Start with the LHS:
(cos^4x - sin^4x) / cos^2x
Recognise the difference of two squares on the top line, which simplifies to (cos^2x - sin^2x)(cos^2x + sin^2x):
(cos^2x - sin^2x)(cos^2x + sin^2x) / cos^2x
Because of the identity sin^2x + cos^2x = 1, the second bracket (cos^2x + sin^2x) simplifies to 1:
(cos^2x - sin^2x) / cos^2x
Separate the two parts of the numerator:
(cos^2x / cos^2x) - (sin^2x / cos^2x)
These parts both simplify to 1 and tan^2x respectively:
1 - tan^2x
= RHS