Exhibit 99.2
DISCOVER FINANCIAL SERVICES | ||||||||||
Unaudited Financial Supplement - 3Q 2007 | ||||||||||
Table of Contents | ||||||||||
Page # | ||||||||||
1 | ………….. | Quarterly Consolidated and Combined Income Statement and Statistical Data | ||||||||
2 | ………….. | Quarterly Consolidated and Combined Income Statement and Statistical Data (Managed Basis) | ||||||||
3 | ………….. | Quarterly U.S. Card Income Statement and Statistical Data (Managed Basis) | ||||||||
4 | ………….. | Quarterly Third-Party Payments Income Statement and Statistical Data (Managed Basis) | ||||||||
5 | ………….. | Quarterly International Card Income Statement and Statistical Data (Managed Basis) | ||||||||
6-10 | ………….. | Quarterly Reconciliation of GAAP to Managed Data |
Discover Financial Services | ||||||||||||||||||||||||||||||||||||||||||||
GAAP Basis | ||||||||||||||||||||||||||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||
Aug 31, 2007 | May 31, 2007 | Feb 28, 2007 | Nov 30, 2006 | Aug 31, 2006 | 3Q07 vs 3Q06 | YTD 2007 | YTD 2006 | 2007 vs 2006 | ||||||||||||||||||||||||||||||||||||
Interest Income | $ | 755,610 | $ | 703,365 | $ | 680,305 | $ | 622,166 | $ | 642,748 | $ | 112,862 | 18 | % | $ | 2,139,280 | $ | 1,836,360 | $ | 302,920 | 16 | % | ||||||||||||||||||||||
Interest Expense | 361,469 | 336,253 | 283,959 | 243,518 | 250,440 | 111,029 | 44 | % | 981,681 | 696,522 | 285,159 | 41 | % | |||||||||||||||||||||||||||||||
Net Interest Income | 394,141 | 367,112 | 396,346 | 378,648 | 392,308 | �� | 1,833 | 0 | % | 1,157,599 | 1,139,838 | 17,761 | 2 | % | ||||||||||||||||||||||||||||||
Provision for Loan Losses | 211,576 | 203,287 | 195,386 | 239,693 | 231,614 | (20,038 | ) | -9 | % | 610,249 | 515,944 | 94,305 | 18 | % | ||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | 182,565 | 163,825 | 200,960 | 138,955 | 160,694 | 21,871 | 14 | % | 547,350 | 623,894 | (76,544 | ) | -12 | % | ||||||||||||||||||||||||||||||
Other Income | 845,498 | 871,693 | 825,677 | 828,263 | 889,374 | (43,876 | ) | -5 | % | 2,542,868 | 2,710,676 | (167,808 | ) | -6 | % | |||||||||||||||||||||||||||||
Employee Compensation and Benefits | 227,904 | 234,373 | 233,318 | 234,625 | 237,436 | (9,532 | ) | -4 | % | 695,595 | 698,571 | (2,976 | ) | 0 | % | |||||||||||||||||||||||||||||
Marketing and Business Development | 163,015 | 140,930 | 142,344 | 197,601 | 145,184 | 17,831 | 12 | % | 446,289 | 405,955 | 40,334 | 10 | % | |||||||||||||||||||||||||||||||
Information Processing & Communications | 99,065 | 96,622 | 93,452 | 102,936 | 98,620 | 445 | 0 | % | 289,139 | 284,659 | 4,480 | 2 | % | |||||||||||||||||||||||||||||||
Professional Fees | 94,060 | 113,264 | 80,958 | 119,049 | 93,027 | 1,033 | 1 | % | 288,282 | 248,720 | 39,562 | 16 | % | |||||||||||||||||||||||||||||||
Premises and Equipment | 22,611 | 24,350 | 22,809 | 23,886 | 23,546 | (935 | ) | -4 | % | 69,770 | 68,392 | 1,378 | 2 | % | ||||||||||||||||||||||||||||||
Other Expense | 92,194 | 93,453 | 82,295 | 103,580 | 84,724 | 7,470 | 9 | % | 267,942 | 231,509 | 36,433 | 16 | % | |||||||||||||||||||||||||||||||
Total Other Expense | 698,849 | 702,992 | 655,176 | 781,677 | 682,537 | 16,312 | 2 | % | 2,057,017 | 1,937,806 | 119,211 | 6 | % | |||||||||||||||||||||||||||||||
Income Before Income Taxes | 329,214 | 332,526 | 371,461 | 185,541 | 367,531 | (38,317 | ) | -10 | % | 1,033,201 | 1,396,764 | (363,563 | ) | -26 | % | |||||||||||||||||||||||||||||
Tax Expense | 126,974 | 123,284 | 137,829 | (981 | ) | 126,138 | 836 | 1 | % | 388,087 | 506,670 | (118,583 | ) | -23 | % | |||||||||||||||||||||||||||||
Net Income | $ | 202,240 | $ | 209,242 | $ | 233,632 | $ | 186,522 | $ | 241,393 | $ | (39,153 | ) | -16 | % | $ | 645,114 | $ | 890,094 | $ | (244,980 | ) | -28 | % | ||||||||||||||||||||
Balance Sheet Statistics | ||||||||||||||||||||||||||||||||||||||||||||
Total Assets | $ | 36,141,011 | $ | 35,672,568 | $ | 29,763,803 | $ | 29,067,242 | $ | 28,318,362 | $ | 7,822,649 | 28 | % | $ | 36,141,011 | $ | 28,318,362 | $ | 7,822,649 | 28 | % | ||||||||||||||||||||||
Total Equity | $ | 5,667,282 | $ | 5,780,284 | $ | 5,528,658 | $ | 5,774,772 | $ | 6,030,941 | $ | (363,659 | ) | -6 | % | $ | 5,667,282 | $ | 6,030,941 | $ | (363,659 | ) | -6 | % | ||||||||||||||||||||
Total Tangible Equity | $ | 4,927,431 | $ | 5,044,586 | $ | 4,797,784 | $ | 5,039,867 | $ | 5,322,013 | $ | (394,582 | ) | -7 | % | $ | 4,927,431 | $ | 5,322,013 | $ | (394,582 | ) | -7 | % | ||||||||||||||||||||
Loan Receivables | $ | 22,393,598 | $ | 22,788,042 | $ | 22,611,707 | $ | 23,742,750 | $ | 23,040,868 | $ | (647,270 | ) | -3 | % | $ | 22,393,598 | $ | 23,040,868 | $ | (647,270 | ) | -3 | % | ||||||||||||||||||||
Average Loan Receivables | $ | 22,736,502 | $ | 21,511,837 | $ | 24,856,212 | $ | 22,677,104 | $ | 22,545,836 | $ | 190,666 | 1 | % | $ | 23,021,556 | $ | 21,563,711 | $ | 1,457,845 | 7 | % | ||||||||||||||||||||||
ROE | 14 | % | 15 | % | 16 | % | 12 | % | 16 | % | 15 | % | 22 | % | ||||||||||||||||||||||||||||||
Net Owned Receivables/Tangible Equity | 4.38 | 4.36 | 4.55 | 4.55 | 4.18 | 0.20 | 5 | % | 4.38 | 4.18 | 0.20 | 5 | % | |||||||||||||||||||||||||||||||
Total Owned Assets/Tangible Equity | 7.33 | 7.07 | 6.20 | 5.77 | 5.32 | 2.01 | 38 | % | 7.33 | 5.32 | 2.01 | 38 | % | |||||||||||||||||||||||||||||||
Net Yield on Loan Receivables | 6.88 | % | 6.77 | % | 6.47 | % | 6.70 | % | 6.90 | % | (2 | ) | bps | 6.70 | % | 7.04 | % | (34 | ) | bps | ||||||||||||||||||||||||
Return on Loan Receivables | 3.53 | % | 3.86 | % | 3.81 | % | 3.30 | % | 4.25 | % | (72 | ) | bps | 3.73 | % | 5.50 | % | (177 | ) | bps | ||||||||||||||||||||||||
Allowance for Loan Loss at (period end) | $ | 792,883 | $ | 788,748 | $ | 793,850 | $ | 832,483 | $ | 811,865 | $ | (18,982 | ) | -2 | % | $ | 792,883 | $ | 811,865 | $ | (18,982 | ) | -2 | % | ||||||||||||||||||||
Net gain on Securitization | $ | (24,043 | ) | $ | 35,620 | $ | (3,997 | ) | $ | 5,492 | $ | (2,165 | ) | $ | (21,878 | ) | 1011 | % | $ | 7,580 | $ | 153,950 | $ | (146,370 | ) | -95 | % | |||||||||||||||||
EPS Statistics | ||||||||||||||||||||||||||||||||||||||||||||
Basic EPS | $ | 0.42 | $ | 0.44 | $ | 0.49 | $ | 0.39 | $ | 0.51 | $ | (0.09 | ) | -16 | % | $ | 1.35 | $ | 1.87 | $ | (0.52 | ) | -28 | % | ||||||||||||||||||||
Diluted EPS | $ | 0.42 | $ | 1.35 | ||||||||||||||||||||||||||||||||||||||||
Stock Price Per Share (period end) | $ | 23.14 | ||||||||||||||||||||||||||||||||||||||||||
Ending Shares Outstanding (000's) | 477,328 | 477,236 | 477,236 | 477,236 | 477,236 | 92 | 0 | % | 477,328 | 477,236 | 92 | 0 | % | |||||||||||||||||||||||||||||||
Weighted Average Shares Outstanding (000's) | 477,272 | 477,236 | 477,236 | 477,236 | 477,236 | 36 | 0 | % | 477,248 | 477,236 | 12 | 0 | % | |||||||||||||||||||||||||||||||
Weighted Average Shares Outstanding (fully diluted), (000's) | 480,071 | 478,278 | ||||||||||||||||||||||||||||||||||||||||||
Book Value Per Share | $ | 11.87 | $ | 11.87 | ||||||||||||||||||||||||||||||||||||||||
Total Credit Card Loans | ||||||||||||||||||||||||||||||||||||||||||||
Credit Card Loans - Owned | $ | 22,301,589 | $ | 22,698,457 | $ | 22,520,861 | $ | 23,646,901 | $ | 22,935,647 | $ | (634,058 | ) | -3 | % | $ | 22,301,589 | $ | 22,935,647 | $ | (634,058 | ) | -3 | % | ||||||||||||||||||||
Average Credit Card Loans - Owned | $ | 22,646,290 | $ | 21,419,465 | $ | 24,760,587 | $ | 22,573,508 | $ | 22,428,025 | $ | 218,265 | 1 | % | $ | 22,928,841 | $ | 21,351,673 | $ | 1,577,168 | 7 | % | ||||||||||||||||||||||
Interest Yield | 10.99 | % | 10.50 | % | 10.41 | % | 10.27 | % | 10.44 | % | 55 | bps | 10.63 | % | 10.42 | % | 21 | bps | ||||||||||||||||||||||||||
Net Principal Charge-off Rate | 3.71 | % | 3.91 | % | 3.77 | % | 3.95 | % | 3.57 | % | 14 | bps | 3.80 | % | 3.74 | % | 6 | bps | ||||||||||||||||||||||||||
Delinquency Rate (over 30 days) | 3.07 | % | 2.94 | % | 3.15 | % | 3.22 | % | 3.19 | % | (12 | ) | bps | 3.07 | % | 3.19 | % | (12 | ) | bps | ||||||||||||||||||||||||
Delinquency Rate (over 90 days) | 1.44 | % | 1.43 | % | 1.55 | % | 1.53 | % | 1.49 | % | (5 | ) | bps | 1.44 | % | 1.49 | % | (5 | ) | bps |
1
Discover Financial Services | ||||||||||||||||||||||||||||||||||||||||||||
Managed Basis1 | ||||||||||||||||||||||||||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||
Aug 31, 2007 | May 31, 2007 | Feb 28, 2007 | Nov 30, 2006 | Aug 31, 2006 | 3Q07 vs 3Q06 | YTD 2007 | YTD 2006 | 2007 vs 2006 | ||||||||||||||||||||||||||||||||||||
Interest Income | $ | 1,751,919 | $ | 1,715,844 | $ | 1,599,684 | $ | 1,543,806 | $ | 1,573,566 | $ | 178,353 | 11 | % | $ | 5,067,447 | $ | 4,623,679 | $ | 443,768 | 10 | % | ||||||||||||||||||||||
Interest Expense | 767,451 | 747,303 | 645,826 | 609,102 | 616,030 | 151,421 | 25 | % | 2,160,580 | 1,728,487 | 432,093 | 25 | % | |||||||||||||||||||||||||||||||
Net Interest Income | 984,468 | 968,541 | 953,858 | 934,704 | 957,536 | 26,932 | 3 | % | 2,906,867 | 2,895,192 | 11,675 | 0 | % | |||||||||||||||||||||||||||||||
Provision for Loan Losses | 509,026 | 530,438 | 482,660 | 527,539 | 495,364 | 13,662 | 3 | % | 1,522,124 | 1,374,105 | 148,019 | 11 | % | |||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | 475,442 | 438,103 | 471,198 | 407,165 | 462,172 | 13,270 | 3 | % | 1,384,743 | 1,521,087 | (136,344 | ) | -9 | % | ||||||||||||||||||||||||||||||
Other Income | 552,621 | 597,415 | 555,439 | 560,053 | 587,896 | (35,275 | ) | -6 | % | 1,705,475 | 1,813,483 | (108,008 | ) | -6 | % | |||||||||||||||||||||||||||||
Employee Compensation and Benefits | 227,904 | 234,373 | 233,318 | 234,625 | 237,436 | (9,532 | ) | -4 | % | 695,595 | 698,571 | (2,976 | ) | 0 | % | |||||||||||||||||||||||||||||
Marketing and Business Development | 163,015 | 140,930 | 142,344 | 197,601 | 145,184 | 17,831 | 12 | % | 446,289 | 405,955 | 40,334 | 10 | % | |||||||||||||||||||||||||||||||
Information Processing & Communications | 99,065 | 96,622 | 93,452 | 102,936 | 98,620 | 445 | 0 | % | 289,139 | 284,659 | 4,480 | 2 | % | |||||||||||||||||||||||||||||||
Professional Fees | 94,060 | 113,264 | 80,958 | 119,049 | 93,027 | 1,033 | 1 | % | 288,282 | 248,720 | 39,562 | 16 | % | |||||||||||||||||||||||||||||||
Premises and Equipment | 22,611 | 24,350 | 22,809 | 23,886 | 23,546 | (935 | ) | -4 | % | 69,770 | 68,392 | 1,378 | 2 | % | ||||||||||||||||||||||||||||||
Other Expense | 92,194 | 93,453 | 82,295 | 103,580 | 84,724 | 7,470 | 9 | % | 267,942 | 231,509 | 36,433 | 16 | % | |||||||||||||||||||||||||||||||
Total Other Expense | 698,849 | 702,992 | 655,176 | 781,677 | 682,537 | 16,312 | 2 | % | 2,057,017 | 1,937,806 | 119,211 | 6 | % | |||||||||||||||||||||||||||||||
Income Before Income Taxes | 329,214 | 332,526 | 371,461 | 185,541 | 367,531 | (38,317 | ) | -10 | % | 1,033,201 | 1,396,764 | (363,563 | ) | -26 | % | |||||||||||||||||||||||||||||
Tax Expense | 126,974 | 123,284 | 137,829 | (981 | ) | 126,138 | 836 | 1 | % | 388,087 | 506,670 | (118,583 | ) | -23 | % | |||||||||||||||||||||||||||||
Net Income | $ | 202,240 | $ | 209,242 | $ | 233,632 | $ | 186,522 | $ | 241,393 | $ | (39,153 | ) | -16 | % | $ | 645,114 | $ | 890,094 | $ | (244,980 | ) | -28 | % | ||||||||||||||||||||
Balance Sheet Statistics | ||||||||||||||||||||||||||||||||||||||||||||
Total Assets | $ | 65,457,390 | $ | 65,112,826 | $ | 57,782,359 | $ | 55,512,185 | $ | 54,713,999 | $ | 10,743,391 | 20 | % | $ | 65,457,390 | $ | 54,713,999 | $ | 10,743,391 | 20 | % | ||||||||||||||||||||||
Total Equity 2 | $ | 5,667,282 | $ | 5,780,284 | $ | 5,528,658 | $ | 5,774,772 | $ | 6,030,941 | $ | (363,659 | ) | -6 | % | $ | 5,667,282 | $ | 6,030,941 | $ | (363,659 | ) | -6 | % | ||||||||||||||||||||
Total Tangible Equity 2 | $ | 4,927,431 | $ | 5,044,586 | $ | 4,797,784 | $ | 5,039,867 | $ | 5,322,013 | $ | (394,582 | ) | -7 | % | $ | 4,927,431 | $ | 5,322,013 | $ | (394,582 | ) | -7 | % | ||||||||||||||||||||
Loan Receivables | $ | 51,892,455 | $ | 51,505,397 | $ | 50,931,556 | $ | 50,446,177 | $ | 49,703,680 | $ | 2,188,775 | 4 | % | $ | 51,892,455 | $ | 49,703,680 | $ | 2,188,775 | 4 | % | ||||||||||||||||||||||
Average Loan Receivables | $ | 51,530,934 | $ | 50,843,952 | $ | 51,574,268 | $ | 49,318,549 | $ | 48,884,255 | $ | 2,646,679 | 5 | % | $ | 51,314,502 | $ | 48,096,995 | $ | 3,217,507 | 7 | % | ||||||||||||||||||||||
Net Managed Receivables/Tangible Equity | 10.37 | 10.05 | 10.45 | 9.84 | 9.19 | 1.18 | 13 | % | 10.37 | 9.19 | 1.18 | 13 | % | |||||||||||||||||||||||||||||||
Total Managed Assets/Tangible Equity | 13.28 | 12.91 | 12.04 | 11.01 | 10.28 | 3.00 | 29 | % | 13.28 | 10.28 | 3.00 | 29 | % | |||||||||||||||||||||||||||||||
Net Yield on Loan Receivables | 7.58 | % | 7.56 | % | 7.50 | % | 7.60 | % | 7.77 | % | (19 | ) | bps | 7.55 | % | 8.02 | % | (47 | ) | bps | ||||||||||||||||||||||||
Return on Loan Receivables | 1.56 | % | 1.63 | % | 1.84 | % | 1.52 | % | 1.96 | % | (40 | ) | bps | 1.67 | % | 2.47 | % | (80 | ) | bps | ||||||||||||||||||||||||
Total Credit Card Loans | ||||||||||||||||||||||||||||||||||||||||||||
Credit Card Loans - Managed | $ | 51,800,446 | $ | 51,415,812 | $ | 50,840,710 | $ | 50,350,328 | $ | 49,598,459 | $ | 2,201,987 | 4 | % | $ | 51,800,446 | $ | 49,598,459 | $ | 2,201,987 | 4 | % | ||||||||||||||||||||||
Average Credit Card Loans - Managed | $ | 51,440,722 | $ | 50,751,580 | $ | 51,478,643 | $ | 49,214,953 | $ | 48,766,444 | $ | 2,674,278 | 5 | % | $ | 51,221,787 | $ | 47,884,957 | $ | 3,336,830 | 7 | % | ||||||||||||||||||||||
Managed Interest Yield | 12.52 | % | 12.35 | % | 12.25 | % | 12.22 | % | 12.38 | % | 14 | bps | 12.37 | % | 12.40 | % | (3 | ) | bps | |||||||||||||||||||||||||
Managed Net Principal Charge-off Rate | 3.95 | % | 4.23 | % | 4.05 | % | 4.15 | % | 3.81 | % | 14 | bps | 4.07 | % | 4.06 | % | 1 | bps | ||||||||||||||||||||||||||
Managed Delinquency Rate (over 30 days) | 3.30 | % | 3.12 | % | 3.44 | % | 3.50 | % | 3.42 | % | (12 | ) | bps | 3.30 | % | 3.42 | % | (12 | ) | bps | ||||||||||||||||||||||||
Managed Delinquency Rate (over 90 days) | 1.55 | % | 1.51 | % | 1.68 | % | 1.65 | % | 1.59 | % | (4 | ) | bps | 1.55 | % | 1.59 | % | (4 | ) | bps | ||||||||||||||||||||||||
Total Credit Card Volume | ||||||||||||||||||||||||||||||||||||||||||||
Domestic | $ | 27,171,729 | $ | 26,408,578 | $ | 26,880,735 | $ | 25,682,545 | $ | 26,754,745 | $ | 416,984 | 2 | % | $ | 80,461,042 | $ | 77,219,348 | $ | 3,241,694 | 4 | % | ||||||||||||||||||||||
International | 3,601,870 | 3,646,009 | 3,578,199 | 3,547,702 | 3,450,974 | 150,896 | 4 | % | 10,826,078 | 8,333,763 | 2,492,315 | 30 | % | |||||||||||||||||||||||||||||||
Total | $ | 30,773,599 | $ | 30,054,587 | $ | 30,458,934 | $ | 29,230,247 | $ | 30,205,719 | $ | 567,880 | 2 | % | $ | 91,287,120 | $ | 85,553,111 | $ | 5,734,009 | 7 | % | ||||||||||||||||||||||
Total Credit Card SalesVolume | ||||||||||||||||||||||||||||||||||||||||||||
Domestic | $ | 23,527,999 | $ | 22,108,865 | $ | 22,037,053 | $ | 21,404,325 | $ | 22,690,277 | $ | 837,722 | 4 | % | $ | 67,673,917 | $ | 64,981,252 | $ | 2,692,665 | 4 | % | ||||||||||||||||||||||
International | 3,296,360 | 3,277,439 | 3,169,284 | 3,123,230 | 3,025,561 | 270,799 | 9 | % | 9,743,083 | 7,212,101 | 2,530,982 | 35 | % | |||||||||||||||||||||||||||||||
Total | $ | 26,824,359 | $ | 25,386,304 | $ | 25,206,337 | $ | 24,527,555 | $ | 25,715,838 | $ | 1,108,521 | 4 | % | $ | 77,417,000 | $ | 72,193,353 | $ | 5,223,647 | 7 | % | ||||||||||||||||||||||
Transactions Processed on Networks (000's) | ||||||||||||||||||||||||||||||||||||||||||||
Discover Network | 379,267 | 361,893 | 361,700 | 358,152 | 361,917 | 17,350 | 5 | % | 1,102,860 | 1,041,781 | 61,079 | 6 | % | |||||||||||||||||||||||||||||||
PULSE Network | 593,866 | 558,811 | 520,866 | 488,087 | 472,866 | 121,000 | 26 | % | 1,673,543 | 1,368,390 | 305,153 | 22 | % | |||||||||||||||||||||||||||||||
Total | 973,133 | 920,704 | 882,566 | 846,239 | 834,783 | 138,350 | 17 | % | 2,776,403 | 2,410,171 | 366,232 | 15 | % | |||||||||||||||||||||||||||||||
Segment - Income Before Income Taxes | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Card | $ | 387,085 | $ | 388,813 | $ | 401,026 | $ | 228,986 | $ | 387,314 | $ | (229 | ) | 0 | % | $ | 1,176,924 | $ | 1,411,467 | $ | (234,543 | ) | -17 | % | ||||||||||||||||||||
Third-Party Payments | 9,439 | 8,010 | 11,920 | 6,946 | 9,920 | (481 | ) | -5 | % | 29,369 | 22,003 | 7,366 | 33 | % | ||||||||||||||||||||||||||||||
International Card | (67,310 | ) | (64,297 | ) | (41,485 | ) | (50,391 | ) | (29,703 | ) | (37,607 | ) | -127 | % | (173,092 | ) | (36,706 | ) | (136,386 | ) | 372 | % | ||||||||||||||||||||||
Total | $ | 329,214 | $ | 332,526 | $ | 371,461 | $ | 185,541 | $ | 367,531 | $ | (38,317 | ) | 0 | % | $ | 1,033,201 | $ | 1,396,764 | $ | (363,563 | ) | 0 | % | ||||||||||||||||||||
1 Managed basis assumes loans that have been securitized were not sold and presents earnings and statistical information on these loans in a manner similar to the way loans that have not been sold are presented. See Reconciliation of GAAP to Managed schedule. | ||||||||||||||||||||||||||||||||||||||||||||
2 Balance on a GAAP and Managed basis is the same. |
2
Discover Financial Services | ||||||||||||||||||||||||||||||||||||||||||||
U.S. Card Segment | ||||||||||||||||||||||||||||||||||||||||||||
Managed Basis1 | ||||||||||||||||||||||||||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||
Aug 31, 2007 | May 31, 2007 | Feb 28, 2007 | Nov 30, 2006 | Aug 31, 2006 | 3Q07 vs 3Q06 | YTD 2007 | YTD 2006 | 2007 vs 2006 | ||||||||||||||||||||||||||||||||||||
Interest Income | $ | 1,626,214 | $ | 1,601,324 | $ | 1,481,992 | $ | 1,429,508 | $ | 1,460,607 | $ | 165,607 | 11 | % | $ | 4,709,530 | $ | 4,319,190 | $ | 390,340 | 9 | % | ||||||||||||||||||||||
Interest Expense | 697,643 | 693,837 | 593,610 | 562,185 | 567,033 | 130,610 | 23 | % | 1,985,090 | 1,598,384 | 386,706 | 24 | % | |||||||||||||||||||||||||||||||
Net Interest Income | 928,571 | 907,487 | 888,382 | 867,323 | 893,574 | 34,997 | 4 | % | 2,724,440 | 2,720,806 | 3,634 | 0 | % | |||||||||||||||||||||||||||||||
Provision for Loan Losses | 418,349 | 444,249 | 406,076 | 452,965 | 419,706 | (1,357 | ) | 0 | % | 1,268,674 | 1,210,507 | 58,167 | 5 | % | ||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | 510,222 | 463,238 | 482,306 | 414,358 | 473,868 | 36,354 | 8 | % | 1,455,766 | 1,510,299 | (54,533 | ) | -4 | % | ||||||||||||||||||||||||||||||
Other Income | 481,060 | 526,304 | 490,003 | 493,713 | 510,958 | (29,898 | ) | -6 | % | 1,497,367 | 1,603,963 | (106,596 | ) | -7 | % | |||||||||||||||||||||||||||||
Total Other Expense | 604,197 | 600,729 | 571,283 | 679,085 | 597,512 | 6,685 | 1 | % | 1,776,209 | 1,702,795 | 73,414 | 4 | % | |||||||||||||||||||||||||||||||
Income Before Income Taxes | $ | 387,085 | $ | 388,813 | $ | 401,026 | $ | 228,986 | $ | 387,314 | $ | (229 | ) | 0 | % | $ | 1,176,924 | $ | 1,411,467 | $ | (234,543 | ) | -17 | % | ||||||||||||||||||||
Net Yield on Loan Receivables | 7.84 | % | 7.78 | % | 7.67 | % | 7.75 | % | 7.96 | % | (12 | ) | bps | 7.76 | % | 8.19 | % | (43 | ) | bps | ||||||||||||||||||||||||
Loan Receivables | $ | 47,444,107 | $ | 46,953,902 | $ | 46,356,858 | $ | 45,802,071 | $ | 45,181,757 | $ | 2,262,350 | 5 | % | $ | 47,444,107 | $ | 45,181,757 | $ | 2,262,350 | 5 | % | ||||||||||||||||||||||
Average Loan Receivables | $ | 47,016,472 | $ | 46,296,296 | $ | 46,965,884 | $ | 44,899,320 | $ | 44,523,521 | $ | 2,492,951 | 6 | % | $ | 46,758,044 | $ | 44,246,464 | $ | 2,511,580 | 6 | % | ||||||||||||||||||||||
Credit Card Loans - Managed | $ | 47,352,098 | $ | 46,864,317 | $ | 46,266,012 | $ | 45,706,222 | $ | 45,076,536 | $ | 2,275,562 | 5 | % | $ | 47,352,098 | $ | 45,076,536 | $ | 2,275,562 | 5 | % | ||||||||||||||||||||||
Average Credit Card Loans - Managed | $ | 46,926,260 | $ | 46,203,924 | $ | 46,870,259 | $ | 44,795,724 | $ | 44,405,710 | $ | 2,520,550 | 6 | % | $ | 46,665,329 | $ | 44,105,054 | $ | 2,560,275 | 6 | % | ||||||||||||||||||||||
Managed Interest Yield | 12.76 | % | 12.59 | % | 12.45 | % | 12.42 | % | 12.59 | % | 17 | bps | 12.60 | % | 12.57 | % | 3 | bps | ||||||||||||||||||||||||||
Managed Net Principal Charge-off Rate | 3.70 | % | 4.00 | % | 3.81 | % | 3.99 | % | 3.55 | % | 15 | bps | 3.84 | % | 3.95 | % | (11 | ) | bps | |||||||||||||||||||||||||
Managed Delinquency Rate (over 30 days) | 3.16 | % | 2.97 | % | 3.31 | % | 3.39 | % | 3.31 | % | (15 | ) | bps | 3.16 | % | 3.31 | % | (15 | ) | bps | ||||||||||||||||||||||||
Managed Delinquency Rate (over 90 days) | 1.48 | % | 1.44 | % | 1.63 | % | 1.59 | % | 1.54 | % | (6 | ) | bps | 1.48 | % | 1.54 | % | (6 | ) | bps | ||||||||||||||||||||||||
Total Credit Card Volume | $ | 27,171,729 | $ | 26,408,578 | $ | 26,880,735 | $ | 25,682,545 | $ | 26,754,745 | $ | 416,984 | 2 | % | $ | 80,461,042 | $ | 77,219,348 | $ | 3,241,694 | 4 | % | ||||||||||||||||||||||
Sales Volume | $ | 23,527,999 | $ | 22,108,865 | $ | 22,037,053 | $ | 21,404,325 | $ | 22,690,277 | $ | 837,722 | 4 | % | $ | 67,673,917 | $ | 64,981,252 | $ | 2,692,665 | 4 | % | ||||||||||||||||||||||
1 Managed basis assumes loans that have been securitized were not sold and presents earnings and statistical information on these loans in a manner similar to the way loans that have not been sold are presented. See Reconciliation of GAAP to Managed schedule. |
3
Discover Financial Services | ||||||||||||||||||||||||||||||||||||||||||||
Third-Party Payments Segment | ||||||||||||||||||||||||||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||
Aug 31, 2007 | May 31, 2007 | Feb 28, 2007 | Nov 30, 2006 | Aug 31, 2006 | 3Q07 vs 3Q06 | YTD 2007 | YTD 2006 | 2007 vs 2006 | ||||||||||||||||||||||||||||||||||||
Interest Income | $ | 594 | $ | 558 | $ | 574 | $ | 516 | $ | 528 | $ | 66 | 13 | % | $ | 1,726 | $ | 1,285 | $ | 441 | 34 | % | ||||||||||||||||||||||
Interest Expense | - | 4 | 15 | 6 | - | - | - | 19 | 17 | 2 | 12 | % | ||||||||||||||||||||||||||||||||
Net Interest Income | 594 | 554 | 559 | 510 | 528 | 66 | 13 | % | 1,707 | 1,268 | 439 | 35 | % | |||||||||||||||||||||||||||||||
Provision for Loan Losses | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | 594 | 554 | 559 | 510 | 528 | 66 | 13 | % | 1,707 | 1,268 | 439 | 35 | % | |||||||||||||||||||||||||||||||
Other Income | 29,465 | 29,248 | 30,682 | 28,077 | 29,235 | 230 | 1 | % | 89,395 | 82,623 | 6,772 | 8 | % | |||||||||||||||||||||||||||||||
Total Other Expense | 20,620 | 21,792 | 19,321 | 21,641 | 19,843 | 777 | 4 | % | 61,733 | 61,888 | (155 | ) | 0 | % | ||||||||||||||||||||||||||||||
Income Before Income Taxes | $ | 9,439 | $ | 8,010 | $ | 11,920 | $ | 6,946 | $ | 9,920 | $ | (481 | ) | -5 | % | $ | 29,369 | $ | 22,003 | $ | 7,366 | 33 | % | |||||||||||||||||||||
Transactions Processed on PULSE Network (000's) | 593,866 | 558,811 | 520,866 | 488,087 | 472,866 | 121,000 | 26 | % | 1,673,543 | 1,368,390 | 305,153 | 22 | % |
4
Discover Financial Services | ||||||||||||||||||||||||||||||||||||||||||||
International Card Segment | ||||||||||||||||||||||||||||||||||||||||||||
Managed Basis1 | ||||||||||||||||||||||||||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||||||||||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||
Aug 31, 2007 | May 31, 2007 | Feb 28, 2007 | Nov 30, 2006 | Aug 31, 2006 | 3Q07 vs 3Q06 | YTD 2007 | YTD 2006 | 2007 vs 2006 | ||||||||||||||||||||||||||||||||||||
Interest Income | $ | 125,111 | $ | 113,962 | $ | 117,118 | $ | 113,782 | $ | 112,431 | $ | 12,680 | 11 | % | $ | 356,191 | $ | 303,204 | $ | 52,987 | 17 | % | ||||||||||||||||||||||
Interest Expense | 69,808 | 53,462 | 52,201 | 46,911 | 48,997 | 20,811 | 42 | % | 175,471 | 130,086 | 45,385 | 35 | % | |||||||||||||||||||||||||||||||
Net Interest Income | 55,303 | 60,500 | 64,917 | 66,871 | 63,434 | (8,131 | ) | -13 | % | 180,720 | 173,118 | 7,602 | 4 | % | ||||||||||||||||||||||||||||||
Provision for Loan Losses | 90,677 | 86,189 | 76,584 | 74,574 | 75,658 | 15,019 | 20 | % | 253,450 | 163,598 | 89,852 | 55 | % | |||||||||||||||||||||||||||||||
Net interest income after provision for loan losses | (35,374 | ) | (25,689 | ) | (11,667 | ) | (7,703 | ) | (12,224 | ) | (23,150 | ) | -189 | % | (72,730 | ) | 9,520 | (82,250 | ) | -864 | % | |||||||||||||||||||||||
Other Income | 42,096 | 41,863 | 34,754 | 38,263 | 47,703 | (5,607 | ) | -12 | % | 118,713 | 126,897 | (8,184 | ) | -6 | % | |||||||||||||||||||||||||||||
Total Other Expense | 74,032 | 80,471 | 64,572 | 80,951 | 65,182 | 8,850 | 14 | % | 219,075 | 173,123 | 45,952 | 27 | % | |||||||||||||||||||||||||||||||
Income Before Income Taxes | $ | (67,310 | ) | $ | (64,297 | ) | $ | (41,485 | ) | $ | (50,391 | ) | $ | (29,703 | ) | $ | (37,607 | ) | -127 | % | $ | (173,092 | ) | $ | (36,706 | ) | $ | (136,386 | ) | 372 | % | |||||||||||||
Net Yield on Loan Receivables | 4.86 | % | 5.28 | % | 5.71 | % | 6.07 | % | 5.77 | % | (91 | ) | bps | 5.28 | % | 5.99 | % | (71 | ) | bps | ||||||||||||||||||||||||
Loan Receivables | $ | 4,448,348 | $ | 4,551,495 | $ | 4,574,698 | $ | 4,644,106 | $ | 4,521,923 | $ | (73,575 | ) | -2 | % | $ | 4,448,348 | $ | 4,521,923 | $ | (73,575 | ) | -2 | % | ||||||||||||||||||||
Average Loan Receivables | $ | 4,514,462 | $ | 4,547,656 | $ | 4,608,384 | $ | 4,419,229 | $ | 4,360,734 | $ | 153,728 | 4 | % | $ | 4,556,458 | $ | 3,850,531 | $ | 705,927 | 18 | % | ||||||||||||||||||||||
Credit Card Loans - Managed | $ | 4,448,348 | $ | 4,551,495 | $ | 4,574,698 | $ | 4,644,106 | $ | 4,521,923 | $ | (73,575 | ) | -2 | % | $ | 4,448,348 | $ | 4,521,923 | $ | (73,575 | ) | -2 | % | ||||||||||||||||||||
Average Credit Card Loans - Managed | $ | 4,514,462 | $ | 4,547,656 | $ | 4,608,384 | $ | 4,419,229 | $ | 4,360,734 | $ | 153,728 | 4 | % | $ | 4,556,458 | $ | 3,779,903 | $ | 776,555 | 21 | % | ||||||||||||||||||||||
Managed Interest Yield | 10.00 | % | 9.89 | % | 10.25 | % | 10.23 | % | 10.19 | % | (19 | ) | bps | 10.05 | % | 10.44 | % | (39 | ) | bps | ||||||||||||||||||||||||
Managed Net Principal Charge-off Rate | 6.56 | % | 6.50 | % | 6.45 | % | 5.80 | % | 6.41 | % | 15 | bps | 6.50 | % | 5.30 | % | 120 | bps | ||||||||||||||||||||||||||
Managed Delinquency Rate (over 30 days) | 4.89 | % | 4.69 | % | 4.75 | % | 4.58 | % | 4.47 | % | 42 | bps | 4.89 | % | 4.47 | % | 42 | bps | ||||||||||||||||||||||||||
Managed Delinquency Rate (over 90 days) | 2.30 | % | 2.25 | % | 2.25 | % | 2.22 | % | 2.09 | % | 21 | bps | 2.30 | % | 2.09 | % | 21 | bps | ||||||||||||||||||||||||||
Total Credit Card Volume | $ | 3,601,870 | $ | 3,646,009 | $ | 3,578,199 | $ | 3,547,702 | $ | 3,450,974 | $ | 150,896 | 4 | % | $ | 10,826,078 | $ | 8,333,763 | $ | 2,492,315 | 30 | % | ||||||||||||||||||||||
Sales Volume | $ | 3,296,360 | $ | 3,277,439 | $ | 3,169,284 | $ | 3,123,230 | $ | 3,025,561 | $ | 270,799 | 9 | % | $ | 9,743,083 | $ | 7,212,101 | $ | 2,530,982 | 35 | % | ||||||||||||||||||||||
1 Managed basis assumes loans that have been securitized were not sold and presents earnings and statistical information on these loans in a manner similar to the way loans that have not been sold are presented. See Reconciliation of GAAP to Managed schedule. |
5
DISCOVER FINANCIAL SERVICES | ||||||||||||
RECONCILIATION OF GAAP TO MANAGED | ||||||||||||
The following pages (7-10) present a reconciliation for certain information disclosed on pages 1,2,3 & 5. | ||||||||||||
The data is presented on both a "managed" loan basis and as reported under generally accepted accounting principles ("owned" loan basis). Managed loan data assume that the Company's securitized loan receivables have not been sold and presents the results of securitized loan receivables in the same manner as the Company's owned loans. The Company operates its business and analyzes its financial performance on a managed basis. Accordingly, manner as the Company's owned loans. The Company operates its business and analyzes its financial performance on a managed basis. Accordingly, underwriting and servicing standards are comparable for both owned and securitized loans. The Company believes that managed loan information is useful to investors because it provides information regarding the quality of loan origination and credit performance of the entire managed portfolio and allows investors to understand the related credit risks inherent in owned loans and retained interests in securitizations. Managed loan data is also relevant because the company services the securitized and owned loans, and the related accounts, in the same manner without regard to ownership of the loans. In addition, investors often request information on a managed basis which provides a more meaningful comparison to industry competitors. |
6
Discover Financial Services | ||||||||||||||||||||||||||||
Reconciliation of GAAP to Managed 3 | ||||||||||||||||||||||||||||
(unaudited, dollars in thousands) | ||||||||||||||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
Aug 31, 2007 | May 31, 2007 | Feb 28, 2007 | Nov 30, 2006 | Aug 31, 2006 | YTD 2007 | YTD 2006 | ||||||||||||||||||||||
Interest Income | ||||||||||||||||||||||||||||
GAAP Basis | $ | 755,610 | $ | 703,365 | $ | 680,305 | $ | 622,166 | $ | 642,748 | $ | 2,139,280 | $ | 1,836,360 | ||||||||||||||
Securitization Adjustments 3 | 996,309 | 1,012,479 | 919,379 | 921,640 | 930,818 | 2,928,167 | 2,787,319 | |||||||||||||||||||||
Managed Basis | $ | 1,751,919 | $ | 1,715,844 | $ | 1,599,684 | $ | 1,543,806 | $ | 1,573,566 | $ | 5,067,447 | $ | 4,623,679 | ||||||||||||||
Interest Expense | ||||||||||||||||||||||||||||
GAAP Basis | $ | 361,469 | $ | 336,253 | $ | 283,959 | $ | 243,518 | $ | 250,440 | $ | 981,681 | $ | 696,522 | ||||||||||||||
Securitization Adjustments | 405,982 | 411,050 | 361,867 | 365,584 | 365,590 | 1,178,899 | 1,031,965 | |||||||||||||||||||||
Managed Basis | $ | 767,451 | $ | 747,303 | $ | 645,826 | $ | 609,102 | $ | 616,030 | $ | 2,160,580 | $ | 1,728,487 | ||||||||||||||
Net Interest Income | ||||||||||||||||||||||||||||
GAAP Basis | $ | 394,141 | $ | 367,112 | $ | 396,346 | $ | 378,648 | $ | 392,308 | $ | 1,157,599 | $ | 1,139,838 | ||||||||||||||
Securitization Adjustments | 590,327 | 601,429 | 557,512 | 556,056 | 565,228 | 1,749,268 | 1,755,354 | |||||||||||||||||||||
Managed Basis | $ | 984,468 | $ | 968,541 | $ | 953,858 | $ | 934,704 | $ | 957,536 | $ | 2,906,867 | $ | 2,895,192 | ||||||||||||||
Provision for Loan Losses | ||||||||||||||||||||||||||||
GAAP Basis | $ | 211,576 | $ | 203,287 | $ | 195,386 | $ | 239,693 | $ | 231,614 | $ | 610,249 | $ | 515,944 | ||||||||||||||
Securitization Adjustments | 297,450 | 327,151 | 287,274 | 287,846 | 263,750 | 911,875 | 858,161 | |||||||||||||||||||||
Managed Basis | $ | 509,026 | $ | 530,438 | $ | 482,660 | $ | 527,539 | $ | 495,364 | $ | 1,522,124 | $ | 1,374,105 | ||||||||||||||
Net interest income after provision for loan losses | ||||||||||||||||||||||||||||
GAAP Basis | $ | 182,565 | $ | 163,825 | $ | 200,960 | $ | 138,955 | $ | 160,694 | $ | 547,350 | $ | 623,894 | ||||||||||||||
Securitization Adjustments | 292,877 | 274,278 | 270,238 | 268,210 | 301,478 | 837,393 | 897,193 | |||||||||||||||||||||
Managed Basis | $ | 475,442 | $ | 438,103 | $ | 471,198 | $ | 407,165 | $ | 462,172 | $ | 1,384,743 | $ | 1,521,087 | ||||||||||||||
Other Income | ||||||||||||||||||||||||||||
GAAP Basis | $ | 845,498 | $ | 871,693 | $ | 825,677 | $ | 828,263 | $ | 889,374 | $ | 2,542,868 | $ | 2,710,676 | ||||||||||||||
Securitization Adjustments | (292,877 | ) | (274,278 | ) | (270,238 | ) | (268,210 | ) | (301,478 | ) | (837,393 | ) | (897,193 | ) | ||||||||||||||
Managed Basis | $ | 552,621 | $ | 597,415 | $ | 555,439 | $ | 560,053 | $ | 587,896 | $ | 1,705,475 | $ | 1,813,483 | ||||||||||||||
Total Assets | ||||||||||||||||||||||||||||
GAAP Basis | $ | 36,141,011 | $ | 35,672,568 | $ | 29,763,803 | $ | 29,067,242 | $ | 28,318,362 | $ | 36,141,011 | $ | 28,318,362 | ||||||||||||||
Securitization Adjustments | 29,316,379 | 29,440,258 | 28,018,556 | 26,444,943 | 26,395,637 | 29,316,379 | 26,395,637 | |||||||||||||||||||||
Managed Basis | $ | 65,457,390 | $ | 65,112,826 | $ | 57,782,359 | $ | 55,512,185 | $ | 54,713,999 | $ | 65,457,390 | $ | 54,713,999 | ||||||||||||||
Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | $ | 22,393,598 | $ | 22,788,042 | $ | 22,611,707 | $ | 23,742,750 | $ | 23,040,868 | $ | 22,393,598 | $ | 23,040,868 | ||||||||||||||
Securitization Adjustments | 29,498,857 | 28,717,355 | 28,319,849 | 26,703,427 | 26,662,812 | 29,498,857 | 26,662,812 | |||||||||||||||||||||
Managed Basis | $ | 51,892,455 | $ | 51,505,397 | $ | 50,931,556 | $ | 50,446,177 | $ | 49,703,680 | $ | 51,892,455 | $ | 49,703,680 | ||||||||||||||
Average Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | $ | 22,736,502 | $ | 21,511,837 | $ | 24,856,212 | $ | 22,677,104 | $ | 22,545,836 | $ | 23,021,556 | $ | 21,563,711 | ||||||||||||||
Securitization Adjustments | 28,794,432 | 29,332,115 | 26,718,056 | 26,641,445 | 26,338,419 | 28,292,946 | 26,533,284 | |||||||||||||||||||||
Managed Basis | $ | 51,530,934 | $ | 50,843,952 | $ | 51,574,268 | $ | 49,318,549 | $ | 48,884,255 | $ | 51,314,502 | $ | 48,096,995 | ||||||||||||||
Net Receivables/Tangible Equity | ||||||||||||||||||||||||||||
GAAP Basis | 4.38 | 4.36 | 4.55 | 4.55 | 4.18 | 4.38 | 4.18 | |||||||||||||||||||||
Securitization Adjustments | 5.99 | 5.69 | 5.90 | 5.30 | 5.01 | 5.99 | 5.01 | |||||||||||||||||||||
Managed Basis | 10.37 | 10.05 | 10.45 | 9.84 | 9.19 | 10.37 | 9.19 | |||||||||||||||||||||
Total Assets/Tangible Equity | ||||||||||||||||||||||||||||
GAAP Basis | 7.33 | 7.07 | 6.20 | 5.77 | 5.32 | 7.33 | 5.32 | |||||||||||||||||||||
Securitization Adjustments | 5.95 | 5.84 | 5.84 | 5.25 | 4.96 | 5.95 | 4.96 | |||||||||||||||||||||
Managed Basis | 13.28 | 12.91 | 12.04 | 11.01 | 10.28 | 13.28 | 10.28 |
7
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
Aug 31, 2007 | May 31, 2007 | Feb 28, 2007 | Nov 30, 2006 | Aug 31, 2006 | YTD 2007 | YTD 2006 | ||||||||||||||||||||||
Net Yield on Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | 6.88 | % | 6.77 | % | 6.47 | % | 6.70 | % | 6.90 | % | 6.70 | % | 7.04 | % | ||||||||||||||
Securitization Adjustments | 8.13 | % | 8.13 | % | 8.46 | % | 8.37 | % | 8.51 | % | 8.24 | % | 8.81 | % | ||||||||||||||
Managed Basis | 7.58 | % | 7.56 | % | 7.50 | % | 7.60 | % | 7.77 | % | 7.55 | % | 8.02 | % | ||||||||||||||
Return on Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | 3.53 | % | 3.86 | % | 3.81 | % | 3.30 | % | 4.25 | % | 3.73 | % | 5.50 | % | ||||||||||||||
Securitization Adjustments | 2.79 | % | 2.83 | % | 3.55 | % | 2.81 | % | 3.64 | % | 3.04 | % | 4.47 | % | ||||||||||||||
Managed Basis | 1.56 | % | 1.63 | % | 1.84 | % | 1.52 | % | 1.96 | % | 1.67 | % | 2.47 | % | ||||||||||||||
Total Credit Card Loans | ||||||||||||||||||||||||||||
Credit Card Loans | ||||||||||||||||||||||||||||
GAAP Basis | $ | 22,301,589 | $ | 22,698,457 | $ | 22,520,861 | $ | 23,646,901 | $ | 22,935,647 | $ | 22,301,589 | $ | 22,935,647 | ||||||||||||||
Securitization Adjustments | 29,498,857 | 28,717,355 | 28,319,849 | 26,703,427 | 26,662,812 | 29,498,857 | 26,662,812 | |||||||||||||||||||||
Managed Basis | $ | 51,800,446 | $ | 51,415,812 | $ | 50,840,710 | $ | 50,350,328 | $ | 49,598,459 | $ | 51,800,446 | $ | 49,598,459 | ||||||||||||||
Average Credit Card Loans | ||||||||||||||||||||||||||||
GAAP Basis | $ | 22,646,290 | $ | 21,419,465 | $ | 24,760,587 | $ | 22,573,508 | $ | 22,428,025 | $ | 22,928,841 | $ | 21,351,673 | ||||||||||||||
Securitization Adjustments | 28,794,432 | 29,332,115 | 26,718,056 | 26,641,445 | 26,338,419 | 28,292,946 | 26,533,284 | |||||||||||||||||||||
Managed Basis | $ | 51,440,722 | $ | 50,751,580 | $ | 51,478,643 | $ | 49,214,953 | $ | 48,766,444 | $ | 51,221,787 | $ | 47,884,957 | ||||||||||||||
Interest Yield | ||||||||||||||||||||||||||||
GAAP Basis | 10.99 | % | 10.50 | % | 10.41 | % | 10.27 | % | 10.44 | % | 10.63 | % | 10.42 | % | ||||||||||||||
Securitization Adjustments | 13.73 | % | 13.69 | % | 13.96 | % | 13.88 | % | 14.02 | % | 13.79 | % | 13.99 | % | ||||||||||||||
Managed Basis | 12.52 | % | 12.35 | % | 12.25 | % | 12.22 | % | 12.38 | % | 12.37 | % | 12.40 | % | ||||||||||||||
Net Principal Charge-off Rate | ||||||||||||||||||||||||||||
GAAP Basis | 3.71 | % | 3.91 | % | 3.77 | % | 3.95 | % | 3.57 | % | 3.80 | % | 3.74 | % | ||||||||||||||
Securitization Adjustments | 4.13 | % | 4.46 | % | 4.30 | % | 4.32 | % | 4.01 | % | 4.30 | % | 4.31 | % | ||||||||||||||
Managed Basis | 3.95 | % | 4.23 | % | 4.05 | % | 4.15 | % | 3.81 | % | 4.07 | % | 4.06 | % | ||||||||||||||
Delinquency Rate (over 30 days) | ||||||||||||||||||||||||||||
GAAP Basis | 3.07 | % | 2.94 | % | 3.15 | % | 3.22 | % | 3.19 | % | 3.07 | % | 3.19 | % | ||||||||||||||
Securitization Adjustments | 3.48 | % | 3.26 | % | 3.67 | % | 3.76 | % | 3.62 | % | 3.48 | % | 3.62 | % | ||||||||||||||
Managed Basis | 3.30 | % | 3.12 | % | 3.44 | % | 3.50 | % | 3.42 | % | 3.30 | % | 3.42 | % | ||||||||||||||
Delinquency Rate (over 90 days) | ||||||||||||||||||||||||||||
GAAP Basis | 1.44 | % | 1.43 | % | 1.55 | % | 1.53 | % | 1.49 | % | 1.44 | % | 1.49 | % | ||||||||||||||
Securitization Adjustments | 1.63 | % | 1.58 | % | 1.79 | % | 1.75 | % | 1.68 | % | 1.63 | % | 1.68 | % | ||||||||||||||
Managed Basis | 1.55 | % | 1.51 | % | 1.68 | % | 1.65 | % | 1.59 | % | 1.55 | % | 1.59 | % | ||||||||||||||
US CARD | ||||||||||||||||||||||||||||
Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | $ | 19,170,450 | $ | 19,938,986 | $ | 19,727,837 | $ | 20,790,244 | $ | 20,159,249 | $ | 19,170,450 | $ | 20,159,249 | ||||||||||||||
Securitization Adjustments | 28,273,657 | 27,014,916 | 26,629,021 | 25,011,827 | 25,022,508 | 28,273,657 | 25,022,508 | |||||||||||||||||||||
Managed Basis | $ | 47,444,107 | $ | 46,953,902 | $ | 46,356,858 | $ | 45,802,071 | $ | 45,181,757 | $ | 47,444,107 | $ | 45,181,757 | ||||||||||||||
Average Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | $ | 19,812,392 | $ | 18,673,525 | $ | 21,936,791 | $ | 19,888,844 | $ | 19,788,137 | $ | 20,127,794 | $ | 19,041,730 | ||||||||||||||
Securitization Adjustments | 27,204,080 | 27,622,771 | 25,029,093 | 25,010,476 | 24,735,384 | 26,630,250 | 25,204,734 | |||||||||||||||||||||
Managed Basis | $ | 47,016,472 | $ | 46,296,296 | $ | 46,965,884 | $ | 44,899,320 | $ | 44,523,521 | $ | 46,758,044 | $ | 44,246,464 | ||||||||||||||
Net Yield on Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | 7.26 | % | 7.09 | % | 6.65 | % | 6.82 | % | 7.10 | % | 6.99 | % | 7.23 | % | ||||||||||||||
Securitization Adjustments | 8.26 | % | 8.24 | % | 8.56 | % | 8.49 | % | 8.65 | % | 8.35 | % | 8.92 | % | ||||||||||||||
Managed Basis | 7.84 | % | 7.78 | % | 7.67 | % | 7.75 | % | 7.96 | % | 7.76 | % | 8.19 | % |
8
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
Aug 31, 2007 | May 31, 2007 | Feb 28, 2007 | Nov 30, 2006 | Aug 31, 2006 | YTD 2007 | YTD 2006 | ||||||||||||||||||||||
Domestic Credit Card Loans | ||||||||||||||||||||||||||||
Credit Card Loans | ||||||||||||||||||||||||||||
GAAP Basis | $ | 19,078,441 | $ | 19,849,401 | $ | 19,636,991 | $ | 20,694,395 | $ | 20,054,028 | $ | 19,078,441 | $ | 20,054,028 | ||||||||||||||
Securitization Adjustments | 28,273,657 | 27,014,916 | 26,629,021 | 25,011,827 | 25,022,508 | 28,273,657 | 25,022,508 | |||||||||||||||||||||
Managed Basis | $ | 47,352,098 | $ | 46,864,317 | $ | 46,266,012 | $ | 45,706,222 | $ | 45,076,536 | $ | 47,352,098 | $ | 45,076,536 | ||||||||||||||
Average Credit Card Loans | ||||||||||||||||||||||||||||
GAAP Basis | $ | 19,722,180 | $ | 18,581,153 | $ | 21,841,166 | $ | 19,785,248 | $ | 19,670,326 | $ | 20,035,079 | $ | 18,900,320 | ||||||||||||||
Securitization Adjustments | 27,204,080 | 27,622,771 | 25,029,093 | 25,010,476 | 24,735,384 | 26,630,250 | 25,204,734 | |||||||||||||||||||||
Managed Basis | $ | 46,926,260 | $ | 46,203,924 | $ | 46,870,259 | $ | 44,795,724 | $ | 44,405,710 | $ | 46,665,329 | $ | 44,105,054 | ||||||||||||||
Managed Interest Yield | ||||||||||||||||||||||||||||
GAAP Basis | 11.22 | % | 10.72 | % | 10.55 | % | 10.37 | % | 10.56 | % | 10.82 | % | 10.54 | % | ||||||||||||||
Securitization Adjustments | 13.88 | % | 13.85 | % | 14.10 | % | 14.04 | % | 14.20 | % | 13.94 | % | 14.09 | % | ||||||||||||||
Managed Basis | 12.76 | % | 12.59 | % | 12.45 | % | 12.42 | % | 12.59 | % | 12.60 | % | 12.57 | % | ||||||||||||||
Net Principal Charge-off Rate | ||||||||||||||||||||||||||||
GAAP Basis | 3.27 | % | 3.51 | % | 3.43 | % | 3.67 | % | 3.19 | % | 3.40 | % | 3.63 | % | ||||||||||||||
Securitization Adjustments | 4.01 | % | 4.34 | % | 4.14 | % | 4.23 | % | 3.84 | % | 4.16 | % | 4.19 | % | ||||||||||||||
Managed Basis | 3.70 | % | 4.00 | % | 3.81 | % | 3.99 | % | 3.55 | % | 3.84 | % | 3.95 | % | ||||||||||||||
Delinquency Rate (over 30 days) | ||||||||||||||||||||||||||||
GAAP Basis | 2.80 | % | 2.71 | % | 2.97 | % | 3.05 | % | 3.03 | % | 2.80 | % | 3.03 | % | ||||||||||||||
Securitization Adjustments | 3.40 | % | 3.16 | % | 3.56 | % | 3.67 | % | 3.54 | % | 3.40 | % | 3.54 | % | ||||||||||||||
Managed Basis | 3.16 | % | 2.97 | % | 3.31 | % | 3.39 | % | 3.31 | % | 3.16 | % | 3.31 | % | ||||||||||||||
Delinquency Rate (over 90 days) | ||||||||||||||||||||||||||||
GAAP Basis | 1.31 | % | 1.31 | % | 1.46 | % | 1.44 | % | 1.41 | % | 1.31 | % | 1.41 | % | ||||||||||||||
Securitization Adjustments | 1.60 | % | 1.54 | % | 1.75 | % | 1.72 | % | 1.64 | % | 1.60 | % | 1.64 | % | ||||||||||||||
Managed Basis | 1.48 | % | 1.44 | % | 1.63 | % | 1.59 | % | 1.54 | % | 1.48 | % | 1.54 | % | ||||||||||||||
INTERNATIONAL CARD | ||||||||||||||||||||||||||||
Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | $ | 3,223,148 | $ | 2,849,056 | $ | 2,883,870 | $ | 2,952,506 | $ | 2,881,619 | $ | 3,223,148 | $ | 2,881,619 | ||||||||||||||
Securitization Adjustments | 1,225,200 | 1,702,439 | 1,690,828 | 1,691,600 | 1,640,304 | 1,225,200 | 1,640,304 | |||||||||||||||||||||
Managed Basis | $ | 4,448,348 | $ | 4,551,495 | $ | 4,574,698 | $ | 4,644,106 | $ | 4,521,923 | $ | 4,448,348 | $ | 4,521,923 | ||||||||||||||
Average Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | $ | 2,924,110 | $ | 2,838,312 | $ | 2,919,421 | $ | 2,788,260 | $ | 2,757,699 | $ | 2,893,762 | $ | 2,521,981 | ||||||||||||||
Securitization Adjustments | 1,590,352 | 1,709,344 | 1,688,963 | 1,630,969 | 1,603,035 | 1,662,696 | 1,328,550 | |||||||||||||||||||||
Managed Basis | $ | 4,514,462 | $ | 4,547,656 | $ | 4,608,384 | $ | 4,419,229 | $ | 4,360,734 | $ | 4,556,458 | $ | 3,850,531 | ||||||||||||||
Net Yield on Loan Receivables | ||||||||||||||||||||||||||||
GAAP Basis | 4.21 | % | 4.60 | % | 4.99 | % | 5.77 | % | 5.39 | % | 4.60 | % | 5.57 | % | ||||||||||||||
Securitization Adjustments | 6.06 | % | 6.41 | % | 6.96 | % | 6.58 | % | 6.42 | % | 6.48 | % | 6.79 | % | ||||||||||||||
Managed Basis | 4.86 | % | 5.28 | % | 5.71 | % | 6.07 | % | 5.77 | % | 5.28 | % | 5.99 | % | ||||||||||||||
International Credit Card Loans | ||||||||||||||||||||||||||||
Credit Card Loans | ||||||||||||||||||||||||||||
GAAP Basis | $ | 3,223,148 | $ | 2,849,056 | $ | 2,883,870 | $ | 2,952,506 | $ | 2,881,619 | $ | 3,223,148 | $ | 2,881,619 | ||||||||||||||
Securitization Adjustments | 1,225,200 | 1,702,439 | 1,690,828 | 1,691,600 | 1,640,304 | 1,225,200 | 1,640,304 | |||||||||||||||||||||
Managed Basis | $ | 4,448,348 | $ | 4,551,495 | $ | 4,574,698 | $ | 4,644,106 | $ | 4,521,923 | $ | 4,448,348 | $ | 4,521,923 | ||||||||||||||
Average Credit Card Loans | ||||||||||||||||||||||||||||
GAAP Basis | $ | 2,924,110 | $ | 2,838,312 | $ | 2,919,421 | $ | 2,788,260 | $ | 2,757,699 | $ | 2,893,762 | $ | 2,451,353 | ||||||||||||||
Securitization Adjustments | 1,590,352 | 1,709,344 | 1,688,963 | 1,630,969 | 1,603,035 | 1,662,696 | 1,328,550 | |||||||||||||||||||||
Managed Basis | $ | 4,514,462 | $ | 4,547,656 | $ | 4,608,384 | $ | 4,419,229 | $ | 4,360,734 | $ | 4,556,458 | $ | 3,779,903 |
9
Quarter Ended | Nine Months Ended | |||||||||||||||||||||||||||
Aug 31, 2007 | May 31, 2007 | Feb 28, 2007 | Nov 30, 2006 | Aug 31, 2006 | YTD 2007 | YTD 2006 | ||||||||||||||||||||||
Interest Yield | ||||||||||||||||||||||||||||
GAAP Basis | 9.42 | % | 9.09 | % | 9.38 | % | 9.53 | % | 9.58 | % | 9.30 | % | 9.51 | % | ||||||||||||||
Securitization Adjustments | 11.07 | % | 11.20 | % | 11.77 | % | 11.41 | % | 11.24 | % | 11.35 | % | 12.16 | % | ||||||||||||||
Managed Basis | 10.00 | % | 9.89 | % | 10.25 | % | 10.23 | % | 10.19 | % | 10.05 | % | 10.44 | % | ||||||||||||||
Net Principal Charge-off Rate | ||||||||||||||||||||||||||||
GAAP Basis | 6.71 | % | 6.53 | % | 6.29 | % | 5.88 | % | 6.32 | % | 6.51 | % | 4.58 | % | ||||||||||||||
Securitization Adjustments | 6.27 | % | 6.45 | % | 6.72 | % | 5.67 | % | 6.58 | % | 6.49 | % | 6.64 | % | ||||||||||||||
Managed Basis | 6.56 | % | 6.50 | % | 6.45 | % | 5.80 | % | 6.41 | % | 6.50 | % | 5.30 | % | ||||||||||||||
Delinquency Rate (over 30 days) | ||||||||||||||||||||||||||||
GAAP Basis | 4.63 | % | 4.55 | % | 4.35 | % | 4.36 | % | 4.29 | % | 4.63 | % | 4.29 | % | ||||||||||||||
Securitization Adjustments | 5.55 | % | 4.93 | % | 5.42 | % | 4.96 | % | 4.78 | % | 5.55 | % | 4.78 | % | ||||||||||||||
Managed Basis | 4.89 | % | 4.69 | % | 4.75 | % | 4.58 | % | 4.47 | % | 4.89 | % | 4.47 | % | ||||||||||||||
Delinquency Rate (over 90 days) | ||||||||||||||||||||||||||||
GAAP Basis | 2.21 | % | 2.24 | % | 2.16 | % | 2.16 | % | 2.03 | % | 2.21 | % | 2.03 | % | ||||||||||||||
Securitization Adjustments | 2.51 | % | 2.26 | % | 2.40 | % | 2.32 | % | 2.19 | % | 2.51 | % | 2.19 | % | ||||||||||||||
Managed Basis | 2.30 | % | 2.25 | % | 2.25 | % | 2.22 | % | 2.09 | % | 2.30 | % | 2.09 | % | ||||||||||||||
3 Securitization Adjustments present the effect of loan securitization by recharacterizing as securitization income the portions of the following items that relate to the securitized loans: interest income, interest expense, provision for loan losses, discount and interchange revenue and loan fee revenues. Securitization income is reported in other income. | ||||||||||||||||||||||||||||
10 |