Discover Financial Services 8K Reports Fourth Quarter | DFS 16 Dec 10

Exhibit 99.2

Discover Financial Services
GAAP Basis 1
(unaudited, dollars in thousands, except per share statistics)
	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	$	1,499,347		$	1,535,939		$	1,551,782		$	1,559,150		$	638,086		$	861,261		135	%	$	6,146,218		$	3,145,080		$	3,001,138		95	%
Interest Expense		375,506			389,137			404,621			413,724			314,158			61,348		20	%		1,582,988			1,251,284			331,704		27	%
Net Interest Income		1,123,841			1,146,802			1,147,161			1,145,426			323,928			799,913		NM			4,563,230			1,893,796			2,669,434		141	%
Other Income 2		472,135			564,144			512,844			545,876			1,253,559			(781,424	)	(62	%)		2,094,999			4,840,595			(2,745,596	)	(57	%)
Revenue Net of Interest Expense		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	%)
Provision for Loan Losses		382,670			712,565			724,264			1,387,206			399,732			(17,062	)	(4	%)		3,206,705			2,362,405			844,300		36	%
Employee Compensation and Benefits		200,139			204,210			202,536			195,764			191,516			8,623		5	%		802,649			827,683			(25,034	)	(3	%)
Marketing and Business Development		149,911			130,532			97,970			84,673			113,851			36,060		32	%		463,086			406,020			57,066		14	%
Information Processing & Communications		67,249			62,357			63,087			65,418			72,192			(4,943	)	(7	%)		258,111			289,209			(31,098	)	(11	%)
Professional Fees		103,479			85,289			78,067			75,813			92,910			10,569		11	%		342,648			321,329			21,319		7	%
Premises and Equipment		17,001			17,722			17,691			17,860			18,282			(1,281	)	(7	%)		70,274			73,014			(2,740	)	(4	%)
Other Expense		90,296			66,128			54,197			35,276			118,748			(28,452	)	(24	%)		245,897			333,833			(87,936	)	(26	%)
Total Other Expense		628,075			566,238			513,548			474,804			607,499			20,576		3	%		2,182,665			2,251,088			(68,423	)	(3	%)
Income Before Income Taxes 2		585,231			432,143			422,193			(170,708	)		570,256			14,975		3	%		1,268,859			2,120,898			(852,039	)	(40	%)
Tax Expense		235,589			171,526			164,126			(67,170	)		217,719			17,870		8	%		504,071			844,713			(340,642	)	(40	%)
Net Income 2	$	349,642		$	260,617		$	258,067		$	(103,538	)	$	352,537		$	(2,895	)	(1	%)	$	764,788		$	1,276,185		$	(511,397	)	(40	%)

Net Income Allocated to Common Stockholders 2, 3	$	346,517		$	258,194		$	184,590		$	(122,233	)	$	330,505		$	16,012		5	%	$	667,938		$	1,206,965		$	(539,027	)	(45	%)

Effective Tax Rate 4		40.3	%		39.7	%		38.9	%		39.3	%		38.2	%							39.7	%		39.8	%

Balance Sheet Statistics
Total Assets	$	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	%
Tangible Assets 5	$	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	%
Total Equity	$	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	%)
Total Common Equity	$	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	%)
Total Common Equity/Total Assets		10.6	%		10.2	%		9.7	%		8.8	%		15.8	%							10.6	%		15.8	%
Total Common Equity/Net Loans 6		14.2	%		13.2	%		13.1	%		12.8	%		33.3	%							14.2	%		33.3	%
Book Value per share 7	$	11.85		$	11.22		$	11.10		$	12.90		$	15.54		$	(3.69	)	(24	%)	$	11.85		$	15.54		$	(3.69	)	(24	%)
ROE 2,8		22	%		17	%		16	%		(6	%)		16	%							12	%		17	%

Allowance for Loan Loss (period end)	$	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	%
Change in Loan Loss Reserves	$	(414,261	)	$	(186,903	)	$	(276,736	)	$	305,000		$	(74,461	)	$	(339,800	)	NM		$	(572,900	)	$	383,314		$	(956,214	)	NM
Reserve Rate 9		6.77	%		7.47	%		7.86	%		8.40	%		7.44	%		(67	)	bps			6.77	%		7.44	%		(67	)	bps

Per Share Statistics
Basic EPS 2, 10	$	0.64		$	0.47		$	0.34		$	(0.22	)	$	0.61		$	0.03		5	%	$	1.23		$	2.39		$	(1.16	)	(49	%)
Diluted EPS 2, 10	$	0.64		$	0.47		$	0.33		$	(0.22	)	$	0.60		$	0.04		7	%	$	1.22		$	2.38		$	(1.16	)	(49	%)
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			551,343			(6,660	)	(1	%)		548,760			507,907			40,853		8	%

Loan Receivables
Total Loans	$	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	%
Average Total Loans	$	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	%

Interest Yield 11		12.24	%		12.16	%		12.25	%		12.15	%		10.25	%		199		bps			12.20	%		11.31	%		89		bps
Net Principal Charge-off Rate 12		6.58	%		7.18	%		7.97	%		8.51	%		7.98	%		(140	)	bps			7.57	%		7.45	%		12		bps
Delinquency Rate (over 30 days) 13		3.89	%		4.16	%		4.52	%		5.05	%		4.92	%		(103	)	bps			3.89	%		4.92	%		(103	)	bps
Delinquency Rate (over 90 days) 14		2.03	%		2.19	%		2.45	%		2.77	%		2.58	%		(55	)	bps			2.03	%		2.58	%		(55	)	bps
Net Charge-off Dollars	$	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	%
Loans Delinquent Over 30 Days	$	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	%
Loans Delinquent Over 90 Days	$	993,618		$	1,098,611		$	1,224,526		$	1,386,386		$	608,437			385,181		63	%	$	993,618		$	608,437		$	385,181		63	%

Transactions Processed on Networks (000's)
Discover Network		412,558			418,423			392,571			381,562			387,350			25,208		7	%		1,605,114			1,513,955			91,159		6	%
PULSE Network		901,184			882,172			805,281			719,906			676,817			224,367		33	%		3,308,543			2,878,720			429,823		15	%
Total		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	%

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 Services		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	%
Discover Network - Proprietary 16		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	%
Total	$	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	%

Discover Financial Services
As Adjusted Basis (for 2009 data)
(unaudited, dollars in thousands, except per share statistics)
	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	$	1,499,347		$	1,535,939		$	1,551,782		$	1,559,150		$	1,576,442		$	(77,095	)	(5	%)	$	6,146,218		$	6,435,152		$	(288,934	)	(4	%)
Interest Expense		375,506			389,137			404,621			413,724			393,160			(17,654	)	(4	%)		1,582,988			1,605,499			(22,511	)	(1	%)
Net Interest Income		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	%)
Other Income		472,135			564,144			512,844			545,876			550,229			(78,094	)	(14	%)		2,094,999			2,186,064			(91,065	)	(4	%)
Revenue Net of Interest Expense		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	%)
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	%)
Employee Compensation and Benefits		200,139			204,210			202,536			195,764			191,516			8,623		5	%		802,649			827,683			(25,034	)	(3	%)
Marketing and Business Development		149,911			130,532			97,970			84,673			113,851			36,060		32	%		463,086			406,020			57,066		14	%
Information Processing & Communications		67,249			62,357			63,087			65,418			72,192			(4,943	)	(7	%)		258,111			289,209			(31,098	)	(11	%)
Professional Fees		103,479			85,289			78,067			75,813			92,910			10,569		11	%		342,648			321,329			21,319		7	%
Premises and Equipment		17,001			17,722			17,691			17,860			18,282			(1,281	)	(7	%)		70,274			73,014			(2,740	)	(4	%)
Other Expense		90,296			66,128			54,197			35,276			89,756			540		1	%		245,897			304,841			(58,944	)	(19	%)
Total Other Expense		628,075			566,238			513,548			474,804			578,507			49,568		9	%		2,182,665			2,222,096			(39,431	)	(2	%)
Income Before Income Taxes		585,231			432,143			422,193			(170,708	)		(103,257	)		688,488		NM			1,268,859			(329,409	)		1,598,268		NM
Tax Expense		235,589			171,526			164,126			(67,170	)		(44,037	)		279,626		NM			504,071			(92,125	)		596,196		NM
Net Income	$	349,642		$	260,617		$	258,067		$	(103,538	)	$	(59,220	)	$	408,862		NM		$	764,788		$	(237,284	)	$	1,002,072		NM

Net Income Allocated to Common Stockholders 3	$	346,517		$	258,194		$	184,590		$	(122,233	)	$	(77,855	)	$	424,372		NM		$	667,938		$	(290,539	)	$	958,477		NM

Effective Tax Rate 4		40.3	%		39.7	%		38.9	%		39.3	%		42.6	%							39.7	%		28.0	%

Balance Sheet Statistics
Total Assets	$	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	%)
Tangible Assets 5	$	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	%)
Total Equity	$	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	%)
Total Common Equity	$	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	%
Tangible Common Equity 17	$	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	%
Tangible Common Equity/Tangible Assets 17, 18		10.0	%		9.5	%		9.1	%		8.1	%		8.2	%							10.0	%		8.2	%
Tangible Common Equity/Net Loans 6, 17, 19		13.2	%		12.2	%		12.1	%		11.8	%		11.7	%							13.2	%		11.7	%
Tangible Common Equity per share 17, 20	$	11.04		$	10.40		$	10.28		$	9.94		$	10.12		$	0.92		9	%	$	11.04		$	10.12		$	0.92		9	%
ROE 8		22	%		17	%		16	%		(6	%)		(3	%)							12	%		(4	%)

Net Interest Margin 21		9.28	%		9.16	%		9.14	%		9.01	%		9.38	%		(10	)	bps			9.14	%		9.45	%		(31	)	bps
Return on Loan Receivables 22		2.89	%		2.08	%		2.06	%		(0.81	%)		(0.47	%)		336		bps			1.53	%		(0.46	%)		199		bps

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	%)
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.

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	%

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	%

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	%

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 Stateme nt 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 rep ort 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 va lue 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.

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	%

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	)

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	%

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.

Discover Financial Services (DFS) 8-KDiscover Financial Services Reports Fourth Quarter