Discover Financial Services (DFS) 8-K Discover Financial Services Reports Fourth Quarter Results

Exhibit 99.2

Discover Financial Services

GAAP Basis

(unaudited, dollars in thousands, except per share statistics)

	Quarter Ended															Nov 30, 2007						Year Ended
	Nov 30, 2007			Aug 31, 2007			May 31, 2007			Feb 28, 2007			Nov 30, 2006			vs Nov 30, 2006						2007			2006			2007 vs 2006
Earnings Summary
Interest Income	$	748,889		$	755,610		$	703,365		$	680,305		$	622,166		$	126,723			20	%	$	2,888,169		$	2,458,526		$	429,643			17	%
Interest Expense		400,734			361,469			336,253			283,959			243,518			157,216			65	%		1,382,415			940,040			442,375			47	%
Net Interest Income		348,155			394,141			367,112			396,346			378,648			(30,493	)		(8	%)		1,505,754			1,518,486			(12,732	)		(1	%)
Other Income		1,003,251			845,498			871,693			825,677			828,263			174,988			21	%		3,546,119			3,538,939			7,180			0	%
Revenue Net of Interest Expense		1,351,406			1,239,639			1,238,805			1,222,023			1,206,911			144,495			12	%		5,051,873			5,057,425			(5,552	)		(0	%)
Provision for Loan Losses		339,916			211,576			203,287			195,386			239,693			100,223			42	%		950,165			755,637			194,528			26	%
Employee Compensation and Benefits		226,494			227,904			234,373			233,318			234,625			(8,131	)		(3	%)		922,089			933,196			(11,107	)		(1	%)
Marketing and Business Development		163,916			163,015			140,930			142,344			197,601			(33,685	)		(17	%)		610,205			603,556			6,649			1	%
Information Processing & Communications		98,926			99,065			96,622			93,452			102,936			(4,010	)		(4	%)		388,065			387,595			470			0	%
Professional Fees		102,742			94,060			113,264			80,958			119,049			(16,307	)		(14	%)		391,024			367,769			23,255			6	%
Premises and Equipment		21,761			22,611			24,350			22,809			23,886			(2,125	)		(9	%)		91,531			92,278			(747	)		(1	%)
Other Expense 1		485,656			92,194			93,453			82,295			103,580			382,076		NM				753,598			335,089			418,509			125	%
Total Other Expense		1,099,495			698,849			702,992			655,176			781,677			317,818			41	%		3,156,512			2,719,483			437,029			16	%
Income (Loss) Before Income Taxes 1		(88,005	)		329,214			332,526			371,461			185,541			(273,546	)		(147	%)		945,196			1,582,305			(637,109	)		(40	%)
Tax Expense		(3,938	)		126,974			123,284			137,829			(981	)		(2,957	)	NM				384,149			505,689			(121,540	)		(24	%)
Net Income (Loss) 1	$	(84,067	)	$	202,240		$	209,242		$	233,632		$	186,522		$	(270,589	)		(145	%)	$	561,047		$	1,076,616		$	(515,569	)		(48	%)
Effective Tax Rate		4.5	%		38.6	%		37.1	%		37.1	%		(0.5	%)								40.6	%		32.0	%
Balance Sheet Statistics
Loan Receivables	$	23,954,295		$	22,393,598		$	22,788,042		$	22,611,707		$	23,742,750		$	211,545			1	%	$	23,954,295		$	23,742,750		$	211,545			1	%
Total Assets	$	37,348,409		$	36,141,011		$	35,672,568		$	29,763,803		$	29,067,242		$	8,281,167			28	%	$	37,348,409		$	29,067,242		$	8,281,167			28	%
Total Equity	$	5,571,839		$	5,667,282		$	5,780,284		$	5,528,658		$	5,774,772		$	(202,933	)		(4	%)	$	5,571,839		$	5,774,772		$	(202,933	)		(4	%)
Total Tangible Equity	$	5,218,375		$	4,927,431		$	5,044,586		$	4,797,784		$	5,039,867		$	178,508			4	%	$	5,218,375		$	5,039,867		$	178,508			4	%
Tangible Equity/Total Owned Assets		14.0	%		13.6	%		14.1	%		16.1	%		17.3	%								14.0	%		17.3	%
ROE 1		(6	%)		14	%		15	%		16	%		12	%								10	%		20	%
Allowance for Loan Loss (period end)	$	916,844		$	792,883		$	788,748		$	793,850		$	832,483		$	84,361			10	%	$	916,844		$	832,483		$	84,361			10	%
Change in Loan Loss Reserves	$	120,703		$	1,446		$	(6,098	)	$	(38,471	)	$	16,623		$	104,080		NM			$	77,580		$	(71,309	)	$	148,889		NM
Interest-only Strip Receivable (period end)	$	400,313		$	353,289		$	372,796		$	331,621		$	337,752		$	62,561			19	%	$	400,313		$	337,752		$	62,561			19	%
Net Revaluation of Retained Interests	$	37,298		$	(24,043	)	$	35,620		$	(3,997	)	$	5,492		$	31,806		NM			$	44,878		$	159,442		$	(114,564	)		(72	%)
Per Share Statistics
Basic EPS 1	$	(0.18	)	$	0.42		$	0.44		$	0.49		$	0.39		$	(0.57	)		(146	%)	$	1.18		$	2.26		$	(1.08	)		(48	%)
Diluted EPS 1, 2	$	(0.18	)	$	0.42		$	0.44		$	0.49		$	0.39		$	(0.57	)		(146	%)	$	1.17		$	2.26		$	(1.09	)		(48	%)
Stock Price (period end)	$	17.37		$	23.14
Book Value	$	11.66		$	11.87																	$	11.66
Ending Shares Outstanding (000's)		477,688			477,328			477,236			477,236			477,236			452			0	%		477,688			477,236			452			0	%
Weighted Average Shares Outstanding (000's)		477,567			477,272			477,236			477,236			477,236			331			0	%		477,328			477,236			92			0	%
Weighted Average Shares Outstanding (fully diluted) (000's)		477,567			480,071			477,236			477,236			477,236			331			0	%		478,879			477,236			1,643			0	%
Total Credit Card Loans
Credit Card Loans - Owned	$	23,703,101		$	22,301,589		$	22,698,457		$	22,520,861		$	23,646,901		$	56,200			0	%	$	23,703,101		$	23,646,901		$	56,200			0	%
Average Credit Card Loans - Owned	$	22,468,387		$	22,646,290		$	21,419,465		$	24,760,587		$	22,573,508		$	(105,121	)		(0	%)	$	22,814,043		$	21,656,295		$	1,157,748			5	%
Interest Yield		10.43	%		10.99	%		10.50	%		10.41	%		10.27	%		16		bps				10.58	%		10.38	%		20		bps
Net Principal Charge-off Rate		3.90	%		3.71	%		3.91	%		3.77	%		3.95	%		(5	)	bps				3.82	%		3.79	%		3		bps
Delinquency Rate (over 30 days)		3.50	%		3.07	%		2.94	%		3.15	%		3.22	%		28		bps				3.50	%		3.22	%		28		bps
Delinquency Rate (over 90 days)		1.63	%		1.44	%		1.43	%		1.55	%		1.53	%		10		bps				1.63	%		1.53	%		10		bps
Transactions Processed on Networks (000's)
Discover Network		378,438			384,335			361,893			361,700			358,152			20,286			6	%		1,486,366			1,399,933			86,433			6	%
PULSE Network		611,518			593,866			558,811			520,866			488,087			123,431			25	%		2,285,061			1,856,477			428,584			23	%
Total		989,956			978,201			920,704			882,566			846,239			143,717			17	%		3,771,427			3,256,410			515,017			16	%
Network Volume
PULSE Network	$	23,035,361		$	22,372,106		$	20,799,365		$	20,029,576											$	86,236,408
Third Party Issuers		1,458,959			1,492,568			1,313,438			1,215,140												5,480,105
Total Third Party Payments		24,494,320			23,864,674			22,112,803			21,244,716		$	19,178,369		$	5,315,951			28	%		91,716,513		$	73,196,400		$	18,520,113			25	%
U.S. Card		23,482,095			24,411,714			22,975,645			22,925,046			22,283,874			1,198,221			5	%		93,794,500			89,819,628			3,974,872			4	%
Total	$	47,976,415		$	48,276,388		$	45,088,448		$	44,169,762		$	41,462,243		$	6,514,172			16	%	$	185,511,013		$	163,016,028		$	22,494,985			14	%
1 The quarter ended November 30, 2007 includes a $391 million pre-tax ($279 million after-tax) non-cash impairment charge related to the company's Goldfish business in the International Card Segment. Excluding the impairment charge the company's basic EPS would be $0.41 and $1.76, diluted EPS would be $0.40 and $1.75, and ROE would be 14% and 15% for the quarter and year end, respectively.
2 For all periods prior to the spin off from Morgan Stanley, the same number of shares is being used for diluted EPS as for basic EPS as no common stock of Discover Financial Services was traded prior to July 2, 2007 and no Discover equity awards were outstanding for the prior periods.

Discover Financial Services

Managed Basis¹

(unaudited, dollars in thousands)

	Quarter Ended															Nov 30, 2007						Year Ended
	Nov 30, 2007			Aug 31, 2007			May 31, 2007			Feb 28, 2007			Nov 30, 2006			vs Nov 30, 2006						2007			2006			2007 vs 2006
Earnings Summary
Interest Income	$	1,793,072		$	1,751,919		$	1,715,844		$	1,599,684		$	1,543,806		$	249,266			16	%	$	6,860,519		$	6,167,485		$	693,034			11	%
Interest Expense		815,208			767,451			747,303			645,826			609,102			206,106			34	%		2,975,788			2,337,589			638,199			27	%
Net Interest Income		977,864			984,468			968,541			953,858			934,704			43,160			5	%		3,884,731			3,829,896			54,835			1	%
Other Income		682,344			552,621			597,415			555,439			560,053			122,291			22	%		2,387,819			2,373,536			14,283			1	%
Revenue Net of Interest Expense		1,660,208			1,537,089			1,565,956			1,509,297			1,494,757			165,451			11	%		6,272,550			6,203,432			69,118			1	%
Provision for Loan Losses		648,718			509,026			530,438			482,660			527,539			121,179			23	%		2,170,842			1,901,644			269,198			14	%
Employee Compensation and Benefits		226,494			227,904			234,373			233,318			234,625			(8,131	)		(3	%)		922,089			933,196			(11,107	)		(1	%)
Marketing and Business Development		163,916			163,015			140,930			142,344			197,601			(33,685	)		(17	%)		610,205			603,556			6,649			1	%
Information Processing & Communications		98,926			99,065			96,622			93,452			102,936			(4,010	)		(4	%)		388,065			387,595			470			0	%
Professional Fees		102,742			94,060			113,264			80,958			119,049			(16,307	)		(14	%)		391,024			367,769			23,255			6	%
Premises and Equipment		21,761			22,611			24,350			22,809			23,886			(2,125	)		(9	%)		91,531			92,278			(747	)		(1	%)
Other Expense 2		485,656			92,194			93,453			82,295			103,580			382,076		NM				753,598			335,089			418,509			125	%
Total Other Expense		1,099,495			698,849			702,992			655,176			781,677			317,818			41	%		3,156,512			2,719,483			437,029			16	%
Income (Loss) Before Income Taxes 2		(88,005	)		329,214			332,526			371,461			185,541			(273,546	)		(147	%)		945,196			1,582,305			(637,109	)		(40	%)
Tax Expense		(3,938	)		126,974			123,284			137,829			(981	)		(2,957	)	NM				384,149			505,689			(121,540	)		(24	%)
Net Income (Loss) 2	$	(84,067	)	$	202,240		$	209,242		$	233,632		$	186,522		$	(270,589	)		(145	%)	$	561,047		$	1,076,616		$	(515,569	)		(48	%)
Balance Sheet Statistics
Loan Receivables	$	52,553,604		$	51,892,455		$	51,505,397		$	50,931,556		$	50,446,177		$	2,107,427			4	%	$	52,553,604		$	50,446,177		$	2,107,427			4	%
Average Loan Receivables	$	51,818,029		$	51,530,934		$	50,843,952		$	51,574,268		$	49,318,549		$	2,499,480			5	%	$	51,440,039		$	48,401,547		$	3,038,492			6	%
Total Assets	$	65,724,235		$	65,457,390		$	65,112,826		$	57,782,359		$	55,512,185		$	10,212,050			18	%	$	65,724,235		$	55,512,185		$	10,212,050			18	%
Total Equity 3	$	5,571,839		$	5,667,282		$	5,780,284		$	5,528,658		$	5,774,772		$	(202,933	)		(4	%)	$	5,571,839		$	5,774,772		$	(202,933	)		(4	%)
Total Tangible Equity 3	$	5,218,375		$	4,927,431		$	5,044,586		$	4,797,784		$	5,039,867		$	178,508			4	%	$	5,218,375		$	5,039,867		$	178,508			4	%
Tangible Equity/Net Managed Receivables		10.1	%		9.6	%		10.0	%		9.6	%		10.2	%								10.1	%		10.2	%		(0	)	bps
Tangible Equity/Total Managed Assets		7.9	%		7.5	%		7.8	%		8.3	%		9.1	%								7.9	%		9.1	%
Net Yield on Loan Receivables		7.57	%		7.58	%		7.56	%		7.50	%		7.60	%		(3	)	bps				7.55	%		7.91	%		(36	)	bps
Return on Loan Receivables		(0.65	%)		1.56	%		1.63	%		1.84	%		1.52	%		(217	)	bps				1.09	%		2.22	%		(113	)	bps
Total Credit Card Loans
Credit Card Loans - Managed	$	52,302,410		$	51,800,446		$	51,415,812		$	50,840,710		$	50,350,328		$	1,952,082			4	%	$	52,302,410		$	50,350,328		$	1,952,082			4	%
Average Credit Card Loans - Managed	$	51,688,457		$	51,440,722		$	50,751,580		$	51,478,643		$	49,214,953		$	2,473,504			5	%	$	51,338,135		$	48,216,546		$	3,121,589			6	%
Managed Interest Yield		12.63	%		12.52	%		12.35	%		12.25	%		12.22	%		41		bps				12.44	%		12.36	%		8		bps
Managed Net Principal Charge-off Rate		4.08	%		3.95	%		4.23	%		4.05	%		4.15	%		(7	)	bps				4.08	%		4.08	%		0		bps
Managed Delinquency Rate (over 30 days)		3.73	%		3.30	%		3.12	%		3.44	%		3.50	%		23		bps				3.73	%		3.50	%		23		bps
Managed Delinquency Rate (over 90 days)		1.74	%		1.55	%		1.51	%		1.68	%		1.65	%		9		bps				1.74	%		1.65	%		9		bps
Total Credit Card Volume
Domestic	$	26,159,776		$	27,171,729		$	26,408,578		$	26,880,735		$	25,682,545		$	477,231			2	%	$	106,620,818		$	102,901,893		$	3,718,925			4	%
International		3,428,543	��		3,601,870			3,646,009			3,578,199			3,547,702			(119,159	)		(3	%)		14,254,621			11,881,465			2,373,156			20	%
Total	$	29,588,319		$	30,773,599		$	30,054,587		$	30,458,934		$	29,230,247		$	358,072			1	%	$	120,875,439		$	114,783,358		$	6,092,081			5	%
Total Credit Card Sales Volume
Domestic	$	22,588,639		$	23,527,999		$	22,108,865		$	22,037,053		$	21,404,325		$	1,184,314			6	%	$	90,262,556		$	86,385,577		$	3,876,979			4	%
International		3,212,885			3,296,360			3,277,439			3,169,284			3,123,230			89,655			3	%		12,955,968			10,335,331			2,620,637			25	%
Total	$	25,801,524		$	26,824,359		$	25,386,304		$	25,206,337		$	24,527,555		$	1,273,969			5	%	$	103,218,524		$	96,720,908		$	6,497,616			7	%
Segment - Income Before Income Taxes
U.S. Card	$	327,526		$	387,085		$	388,813		$	401,026		$	228,986		$	98,540			43	%	$	1,504,450		$	1,640,453		$	(136,003	)		(8	%)
Third Party Payments		7,591			9,439			8,010			11,920			6,946			645			9	%		36,960			28,949			8,011			28	%
International Card		(423,122	)		(67,310	)		(64,297	)		(41,485	)		(50,391	)		(372,731	)	NM				(596,214	)		(87,097	)		(509,117	)	NM
Total	$	(88,005	)	$	329,214		$	332,526		$	371,461		$	185,541		$	(273,546	)		(147	%)	$	945,196		$	1,582,305		$	(637,109	)		(40	%)
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 The quarter ended November 30, 2007 includes a $391 million pre-tax ($279 million after-tax) non-cash impairment charge related to the company's Goldfish business in the International Card Segment.
3 Balance on a GAAP and Managed basis is the same.

Discover Financial Services

U.S. Card Segment

Managed Basis¹

(unaudited, dollars in thousands)

	Quarter Ended															Nov 30, 2007						Year Ended
	Nov 30, 2007			Aug 31, 2007			May 31, 2007			Feb 28, 2007			Nov 30, 2006			vs Nov 30, 2006						2007			2006			2007 vs 2006
Earnings Summary
Interest Income	$	1,666,768		$	1,626,214		$	1,601,324		$	1,481,992		$	1,429,508		$	237,260			17	%	$	6,376,298		$	5,748,698		$	627,600			11	%
Interest Expense		743,975			697,643			693,837			593,610			562,185			181,790			32	%		2,729,065			2,160,569			568,496			26	%
Net Interest Income		922,793			928,571			907,487			888,382			867,323			55,470			6	%		3,647,233			3,588,129			59,104			2	%
Other Income		603,709			481,060			526,304			490,003			493,713			109,996			22	%		2,101,076			2,097,676			3,400			0	%
Revenue Net of Interest Expense		1,526,502			1,409,631			1,433,791			1,378,385			1,361,036			165,466			12	%		5,748,309			5,685,805			62,504			1	%
Provision for Loan Losses		584,722			418,349			444,249			406,076			452,965			131,757			29	%		1,853,396			1,663,472			189,924			11	%
Total Other Expense		614,254			604,197			600,729			571,283			679,085			(64,831	)		(10	%)		2,390,463			2,381,880			8,583			0	%
Income Before Income Taxes	$	327,526		$	387,085		$	388,813		$	401,026		$	228,986		$	98,540			43	%	$	1,504,450		$	1,640,453		$	(136,003	)		(8	%)
Loan Receivables	$	48,180,436		$	47,444,107		$	46,953,902		$	46,356,858		$	45,802,071		$	2,378,365			5	%	$	48,180,436		$	45,802,071		$	2,378,365			5	%
Average Loan Receivables	$	47,381,471		$	47,016,472		$	46,296,296		$	46,965,884		$	44,899,320		$	2,482,151			6	%	$	46,913,474		$	44,409,231		$	2,504,243			6	%
Net Yield on Loan Receivables		7.81	%		7.84	%		7.78	%		7.67	%		7.75	%		6		bps				7.77	%		8.08	%		(31	)	bps
Pretax Return on Loan Receivables		2.77	%		3.27	%		3.33	%		3.46	%		2.05	%		72		bps				3.21	%		3.69	%		(48	)	bps
Total Credit Card Loans
Credit Card Loans - Managed	$	47,929,242		$	47,352,098		$	46,864,317		$	46,266,012		$	45,706,222		$	2,223,020			5	%	$	47,929,242		$	45,706,222		$	2,223,020			5	%
Average Credit Card Loans - Managed	$	47,251,899		$	46,926,260		$	46,203,924		$	46,870,259		$	44,795,724		$	2,456,175			5	%	$	46,811,570		$	44,277,249		$	2,534,321			6	%
Managed Interest Yield		12.85	%		12.76	%		12.59	%		12.45	%		12.42	%		43		bps				12.66	%		12.53	%		13		bps
Managed Net Principal Charge-off Rate		3.84	%		3.70	%		4.00	%		3.81	%		3.99	%		(15	)	bps				3.84	%		3.96	%		(12	)	bps
Managed Delinquency Rate (over 30 days)		3.59	%		3.16	%		2.97	%		3.31	%		3.39	%		20		bps				3.59	%		3.39	%		20		bps
Managed Delinquency Rate (over 90 days)		1.68	%		1.48	%		1.44	%		1.63	%		1.59	%		9		bps				1.68	%		1.59	%		9		bps
Total Credit Card Volume	$	26,159,776		$	27,171,729		$	26,408,578		$	26,880,735		$	25,682,545		$	477,231			2	%	$	106,620,818		$	102,901,893		$	3,718,925			4	%
Sales Volume	$	22,588,639		$	23,527,999		$	22,108,865		$	22,037,053		$	21,404,325		$	1,184,314			6	%	$	90,262,556		$	86,385,577		$	3,876,979			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.

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Third Party Payments Segment

(unaudited, dollars in thousands)

	Quarter Ended										Nov 30, 2007					Year Ended
	Nov 30, 2007		Aug 31, 2007		May 31, 2007		Feb 28, 2007		Nov 30, 2006		vs Nov 30, 2006					2007		2006		2007 vs 2006
Earnings Summary
Interest Income	$	650	$	594	$	558	$	574	$	516	$	134		26	%	$	2,376	$	1,801	$	575		32	%
Interest Expense		-		-		4		15		6		(6	)	(100	%)		19		23		(4	)	(17	%)
Net Interest Income		650		594		554		559		510		140		27	%		2,357		1,778		579		33	%
Other Income		29,305		29,465		29,248		30,682		28,077		1,228		4	%		118,700		110,700		8,000		7	%
Revenue Net of Interest Expense		29,955		30,059		29,802		31,241		28,587		1,368		5	%		121,057		112,478		8,579		8	%
Provision for Loan Losses		-		-		-		-		-		-		0	%		-		-		-		0	%
Total Other Expense		22,364		20,620		21,792		19,321		21,641		723		3	%		84,097		83,529		568		1	%
Income Before Income Taxes	$	7,591	$	9,439	$	8,010	$	11,920	$	6,946	$	645		9	%	$	36,960	$	28,949	$	8,011		28	%
Network Volume
PULSE Network	$	23,035,361	$	22,372,106	$	20,799,365	$	20,029,576								$	86,236,408
Third Party Issuers		1,458,959		1,492,568		1,313,438		1,215,140									5,480,105
Total Third Party Payments	$	24,494,320	$	23,864,674	$	22,112,803	$	21,244,716	$	19,178,369	$	5,315,951		28	%	$	91,716,513	$	73,196,400	$	18,520,113		25	%
Transactions Processed on PULSE Network (000's)		611,518		593,866		558,811		520,866		488,087		123,431		25	%		2,285,061		1,856,477		428,584		23	%

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International Card Segment

Managed Basis¹

(unaudited, dollars in thousands)

	Quarter Ended															Nov 30, 2007						Year Ended
	Nov 30, 2007			Aug 31, 2007			May 31, 2007			Feb 28, 2007			Nov 30, 2006			vs Nov 30, 2006						2007			2006			2007 vs 2006
Earnings Summary
Interest Income	$	125,654		$	125,111		$	113,962		$	117,118		$	113,782		$	11,872			10	%	$	481,845		$	416,986		$	64,859			16	%
Interest Expense		71,233			69,808			53,462			52,201			46,911			24,322			52	%		246,704			176,997			69,707			39	%
Net Interest Income		54,421			55,303			60,500			64,917			66,871			(12,450	)		(19	%)		235,141			239,989			(4,848	)		(2	%)
Other Income		49,330			42,096			41,863			34,754			38,263			11,067			29	%		168,043			165,160			2,883			2	%
Revenue Net of Interest Expense		103,751			97,399			102,363			99,671			105,134			(1,383	)		(1	%)		403,184			405,149			(1,965	)		(0	%)
Provision for Loan Losses		63,996			90,677			86,189			76,584			74,574			(10,578	)		(14	%)		317,446			238,172			79,274			33	%
Total Other Expense 2		462,877			74,032			80,471			64,572			80,951			381,926		NM				681,952			254,074			427,878			168	%
Income (Loss) Before Income Taxes 2	$	(423,122	)	$	(67,310	)	$	(64,297	)	$	(41,485	)	$	(50,391	)	$	(372,731	)	NM			$	(596,214	)	$	(87,097	)	$	(509,117	)	NM
Loan Receivables	$	4,373,168		$	4,448,348		$	4,551,495		$	4,574,698		$	4,644,106		$	(270,938	)		(6	%)	$	4,373,168		$	4,644,106		$	(270,938	)		(6	%)
Average Loan Receivables	$	4,436,558		$	4,514,462		$	4,547,656		$	4,608,384		$	4,419,229		$	17,329			0	%	$	4,526,565		$	3,992,316		$	534,249			13	%
Net Yield on Loan Receivables		4.92	%		4.86	%		5.28	%		5.71	%		6.07	%		(115	)	bps				5.19	%		6.01	%		(82	)	bps
Pretax Return on Loan Receivables 2		(38.25	%)		(5.92	%)		(5.61	%)		(3.65	%)		(4.57	%)		(3,368	)	bps				(13.17	%)		(2.18	%)		(1099	)	bps
Total Credit Card Loans
Credit Card Loans - Managed	$	4,373,168		$	4,448,348		$	4,551,495		$	4,574,698		$	4,644,106		$	(270,938	)		(6	%)	$	4,373,168		$	4,644,106		$	(270,938	)		(6	%)
Average Credit Card Loans - Managed	$	4,436,558		$	4,514,462		$	4,547,656		$	4,608,384		$	4,419,229		$	17,329			0	%	$	4,526,565		$	3,939,297		$	587,268			15	%
Managed Interest Yield		10.32	%		10.00	%		9.89	%		10.25	%		10.23	%		9		bps				10.11	%		10.38	%		(27	)	bps
Managed Net Principal Charge-off Rate		6.65	%		6.56	%		6.50	%		6.45	%		5.80	%		85		bps				6.54	%		5.45	%		109		bps
Managed Delinquency Rate (over 30 days)		5.25	%		4.89	%		4.69	%		4.75	%		4.58	%		67		bps				5.25	%		4.58	%		67		bps
Managed Delinquency Rate (over 90 days)		2.43	%		2.30	%		2.25	%		2.25	%		2.22	%		21		bps				2.43	%		2.22	%		21		bps
Total Credit Card Volume	$	3,428,543		$	3,601,870		$	3,646,009		$	3,578,199		$	3,547,702		$	(119,159	)		(3	%)	$	14,254,621		$	11,881,465		$	2,373,156			20	%
Sales Volume	$	3,212,885		$	3,296,360		$	3,277,439		$	3,169,284		$	3,123,230		$	89,655			3	%	$	12,955,968		$	10,335,331		$	2,620,637			25	%
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 Includes non-cash impairment charge related to the company's Goldfish business ($391 million pre-tax, $279 million after-tax).

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RECONCILIATION OF GAAP TO MANAGED

The following pages present a reconciliation for certain information disclosed in the financial data supplement.

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, 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.

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Reconciliation of GAAP to Managed ¹

(unaudited, dollars in thousands)

	Quarter Ended															Year Ended
	Nov 30, 2007			Aug 31, 2007			May 31, 2007			Feb 28, 2007			Nov 30, 2006			2007			2006
Interest Income
GAAP Basis	$	748,889		$	755,610		$	703,365		$	680,305		$	622,166		$	2,888,169		$	2,458,526
Securitization Adjustments 1		1,044,183			996,309			1,012,479			919,379			921,640			3,972,350			3,708,959
Managed Basis	$	1,793,072		$	1,751,919		$	1,715,844		$	1,599,684		$	1,543,806		$	6,860,519		$	6,167,485
Interest Expense
GAAP Basis	$	400,734		$	361,469		$	336,253		$	283,959		$	243,518		$	1,382,415		$	940,040
Securitization Adjustments		414,474			405,982			411,050			361,867			365,584			1,593,373			1,397,549
Managed Basis	$	815,208		$	767,451		$	747,303		$	645,826		$	609,102		$	2,975,788		$	2,337,589
Net Interest Income
GAAP Basis	$	348,155		$	394,141		$	367,112		$	396,346		$	378,648		$	1,505,754		$	1,518,486
Securitization Adjustments		629,709			590,327			601,429			557,512			556,056			2,378,977			2,311,410
Managed Basis	$	977,864		$	984,468		$	968,541		$	953,858		$	934,704		$	3,884,731		$	3,829,896
Other Income
GAAP Basis	$	1,003,251		$	845,498		$	871,693		$	825,677		$	828,263		$	3,546,119		$	3,538,939
Securitization Adjustments		(320,907	)		(292,877	)		(274,278	)		(270,238	)		(268,210	)		(1,158,300	)		(1,165,403	)
Managed Basis	$	682,344		$	552,621		$	597,415		$	555,439		$	560,053		$	2,387,819		$	2,373,536
Revenue Net of Interest Expense
GAAP Basis	$	1,351,406		$	1,239,639		$	1,238,805		$	1,222,023		$	1,206,911		$	5,051,873		$	5,057,425
Securitization Adjustments		308,802			297,450			327,151			287,274			287,846			1,220,677			1,146,007
Managed Basis	$	1,660,208		$	1,537,089		$	1,565,956		$	1,509,297		$	1,494,757		$	6,272,550		$	6,203,432
Provision for Loan Losses
GAAP Basis	$	339,916		$	211,576		$	203,287		$	195,386		$	239,693		$	950,165		$	755,637
Securitization Adjustments		308,802			297,450			327,151			287,274			287,846			1,220,677			1,146,007
Managed Basis	$	648,718		$	509,026		$	530,438		$	482,660		$	527,539		$	2,170,842		$	1,901,644
Loan Receivables
GAAP Basis	$	23,954,295		$	22,393,598		$	22,788,042		$	22,611,707		$	23,742,750		$	23,954,295		$	23,742,750
Securitization Adjustments		28,599,309			29,498,857			28,717,355			28,319,849			26,703,427			28,599,309			26,703,427
Managed Basis	$	52,553,604		$	51,892,455		$	51,505,397		$	50,931,556		$	50,446,177		$	52,553,604		$	50,446,177
Total Assets
GAAP Basis	$	37,348,409		$	36,141,011		$	35,672,568		$	29,763,803		$	29,067,242		$	37,348,409		$	29,067,242
Securitization Adjustments		28,375,826			29,316,379			29,440,258			28,018,556			26,444,943			28,375,826			26,444,943
Managed Basis	$	65,724,235		$	65,457,390		$	65,112,826		$	57,782,359		$	55,512,185		$	65,724,235		$	55,512,185
Tangible Equity/Total Assets
GAAP Basis		14.0	%		13.6	%		14.1	%		16.1	%		17.3	%		14.0	%		17.3	%
Securitization Adjustments		18.4	%		16.8	%		17.1	%		17.1	%		19.1	%		18.4	%		19.1	%
Managed Basis		7.9	%		7.5	%		7.8	%		8.3	%		9.1	%		7.9	%		9.1	%
Total Credit Card Loans
Credit Card Loans
GAAP Basis	$	23,703,101		$	22,301,589		$	22,698,457		$	22,520,861		$	23,646,901		$	23,703,101		$	23,646,901
Securitization Adjustments		28,599,309			29,498,857			28,717,355			28,319,849			26,703,427			28,599,309			26,703,427
Managed Basis	$	52,302,410		$	51,800,446		$	51,415,812		$	50,840,710		$	50,350,328		$	52,302,410		$	50,350,328
Average Credit Card Loans
GAAP Basis	$	22,468,387		$	22,646,290		$	21,419,465		$	24,760,587		$	22,573,508		$	22,814,043		$	21,656,295
Securitization Adjustments		29,220,070			28,794,432			29,332,115			26,718,056			26,641,445			28,524,092			26,560,251
Managed Basis	$	51,688,457		$	51,440,722		$	50,751,580		$	51,478,643		$	49,214,953		$	51,338,135		$	48,216,546

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Reconciliation of GAAP to Managed ¹

(unaudited, dollars in thousands)

	Quarter Ended															Year Ended
	Nov 30, 2007			Aug 31, 2007			May 31, 2007			Feb 28, 2007			Nov 30, 2006			2007			2006
Interest Yield
GAAP Basis		10.43	%		10.99	%		10.50	%		10.41	%		10.27	%		10.58	%		10.38	%
Securitization Adjustments		14.33	%		13.73	%		13.69	%		13.96	%		13.88	%		13.93	%		13.96	%
Managed Basis		12.63	%		12.52	%		12.35	%		12.25	%		12.22	%		12.44	%		12.36	%
Net Principal Charge-off Rate
GAAP Basis		3.90	%		3.71	%		3.91	%		3.77	%		3.95	%		3.82	%		3.79	%
Securitization Adjustments		4.23	%		4.13	%		4.46	%		4.30	%		4.32	%		4.28	%		4.31	%
Managed Basis		4.08	%		3.95	%		4.23	%		4.05	%		4.15	%		4.08	%		4.08	%
Delinquency Rate (over 30 days)
GAAP Basis		3.50	%		3.07	%		2.94	%		3.15	%		3.22	%		3.50	%		3.22	%
Securitization Adjustments		3.92	%		3.48	%		3.26	%		3.67	%		3.76	%		3.92	%		3.76	%
Managed Basis		3.73	%		3.30	%		3.12	%		3.44	%		3.50	%		3.73	%		3.50	%
Delinquency Rate (over 90 days)
GAAP Basis		1.63	%		1.44	%		1.43	%		1.55	%		1.53	%		1.63	%		1.53	%
Securitization Adjustments		1.84	%		1.63	%		1.58	%		1.79	%		1.75	%		1.84	%		1.75	%
Managed Basis		1.74	%		1.55	%		1.51	%		1.68	%		1.65	%		1.74	%		1.65	%
US CARD
Loan Receivables
GAAP Basis	$	20,831,117		$	19,170,450		$	19,938,986		$	19,727,837		$	20,790,244		$	20,831,117		$	20,790,244
Securitization Adjustments		27,349,319			28,273,657			27,014,916			26,629,021			25,011,827			27,349,319			25,011,827
Managed Basis	$	48,180,436		$	47,444,107		$	46,953,902		$	46,356,858		$	45,802,071		$	48,180,436		$	45,802,071
Domestic Credit Card Loans
Credit Card Loans
GAAP Basis	$	20,579,923		$	19,078,441		$	19,849,401		$	19,636,991		$	20,694,395		$	20,579,923		$	20,694,395
Securitization Adjustments		27,349,319			28,273,657			27,014,916			26,629,021			25,011,827			27,349,319			25,011,827
Managed Basis	$	47,929,242		$	47,352,098		$	46,864,317		$	46,266,012		$	45,706,222		$	47,929,242		$	45,706,222
Average Credit Card Loans
GAAP Basis	$	19,276,203		$	19,722,180		$	18,581,153		$	21,841,166		$	19,785,248		$	19,845,880		$	19,120,946
Securitization Adjustments		27,975,696			27,204,080			27,622,771			25,029,093			25,010,476			26,965,690			25,156,303
Managed Basis	$	47,251,899		$	46,926,260		$	46,203,924		$	46,870,259		$	44,795,724		$	46,811,570		$	44,277,249
Interest Yield
GAAP Basis		10.53	%		11.22	%		10.72	%		10.55	%		10.37	%		10.75	%		10.50	%
Securitization Adjustments		14.45	%		13.88	%		13.85	%		14.10	%		14.04	%		14.07	%		14.08	%
Managed Basis		12.85	%		12.76	%		12.59	%		12.45	%		12.42	%		12.66	%		12.53	%
Net Principal Charge-off Rate
GAAP Basis		3.43	%		3.27	%		3.51	%		3.43	%		3.67	%		3.41	%		3.64	%
Securitization Adjustments		4.13	%		4.01	%		4.34	%		4.14	%		4.23	%		4.15	%		4.20	%
Managed Basis		3.84	%		3.70	%		4.00	%		3.81	%		3.99	%		3.84	%		3.96	%
Delinquency Rate (over 30 days)
GAAP Basis		3.28	%		2.80	%		2.71	%		2.97	%		3.05	%		3.28	%		3.05	%
Securitization Adjustments		3.82	%		3.40	%		3.16	%		3.56	%		3.67	%		3.82	%		3.67	%
Managed Basis		3.59	%		3.16	%		2.97	%		3.31	%		3.39	%		3.59	%		3.39	%
Delinquency Rate (over 90 days)
GAAP Basis		1.53	%		1.31	%		1.31	%		1.46	%		1.44	%		1.53	%		1.44	%
Securitization Adjustments		1.79	%		1.60	%		1.54	%		1.75	%		1.72	%		1.79	%		1.72	%
Managed Basis		1.68	%		1.48	%		1.44	%		1.63	%		1.59	%		1.68	%		1.59	%

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Reconciliation of GAAP to Managed ¹

(unaudited, dollars in thousands)

	Quarter Ended															Year Ended
	Nov 30, 2007			Aug 31, 2007			May 31, 2007			Feb 28, 2007			Nov 30, 2006			2007			2006
INTERNATIONAL CARD
Loan Receivables
GAAP Basis	$	3,123,178		$	3,223,148		$	2,849,056		$	2,883,870		$	2,952,506		$	3,123,178		$	2,952,506
Securitization Adjustments		1,249,990			1,225,200			1,702,439			1,690,828			1,691,600			1,249,990			1,691,600
Managed Basis	$	4,373,168		$	4,448,348		$	4,551,495		$	4,574,698		$	4,644,106		$	4,373,168		$	4,644,106
International Credit Card Loans
Credit Card Loans
GAAP Basis	$	3,123,178		$	3,223,148		$	2,849,056		$	2,883,870		$	2,952,506		$	3,123,178		$	2,952,506
Securitization Adjustments		1,249,990			1,225,200			1,702,439			1,690,828			1,691,600			1,249,990			1,691,600
Managed Basis	$	4,373,168		$	4,448,348		$	4,551,495		$	4,574,698		$	4,644,106		$	4,373,168		$	4,644,106
Average Credit Card Loans
GAAP Basis	$	3,192,184		$	2,924,110		$	2,838,312		$	2,919,421		$	2,788,260		$	2,968,163		$	2,535,349
Securitization Adjustments		1,244,374			1,590,352			1,709,344			1,688,963			1,630,969			1,558,402			1,403,948
Managed Basis	$	4,436,558		$	4,514,462		$	4,547,656		$	4,608,384		$	4,419,229		$	4,526,565		$	3,939,297
Interest Yield
GAAP Basis		9.77	%		9.42	%		9.09	%		9.38	%		9.53	%		9.42	%		9.51	%
Securitization Adjustments		11.75	%		11.07	%		11.20	%		11.77	%		11.41	%		11.43	%		11.94	%
Managed Basis		10.32	%		10.00	%		9.89	%		10.25	%		10.23	%		10.11	%		10.38	%
Net Principal Charge-off Rate
GAAP Basis		6.70	%		6.71	%		6.53	%		6.29	%		5.88	%		6.56	%		4.94	%
Securitization Adjustments		6.52	%		6.27	%		6.45	%		6.72	%		5.67	%		6.49	%		6.36	%
Managed Basis		6.65	%		6.56	%		6.50	%		6.45	%		5.80	%		6.54	%		5.45	%
Delinquency Rate (over 30 days)
GAAP Basis		4.91	%		4.63	%		4.55	%		4.35	%		4.36	%		4.91	%		4.36	%
Securitization Adjustments		6.09	%		5.55	%		4.93	%		5.42	%		4.96	%		6.09	%		4.96	%
Managed Basis		5.25	%		4.89	%		4.69	%		4.75	%		4.58	%		5.25	%		4.58	%
Delinquency Rate (over 90 days)
GAAP Basis		2.27	%		2.21	%		2.24	%		2.16	%		2.16	%		2.27	%		2.16	%
Securitization Adjustments		2.83	%		2.51	%		2.26	%		2.40	%		2.32	%		2.83	%		2.32	%
Managed Basis		2.43	%		2.30	%		2.25	%		2.25	%		2.22	%		2.43	%		2.22	%
1 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.