Capital One 2014 Annual Report Download - page 268

The following is additional information on the principles and methodologies used in preparing our business segment
results.
•Net interest income: Interest income from loans held for investment and interest expense from deposits and
other interest-bearing liabilities are reflected within each applicable business segment. Because funding and
asset/liability management are managed centrally by our Corporate Treasury Group, net interest income for
our business segments also includes the results of a funds transfer pricing process that is intended to allocate a
cost of funds used or credit for funds provided to all business segment assets and liabilities, respectively, using
a matched funding concept. Also, the taxable-equivalent benefit of tax-exempt products is allocated to each
business unit with a corresponding increase in income tax expense.
•Non-interest income: Non-interest fees and other revenue associated with loans or customers managed by each
business segment and other direct revenues are accounted for within each business segment.
•Provision for credit losses: The provision for credit losses is directly attributable to the business segment in
which the loans are managed.
•Non-interest expense: Non-interest expenses directly managed and incurred by a business segment are accounted
for within each business segment. We allocate certain non-interest expenses indirectly incurred by business
segments, such as corporate support functions, to each business segment based on various factors, including
the actual cost of the services from the service providers, the utilization of the services, the number of employees
or other relevant factors.
•Goodwill and intangible assets: Goodwill and intangible assets that are not directly attributable to business
segments are assigned to business segments based on the relative fair value of each segment. Intangible
amortization is included in the results of the applicable segment.
•Income taxes: Income taxes are assessed for each business segment based on a standard tax rate with the residual
tax expense or benefit to arrive at the consolidated effective tax rate included in the Other category.
•Loans held for investment: Loans are reported within each business segment based on product or customer type.
•Deposits: Deposits are reported within each business segment based on product or customer type.
Segment Results and Reconciliation
We may periodically change our business segments or reclassify business segment results based on modifications
to our management reporting methodologies and changes in organizational alignment. The following tables present
our business segment results for the years ended December 31, 2014, 2013 and 2012, selected balance sheet data as
of December 31, 2014, 2013 and 2012, and a reconciliation of our total business segment results to our reported
consolidated income from continuing operations, assets and deposits. Prior period amounts have been recast to
conform to the current period.
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CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Capital One Financial Corporation (COF)