Attached files
| file | filename |
|---|---|
| 8-K - DISCOVER FINANCIAL SERVICES 8-K - Discover Financial Services | a6543053.htm |
| EX-99.1 - EXHIBIT 99.1 - Discover Financial Services | a6543053-ex991.htm |
Exhibit 99.2
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Discover Financial Services
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GAAP Basis 1
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(unaudited, dollars in thousands, except per share statistics)
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Quarter Ended
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November 30, 2010
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Year Ended
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Nov 30, 2010
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Aug 31, 2010
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May 31, 2010
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Feb 28, 2010
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Nov 30, 2009
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vs. November 30, 2009
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Nov 30, 2010
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Nov 30, 2009
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2010 vs. 2009
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Earnings Summary
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Interest Income
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$ | 1,499,347 | $ | 1,535,939 | $ | 1,551,782 | $ | 1,559,150 | $ | 638,086 | $ | 861,261 | 135 | % | $ | 6,146,218 | $ | 3,145,080 | $ | 3,001,138 | 95 | % | ||||||||||||
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Interest Expense
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375,506 | 389,137 | 404,621 | 413,724 | 314,158 | 61,348 | 20 | % | 1,582,988 | 1,251,284 | 331,704 | 27 | % | |||||||||||||||||||||
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Net Interest Income
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1,123,841 | 1,146,802 | 1,147,161 | 1,145,426 | 323,928 | 799,913 |
NM
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4,563,230 | 1,893,796 | 2,669,434 | 141 | % | ||||||||||||||||||||||
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Other Income 2
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472,135 | 564,144 | 512,844 | 545,876 | 1,253,559 | (781,424 | ) | (62 | %) | 2,094,999 | 4,840,595 | (2,745,596 | ) | (57 | %) | |||||||||||||||||||
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Revenue Net of Interest Expense
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1,595,976 | 1,710,946 | 1,660,005 | 1,691,302 | 1,577,487 | 18,489 | 1 | % | 6,658,229 | 6,734,391 | (76,162 | ) | (1 | %) | ||||||||||||||||||||
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Provision for Loan Losses
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382,670 | 712,565 | 724,264 | 1,387,206 | 399,732 | (17,062 | ) | (4 | %) | 3,206,705 | 2,362,405 | 844,300 | 36 | % | ||||||||||||||||||||
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Employee Compensation and Benefits
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200,139 | 204,210 | 202,536 | 195,764 | 191,516 | 8,623 | 5 | % | 802,649 | 827,683 | (25,034 | ) | (3 | %) | ||||||||||||||||||||
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Marketing and Business Development
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149,911 | 130,532 | 97,970 | 84,673 | 113,851 | 36,060 | 32 | % | 463,086 | 406,020 | 57,066 | 14 | % | |||||||||||||||||||||
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Information Processing & Communications
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67,249 | 62,357 | 63,087 | 65,418 | 72,192 | (4,943 | ) | (7 | %) | 258,111 | 289,209 | (31,098 | ) | (11 | %) | |||||||||||||||||||
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Professional Fees
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103,479 | 85,289 | 78,067 | 75,813 | 92,910 | 10,569 | 11 | % | 342,648 | 321,329 | 21,319 | 7 | % | |||||||||||||||||||||
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Premises and Equipment
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17,001 | 17,722 | 17,691 | 17,860 | 18,282 | (1,281 | ) | (7 | %) | 70,274 | 73,014 | (2,740 | ) | (4 | %) | |||||||||||||||||||
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Other Expense
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90,296 | 66,128 | 54,197 | 35,276 | 118,748 | (28,452 | ) | (24 | %) | 245,897 | 333,833 | (87,936 | ) | (26 | %) | |||||||||||||||||||
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Total Other Expense
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628,075 | 566,238 | 513,548 | 474,804 | 607,499 | 20,576 | 3 | % | 2,182,665 | 2,251,088 | (68,423 | ) | (3 | %) | ||||||||||||||||||||
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Income Before Income Taxes 2
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585,231 | 432,143 | 422,193 | (170,708 | ) | 570,256 | 14,975 | 3 | % | 1,268,859 | 2,120,898 | (852,039 | ) | (40 | %) | |||||||||||||||||||
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Tax Expense
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235,589 | 171,526 | 164,126 | (67,170 | ) | 217,719 | 17,870 | 8 | % | 504,071 | 844,713 | (340,642 | ) | (40 | %) | |||||||||||||||||||
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Net Income 2
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$ | 349,642 | $ | 260,617 | $ | 258,067 | $ | (103,538 | ) | $ | 352,537 | $ | (2,895 | ) | (1 | %) | $ | 764,788 | $ | 1,276,185 | $ | (511,397 | ) | (40 | %) | |||||||||
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Net Income Allocated to Common Stockholders 2, 3
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$ | 346,517 | $ | 258,194 | $ | 184,590 | $ | (122,233 | ) | $ | 330,505 | $ | 16,012 | 5 | % | $ | 667,938 | $ | 1,206,965 | $ | (539,027 | ) | (45 | %) | ||||||||||
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Effective Tax Rate 4
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40.3 | % | 39.7 | % | 38.9 | % | 39.3 | % | 38.2 | % | 39.7 | % | 39.8 | % | ||||||||||||||||||||
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Balance Sheet Statistics
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Total Assets
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$ | 60,784,968 | $ | 60,057,553 | $ | 62,153,678 | $ | 66,818,951 | $ | 46,020,987 | $ | 14,763,981 | 32 | % | $ | 60,784,968 | $ | 46,020,987 | $ | 14,763,981 | 32 | % | ||||||||||||
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Tangible Assets 5
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$ | 60,340,574 | $ | 59,611,493 | $ | 61,705,953 | $ | 66,369,560 | $ | 45,569,930 | $ | 14,770,644 | 32 | % | $ | 60,340,574 | $ | 45,569,930 | $ | 14,770,644 | 32 | % | ||||||||||||
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Total Equity
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$ | 6,456,846 | $ | 6,111,297 | $ | 6,038,267 | $ | 7,015,048 | $ | 8,435,547 | $ | (1,978,701 | ) | (23 | %) | $ | 6,456,846 | $ | 8,435,547 | $ | (1,978,701 | ) | (23 | %) | ||||||||||
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Total Common Equity
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$ | 6,456,846 | $ | 6,111,297 | $ | 6,038,267 | $ | 5,853,594 | $ | 7,277,481 | $ | (820,635 | ) | (11 | %) | $ | 6,456,846 | $ | 7,277,481 | $ | (820,635 | ) | (11 | %) | ||||||||||
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Total Common Equity/Total Assets
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10.6 | % | 10.2 | % | 9.7 | % | 8.8 | % | 15.8 | % | 10.6 | % | 15.8 | % | ||||||||||||||||||||
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Total Common Equity/Net Loans 6
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14.2 | % | 13.2 | % | 13.1 | % | 12.8 | % | 33.3 | % | 14.2 | % | 33.3 | % | ||||||||||||||||||||
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Book Value per share 7
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$ | 11.85 | $ | 11.22 | $ | 11.10 | $ | 12.90 | $ | 15.54 | $ | (3.69 | ) | (24 | %) | $ | 11.85 | $ | 15.54 | $ | (3.69 | ) | (24 | %) | ||||||||||
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ROE 2,8
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22 | % | 17 | % | 16 | % | (6 | %) | 16 | % | 12 | % | 17 | % | ||||||||||||||||||||
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Allowance for Loan Loss (period end)
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$ | 3,304,118 | $ | 3,743,721 | $ | 3,930,624 | $ | 4,207,360 | $ | 1,757,899 | $ | 1,546,219 | 88 | % | $ | 3,304,118 | $ | 1,757,899 | $ | 1,546,219 | 88 | % | ||||||||||||
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Change in Loan Loss Reserves
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$ | (414,261 | ) | $ | (186,903 | ) | $ | (276,736 | ) | $ | 305,000 | $ | (74,461 | ) | $ | (339,800 | ) |
NM
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$ | (572,900 | ) | $ | 383,314 | $ | (956,214 | ) |
NM
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Reserve Rate 9
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6.77 | % | 7.47 | % | 7.86 | % | 8.40 | % | 7.44 | % | (67 | ) |
bps
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6.77 | % | 7.44 | % | (67 | ) |
bps
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Per Share Statistics
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Basic EPS 2, 10
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$ | 0.64 | $ | 0.47 | $ | 0.34 | $ | (0.22 | ) | $ | 0.61 | $ | 0.03 | 5 | % | $ | 1.23 | $ | 2.39 | $ | (1.16 | ) | (49 | %) | ||||||||||
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Diluted EPS 2, 10
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$ | 0.64 | $ | 0.47 | $ | 0.33 | $ | (0.22 | ) | $ | 0.60 | $ | 0.04 | 7 | % | $ | 1.22 | $ | 2.38 | $ | (1.16 | ) | (49 | %) | ||||||||||
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Common Stock Price (period end)
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$ | 18.28 | $ | 14.51 | $ | 13.45 | $ | 13.65 | $ | 15.46 | $ | 2.82 | 18 | % | $ | 18.28 | $ | 15.46 | $ | 2.82 | 18 | % | ||||||||||||
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Ending Common Shares Outstanding (000's)
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544,682 | 544,550 | 543,993 | 543,777 | 542,922 | 1,760 | 0 | % | 544,682 | 542,922 | 1,760 | 0 | % | |||||||||||||||||||||
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Weighted Average Common Shares Outstanding (000's)
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544,615 | 544,314 | 543,875 | 543,422 | 542,826 | 1,789 | 0 | % | 544,058 | 504,550 | 39,508 | 8 | % | |||||||||||||||||||||
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Weighted Average Common Shares Outstanding (fully diluted) (000's)
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544,683 | 547,082 | 552,060 | 543,422 | 551,343 | (6,660 | ) | (1 | %) | 548,760 | 507,907 | 40,853 | 8 | % | ||||||||||||||||||||
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Loan Receivables
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Total Loans
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$ | 48,836,413 | $ | 50,130,664 | $ | 50,024,718 | $ | 50,093,516 | $ | 23,625,084 | 25,211,329 | 107 | % | $ | 48,836,413 | $ | 23,625,084 | $ | 25,211,329 | 107 | % | |||||||||||||
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Average Total Loans
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$ | 48,596,601 | $ | 49,687,300 | $ | 49,818,909 | $ | 51,555,460 | $ | 23,835,598 | 24,761,003 | 104 | % | $ | 49,909,187 | $ | 26,552,574 | $ | 23,356,613 | 88 | % | |||||||||||||
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Interest Yield 11
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12.24 | % | 12.16 | % | 12.25 | % | 12.15 | % | 10.25 | % | 199 |
bps
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12.20 | % | 11.31 | % | 89 |
bps
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Net Principal Charge-off Rate 12
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6.58 | % | 7.18 | % | 7.97 | % | 8.51 | % | 7.98 | % | (140 | ) |
bps
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7.57 | % | 7.45 | % | 12 |
bps
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Delinquency Rate (over 30 days) 13
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3.89 | % | 4.16 | % | 4.52 | % | 5.05 | % | 4.92 | % | (103 | ) |
bps
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3.89 | % | 4.92 | % | (103 | ) |
bps
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Delinquency Rate (over 90 days) 14
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2.03 | % | 2.19 | % | 2.45 | % | 2.77 | % | 2.58 | % | (55 | ) |
bps
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2.03 | % | 2.58 | % | (55 | ) |
bps
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Net Charge-off Dollars
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$ | 796,931 | $ | 899,468 | $ | 1,001,000 | $ | 1,082,206 | $ | 474,193 | 322,738 | 68 | % | $ | 3,779,605 | $ | 1,979,091 | $ | 1,800,514 | 91 | % | |||||||||||||
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Loans Delinquent Over 30 Days
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$ | 1,901,924 | $ | 2,083,128 | $ | 2,263,608 | $ | 2,529,580 | $ | 1,161,497 | 740,427 | 64 | % | $ | 1,901,924 | $ | 1,161,497 | $ | 740,427 | 64 | % | |||||||||||||
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Loans Delinquent Over 90 Days
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$ | 993,618 | $ | 1,098,611 | $ | 1,224,526 | $ | 1,386,386 | $ | 608,437 | 385,181 | 63 | % | $ | 993,618 | $ | 608,437 | $ | 385,181 | 63 | % | |||||||||||||
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Transactions Processed on Networks (000's)
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Discover Network
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412,558 | 418,423 | 392,571 | 381,562 | 387,350 | 25,208 | 7 | % | 1,605,114 | 1,513,955 | 91,159 | 6 | % | |||||||||||||||||||||
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PULSE Network
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901,184 | 882,172 | 805,281 | 719,906 | 676,817 | 224,367 | 33 | % | 3,308,543 | 2,878,720 | 429,823 | 15 | % | |||||||||||||||||||||
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Total
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1,313,742 | 1,300,595 | 1,197,852 | 1,101,468 | 1,064,167 | 249,575 | 23 | % | 4,913,657 | 4,392,675 | 520,982 | 12 | % | |||||||||||||||||||||
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Volume
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PULSE Network
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$ | 31,333,712 | $ | 30,581,850 | $ | 28,645,624 | $ | 27,617,635 | $ | 24,667,926 | $ | 6,665,786 | 27 | % | $ | 118,178,821 | $ | 109,302,121 | $ | 8,876,700 | 8 | % | ||||||||||||
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Third-Party Issuers
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1,768,429 | 1,793,785 | 1,678,337 | 1,561,929 | 1,522,269 | 246,160 | 16 | % | 6,802,480 | 5,671,555 | 1,130,925 | 20 | % | |||||||||||||||||||||
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Diners Club International 15
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7,327,446 | 6,542,418 | 6,708,533 | 6,554,504 | 7,172,809 | 154,637 | 2 | % | 27,132,901 | 26,172,977 | 959,924 | 4 | % | |||||||||||||||||||||
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Total Payment Services
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40,429,587 | 38,918,053 | 37,032,494 | 35,734,068 | 33,363,004 | 7,066,583 | 21 | % | 152,114,202 | 141,146,653 | 10,967,549 | 8 | % | |||||||||||||||||||||
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Discover Network - Proprietary 16
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24,075,419 | 24,880,163 | 23,631,719 | 23,172,534 | 22,712,600 | 1,362,819 | 6 | % | 95,759,835 | 90,688,997 | 5,070,838 | 6 | % | |||||||||||||||||||||
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Total
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$ | 64,505,006 | $ | 63,798,216 | $ | 60,664,213 | $ | 58,906,602 | $ | 56,075,604 | $ | 8,429,402 | 15 | % | $ | 247,874,037 | $ | 231,835,650 | $ | 16,038,387 | 7 | % | ||||||||||||
1
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Discover Financial Services
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As Adjusted Basis (for 2009 data)
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(unaudited, dollars in thousands, except per share statistics)
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Quarter Ended
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November 30, 2010
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Year Ended
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Nov 30, 2010
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Aug 31, 2010
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May 31, 2010
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Feb 28, 2010
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Nov 30, 2009
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vs. November 30, 2009
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Nov 30, 2010
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Nov 30, 2009
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2010 vs. 2009
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Earnings Summary
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Interest Income
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$ | 1,499,347 | $ | 1,535,939 | $ | 1,551,782 | $ | 1,559,150 | $ | 1,576,442 | $ | (77,095 | ) | (5 | %) | $ | 6,146,218 | $ | 6,435,152 | $ | (288,934 | ) | (4 | %) | ||||||||||
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Interest Expense
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375,506 | 389,137 | 404,621 | 413,724 | 393,160 | (17,654 | ) | (4 | %) | 1,582,988 | 1,605,499 | (22,511 | ) | (1 | %) | |||||||||||||||||||
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Net Interest Income
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1,123,841 | 1,146,802 | 1,147,161 | 1,145,426 | 1,183,282 | (59,441 | ) | (5 | %) | 4,563,230 | 4,829,653 | (266,423 | ) | (6 | %) | |||||||||||||||||||
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Other Income
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472,135 | 564,144 | 512,844 | 545,876 | 550,229 | (78,094 | ) | (14 | %) | 2,094,999 | 2,186,064 | (91,065 | ) | (4 | %) | |||||||||||||||||||
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Revenue Net of Interest Expense
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1,595,976 | 1,710,946 | 1,660,005 | 1,691,302 | 1,733,511 | (137,535 | ) | (8 | %) | 6,658,229 | 7,015,717 | (357,488 | ) | (5 | %) | |||||||||||||||||||
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Provision for Loan Losses
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382,670 | 712,565 | 724,264 | 1,387,206 | 1,258,261 | (875,591 | ) | (70 | %) | 3,206,705 | 5,123,030 | (1,916,325 | ) | (37 | %) | |||||||||||||||||||
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Employee Compensation and Benefits
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200,139 | 204,210 | 202,536 | 195,764 | 191,516 | 8,623 | 5 | % | 802,649 | 827,683 | (25,034 | ) | (3 | %) | ||||||||||||||||||||
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Marketing and Business Development
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149,911 | 130,532 | 97,970 | 84,673 | 113,851 | 36,060 | 32 | % | 463,086 | 406,020 | 57,066 | 14 | % | |||||||||||||||||||||
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Information Processing & Communications
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67,249 | 62,357 | 63,087 | 65,418 | 72,192 | (4,943 | ) | (7 | %) | 258,111 | 289,209 | (31,098 | ) | (11 | %) | |||||||||||||||||||
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Professional Fees
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103,479 | 85,289 | 78,067 | 75,813 | 92,910 | 10,569 | 11 | % | 342,648 | 321,329 | 21,319 | 7 | % | |||||||||||||||||||||
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Premises and Equipment
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17,001 | 17,722 | 17,691 | 17,860 | 18,282 | (1,281 | ) | (7 | %) | 70,274 | 73,014 | (2,740 | ) | (4 | %) | |||||||||||||||||||
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Other Expense
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90,296 | 66,128 | 54,197 | 35,276 | 89,756 | 540 | 1 | % | 245,897 | 304,841 | (58,944 | ) | (19 | %) | ||||||||||||||||||||
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Total Other Expense
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628,075 | 566,238 | 513,548 | 474,804 | 578,507 | 49,568 | 9 | % | 2,182,665 | 2,222,096 | (39,431 | ) | (2 | %) | ||||||||||||||||||||
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Income Before Income Taxes
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585,231 | 432,143 | 422,193 | (170,708 | ) | (103,257 | ) | 688,488 |
NM
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1,268,859 | (329,409 | ) | 1,598,268 |
NM
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Tax Expense
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235,589 | 171,526 | 164,126 | (67,170 | ) | (44,037 | ) | 279,626 |
NM
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504,071 | (92,125 | ) | 596,196 |
NM
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Net Income
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$ | 349,642 | $ | 260,617 | $ | 258,067 | $ | (103,538 | ) | $ | (59,220 | ) | $ | 408,862 |
NM
|
$ | 764,788 | $ | (237,284 | ) | $ | 1,002,072 |
NM
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Net Income Allocated to Common Stockholders 3
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$ | 346,517 | $ | 258,194 | $ | 184,590 | $ | (122,233 | ) | $ | (77,855 | ) | $ | 424,372 |
NM
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$ | 667,938 | $ | (290,539 | ) | $ | 958,477 |
NM
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Effective Tax Rate 4
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40.3 | % | 39.7 | % | 38.9 | % | 39.3 | % | 42.6 | % | 39.7 | % | 28.0 | % | ||||||||||||||||||||
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Balance Sheet Statistics
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Total Assets
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$ | 60,784,968 | $ | 60,057,553 | $ | 62,153,678 | $ | 66,818,951 | $ | 67,116,359 | $ | (6,331,391 | ) | (9 | %) | $ | 60,784,968 | $ | 67,116,359 | $ | (6,331,391 | ) | (9 | %) | ||||||||||
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Tangible Assets 5
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$ | 60,340,574 | $ | 59,611,493 | $ | 61,705,953 | $ | 66,369,560 | $ | 66,665,302 | $ | (6,324,728 | ) | (9 | %) | $ | 60,340,574 | $ | 66,665,302 | $ | (6,324,728 | ) | (9 | %) | ||||||||||
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Total Equity
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$ | 6,456,846 | $ | 6,111,297 | $ | 6,038,267 | $ | 7,015,048 | $ | 7,102,991 | $ | (646,145 | ) | (9 | %) | $ | 6,456,846 | $ | 7,102,991 | $ | (646,145 | ) | (9 | %) | ||||||||||
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Total Common Equity
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$ | 6,456,846 | $ | 6,111,297 | $ | 6,038,267 | $ | 5,853,594 | $ | 5,944,925 | $ | 511,921 | 9 | % | $ | 6,456,846 | $ | 5,944,925 | $ | 511,921 | 9 | % | ||||||||||||
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Tangible Common Equity 17
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$ | 6,012,452 | $ | 5,665,237 | $ | 5,590,542 | $ | 5,404,203 | $ | 5,493,868 | $ | 518,584 | 9 | % | $ | 6,012,452 | $ | 5,493,868 | $ | 518,584 | 9 | % | ||||||||||||
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Tangible Common Equity/Tangible Assets 17, 18
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10.0 | % | 9.5 | % | 9.1 | % | 8.1 | % | 8.2 | % | 10.0 | % | 8.2 | % | ||||||||||||||||||||
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Tangible Common Equity/Net Loans 6, 17, 19
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13.2 | % | 12.2 | % | 12.1 | % | 11.8 | % | 11.7 | % | 13.2 | % | 11.7 | % | ||||||||||||||||||||
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Tangible Common Equity per share 17, 20
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$ | 11.04 | $ | 10.40 | $ | 10.28 | $ | 9.94 | $ | 10.12 | $ | 0.92 | 9 | % | $ | 11.04 | $ | 10.12 | $ | 0.92 | 9 | % | ||||||||||||
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ROE 8
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22 | % | 17 | % | 16 | % | (6 | %) | (3 | %) | 12 | % | (4 | %) | ||||||||||||||||||||
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Net Interest Margin 21
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9.28 | % | 9.16 | % | 9.14 | % | 9.01 | % | 9.38 | % | (10 | ) |
bps
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9.14 | % | 9.45 | % | (31 | ) |
bps
|
||||||||||||||
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Return on Loan Receivables 22
|
2.89 | % | 2.08 | % | 2.06 | % | (0.81 | %) | (0.47 | %) | 336 |
bps
|
1.53 | % | (0.46 | %) | 199 |
bps
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||||||||||||||||
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Allowance for Loan Loss (period end)
|
$ | 3,304,118 | $ | 3,743,721 | $ | 3,930,624 | $ | 4,207,360 | $ | 3,902,360 | $ | (598,242 | ) | (15 | %) | $ | 3,304,118 | $ | 3,902,360 | $ | (598,242 | ) | (15 | %) | ||||||||||
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Change in Loan Loss Reserves
|
$ | (414,261 | ) | $ | (186,903 | ) | $ | (276,736 | ) | $ | 305,000 | $ | 194,789 | $ | (609,050 | ) |
NM
|
$ | (572,900 | ) | $ | 1,148,002 | $ | (1,720,902 | ) | (150 | %) | |||||||
|
Reserve Rate 9
|
6.77 | % | 7.47 | % | 7.86 | % | 8.40 | % | 7.67 | % | (90 | ) |
bps
|
6.77 | % | 7.67 | % | (90 | ) |
bps
|
||||||||||||||
|
Reserve Rate (excluding guaranteed student loans) 23
|
6.87 | % | 7.80 | % | 8.21 | % | 8.73 | % | 7.87 | % | (100 | ) |
bps
|
6.87 | % | 7.87 | % | (100 | ) |
bps
|
||||||||||||||
|
Per Share Statistics
|
||||||||||||||||||||||||||||||||||
|
Basic EPS 10
|
$ | 0.64 | $ | 0.47 | $ | 0.34 | $ | (0.22 | ) | $ | (0.14 | ) | $ | 0.78 |
NM
|
$ | 1.23 | $ | (0.58 | ) | $ | 1.81 |
NM
|
|||||||||||
|
Diluted EPS 10
|
$ | 0.64 | $ | 0.47 | $ | 0.33 | $ | (0.22 | ) | $ | (0.14 | ) | $ | 0.78 |
NM
|
$ | 1.22 | $ | (0.58 | ) | $ | 1.80 |
NM
|
|||||||||||
|
Common Stock Price (period end)
|
$ | 18.28 | $ | 14.51 | $ | 13.45 | $ | 13.65 | $ | 15.46 | $ | 2.82 | 18 | % | $ | 18.28 | $ | 15.46 | $ | 2.82 | 18 | % | ||||||||||||
|
Ending Common Shares Outstanding (000's)
|
544,682 | 544,550 | 543,993 | 543,777 | 542,922 | 1,760 | 0 | % | 544,682 | 542,922 | 1,760 | 0 | % | |||||||||||||||||||||
|
Weighted Average Common Shares Outstanding (000's)
|
544,615 | 544,314 | 543,875 | 543,422 | 542,826 | 1,789 | 0 | % | 544,058 | 504,550 | 39,508 | 8 | % | |||||||||||||||||||||
|
Weighted Average Common Shares Outstanding (fully diluted) (000's)
|
544,683 | 547,082 | 552,060 | 543,422 | 542,826 | 1,857 | 0 | % | 548,760 | 504,550 | 44,210 | 9 | % | |||||||||||||||||||||
|
Loan Receivables
|
||||||||||||||||||||||||||||||||||
|
Total Loans
|
$ | 48,836,413 | $ | 50,130,664 | $ | 50,024,718 | $ | 50,093,516 | $ | 50,854,146 | (2,017,733 | ) | (4 | %) | $ | 48,836,413 | $ | 50,854,146 | $ | (2,017,733 | ) | (4 | %) | |||||||||||
|
Average Total Loans
|
$ | 48,596,601 | $ | 49,687,300 | $ | 49,818,909 | $ | 51,555,460 | $ | 50,585,332 | (1,988,731 | ) | (4 | %) | $ | 49,909,187 | $ | 51,130,117 | $ | (1,220,930 | ) | (2 | %) | |||||||||||
|
Interest Yield 11
|
12.24 | % | 12.16 | % | 12.25 | % | 12.15 | % | 12.35 | % | (11 | ) |
bps
|
12.20 | % | 12.40 | % | (20 | ) |
bps
|
||||||||||||||
|
Net Principal Charge-off Rate 12
|
6.58 | % | 7.18 | % | 7.97 | % | 8.51 | % | 8.43 | % | (185 | ) |
bps
|
7.57 | % | 7.77 | % | (20 | ) |
bps
|
||||||||||||||
|
Delinquency Rate (over 30 days) 13
|
3.89 | % | 4.16 | % | 4.52 | % | 5.05 | % | 5.31 | % | (142 | ) |
bps
|
3.89 | % | 5.31 | % | (142 | ) |
bps
|
||||||||||||||
|
Delinquency Rate (over 90 days) 14
|
2.03 | % | 2.19 | % | 2.45 | % | 2.77 | % | 2.78 | % | (75 | ) |
bps
|
2.03 | % | 2.78 | % | (75 | ) |
bps
|
||||||||||||||
|
Net Charge-off Dollars
|
$ | 796,931 | $ | 899,468 | $ | 1,001,000 | $ | 1,082,206 | $ | 1,063,472 | $ | (266,541 | ) | (25 | %) | $ | 3,779,605 | $ | 3,975,028 | $ | (195,423 | ) | (5 | %) | ||||||||||
|
Loans Delinquent Over 30 Days
|
$ | 1,901,924 | $ | 2,083,128 | $ | 2,263,608 | $ | 2,529,580 | $ | 2,700,959 | $ | (799,035 | ) | (30 | %) | $ | 1,901,924 | $ | 2,700,959 | $ | (799,035 | ) | (30 | %) | ||||||||||
|
Loans Delinquent Over 90 Days
|
$ | 993,618 | $ | 1,098,611 | $ | 1,224,526 | $ | 1,386,386 | $ | 1,411,779 | $ | (418,161 | ) | (30 | %) | $ | 993,618 | $ | 1,411,779 | $ | (418,161 | ) | (30 | %) | ||||||||||
|
Segment - Income Before Income Taxes
|
||||||||||||||||||||||||||||||||||
|
Direct Banking
|
$ | 553,905 | $ | 395,299 | $ | 385,939 | $ | (207,665 | ) | $ | (127,028 | ) | $ | 680,933 |
NM
|
$ | 1,127,478 | $ | (435,953 | ) | $ | 1,563,431 |
NM
|
|||||||||||
|
Payment Services
|
31,326 | 36,844 | 36,254 | 36,957 | 23,771 | 7,555 | 32 | % | 141,381 | 106,544 | 34,837 | 33 | % | |||||||||||||||||||||
|
Total
|
$ | 585,231 | $ | 432,143 | $ | 422,193 | $ | (170,708 | ) | $ | (103,257 | ) | $ | 688,488 |
NM
|
$ | 1,268,859 | $ | (329,409 | ) | $ | 1,598,268 |
NM
|
|||||||||||
Note: As adjusted basis (non-GAAP) data is presented to show how the Company's financial data would be presented for each of the fiscal quarters in the year ended November 30, 2009 if the trusts used in the Company’s securitization activities were consolidated into the Company’s financial statements for such periods. As adjusted income statement data also excludes the impact of income received in connection with the settlement of the Company's antitrust litigation with Visa and MasterCard in each quarter of 2009 and the income statement impact of the Morgan Stanley special dividend agreement dispute in the fourth quarter of 2009. For reconciliation of comparable GAAP measures see Reconciliation of GAAP to As Adjusted data.
2
|
Discover Financial Services
|
||||||||||||||||||||||||||||||||||
|
Direct Banking Segment
|
||||||||||||||||||||||||||||||||||
|
Managed Basis 24
|
||||||||||||||||||||||||||||||||||
|
(unaudited, dollars in thousands)
|
||||||||||||||||||||||||||||||||||
|
Quarter Ended
|
November 30, 2010
|
Year Ended
|
||||||||||||||||||||||||||||||||
|
Nov 30, 2010
|
Aug 31, 2010
|
May 31, 2010
|
Feb 28, 2010
|
Nov 30, 2009
|
vs. November 30, 2009
|
Nov 30, 2010
|
Nov 30, 2009
|
2010 vs. 2009
|
||||||||||||||||||||||||||
|
Earnings Summary
|
||||||||||||||||||||||||||||||||||
|
Interest Income
|
$ | 1,499,343 | $ | 1,535,934 | $ | 1,551,775 | $ | 1,559,147 | $ | 1,585,612 | $ | (86,269 | ) | (5 | %) | $ | 6,146,199 | $ | 6,459,974 | $ | (313,775 | ) | (5 | %) | ||||||||||
|
Interest Expense
|
375,423 | 389,059 | 404,577 | 413,686 | 403,266 | (27,843 | ) | (7 | %) | 1,582,745 | 1,648,198 | (65,453 | ) | (4 | %) | |||||||||||||||||||
|
Net Interest Income
|
1,123,920 | 1,146,875 | 1,147,198 | 1,145,461 | 1,182,346 | (58,426 | ) | (5 | %) | 4,563,454 | 4,811,776 | (248,322 | ) | (5 | %) | |||||||||||||||||||
|
Other Income
|
403,591 | 495,771 | 447,711 | 480,341 | 924,499 | (520,908 | ) | (56 | %) | 1,827,414 | 3,677,881 | (1,850,467 | ) | (50 | %) | |||||||||||||||||||
|
Revenue Net of Interest Expense
|
1,527,511 | 1,642,646 | 1,594,909 | 1,625,802 | 2,106,845 | (579,334 | ) | (27 | %) | 6,390,868 | 8,489,657 | (2,098,789 | ) | (25 | %) | |||||||||||||||||||
|
Provision for Loan Losses
|
382,670 | 712,565 | 724,264 | 1,387,206 | 989,009 | (606,339 | ) | (61 | %) | 3,206,705 | 4,358,341 | (1,151,636 | ) | (26 | %) | |||||||||||||||||||
|
Total Other Expense
|
590,936 | 534,782 | 484,706 | 446,261 | 571,351 | 19,585 | 3 | % | 2,056,685 | 2,116,962 | (60,277 | ) | (3 | %) | ||||||||||||||||||||
|
Income Before Income Taxes
|
$ | 553,905 | $ | 395,299 | $ | 385,939 | $ | (207,665 | ) | $ | 546,485 | $ | 7,420 | 1 | % | $ | 1,127,478 | $ | 2,014,354 | $ | (886,876 | ) | (44 | %) | ||||||||||
|
Net Interest Margin 21
|
9.28 | % | 9.16 | % | 9.14 | % | 9.01 | % | 9.37 | % | (9 | ) |
bps
|
9.14 | % | 9.41 | % | (27 | ) |
bps
|
||||||||||||||
|
Pretax Return on Loan Receivables 25
|
4.57 | % | 3.16 | % | 3.07 | % | (1.63 | %) | 4.33 | % | 24 |
bps
|
2.26 | % | 3.94 | % | (168 | ) |
bps
|
|||||||||||||||
|
Loan Receivables
|
||||||||||||||||||||||||||||||||||
|
Total Loans
|
$ | 48,836,413 | $ | 50,130,664 | $ | 50,024,718 | $ | 50,093,516 | $ | 50,860,372 | $ | (2,023,959 | ) | (4 | %) | $ | 48,836,413 | $ | 50,860,372 | $ | (2,023,959 | ) | (4 | %) | ||||||||||
|
Average Total Loans
|
$ | 48,596,601 | $ | 49,687,300 | $ | 49,818,909 | $ | 51,555,460 | $ | 50,590,846 | $ | (1,994,245 | ) | (4 | %) | $ | 49,909,187 | $ | 51,140,614 | $ | (1,231,427 | ) | (2 | %) | ||||||||||
|
Interest Yield 11
|
12.24 | % | 12.16 | % | 12.25 | % | 12.15 | % | 12.34 | % | (10 | ) |
bps
|
12.20 | % | 12.36 | % | (16 | ) |
bps
|
||||||||||||||
|
Net Principal Charge-off Rate 12
|
6.58 | % | 7.18 | % | 7.97 | % | 8.51 | % | 8.43 | % | (185 | ) |
bps
|
7.57 | % | 7.77 | % | (20 | ) |
bps
|
||||||||||||||
|
Delinquency Rate (over 30 days) 13
|
3.89 | % | 4.16 | % | 4.52 | % | 5.05 | % | 5.31 | % | (142 | ) |
bps
|
3.89 | % | 5.31 | % | (142 | ) |
bps
|
||||||||||||||
|
Delinquency Rate (over 90 days) 14
|
2.03 | % | 2.19 | % | 2.45 | % | 2.77 | % | 2.78 | % | (75 | ) |
bps
|
2.03 | % | 2.78 | % | (75 | ) |
bps
|
||||||||||||||
|
Net Charge-off Dollars
|
$ | 796,931 | $ | 899,468 | $ | 1,001,000 | $ | 1,082,206 | $ | 1,063,472 | $ | (266,541 | ) | (25 | %) | $ | 3,779,605 | $ | 3,975,028 | $ | (195,423 | ) | (5 | %) | ||||||||||
|
Loans Delinquent Over 30 Days
|
$ | 1,901,924 | $ | 2,083,128 | $ | 2,263,608 | $ | 2,529,580 | $ | 2,700,959 | $ | (799,035 | ) | (30 | %) | $ | 1,901,924 | $ | 2,700,959 | $ | (799,035 | ) | (30 | %) | ||||||||||
|
Loans Delinquent Over 90 Days
|
$ | 993,618 | $ | 1,098,611 | $ | 1,224,526 | $ | 1,386,386 | $ | 1,411,779 | $ | (418,161 | ) | (30 | %) | $ | 993,618 | $ | 1,411,779 | $ | (418,161 | ) | (30 | %) | ||||||||||
|
Credit Card Loans
|
||||||||||||||||||||||||||||||||||
|
Credit Card Loans
|
$ | 45,156,994 | $ | 45,248,166 | $ | 45,328,330 | $ | 45,761,239 | $ | 47,465,590 | $ | (2,308,596 | ) | (5 | %) | $ | 45,156,994 | $ | 47,465,590 | $ | (2,308,596 | ) | (5 | %) | ||||||||||
|
Average Credit Card Loans
|
$ | 44,669,713 | $ | 44,905,220 | $ | 45,279,580 | $ | 47,646,479 | $ | 47,429,775 | $ | (2,760,062 | ) | (6 | %) | $ | 45,616,791 | $ | 48,854,822 | $ | (3,238,031 | ) | (7 | %) | ||||||||||
|
Interest Yield 11
|
12.68 | % | 12.86 | % | 12.93 | % | 12.70 | % | 12.75 | % | (7 | ) |
bps
|
12.79 | % | 12.59 | % | 20 |
bps
|
|||||||||||||||
|
Net Principal Charge-off Rate 12
|
6.95 | % | 7.73 | % | 8.56 | % | 9.00 | % | 8.81 | % | (186 | ) |
bps
|
8.08 | % | 8.00 | % | 8 |
bps
|
|||||||||||||||
|
Delinquency Rate (over 30 days) 13
|
4.06 | % | 4.39 | % | 4.85 | % | 5.39 | % | 5.60 | % | (154 | ) |
bps
|
4.06 | % | 5.60 | % | (154 | ) |
bps
|
||||||||||||||
|
Delinquency Rate (over 90 days) 14
|
2.12 | % | 2.35 | % | 2.63 | % | 2.98 | % | 2.94 | % | (82 | ) |
bps
|
2.12 | % | 2.94 | % | (82 | ) |
bps
|
||||||||||||||
|
Net Charge-off Dollars
|
$ | 773,829 | $ | 875,292 | $ | 977,084 | $ | 1,057,920 | $ | 1,041,247 | $ | (267,418 | ) | (26 | %) | $ | 3,684,125 | $ | 3,906,893 | $ | (222,768 | ) | (6 | %) | ||||||||||
|
Loans Delinquent Over 30 Days
|
$ | 1,831,119 | $ | 1,986,049 | $ | 2,196,312 | $ | 2,467,482 | $ | 2,656,689 | $ | (825,570 | ) | (31 | %) | $ | 1,831,119 | $ | 2,656,689 | $ | (825,570 | ) | (31 | %) | ||||||||||
|
Loans Delinquent Over 90 Days
|
$ | 958,216 | $ | 1,062,171 | $ | 1,192,684 | $ | 1,364,801 | $ | 1,393,474 | $ | (435,258 | ) | (31 | %) | $ | 958,216 | $ | 1,393,474 | $ | (435,258 | ) | (31 | %) | ||||||||||
|
Total Discover Card Volume
|
$ | 25,054,455 | $ | 25,552,568 | $ | 24,247,382 | $ | 23,844,456 | $ | 23,335,440 | $ | 1,719,015 | 7 | % | $ | 98,698,861 | $ | 95,592,170 | $ | 3,106,691 | 3 | % | ||||||||||||
|
Discover Card Sales Volume
|
$ | 23,219,361 | $ | 23,992,715 | $ | 22,858,772 | $ | 22,399,675 | $ | 21,903,694 | $ | 1,315,667 | 6 | % | $ | 92,470,523 | $ | 87,460,552 | $ | 5,009,971 | 6 | % | ||||||||||||
3
|
Discover Financial Services
|
||||||||||||||||||||||||||||||||||
|
Direct Banking Segment
|
||||||||||||||||||||||||||||||||||
|
As Adjusted Basis (for 2009 data)
|
||||||||||||||||||||||||||||||||||
|
(unaudited, dollars in thousands)
|
||||||||||||||||||||||||||||||||||
|
Quarter Ended
|
November 30, 2010
|
Year Ended
|
||||||||||||||||||||||||||||||||
|
Nov 30, 2010
|
Aug 31, 2010
|
May 31, 2010
|
Feb 28, 2010
|
Nov 30, 2009
|
vs. November 30, 2009
|
Nov 30, 2010
|
Nov 30, 2009
|
2010 vs. 2009
|
||||||||||||||||||||||||||
|
Earnings Summary
|
||||||||||||||||||||||||||||||||||
|
Interest Income
|
$ | 1,499,343 | $ | 1,535,934 | $ | 1,551,775 | $ | 1,559,147 | $ | 1,576,364 | $ | (77,021 | ) | (5 | %) | $ | 6,146,199 | $ | 6,434,054 | $ | (287,855 | ) | (4 | %) | ||||||||||
|
Interest Expense
|
375,423 | 389,059 | 404,577 | 413,686 | 393,128 | (17,705 | ) | (5 | %) | 1,582,745 | 1,605,277 | (22,532 | ) | (1 | %) | |||||||||||||||||||
|
Net Interest Income
|
1,123,920 | 1,146,875 | 1,147,198 | 1,145,461 | 1,183,236 | (59,316 | ) | (5 | %) | 4,563,454 | 4,828,777 | (265,323 | ) | (5 | %) | |||||||||||||||||||
|
Other Income
|
403,591 | 495,771 | 447,711 | 480,341 | 490,356 | (86,765 | ) | (18 | %) | 1,827,414 | 1,946,270 | (118,856 | ) | (6 | %) | |||||||||||||||||||
|
Revenue Net of Interest Expense
|
1,527,511 | 1,642,646 | 1,594,909 | 1,625,802 | 1,673,592 | (146,081 | ) | (9 | %) | 6,390,868 | 6,775,047 | (384,179 | ) | (6 | %) | |||||||||||||||||||
|
Provision for Loan Losses
|
382,670 | 712,565 | 724,264 | 1,387,206 | 1,258,261 | (875,591 | ) | (70 | %) | 3,206,705 | 5,123,030 | (1,916,325 | ) | (37 | %) | |||||||||||||||||||
|
Total Other Expense
|
590,936 | 534,782 | 484,706 | 446,261 | 542,359 | 48,577 | 9 | % | 2,056,685 | 2,087,970 | (31,285 | ) | (1 | %) | ||||||||||||||||||||
|
Income Before Income Taxes
|
$ | 553,905 | $ | 395,299 | $ | 385,939 | $ | (207,665 | ) | $ | (127,028 | ) | $ | 680,933 |
NM
|
$ | 1,127,478 | $ | (435,953 | ) | $ | 1,563,431 |
NM
|
|||||||||||
|
Net Interest Margin 21
|
9.28 | % | 9.16 | % | 9.14 | % | 9.01 | % | 9.38 | % | (10 | ) |
bps
|
9.14 | % | 9.44 | % | (30 | ) |
bps
|
||||||||||||||
|
Pretax Return on Loan Receivables 25
|
4.57 | % | 3.16 | % | 3.07 | % | (1.63 | %) | (1.01 | %) | 558 |
bps
|
2.26 | % | (0.85 | %) | 311 |
bps
|
||||||||||||||||
|
Loan Receivables
|
||||||||||||||||||||||||||||||||||
|
Total Loans
|
$ | 48,836,413 | $ | 50,130,664 | $ | 50,024,718 | $ | 50,093,516 | $ | 50,854,146 | $ | (2,017,733 | ) | (4 | %) | $ | 48,836,413 | $ | 50,854,146 | $ | (2,017,733 | ) | (4 | %) | ||||||||||
|
Average Total Loans
|
$ | 48,596,601 | $ | 49,687,300 | $ | 49,818,909 | $ | 51,555,460 | $ | 50,585,332 | $ | (1,988,731 | ) | (4 | %) | $ | 49,909,187 | $ | 51,130,117 | $ | (1,220,930 | ) | (2 | %) | ||||||||||
|
Interest Yield 11
|
12.24 | % | 12.16 | % | 12.25 | % | 12.15 | % | 12.35 | % | (11 | ) |
bps
|
12.20 | % | 12.40 | % | (20 | ) |
bps
|
||||||||||||||
|
Net Principal Charge-off Rate 12
|
6.58 | % | 7.18 | % | 7.97 | % | 8.51 | % | 8.43 | % | (185 | ) |
bps
|
7.57 | % | 7.77 | % | (20 | ) |
bps
|
||||||||||||||
|
Delinquency Rate (over 30 days) 13
|
3.89 | % | 4.16 | % | 4.52 | % | 5.05 | % | 5.31 | % | (142 | ) |
bps
|
3.89 | % | 5.31 | % | (142 | ) |
bps
|
||||||||||||||
|
Delinquency Rate (over 90 days) 14
|
2.03 | % | 2.19 | % | 2.45 | % | 2.77 | % | 2.78 | % | (75 | ) |
bps
|
2.03 | % | 2.78 | % | (75 | ) |
bps
|
||||||||||||||
|
Net Charge-off Dollars
|
$ | 796,931 | $ | 899,468 | $ | 1,001,000 | $ | 1,082,206 | $ | 1,063,472 | $ | (266,541 | ) | (25 | %) | $ | 3,779,605 | $ | 3,975,028 | $ | (195,423 | ) | (5 | %) | ||||||||||
|
Loans Delinquent Over 30 Days
|
$ | 1,901,924 | $ | 2,083,128 | $ | 2,263,608 | $ | 2,529,580 | $ | 2,700,959 | $ | (799,035 | ) | (30 | %) | $ | 1,901,924 | $ | 2,700,959 | $ | (799,035 | ) | (30 | %) | ||||||||||
|
Loans Delinquent Over 90 Days
|
$ | 993,618 | $ | 1,098,611 | $ | 1,224,526 | $ | 1,386,386 | $ | 1,411,779 | $ | (418,161 | ) | (30 | %) | $ | 993,618 | $ | 1,411,779 | $ | (418,161 | ) | (30 | %) | ||||||||||
|
Credit Card Loans
|
||||||||||||||||||||||||||||||||||
|
Credit Card Loans
|
$ | 45,156,994 | $ | 45,248,166 | $ | 45,328,330 | $ | 45,761,239 | $ | 47,459,364 | $ | (2,302,370 | ) | (5 | %) | $ | 45,156,994 | $ | 47,459,364 | $ | (2,302,370 | ) | (5 | %) | ||||||||||
|
Average Credit Card Loans
|
$ | 44,669,713 | $ | 44,905,220 | $ | 45,279,580 | $ | 47,646,479 | $ | 47,424,261 | $ | (2,754,548 | ) | (6 | %) | $ | 45,616,791 | $ | 48,844,325 | $ | (3,227,534 | ) | (7 | %) | ||||||||||
|
Interest Yield 11
|
12.68 | % | 12.86 | % | 12.93 | % | 12.70 | % | 12.76 | % | (8 | ) |
bps
|
12.79 | % | 12.63 | % | 16 |
bps
|
|||||||||||||||
|
Net Principal Charge-off Rate 12
|
6.95 | % | 7.73 | % | 8.56 | % | 9.00 | % | 8.81 | % | (186 | ) |
bps
|
8.08 | % | 8.00 | % | 8 |
bps
|
|||||||||||||||
|
Delinquency Rate (over 30 days) 13
|
4.06 | % | 4.39 | % | 4.85 | % | 5.39 | % | 5.60 | % | (154 | ) |
bps
|
4.06 | % | 5.60 | % | (154 | ) |
bps
|
||||||||||||||
|
Delinquency Rate (over 90 days) 14
|
2.12 | % | 2.35 | % | 2.63 | % | 2.98 | % | 2.94 | % | (82 | ) |
bps
|
2.12 | % | 2.94 | % | (82 | ) |
bps
|
||||||||||||||
|
Net Charge-off Dollars
|
$ | 773,829 | $ | 875,292 | $ | 977,084 | $ | 1,057,920 | $ | 1,041,247 | $ | (267,418 | ) | (26 | %) | $ | 3,684,125 | $ | 3,906,893 | $ | (222,768 | ) | (6 | %) | ||||||||||
|
Loans Delinquent Over 30 Days
|
$ | 1,831,119 | $ | 1,986,049 | $ | 2,196,312 | $ | 2,467,482 | $ | 2,656,689 | $ | (825,570 | ) | (31 | %) | $ | 1,831,119 | $ | 2,656,689 | $ | (825,570 | ) | (31 | %) | ||||||||||
|
Loans Delinquent Over 90 Days
|
$ | 958,216 | $ | 1,062,171 | $ | 1,192,684 | $ | 1,364,801 | $ | 1,393,474 | $ | (435,258 | ) | (31 | %) | $ | 958,216 | $ | 1,393,474 | $ | (435,258 | ) | (31 | %) | ||||||||||
|
Total Discover Card Volume
|
$ | 25,054,455 | $ | 25,552,568 | $ | 24,247,382 | $ | 23,844,456 | $ | 23,335,440 | $ | 1,719,015 | 7 | % | $ | 98,698,861 | $ | 95,592,170 | $ | 3,106,691 | 3 | % | ||||||||||||
|
Discover Card Sales Volume
|
$ | 23,219,361 | $ | 23,992,715 | $ | 22,858,772 | $ | 22,399,675 | $ | 21,903,694 | $ | 1,315,667 | 6 | % | $ | 92,470,523 | $ | 87,460,552 | $ | 5,009,971 | 6 | % | ||||||||||||
Note: As adjusted basis (non-GAAP) data is presented to show how the Company's financial data would be presented for each of the fiscal quarters in the year ended November 30, 2009 if the trusts used in the Company’s securitization activities were consolidated into the Company’s financial statements for such periods. As adjusted income statement data also excludes the impact of income received in connection with the settlement of the Company's antitrust litigation with Visa and MasterCard in each quarter of 2009 and the income statement impact of the Morgan Stanley special dividend agreement dispute in the fourth quarter of 2009. For reconciliation of comparable GAAP measures see Reconciliation of GAAP to As Adjusted data.
4
|
Discover Financial Services
|
|||||||||||||||||||||||||||||||||
|
Payment Services Segment
|
|||||||||||||||||||||||||||||||||
|
(unaudited, dollars in thousands)
|
|||||||||||||||||||||||||||||||||
|
Quarter Ended
|
November 30, 2010
|
Year Ended
|
|||||||||||||||||||||||||||||||
|
Nov 30, 2010
|
Aug 31, 2010
|
May 31, 2010
|
Feb 28, 2010
|
Nov 30, 2009
|
vs. November 30, 2009
|
Nov 30, 2010
|
Nov 30, 2009
|
2010 vs. 2009
|
|||||||||||||||||||||||||
|
Earnings Summary
|
|||||||||||||||||||||||||||||||||
|
Interest Income
|
$ | 4 | $ | 5 | $ | 7 | $ | 3 | $ | 78 | $ | (74 | ) | (95 | %) | $ | 19 | $ | 1,098 | $ | (1,079 | ) | (98 | %) | |||||||||
|
Interest Expense
|
83 | 78 | 44 | 38 | 32 | 51 | 159 | % | 243 | 222 | 21 | 9 | % | ||||||||||||||||||||
|
Net Interest Income
|
(79 | ) | (73 | ) | (37 | ) | (35 | ) | 46 | (125 | ) |
NM
|
(224 | ) | 876 | (1,100 | ) | (126 | %) | ||||||||||||||
|
Other Income
|
68,544 | 68,373 | 65,133 | 65,535 | 59,873 | 8,671 | 14 | % | 267,585 | 239,794 | 27,791 | 12 | % | ||||||||||||||||||||
|
Revenue Net of Interest Expense
|
68,465 | 68,300 | 65,096 | 65,500 | 59,919 | 8,546 | 14 | % | 267,361 | 240,670 | 26,691 | 11 | % | ||||||||||||||||||||
|
Provision for Loan Losses
|
- | - | - | - | - | - |
NM
|
- | - | - |
NM
|
||||||||||||||||||||||
|
Total Other Expense
|
37,139 | 31,456 | 28,842 | 28,543 | 36,148 | 991 | 3 | % | 125,980 | 134,126 | (8,146 | ) | (6 | %) | |||||||||||||||||||
|
Income Before Income Taxes
|
$ | 31,326 | $ | 36,844 | $ | 36,254 | $ | 36,957 | $ | 23,771 | $ | 7,555 | 32 | % | $ | 141,381 | $ | 106,544 | $ | 34,837 | 33 | % | |||||||||||
|
Volume
|
|||||||||||||||||||||||||||||||||
|
PULSE Network
|
$ | 31,333,712 | $ | 30,581,850 | $ | 28,645,624 | $ | 27,617,635 | $ | 24,667,926 | $ | 6,665,786 | 27 | % | $ | 118,178,821 | $ | 109,302,121 | $ | 8,876,700 | 8 | % | |||||||||||
|
Third-Party Issuers
|
1,768,429 | 1,793,785 | 1,678,337 | 1,561,929 | 1,522,269 | 246,160 | 16 | % | 6,802,480 | 5,671,555 | 1,130,925 | 20 | % | ||||||||||||||||||||
|
Diners Club International 15
|
7,327,446 | 6,542,418 | 6,708,533 | 6,554,504 | 7,172,809 | 154,637 | 2 | % | 27,132,901 | 26,172,977 | 959,924 | 4 | % | ||||||||||||||||||||
|
Total Payment Services16
|
$ | 40,429,587 | $ | 38,918,053 | $ | 37,032,494 | $ | 35,734,068 | $ | 33,363,004 | $ | 7,066,583 | 21 | % | $ | 152,114,202 | $ | 141,146,653 | $ | 10,967,549 | 8 | % | |||||||||||
|
Transactions Processed on PULSE Network (000's)
|
901,184 | 882,172 | 805,281 | 719,906 | 676,817 | 224,367 | 33 | % | 3,308,543 | 2,878,720 | 429,823 | 15 | % | ||||||||||||||||||||
5
DISCOVER FINANCIAL SERVICES
RECONCILIATION OF GAAP TO AS ADJUSTED DATA
The following pages present a reconciliation for certain information disclosed in the financial data supplement.
The trusts used in the securitization activities of Discover Financial Services (the "Company") are included in the Company's consolidated financial results beginning with the fiscal quarter ending February 28, 2010, in accordance with the Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 166, Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140 ("Statement No. 166") (codified under the FASB Accounting Standards Codification ("ASC") Section 860, Transfers and Servicing ) and Statement of Financial Accounting Standards No. 167, Amendments to FASB Interpretations No. 46(R) ("Statement No. 167") (codified under ASC Section 810, Consolidation), which were effective for the Company at the beginning of its current fiscal year, December 1, 2009.
The Company did not retrospectively adopt Statements No. 166 and 167 and, therefore, financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for 2010 and beyond will reflect the new accounting requirements, but the historical GAAP financial statements for periods ending on or before November 30, 2009 will continue to reflect the accounting applicable prior to the Company’s adoption of Statements No. 166 and 167.
To allow for a more meaningful historical comparison in analyzing financial data presented in 2010 and beyond, the Company has prepared financial statements showing how the Company's financial data would have been presented if the trusts used in the Company's securitization activities were consolidated into the Company's financial statements in 2009. In preparing the financial statements, the Company made securitization and as adjusted adjustments for each period. Securitization adjustments reverse the effect of loan securitization by recharacterizing securitization income to report interest income, interest expense, provision for loan losses, discount and interchange revenue and loan fee revenues in the same lines as non-securitized loans. As adjusted adjustments include additional amounts necessary to reflect results as if the trusts used in our securitization activities had been fully consolidated in our historical results and adjustments to exclude the impact of income received in connection with the settlement of the Company's antitrust litigation with Visa and MasterCard in each quarter of 2009 and the income statement impact of the Morgan Stanley special dividend agreement dispute in the fourth quarter of 2009.
Tangible common equity ("TCE"), a non-GAAP financial measure, represents common equity less goodwill and intangibles. A reconcilation of TCE to common equity, a GAAP financial measure, is shown on the pages that follow. Other financial services companies may also use TCE and definitions may vary, so we advise users of this information to exercise caution in comparing TCE of different companies. TCE is included because management believes that common equity excluding goodwill and intangibles is a more meaningful valuation to investors of the true net asset value of the company.
Reserve rate (excluding guaranteed student loans), a non-GAAP financial measure, represents the allowance for loan losses as a percentage of total loans excluding guaranteed student loans. A reconciliation of total loans, a GAAP financial measure, to loans excluding the guaranteed portion of student loans is shown on the pages that follow. A portion of the Company's student loans are 97% guaranteed by the federal government under the Federal Family Education Loan Program. These guaranteed student loans carry little default risk and therefore, are reserved at a significantly lower rate than the remaining portfolio. Management believes that a reserve rate excluding the government guaranteed portion of student loans is a more meaningful valuation to investors of the portion of the portfolio that has a risk of loss.
6
|
Discover Financial Services
|
||||||||||||||||||||
|
Reconciliation of GAAP to As Adjusted Data
|
||||||||||||||||||||
|
(unaudited, dollars in thousands, except per share statistics)
|
||||||||||||||||||||
|
Nov 30, 2010
|
Aug 31, 2010
|
May 31, 2010
|
Feb 28, 2010
|
Nov 30, 2009
|
||||||||||||||||
|
GAAP Total Common Equity
|
$ | 6,456,846 | $ | 6,111,297 | $ | 6,038,267 | $ | 5,853,594 | $ | 7,277,481 | ||||||||||
|
As Adjusted Adjustments26
|
- | - | - | - | (1,332,556 | ) | ||||||||||||||
|
As Adjusted Total Common Equity
|
6,456,846 | 6,111,297 | 6,038,267 | 5,853,594 | 5,944,925 | |||||||||||||||
|
Less: Goodwill
|
(255,421 | ) | (255,421 | ) | (255,421 | ) | (255,421 | ) | (255,421 | ) | ||||||||||
|
Less: Intangibles
|
(188,973 | ) | (190,639 | ) | (192,304 | ) | (193,970 | ) | (195,636 | ) | ||||||||||
|
As Adjusted Tangible Common Equity
|
$ | 6,012,452 | $ | 5,665,237 | $ | 5,590,542 | $ | 5,404,203 | $ | 5,493,868 | ||||||||||
|
GAAP Book Value per share
|
$ | 11.85 | $ | 11.22 | $ | 11.10 | $ | 12.90 | $ | 15.54 | ||||||||||
|
Less: As Adjusted Adjustments
|
- | - | - | 0.00 | (2.45 | ) | ||||||||||||||
|
As Adjusted Book Value per share
|
11.85 | 11.22 | 11.10 | 12.90 | 13.09 | |||||||||||||||
|
Less: Goodwill
|
(0.47 | ) | (0.47 | ) | (0.47 | ) | (0.47 | ) | (0.47 | ) | ||||||||||
|
Less: Intangibles
|
(0.35 | ) | (0.35 | ) | (0.35 | ) | (0.36 | ) | (0.36 | ) | ||||||||||
|
Less: Preferred Stock
|
- | - | - | (2.14 | ) | (2.13 | ) | |||||||||||||
|
As Adjusted Tangible Common Equity per share
|
$ | 11.04 | $ | 10.40 | $ | 10.28 | $ | 9.94 | $ | 10.12 | ||||||||||
|
GAAP Total Loans
|
$ | 48,836,413 | $ | 50,130,664 | $ | 50,024,718 | $ | 50,093,516 | $ | 23,625,084 | ||||||||||
|
Securitization Adjustments27
|
NA
|
NA
|
NA
|
NA
|
27,235,288 | |||||||||||||||
|
Managed Basis
|
48,836,413 | 50,130,664 | 50,024,718 | 50,093,516 | 50,860,372 | |||||||||||||||
|
As Adjusted Adjustments
|
- | - | - | - | (6,226 | ) | ||||||||||||||
|
As Adjusted Total Loans
|
48,836,413 | 50,130,664 | 50,024,718 | 50,093,516 | 50,854,146 | |||||||||||||||
|
Less: Guaranteed portion of student loans
|
(764,458 | ) | (2,128,446 | ) | (2,120,231 | ) | (1,910,889 | ) | (1,274,453 | ) | ||||||||||
|
As Adjusted Total Loans Less: Guaranteed portion of student loans
|
$ | 48,071,955 | $ | 48,002,218 | $ | 47,904,487 | $ | 48,182,627 | $ | 49,579,693 | ||||||||||
|
Reserve Rate
|
||||||||||||||||||||
|
GAAP Basis
|
6.77 | % | 7.47 | % | 7.86 | % | 8.40 | % | 7.44 | % | ||||||||||
|
Adjustments28
|
- | - | - | - | 0.23 | % | ||||||||||||||
|
As Adjusted
|
6.77 | % | 7.47 | % | 7.86 | % | 8.40 | % | 7.67 | % | ||||||||||
|
Adjustments (to exclude guaranteed student loans)
|
0.10 | % | 0.33 | % | 0.35 | % | 0.33 | % | 0.20 | % | ||||||||||
|
As Adjusted (excluding guaranteed student loans)
|
6.87 | % | 7.80 | % | 8.21 | % | 8.73 | % | 7.87 | % | ||||||||||
7
|
Discover Financial Services
|
|||||||||||||||||
|
Reconciliation of GAAP to As Adjusted Data
|
|||||||||||||||||
|
(unaudited, dollars in thousands, except per share statistics)
|
|||||||||||||||||
|
Quarter Ended
|
Year Ended
|
Quarter Ended
|
Year Ended
|
||||||||||||||
|
Nov 30, 2009
|
Nov 30, 2009
|
Nov 30, 2009
|
Nov 30, 2009
|
||||||||||||||
|
Total Company
|
Total Company (continued)
|
||||||||||||||||
|
Interest Income
|
Total Assets
|
||||||||||||||||
|
GAAP Basis
|
$ | 638,086 | $ | 3,145,080 |
GAAP Basis
|
$ | 46,020,987 | $ | 46,020,987 | ||||||||
|
Securitization Adjustments
|
947,604 | 3,315,992 |
Securitization Adjustments
|
26,968,289 | 26,968,289 | ||||||||||||
|
Managed Basis
|
1,585,690 | 6,461,072 |
Managed Basis
|
72,989,276 | 72,989,276 | ||||||||||||
|
As Adjusted Adjustments
|
(9,248 | ) | (25,920 | ) |
As Adjusted Adjustments
|
(5,872,917 | ) | (5,872,917 | ) | ||||||||
|
As Adjusted
|
$ | 1,576,442 | $ | 6,435,152 |
As Adjusted
|
$ | 67,116,359 | $ | 67,116,359 | ||||||||
|
Interest Expense
|
Tangible Assets
|
||||||||||||||||
|
GAAP Basis
|
$ | 314,158 | $ | 1,251,284 |
GAAP Basis
|
$ | 45,569,930 | $ | 45,569,930 | ||||||||
|
Securitization Adjustments
|
89,140 | 397,136 |
Securitization Adjustments
|
26,968,289 | 26,968,289 | ||||||||||||
|
Managed Basis
|
403,298 | 1,648,420 |
Managed Basis
|
72,538,219 | 72,538,219 | ||||||||||||
|
As Adjusted Adjustments
|
(10,138 | ) | (42,921 | ) |
As Adjusted Adjustments
|
(5,872,917 | ) | (5,872,917 | ) | ||||||||
|
As Adjusted
|
$ | 393,160 | $ | 1,605,499 |
As Adjusted
|
$ | 66,665,302 | $ | 66,665,302 | ||||||||
|
Net Interest Income
|
Total Equity
|
||||||||||||||||
|
GAAP Basis
|
$ | 323,928 | $ | 1,893,796 |
GAAP Basis
|
$ | 8,435,547 | $ | 8,435,547 | ||||||||
|
Securitization Adjustments
|
858,464 | 2,918,856 |
As Adjusted Adjustments
|
(1,332,556 | ) | (1,332,556 | ) | ||||||||||
|
Managed Basis
|
1,182,392 | 4,812,652 |
As Adjusted
|
$ | 7,102,991 | $ | 7,102,991 | ||||||||||
|
As Adjusted Adjustments
|
890 | 17,001 | |||||||||||||||
|
As Adjusted
|
$ | 1,183,282 | $ | 4,829,653 |
Allowance for Loan Losses
|
||||||||||||
|
GAAP Basis
|
$ | 1,757,899 | $ | 1,757,899 | |||||||||||||
|
Other Income
|
As Adjusted Adjustments
|
2,144,461 | 2,144,461 | ||||||||||||||
|
GAAP Basis
|
$ | 1,253,559 | $ | 4,840,595 |
As Adjusted
|
$ | 3,902,360 | $ | 3,902,360 | ||||||||
|
Securitization Adjustments
|
(269,187 | ) | (922,920 | ) | |||||||||||||
|
Managed Basis
|
984,372 | 3,917,675 |
Change in Loan Loss Reserves
|
||||||||||||||
|
As Adjusted Adjustments
|
(434,143 | ) | (1,731,611 | ) |
GAAP Basis
|
$ | (74,461 | ) | $ | 383,314 | |||||||
|
As Adjusted
|
$ | 550,229 | $ | 2,186,064 |
As Adjusted Adjustments
|
269,250 | 764,689 | ||||||||||
|
As Adjusted
|
$ | 194,789 | $ | 1,148,003 | |||||||||||||
|
Revenue Net of Interest Expense
|
|||||||||||||||||
|
GAAP Basis
|
$ | 1,577,487 | $ | 6,734,391 |
Loan Receivables
|
||||||||||||
|
Securitization Adjustments
|
589,277 | 1,995,936 | |||||||||||||||
|
Managed Basis
|
2,166,764 | 8,730,327 |
Average Total Loans
|
||||||||||||||
|
As Adjusted Adjustments
|
(433,253 | ) | (1,714,610 | ) |
GAAP Basis
|
$ | 23,835,598 | $ | 26,552,574 | ||||||||
|
As Adjusted
|
$ | 1,733,511 | $ | 7,015,717 |
Securitization Adjustments
|
26,755,248 | 24,588,040 | ||||||||||
|
Managed Basis
|
50,590,846 | 51,140,614 | |||||||||||||||
|
Provision for Loan Losses
|
As Adjusted Adjustments
|
(5,514 | ) | (10,497 | ) | ||||||||||||
|
GAAP Basis
|
$ | 399,732 | $ | 2,362,405 |
As Adjusted
|
$ | 50,585,332 | $ | 51,130,117 | ||||||||
|
Securitization Adjustments
|
589,277 | 1,995,936 | |||||||||||||||
|
Managed Basis
|
989,009 | 4,358,341 |
Net Charge-off Dollars
|
||||||||||||||
|
As Adjusted Adjustments
|
269,252 | 764,689 |
GAAP Basis
|
$ | 474,193 | $ | 1,979,091 | ||||||||||
|
As Adjusted
|
$ | 1,258,261 | $ | 5,123,030 |
Adjustments
|
589,279 | 1,995,936 | ||||||||||
|
As Adjusted
|
$ | 1,063,472 | $ | 3,975,027 | |||||||||||||
|
Other Expense
|
|||||||||||||||||
|
GAAP Basis
|
$ | 118,748 | $ | 333,833 |
Loans Delinquent Over 30 Days
|
||||||||||||
|
As Adjusted Adjustments
|
(28,992 | ) | (28,992 | ) |
GAAP Basis
|
$ | 1,161,497 | $ | 1,161,497 | ||||||||
|
As Adjusted
|
$ | 89,756 | $ | 304,841 |
Adjustments
|
1,539,462 | 1,539,462 | ||||||||||
|
As Adjusted
|
$ | 2,700,959 | $ | 2,700,959 | |||||||||||||
|
Total Other Expense
|
|||||||||||||||||
|
GAAP Basis
|
$ | 607,499 | $ | 2,251,088 |
Loans Delinquent Over 90 Days
|
||||||||||||
|
As Adjusted Adjustments
|
(28,992 | ) | (28,992 | ) |
GAAP Basis
|
$ | 608,437 | $ | 608,437 | ||||||||
|
As Adjusted
|
$ | 578,507 | $ | 2,222,096 |
Adjustments
|
803,342 | 803,342 | ||||||||||
|
As Adjusted
|
$ | 1,411,779 | $ | 1,411,779 | |||||||||||||
|
Income Before Income Taxes
|
|||||||||||||||||
|
GAAP Basis
|
$ | 570,256 | $ | 2,120,898 |
Direct Banking Earnings Summary
|
||||||||||||
|
As Adjusted Adjustments
|
(673,513 | ) | (2,450,307 | ) | |||||||||||||
|
As Adjusted
|
$ | (103,257 | ) | $ | (329,409 | ) |
Interest Income
|
||||||||||
|
Managed
|
$ | 1,585,612 | $ | 6,459,974 | |||||||||||||
|
Tax Expense
|
As Adjusted Adjustments
|
(9,248 | ) | (25,920 | ) | ||||||||||||
|
GAAP Basis
|
$ | 217,719 | $ | 844,713 |
As Adjusted
|
$ | 1,576,364 | $ | 6,434,054 | ||||||||
|
As Adjusted Adjustments
|
(261,756 | ) | (936,838 | ) | |||||||||||||
|
As Adjusted
|
$ | (44,037 | ) | $ | (92,125 | ) |
Interest Expense
|
||||||||||
|
Managed
|
$ | 403,266 | $ | 1,648,198 | |||||||||||||
|
Net Income
|
As Adjusted Adjustments
|
(10,138 | ) | (42,921 | ) | ||||||||||||
|
GAAP Basis
|
$ | 352,537 | $ | 1,276,185 |
As Adjusted
|
$ | 393,128 | $ | 1,605,277 | ||||||||
|
As Adjusted Adjustments
|
(411,757 | ) | (1,513,469 | ) | |||||||||||||
|
As Adjusted
|
$ | (59,220 | ) | $ | (237,284 | ) |
Net Interest Income
|
||||||||||
|
Managed
|
$ | 1,182,346 | $ | 4,811,776 | |||||||||||||
|
Net Income Allocated to Common Stockholders
|
As Adjusted Adjustments
|
890 | 17,001 | ||||||||||||||
|
GAAP Basis
|
$ | 330,505 | $ | 1,206,965 |
As Adjusted
|
$ | 1,183,236 | $ | 4,828,777 | ||||||||
|
As Adjusted Adjustments
|
(408,360 | ) | (1,497,504 | ) | |||||||||||||
|
As Adjusted
|
$ | (77,855 | ) | $ | (290,539 | ) | |||||||||||
8
|
|
|
|
|
|
| Discover Financial Services | |||||||||||||||||
| Reconciliation of GAAP to As Adjusted Data | |||||||||||||||||
| (unaudited, dollars in thousands, except per share statistics) | |||||||||||||||||
| Quarter Ended | Year Ended | Quarter Ended | Year Ended | ||||||||||||||
| Nov 30, 2009 | Nov 30, 2009 | Nov 30, 2009 | Nov 30, 2009 | ||||||||||||||
|
Direct Banking Earnings Summary (continued)
|
Total Company Ratios
|
||||||||||||||||
|
Other Income
|
Tangible Common Equity/Net Loans
|
||||||||||||||||
|
Managed
|
$ | 924,499 | $ | 3,677,881 |
GAAP Basis
|
31.2 | % | 31.2 | % | ||||||||
|
As Adjusted Adjustments
|
(434,143 | ) | (1,731,611 | ) |
Adjustments
|
(19.5 | %) | (19.5 | %) | ||||||||
|
As Adjusted
|
$ | 490,356 | $ | 1,946,270 |
As Adjusted
|
11.7 | % | 11.7 | % | ||||||||
|
Revenue Net of Interest Expense
|
ROE
|
||||||||||||||||
|
Managed
|
$ | 2,106,845 | $ | 8,489,657 |
GAAP Basis
|
16 | % | 17 | % | ||||||||
|
As Adjusted Adjustments
|
(433,253 | ) | (1,714,610 | ) |
Adjustments
|
(19 | %) | (21 | %) | ||||||||
|
As Adjusted
|
$ | 1,673,592 | $ | 6,775,047 |
As Adjusted
|
(3 | %) | (4 | %) | ||||||||
|
Provision for Loan Losses
|
Net Interest Margin
|
||||||||||||||||
|
Managed
|
$ | 989,009 | $ | 4,358,341 |
GAAP Basis
|
5.45 | % | 7.13 | % | ||||||||
|
As Adjusted Adjustments
|
269,252 | 764,689 |
Adjustments
|
3.93 | % | 2.32 | % | ||||||||||
|
As Adjusted
|
$ | 1,258,261 | $ | 5,123,030 |
As Adjusted
|
9.38 | % | 9.45 | % | ||||||||
|
Total Other Expense
|
Return on Loan Receivables
|
||||||||||||||||
|
Managed
|
$ | 571,351 | $ | 2,116,962 |
GAAP Basis
|
5.93 | % | 4.81 | % | ||||||||
|
As Adjusted Adjustments
|
(28,992 | ) | (28,992 | ) |
Adjustments
|
(6.40 | %) | (5.27 | %) | ||||||||
|
As Adjusted
|
$ | 542,359 | $ | 2,087,970 |
As Adjusted
|
(0.47 | %) | (0.46 | %) | ||||||||
|
Income Before Income Taxes
|
Basic EPS
|
||||||||||||||||
|
Managed
|
$ | 546,485 | $ | 2,014,354 |
GAAP Basis
|
$ | 0.61 | $ | 2.39 | ||||||||
|
As Adjusted Adjustments
|
(673,513 | ) | (2,450,307 | ) |
Adjustments
|
(0.75 | ) | (2.97 | ) | ||||||||
|
As Adjusted
|
$ | (127,028 | ) | $ | (435,953 | ) |
As Adjusted
|
$ | (0.14 | ) | $ | (0.58 | ) | ||||
|
Pretax Return on Loan Receivables
|
Diluted EPS
|
||||||||||||||||
|
GAAP Basis
|
4.33 | % | 3.94 | % |
GAAP Basis
|
$ | 0.60 | $ | 2.38 | ||||||||
|
Adjustments
|
(5.34 | %) | (4.79 | %) |
Adjustments
|
(0.74 | ) | (2.95 | ) | ||||||||
|
As Adjusted
|
(1.01 | %) | (0.85 | %) |
As Adjusted
|
$ | (0.14 | ) | $ | (0.58 | ) | ||||||
|
Credit Card Loan Receivables
|
Loan Receivables Ratios
|
||||||||||||||||
|
Credit Card Loans
|
Interest Yield
|
||||||||||||||||
|
GAAP Basis
|
$ | 20,230,302 | $ | 20,230,302 |
GAAP Basis
|
10.25 | % | 11.31 | % | ||||||||
|
Securitization Adjustments
|
27,235,288 | 27,235,288 |
Adjustments
|
2.10 | % | 1.09 | % | ||||||||||
|
Managed Basis
|
47,465,590 | 47,465,590 |
As Adjusted
|
12.35 | % | 12.40 | % | ||||||||||
|
As Adjusted Adjustments
|
(6,226 | ) | (6,226 | ) | |||||||||||||
|
As Adjusted
|
$ | 47,459,364 | $ | 47,459,364 |
Net Principal Charge-off Rate
|
||||||||||||
|
GAAP Basis
|
7.98 | % | 7.45 | % | |||||||||||||
|
Average Credit Card Loans
|
Adjustments
|
0.45 | % | 0.32 | % | ||||||||||||
|
GAAP Basis
|
$ | 20,674,527 | $ | 24,266,782 |
As Adjusted
|
8.43 | % | 7.77 | % | ||||||||
|
Securitization Adjustments
|
26,755,248 | 24,588,040 | |||||||||||||||
|
Managed Basis
|
47,429,775 | 48,854,822 |
Delinquency Rate (over 30 days)
|
||||||||||||||
|
As Adjusted Adjustments
|
(5,514 | ) | (10,497 | ) |
GAAP Basis
|
4.92 | % | 4.92 | % | ||||||||
|
As Adjusted
|
$ | 47,424,261 | $ | 48,844,325 |
Adjustments
|
0.39 | % | 0.39 | % | ||||||||
|
As Adjusted
|
5.31 | % | 5.31 | % | |||||||||||||
|
Net Charge-off Dollars
|
|||||||||||||||||
|
GAAP Basis
|
$ | 451,970 | $ | 1,910,957 |
Delinquency Rate (over 90 days)
|
||||||||||||
|
Adjustments
|
589,278 | 1,995,936 |
GAAP Basis
|
2.58 | % | 2.58 | % | ||||||||||
|
As Adjusted
|
$ | 1,041,247 | $ | 3,906,893 |
Adjustments
|
0.20 | % | 0.20 | % | ||||||||
|
As Adjusted
|
2.78 | % | 2.78 | % | |||||||||||||
|
Loans Delinquent Over 30 Days
|
|||||||||||||||||
|
GAAP Basis
|
$ | 1,117,228 | $ | 1,117,228 |
Credit Card Ratios
|
||||||||||||
|
Adjustments
|
1,539,461 | 1,539,461 | |||||||||||||||
|
As Adjusted
|
$ | 2,656,689 | $ | 2,656,689 |
Interest Yield
|
||||||||||||
|
GAAP Basis
|
10.86 | % | 11.69 | % | |||||||||||||
|
Loans Delinquent Over 90 Days
|
Adjustments
|
1.90 | % | 0.94 | % | ||||||||||||
|
GAAP Basis
|
$ | 590,132 | $ | 590,132 |
As Adjusted
|
12.76 | % | 12.63 | % | ||||||||
|
Adjustments
|
803,342 | 803,342 | |||||||||||||||
|
As Adjusted
|
$ | 1,393,474 | $ | 1,393,474 |
Net Principal Charge-off Rate
|
||||||||||||
|
GAAP Basis
|
8.77 | % | 7.87 | % | |||||||||||||
|
Total Company Ratios
|
Adjustments
|
0.04 | % | 0.13 | % | ||||||||||||
|
As Adjusted
|
8.81 | % | 8.00 | % | |||||||||||||
|
Effective Tax Rate
|
|||||||||||||||||
|
GAAP Basis
|
38.2 | % | 39.8 | % |
Delinquency Rate (over 30 days)
|
||||||||||||
|
Adjustments
|
4.5 | % | (11.9 | %) |
GAAP Basis
|
5.52 | % | 5.52 | % | ||||||||
|
As Adjusted
|
42.6 | % | 28.0 | % |
Adjustments
|
0.08 | % | 0.08 | % | ||||||||
|
As Adjusted
|
5.60 | % | 5.60 | % | |||||||||||||
|
Tangible Common Equity/Tangible Assets
|
|||||||||||||||||
|
GAAP Basis
|
15.0 | % | 15.0 | % |
Delinquency Rate (over 90 days)
|
||||||||||||
|
Adjustments
|
(6.8 | %) | (6.8 | %) |
GAAP Basis
|
2.92 | % | 2.92 | % | ||||||||
|
As Adjusted
|
8.2 | % | 8.2 | % |
Adjustments
|
0.02 | % | 0.02 | % | ||||||||
|
As Adjusted
|
2.94 | % | 2.94 | % | |||||||||||||
9
|
1 GAAP data is presented in accordance with Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards ("FAS") No. 140 for the quarter and year ended November 30, 2009. GAAP data for the quarters beginning February 28, 2010 is presented in accordance with FAS No. 166, Accounting for Transfers of Financial Assets – an amendment of FAS No. 140 and FAS No. 167, Amendments to FASB Interpretations No. 46(R), which were effective for the Company at the beginning of its current fiscal year, December 1, 2009.
|
|
2 The quarter and year ended November 30, 2009 include $472 million (estimated $285 million after-tax), and $1.9 billion (estimated $1.2 billion after-tax), respectively related to anti-trust litigation settlement.
|
|
3 Net Income Allocated to Common Stockholders represents net income less (i) dividends and accretion of discount on shares of preferred stock and (ii) income allocated to participating securities.
|
|
4 Effective Tax Rate represents tax expense divided by income before income taxes.
|
|
5 Tangible Assets represents total assets less goodwill and intangibles.
|
|
6 Net Loans represents total loans less the allowance for loan loss (period end).
|
|
7 Book Value per share represents total equity divided by ending common shares outstanding.
|
|
8 Return on Equity represents net income (annualized) divided by average total equity for the reporting period.
|
|
9 Reserve Rate represents the allowance for loan losses divided by total loans. The Reserve Rate includes federal student loans held for sale.
|
|
10 Earnings Per Share represents net income allocated to common stockholders divided by the weighted average common shares outstanding.
|
|
11 Interest Yield represents interest income on loan receivables (annualized) divided by average loans for the reporting period.
|
|
12 Net Principal Charge-off Rate represents net principal charge-off dollars (annualized) divided by average loans for the reporting period.
|
|
13 Delinquency Rate (Over 30 Days) represents loans delinquent over thirty days divided by ending loans (total or credit card loans, as appropriate).
|
|
14 Delinquency Rate (Over 90 Days) represents loans delinquent over ninety days divided by ending loans (total or credit card loans, as appropriate).
|
|
15 Volume is derived from data provided by licensees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment.
|
|
16 Gross proprietary sales volume on the Discover Network.
|
|
17 Tangible common equity ("TCE"), a non-GAAP financial measure, represents total common equity less goodwill and intangibles. The Company believes TCE is a more meaningful valuation to investors of the net asset value of the Company. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of GAAP to As Adjusted data schedule.
|
|
18 Tangible Common Equity/Tangible Assets, a non-GAAP measure, represents total common equity less goodwill and intangibles divided by total assets less goodwill and intangibles.
|
|
19 Tangible Common Equity/Net Loans, a non-GAAP measure, represents total common equity less goodwill and intangibles divided by total loans less the allowance for loan loss (period end).
|
|
20 Tangible Common Equity per Share, a non-GAAP measure, represents total common equity less goodwill and intangibles divided by ending common shares outstanding.
|
|
21 Net Interest Margin represents net interest income (annualized) divided by average total loans for the period.
|
|
22 Return on Loan Receivables represents net income (annualized) divided by average total loans for the period.
|
|
23 Reserve Rate (excluding guaranteed student loans), a non-GAAP financial measure, represents the allowance for loan losses as a percentage of total loans excluding guaranteed student loans. The Company believes that a reserve rate excluding the government guaranteed portion of student loans is a more meaningful valuation to investors of the portion of the portfolio that has a risk of loss. For a corresponding reconciliation of loans excluding the guaranteed portion of student loans to a GAAP financial measure, see Reconciliation of GAAP to As Adjusted data schedule.
|
|
24 Managed basis assumes that loans that have been securitized were not sold and presents financial information regarding these loans in a manner similar to the presentation of financial information regarding loans that have not been sold.
|
|
25 Pretax Return on Loan Receivables represents income before income taxes (annualized) divided by average total loans for the period.
|
|
26 As adjusted adjustments include additional amounts necessary to reflect results as if the trusts used in our securitization activities had been fully consolidated in our historical results. Also included are adjustments to exclude the impact of income received in
connection with the settlement of the Company's antitrust litigation with Visa and MasterCard and the income statement impact of the Morgan Stanley special dividend agreement dispute in the fourth quarter and full year of 2009.
|
|
27 Securitization Adjustments reverse the effect of loan securitization by recharacterizing securitization income to report interest income, interest expense, provision for loan losses, discount and interchange revenue and loan fee revenues in the same lines as non-securitized loans. Beginning December 1, 2009, securitization adjustments are no longer applicable as the trust assets are consolidated in GAAP reporting.
|
|
28 Adjustments represent the difference between GAAP basis and As Adjusted basis.
|
10