Capital One 2011 Annual Report Download - page 138

SEC rules, the shelf registration statement, which we filed in May 2009, expires three years after filing. As
previously discussed, during the third quarter of 2011, we issued four different series of our senior notes for total
proceeds of approximately $3.0 billion. The offering of senior notes included $250 million aggregate principal
amount of our Floating Rate Senior Notes due 2014, $750 million aggregate principal amount of our 2.125%
Senior Notes due 2014, $750 million aggregate principal amount of our 3.150% Senior Notes due 2016 and
$1.25 billion aggregate principal amount of our 4.750% Senior Notes due 2021.
In addition to issuance capacity under the shelf registration statement, we also have access to FHLB Advances
and Letters of Credit with a maximum borrowing capacity of $11.2 billion as of December 31, 2011. We had
$6.6 billion outstanding as of December 31, 2011, and $4.6 billion still available to us to borrow against under
this program. This funding source is non-revolving, and funding availability is subject to market conditions. The
ability to draw down funding is based on membership status, and the amount is dependent upon the Banks’
ability to post collateral.
Covenants
The terms of certain lease and credit facility agreements related to other borrowings and operating leases include
several financial covenants that require performance measures and equity ratios to be met. If these covenants are
not met, there may be an acceleration of the payment due dates noted in Table 38. As of December 31, 2011, we
were not in default of any such covenants.
Contractual Obligations
In the normal course of business, we enter into various contractual obligations that may require future cash
payments that affect our short- and long-term liquidity and capital resource needs. Our primary future cash
outflows primarily relate to deposits, borrowings and operating leases. Table 38 summarizes, by remaining
contractual maturity, our significant contractual cash obligations based on the undiscounted future cash payments
as of December 31, 2011. The actual timing and amounts of future cash payments may differ from the amounts
presented below due to a number of factors, such as discretionary debt repurchases. Table 38 excludes certain
obligations where the obligation is short-term or subject to valuation based on market factors, such as trade
payables and trading liabilities. The table also excludes the representation and warranty reserve of $943 million
as of December 31, 2011 and obligations for pension and postretirement benefit plans, which are discussed in
more detail in “Note 17—Employee Benefit Plans.”
Table 38: Contractual Obligations
December 31, 2011
(Dollars in millions)
Up to 1
Year
> 1 Year
to 3 Years
> 3 Years
to 5 Years > 5 Years Total
Interest-bearing time deposits(1) ...................... $ 6,505 $ 7,008 $2,133 $ 411 $16,057
Senior and subordinated notes ....................... 640 3,249 2,354 4,791 11,034
Other borrowings(2) ............................... 12,480 6,481 1,869 7,697 28,527
Operating leases .................................. 172 330 282 806 1,590
Purchase obligations(3)(4) ............................ 323 121 86 37 567
Total obligations .................................. $20,120 $17,189 $6,724 $13,742 $57,775
(1) Includes only those interest bearing deposits which have a contractual maturity date.
(2) Other borrowings includes secured borrowings for our on-balance sheet auto loan securitizations, junior subordinated
capital securities and debentures, FHLB advances and other short-term borrowings.
(3) Represents agreements to purchase goods or services that are enforceable and legally binding and specify all significant
terms. The purchase obligations are included through the termination date of the agreements even if the contract is
renewable. These include capital expenditures, contractual commitments to purchase equipment and services, software
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