Capital One 2009 Annual Report Download - page 136
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Please find page 136 of the 2009 Capital One annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
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123
During 2007, the Company sold its remaining interest in DealerTrack, a leading provider of on-demand software and data solutions
for the automotive retail industry. The sale resulted in a $46.2 million gain, which was recorded in non-interest income and reported in
the Consumer Banking segment.
Visa Litigation and IPO
During 2007, the Company recognized a pre-tax charge of $79.8 million for liabilities in connection with the Visa antitrust lawsuit
settlement with American Express. Additionally, the Company 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. The 2007
litigation charges were recorded in non-interest expense and held in the Other category. During the first quarter of 2008, Visa
completed an initial public offering (“IPO”) of its stock. With IPO proceeds Visa established an escrow account for the benefit of
member banks to fund certain litigation settlements and claims. As a result, in the first quarter of 2008, the Company reversed its
Visa-related indemnification liabilities of $90.9 million recorded in other liabilities with a corresponding reduction of other non-
interest expense. In addition, the Company recognized a gain of $109.0 million in non-interest income for the redemption of
2.5 million shares related to the Visa IPO. Both items were included in the Other category.
MasterCard Stock Sale
During 2008, the Company recognized a gain of $44.9 million in non-interest income from the conversion and sale of 154,991 shares
of MasterCard, Inc. class B common stock, which was recorded in the Other category.
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 could have voluntarily elected 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 in
the Other category.