Capital One 2014 Annual Report Download - page 64

Business Outlook
We discuss below our current expectations regarding our total company performance and the performance of each of
our business segments over the near-term based on market conditions, the regulatory environment and our business
strategies as of the time we filed this Annual Report on Form 10-K. The statements contained in this section are based
on our current expectations regarding our outlook for our financial results and business strategies. Our expectations
take into account, and should be read in conjunction with, our expectations regarding economic trends and analysis
of our business as discussed in “Part I—Item 1. Business” and “Part II—Item 7. MD&A” of this Report. Certain
statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995. Actual results could differ materially from those in our forward-looking statements. Except as otherwise
disclosed, forward-looking statements do not reflect: (i) any change in current dividend or repurchase strategies;
(ii) the effect of any acquisitions, divestitures or similar transactions that have not been previously disclosed; or
(iii) any changes in laws, regulations or regulatory interpretations, in each case after the date as of which such
statements are made. See “Part I—Item 1. Business—Forward—Looking Statements” in this Report for more
information on the forward-looking statements included in this Report and “Part I—Item 1A. Risk Factors” in this
Report for factors that could materially influence our results.
Total Company Expectations
Our strategies and actions are designed to deliver and sustain strong returns and capital generation through the
acquisition and retention of franchise-enhancing customer relationships across our businesses. We believe that
franchise-enhancing customer relationships create and sustain significant long-term value through low risk-adjusted
credit costs, long and loyal customer relationships and a gradual build in loan balances and revenues over time.
Examples of franchise-enhancing customer relationships include rewards customers and partnerships in our Credit
Card business, retail deposit customers in our Consumer Banking business and primary banking relationships with
commercial customers in our Commercial Banking business. We intend to grow these customer relationships by
continuing to invest in scalable infrastructure and operating platforms, so that we can meet the heightened risk
management expectations facing all banks and deliver a “brand-defining” customer experience that builds and sustains
a valuable, long-term customer franchise.
We delivered attractive risk-adjusted returns in 2014, and we expect that will continue. In 2015, we expect growth
in full-year revenues, driven by growth in average loans. We also expect that full-year marketing and operating
expenses will both be higher in 2015 than they were in 2014. We expect the full-year 2015 efficiency ratio to be
between 53.5% and 54.5%, excluding non-recurring items. We also expect that efficiency ratio will vary, perhaps
significantly, from quarter to quarter based on factors such as day count, the timing of growth and associated
revenues, and the timing of investments throughout the year.
We believe our actions have created a well-positioned balance sheet with strong capital and liquidity. Pursuant to
our approved 2014 capital plan, we expect to complete our previously announced $2.5 billion 2014 Stock Repurchase
Program in the first quarter of 2015.
The timing and exact amount of any common stock repurchases will depend on various factors, including market
conditions, our capital position and amount of our retained earnings. Our 2014 Stock Repurchase Program does
not include specific price targets, may be executed through open market purchases or privately negotiated
transactions, including utilizing Rule 10b5-1 programs, and may be suspended at any time. See “MD&A—
Capital Management—Capital Planning and Regulatory Stress Testing” for more information.
Business Segment Expectations
•Credit Card: In our Domestic Card business, we continue to expect the quarterly charge-off rate throughout
2015 to be in the mid-to-high three percent range. We expect normal seasonal patterns throughout the year,
including an increase in the charge-off rate in the first quarter of 2015, as compared to the fourth quarter of
42 Capital One Financial Corporation (COF)