Capital One 2015 Annual Report Download - page 214

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
195 Capital One Financial Corporation (COF)
NOTE 18—INCOME TAXES
We recognize the current and deferred tax consequences of all transactions that have been recognized in the consolidated financial
statements using the provisions of enacted tax laws. Deferred tax assets and liabilities are determined based on differences between
the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected
to apply to taxable income in which the differences are expected to be settled or realized. Valuation allowances are recorded to
reduce deferred tax assets to an amount that is more likely than not to be realized.
The following table presents significant components of the provision for income taxes attributable to continuing operations:
Table 18.1: Significant Components of the Provision for Income Taxes Attributable to Continuing Operations
Year Ended December 31,
(Dollars in millions) 2015 2014 2013
Current income tax provision:
Federal taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,991 $ 1,934 $ 1,581
State taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 197 194
International taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 91 115
Total current provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,271 $ 2,222 $ 1,890
Deferred income tax (benefit) provision:
Federal taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (368) $ (125) $ 284
State taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (39) 22 46
International taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527 4
Total deferred (benefit) provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (402) $ (76) $ 334
Total income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,869 $ 2,146 $ 2,224
The international income tax provision is related to pre-tax earnings from foreign operations of approximately $288 million in
2015, $466 million in 2014 and $459 million in 2013.
The following table presents the income tax provision (benefit) reported in stockholders’ equity:
Table 18.2: Income Tax Provision (Benefit) Reported in Stockholders’ Equity
Year Ended December 31,
(Dollars in millions) 2015 2014 2013
Income tax provision (benefit) recorded in AOCI (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19 $ 374 $ (978)
Income tax (benefit) provision recorded in additional paid in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) 16 (10)
Foreign currency translation losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 6 5
Total income tax provision (benefit) recorded in stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 35 $ 396 $ (983)
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(1) Includes the impact from hedging instruments designated as net investment hedges.
The following table presents the reconciliation of the U.S. federal statutory income tax rate to the Company’s effective income
tax rate applicable to income from continuing operations for the years ended December 31, 2015, 2014 and 2013: