We were well-prepared for the economic downturn in 2002. In fact, we have been since 1994. Capital One ® is built for change—wired to innovate at high speed and turn  on a dime to pursue new opportunities and adapt to changing market conditions. Capital One is also built to last. We know we can’t predict the future, but we believe we can be ready for  whatever it brings. Recessions are inevitable, and interest rates are unpredictable, so we always factor recessions into our plans and hedge our interest rate risk. Because ups and downs in the capital markets are also inevitable, we have well-diversified sources of funding, including a large and growing pool of consumer deposits. And to be ready for the unexpected, we keep the Company in peak financial condition. Underwriting standards are rigorous. Credit lines are low. Accounts are closely managed. Conservatism is the hallmark of our accounting practices, and our  capital now stands at an all-time high—7.9% of managed assets.  While our core business, marketing credit cards to U.S. consumers, is strong and growing, we are steadily  and successfully diversifying beyond it, broadening our customer base by creating profitable new products and entering new geographies. More than 27% of our current loan portfolio was generated in markets we did not serve six years ago, and we expect the proportion to rise as we continue to diversify.  Although 2002 presented big challenges, Capital One turned in another record year. Because of its strategic focus on creating long-term value, we believe the Company has an exceptional capacity to weather the unexpected.  All the pieces are in place for continued success. Our associates are world-class. We have a powerful brand. Our highly flexible information-based strategy allows for steady diversification and rapid innovation in our existing businesses. We’re succeeding in other geographies, in auto finance and in several lending sectors new to us. All of these sectors are growing, and many are larger by far than the credit card market. We have as much confidence as ever in Capital One’s prospects, short term and long. 13