Capital One 2013 Annual Report Download - page 246

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income tax benefits of $1 million, $620 million and $3 million in 2013, 2012 and 2011, respectively, were
allocated directly to reduce goodwill from acquisitions.
Table 17.2: Income Tax Provision (Benefit) Reported in Stockholders’ Equity
Year Ended December 31,
(Dollars in millions) 2013 2012 2011
Foreign currency translation gains (losses) .................................... $5$ 3 $ (1)
Net unrealized gains (losses) on securities available for sale ...................... (364) 256 (41)
Net unrealized gains (losses) on securities transfered to held to maturity ............. (538) 00
Net unrealized gains (losses) on cash flow hedge instruments ..................... (95) 47 18
Employee stock plans ..................................................... (10) 15 (19)
Other .................................................................. 19 0 (7)
Total income tax provision (benefit) ......................................... $(983) $321 $(50)
Table 17.3: Effective Income Tax Rate
Year Ended December 31,
(Dollars in millions) 2013 2012 2011
Income tax at U.S. federal statutory tax rate ..................................... 35.0% 35.0% 35.0%
State taxes, net of federal benefit ............................................. 2.1 1.9 1.4
Resolution of federal income tax issues and audits ............................... 0(0.2) (1.1)
Low-income housing, New Markets, and other tax credits ......................... (4.7) (5.0) (4.3)
Other foreign tax differences, net ............................................. (0.6) (0.7) (0.1)
Nontaxable bargain purchase gain ............................................ 0(4.1) 0.0
Other, net ................................................................ (0.2) (1.1) (1.8)
Income tax effective tax rate ................................................. 31.6% 25.8% 29.1%
During 2013, 2012 and 2011, our income tax expense was reduced by $3 million, $7 million and $50 million,
respectively, due to the resolution of certain tax issues and audits for prior years with the Internal Revenue
Service (“IRS”). This reduction represented the release of previous accruals for potential audit and litigation
adjustments which were subsequently settled or eliminated and further refinement of existing tax exposures.
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