on May 31, 2010. In 2007 shareholders approved an amendment to the MasterCard Certificate of
Incorporation that provides for an accelerated conversion of class B common stock into class A common stock. The MasterCard Board
of Directors approved a conversion window running from August 4 to October 5, 2007, during which time owners of class B shares
may voluntarily elect to convert and sell a certain number of their shares. During the conversion period, Capital One elected to convert
and sell 300,482 shares of MasterCard class B common stock. The Company recognized gains of $43.4 million on these transactions
in non-interest income.
Gain on Sale of Equity Interest in DealerTrack
In 2001 we acquired a 7% stake in the privately held company DealerTrack, a leading provider of on-demand software and data
solutions for the automotive retail industry. DealerTrack went public in 2005. During the first quarter of 2007 we sold our remaining
interest of 1,832,767 shares for $52.2 million resulting in a pre-tax gain of $46.2 million in non-interest income.
Senior Note Issuance
During the third quarter 2007, we closed the public offering of $1.5 billion aggregate principal amount of our Senior Notes Due 2017
(the Notes). The Notes were issued pursuant to a Senior Indenture dated as of November 1, 1996 (the Indenture) between the
Corporation and The Bank of New York Trust Company, N.A. (as successor to Harris Trust and Savings Bank), as Indenture Trustee.
Proceeds from the sale of the notes will be used for general corporate purposes, which may include repurchases of shares of our
common stock. Additional information can be found in Item 8 Financial Statements and Supplementary DataNotes to the
Consolidated Financial StatementsNote 8 and Part 2, Item 7, Section VIII. Liquidity and Funding.