8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 17, 2009

DISCOVER FINANCIAL SERVICES

(Exact name of registrant as specified in its charter)

Commission File Number: 001-33378

Delaware	36-2517428
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

2500 Lake Cook Road, Riverwoods, Illinois 60015

(Address of principal executive offices, including zip code)

(224) 405-0900

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.                      Results of Operations and Financial Condition.

On September 17, 2009, Discover Financial Services (the “Company”) released financial information with respect to the quarter ended August 31, 2009. A copy of the press release containing this information is attached hereto as Exhibit 99.1 and incorporated herein by reference. In addition, a copy of the Company's Financial Data Supplement for the quarter ended August 31, 2009 is attached hereto as Exhibit 99.2 and incorporated herein by reference.

The information contained in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 and Exhibit 99.2, is furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly stated by specific reference in such filing.

Item 9.01.                      Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press Release of the Company dated September 17, 2009 containing financial information for the quarter ended August 31, 2009
99.2	Financial Data Supplement of the Company for the quarter ended August 31, 2009

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DISCOVER FINANCIAL SERVICES
Dated: September 17, 2009	By:	/s/ D. Christopher Greene
		Name:  D. Christopher Greene
		Title:  Vice President, Assistant General Counsel and Assistant Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release of the Company dated September 17, 2009 containing financial information for the quarter ended August 31, 2009
99.2	Financial Data Supplement of the Company for the quarter ended August 31, 2009

EX-99.1

Exhibit 99.1

DISCOVER FINANCIAL SERVICES REPORTS THIRD QUARTER RESULTS:

NET INCOME OF $577 MILLION AND EARNINGS PER SHARE OF $1.07

Riverwoods, IL, Sept. 17, 2009 - Discover Financial Services (NYSE: DFS) today reported net income for the quarter ended Aug. 31, 2009 of $577 million, up $397 million from the third quarter of 2008, and diluted EPS of $1.07, up $0.70 from the third quarter of 2008. Net income for the third quarter of 2009 includes approximately $287 million (after-tax) related to the Visa/MasterCard antitrust litigation settlement.

Highlights

●   Managed1 loans of $51 billion were relatively unchanged from the prior quarter.

●   Managed net yield on loan receivables rose to 9.90%.

●   Discover Card sales volume declined 7% from the prior year to $23 billion.

●   The third-quarter managed net charge-off rate rose to 8.39%.

●   The company re-entered the securitization market which drove a $2 billion decline in on-balance sheet loans and a release of loan loss reserves.

●   Deposit balances originated through direct-to-consumer and affinity relationships surpassed $10 billion, an increase of $2 billion from the prior quarter.

●   Total company expenses were down 14% from the prior year.

●   Third-Party Payments segment volume was $36 billion, a 2% increase from the prior year.

"I am very pleased with Discover's results this quarter, which were characterized by solid revenue growth, better than expected credit performance, continued reduction of expenses and our re-entry into the capital markets,” said David Nelms, Discover’s chairman and chief executive officer. "While maintaining a very cautious view of credit due to the mixed signals in the US economy, we continue to invest for future growth as we build our brand and global payments networks."

1 All references herein to financial information presented on a managed basis assume 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. Management believes it is useful for investors to consider the credit performance of the entire managed loan portfolio to understand the quality of loan originations and the related credit risks inherent in the owned portfolio and retained interests in securitization.  For more information, and a detailed reconciliation, see the schedule titled “Reconciliation of GAAP to Managed Data” attached to this press release.

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Segment Results (Managed Basis):

U.S. Card

Pretax income was $913 million in the third quarter of 2009 as compared to $245 million for the third quarter of 2008.

Managed loans ended the quarter at $51 billion, up 1% compared to the prior year, as lower cardmember payments and growth in both student and personal loans were largely offset by lower balance transfer activity and sales volume.  Sales volume declined 7% compared to the prior year, reflecting lower gas prices and a general decline in consumer spending, but increased 6% from the prior quarter, primarily as a result of seasonal growth. Balance transfer volume declined 84% and 76% from the prior year and prior quarter, respectively, as the company further reduced its marketing of promotional rate balance transfer offers.

Net yield on loan receivables rose to 9.90%, an increase of 95 basis points from the prior year and 64 basis points from the prior quarter.  The increases reflect the impact of higher interest rates on standard balances and a substantial reduction in promotional rate balances. The increase over the prior year is partially offset by higher interest charge-offs.  In addition, the second quarter of 2009 included a $16 million charge related to an industry-wide FDIC special assessment which had the effect of reducing second quarter net yield by 12 basis points.

The managed net charge-off rate increased to 8.39% for the third quarter of 2009, up 319 basis points and 60 basis points from the prior year and the prior quarter, respectively, as consumer bankruptcies and unemployment continued to rise.  The over 30 days delinquency rate on managed loans was 5.10%, up 125 basis points from the prior year primarily due to the economic downturn, and up 2 basis points from the second quarter of 2009.  The managed net charge-off rate for the fourth quarter of 2009 is expected to be between 8.5% and 9%.

Provision for loan losses increased $170 million, or 23%, from the prior year due to higher net charge-offs.  The allowance for loan losses increased $873 million from the prior year, but decreased $154 million from the prior quarter.  The increase from the prior year reflects a reserve addition related to a 278 basis point increase in the reserve rate and a $3 billion increase in on-balance sheet loans due to maturing securitizations.  The decrease from the prior quarter reflects a $2 billion decline in the level of on-balance sheet loans in the quarter as a result of securitization activities.

Other income increased $573 million from the prior year, including $472 million related to the Visa/MasterCard antitrust litigation settlement and a $69 million favorable revaluation of the interest-only strip receivable compared to a $34 million unfavorable revaluation in the prior year.

Expenses decreased $96 million, or 16%, from the prior year, reflecting reduced marketing, lower headcount and the impact of other cost containment initiatives.

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Third-Party Payments

The Third-Party Payments segment transaction volume of $36 billion was up 2% from the prior year, as the inclusion of a full quarter of Diners Club International volume was partially offset by lower sales volume from third-party issuers and a 1% decrease in PULSE volumes.  The third quarter 2008 transaction volume included two months of volume related to Diners Club International, which was acquired on June 30, 2008.

Pretax income of $27 million was down $1 million from the prior year. Segment expenses include a higher level of international marketing investments, partially offset by the impact of cost containment initiatives. In addition, segment revenues and expenses were impacted by the inclusion of a full quarter of Diners Club International results.

Capital Markets Activity

During the quarter, the company raised approximately $534 million through a common stock offering and issued debt of $400 million.  The company's securitization trust issued $1.5 billion of asset-backed securities through the TALF program and the company completed a number of actions to adjust the credit enhancement structure of the securitization trusts.

Dividends

The company’s board declared a cash dividend of $0.02 per share of common stock, payable on Oct. 22, 2009, to stockholders of record at the close of business on Oct. 1, 2009.

Conference Call and Webcast Information

The company will host a conference call to discuss its third quarter results on Thursday, Sept. 17, 2009, at 10 a.m. Central time.  Interested parties can listen to the conference call via a live audio webcast at http://investorrelations.discoverfinancial.com.

About Discover

Discover Financial Services (NYSE: DFS) is a leading credit card issuer and electronic payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers student and personal loans, as well as savings products such as certificates of deposit and money market accounts. Its payments businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in 185 countries and territories. For more information, visit www.discoverfinancial.com.

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Contacts:

Investors:

Craig Streem, 224-405-3575

craigstreem@discover.com

Media:

Jon Drummond, 224-405-1888

jondrummond@discover.com

A financial summary follows. Financial, statistical, and business related information, as well as information regarding business and segment trends, is included in the Financial Supplement. Both the earnings release and the Financial Supplement are available online at http://investorrelations.discoverfinancial.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Discover Financial Services' management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. These forward-looking statements speak only as of the date of this press release, and there is no undertaking to update or revise them as more information becomes available.  The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the actions and initiatives of current and potential competitors; our ability to manage credit risks and securitize our receivables at acceptable rates and under sale accounting treatment; changes in economic variables, such as the availability of consumer credit, the housing market, energy costs, the number and size of personal bankruptcy filings, the rate of unemployment and the levels of consumer confidence and consumer debt; the level and volatility of equity prices, commodity prices and interest rates, currency values, investments, other market fluctuations and other market indices; the availability and cost of funding and capital; access to U.S. equity, debt and deposit markets; the ability to manage our liquidity risk; losses in our investment portfolio; the ability to increase or sustain Discover card usage or attract new cardmembers and introduce new products or services; our ability to attract new merchants and maintain relationships with current merchants; our ability to successfully achieve interoperability among our networks and maintain relationships with network participants; material security breaches of key systems; unforeseen and catastrophic events; our reputation; the potential effects of technological changes; the effect of political, economic and market conditions and geopolitical events; unanticipated developments relating to lawsuits, investigations or similar matters; the impact of current, pending and future legislation, regulation and regulatory and legal actions, including new laws and rules limiting or modifying certain credit card practices and legislation related to government programs to stabilize the financial markets; our ability to attract and retain employees; the ability to protect our intellectual property; the impact of any potential future acquisitions; investor sentiment; resolution of our dispute with Morgan Stanley; and the restrictions on our operations resulting from financing transactions.

Additional factors that could cause Discover Financial Services' results to differ materially from those described in the forward-looking statements can be found under “Part I. Item 1A. Risk Factors” in the Company's Annual Report on Form 10-K for the year ended November 30, 2008 and under “Part II. Item 1A. Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarters ended February 28, 2009 and May 31, 2009, which are filed with the SEC and available at the SEC's internet site (http://www.sec.gov).

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Discover Financial Services
GAAP Basis
(unaudited, dollars in thousands, except per
share statistics)	Quarter Ended
	Aug 31, 2009			May 31, 2009			Aug 31, 2008
Earnings Summary
Interest Income	$	833,217		$	857,984		$	681,692
Interest Expense		304,401			320,005			305,643
Net Interest Income		528,816			537,979			376,049
Other Income 1		1,315,960			1,081,120			875,121
Revenue Net of Interest Expense		1,844,776			1,619,099			1,251,170
Provision for Loan Losses		380,999			643,861			364,838
Employee Compensation and Benefits		208,528			208,151			222,426
Marketing and Business Development		77,814			102,922			137,928
Information Processing & Communications		67,679			74,441			76,675
Professional Fees		83,746			74,550			82,775
Premises and Equipment		18,437			18,223			20,274
Other Expense		67,634			82,341			72,469
Total Other Expense		523,838			560,628			612,547
Income Before Income Taxes 1		939,939			414,610			273,785
Tax Expense		362,485			188,810			94,885
Income From Continuing Operations 1		577,454			225,800			178,900
Discontinued Operations, Net of Tax		0			0			1,153
Net Income 1	$	577,454		$	225,800		$	180,053
Net Income Available to Common Stockholders 1, 2	$	559,387		$	209,246		$	180,053
Effective Tax Rate From Continuing Operations		38.6	%		45.5	%		34.7	%
Balance Sheet Statistics 3
Total Assets	$	42,698,290		$	41,518,288		$	37,283,548
Tangible Assets	$	42,245,313		$	41,063,390		$	36,822,429
Total Equity	$	8,386,202		$	7,415,640		$	6,000,393
Total Common Equity	$	7,231,463		$	6,263,661		$	6,000,393
Total Common Equity/Total Assets		16.9	%		15.1	%		16.1	%
Total Common Equity/Net Loans - Owned		31	%		25	%		29	%
ROE 1		28	%		12	%		12	%
ROE from Continuing Operations 1		28	%		12	%		12	%
Allowance for Loan Loss (period end)	$	1,832,360		$	1,986,473		$	959,769
Change in Loan Loss Reserves	$	(154,113	)	$	107,531		$	112,994
Reserve Rate		7.19	%		7.24	%		4.41	%
Interest-only Strip Receivable (period end)	$	162,252		$	94,670		$	408,649
Net Revaluation of Retained Interests	$	68,880		$	(92,954	)	$	(33,513	)
Per Share Statistics
Basic EPS 1, 4	$	1.09		$	0.43		$	0.38
Basic EPS from Continuing Operations 1, 4	$	1.09		$	0.43		$	0.38
Diluted EPS 1, 4	$	1.07		$	0.43		$	0.37
Diluted EPS from Continuing Operations 1, 4	$	1.07		$	0.43		$	0.37
Common Stock Price (period end)	$	13.75		$	9.56		$	16.45
Book Value	$	15.45		$	15.40		$	12.51
Ending Common Shares Outstanding (000's)		542,749			481,676			479,764
Weighted Average Common Shares Outstanding (000's)		513,098			481,636			479,618
Weighted Average Common Shares Outstanding (fully diluted) (000's)		520,579			484,965			484,128
Loan Receivables  3
Total Loans - Owned	$	25,489,809		$	27,441,514		$	21,767,483
Less: Allowance for Loan Loss (period end)		1,832,360			1,986,473			959,769
Net Loans - Owned	$	23,657,449		$	25,455,041		$	20,807,714
Average Total Loans - Owned	$	26,380,203		$	28,257,484		$	21,053,804
Interest Yield		12.10	%		11.54	%		11.41	%
Net Principal Charge-off Rate		8.05	%		7.53	%		4.76	%
Delinquency Rate (over 30 days)		4.86	%		4.87	%		3.58	%
Delinquency Rate (over 90 days)		2.46	%		2.60	%		1.73	%
Transactions Processed on Networks (000's)
Discover Network		390,643			366,315			388,504
PULSE Network		753,201			762,175			713,791
Total		1,143,844			1,128,490			1,102,295
Volume
PULSE Network		28,051,978		$	29,128,044		$	28,364,575
Third-Party Issuers		1,446,308			1,340,532			1,711,617
Diners Club International 5		6,465,990			6,240,604			5,227,795
Total Third-Party Payments		35,964,276			36,709,180			35,303,987
Discover Network - Proprietary 6		23,579,434			21,972,596			25,117,321
Total	$	59,543,710		$	58,681,776		$	60,421,308

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Discover Financial Services
Managed Basis 7
(unaudited, dollars in thousands)
	Quarter Ended
	Aug 31, 2009			May 31, 2009			Aug 31, 2008
Earnings Summary
Interest Income	$	1,664,081		$	1,607,452		$	1,638,250
Interest Expense		392,642			414,063			534,887
Net Interest Income		1,271,439			1,193,389			1,103,363
Other Income 1		1,116,765			893,081			536,997
Revenue Net of Interest Expense		2,388,204			2,086,470			1,640,360
Provision for Loan Losses		924,427			1,111,232			754,028
Employee Compensation and Benefits		208,528			208,151			222,426
Marketing and Business Development		77,814			102,922			137,928
Information Processing & Communications		67,679			74,441			76,675
Professional Fees		83,746			74,550			82,775
Premises and Equipment		18,437			18,223			20,274
Other Expense		67,634			82,341			72,469
Total Other Expense		523,838			560,628			612,547
Income Before Income Taxes 1		939,939			414,610			273,785
Tax Expense		362,485			188,810			94,885
Income From Continuing Operations 1		577,454			225,800			178,900
Discontinued Operations, Net of Tax		0			0			1,153
Net Income 1	$	577,454		$	225,800		$	180,053
Balance Sheet Statistics 3
Total Assets	$	67,794,309		$	64,846,824		$	65,632,825
Tangible Managed Assets	$	67,341,332		$	64,391,926		$	65,171,706
Total Equity 8	$	8,386,202		$	7,415,640		$	6,000,393
Total Common Equity 8	$	7,231,463		$	6,263,661		$	6,000,393
Tangible Common Equity 8, 9	$	6,778,486		$	5,808,763		$	5,539,274
Total Common Equity/Tangible Managed Assets 10		10.7	%		9.7	%		9.2	%
Tangible Common Equity/Tangible Managed Assets 9, 11		10.1	%		9.0	%		8.5	%
Tangible Common Equity/Net Loans - Managed 9		13.8	%		11.8	%		11.2	%
Tangible Common Equity per share 9	$	12.49		$	12.06		$	11.55
Net Yield on Managed Loan Receivables		9.90	%		9.26	%		8.95	%
Return on Managed Loan Receivables 1		4.49	%		1.75	%		1.45	%
Reserve Rate (excluding guaranteed student loans) 12		7.45	%		7.36	%		4.42	%
Loan Receivables 3
Total Loans - Managed	$	50,903,845		$	51,032,382		$	50,427,305
Less: Allowance for Loan Loss (period end)		1,832,360			1,986,473			959,769
Net Loans - Managed	$	49,071,485		$	49,045,909		$	49,467,536
Average Total Loans - Managed	$	50,971,056		$	51,132,761		$	49,019,083
Managed Interest Yield		12.73	%		12.19	%		12.67	%
Managed Net Principal Charge-off Rate		8.39	%		7.79	%		5.20	%
Managed Delinquency Rate (over 30 days)		5.10	%		5.08	%		3.85	%
Managed Delinquency Rate (over 90 days)		2.60	%		2.73	%		1.88	%
Total Discover Card Volume	$	23,955,402		$	24,336,751		$	28,611,680
Discover Card Sales Volume	$	22,768,927		$	21,494,174		$	24,601,611
Segment - Income Before Income Taxes
U.S. Card 1	$	912,800		$	387,902		$	245,241
Third-Party Payments		27,139			26,708			28,544
Total 1	$	939,939		$	414,610		$	273,785

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Discover Financial Services
U.S. Card Segment
Managed Basis 7
(unaudited, dollars in thousands)
	Quarter Ended
	Aug 31, 2009			May 31, 2009			Aug 31, 2008
Earnings Summary
Interest Income	$	1,663,886		$	1,607,114		$	1,637,588
Interest Expense		392,592			414,002			534,870
Net Interest Income		1,271,294			1,193,112			1,102,718
Other Income 1		1,055,529			834,630			482,311
Revenue Net of Interest Expense		2,326,823			2,027,742			1,585,029
Provision for Loan Losses		924,427			1,111,232			754,028
Total Other Expense		489,596			528,608			585,760
Income Before Income Taxes 1	$	912,800		$	387,902		$	245,241
Net Yield on Managed Loan Receivables		9.90	%		9.26	%		8.95	%
Pretax Return on Managed Loan Receivables 1		7.10	%		3.01	%		1.99	%
Loan Receivables
Total Loans - Managed	$	50,903,845		$	51,032,382		$	50,427,305
Average Total Loans - Managed	$	50,971,056		$	51,132,761		$	49,019,083
Managed Interest Yield		12.73	%		12.19	%		12.67	%
Managed Net Principal Charge-off Rate		8.39	%		7.79	%		5.20	%
Managed Delinquency Rate (over 30 days)		5.10	%		5.08	%		3.85	%
Managed Delinquency Rate (over 90 days)		2.60	%		2.73	%		1.88	%
Credit Card Loans
Credit Card Loans - Managed	$	48,135,639		$	48,903,632		$	49,348,507
Average Credit Card Loans - Managed	$	48,641,890		$	49,108,321		$	48,168,124
Managed Interest Yield		12.99	%		12.37	%		12.70	%
Managed Net Principal Charge-off Rate		8.63	%		7.99	%		5.28	%
Managed Delinquency Rate (over 30 days)		5.31	%		5.23	%		3.92	%
Managed Delinquency Rate (over 90 days)		2.72	%		2.82	%		1.92	%
Total Discover Card Volume	$	23,955,402		$	24,336,751		$	28,611,680
Discover Card Sales Volume	$	22,768,927		$	21,494,174		$	24,601,611

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Discover Financial Services
Third-Party Payments Segment
(unaudited, dollars in thousands)
	Quarter Ended
	Aug 31, 2009		May 31, 2009		Aug 31, 2008
Earnings Summary
Interest Income	$	195	$	338	$	662
Interest Expense		50		61		17
Net Interest Income		145		277		645
Other Income		61,236		58,451		54,686
Revenue Net of Interest Expense		61,381		58,728		55,331
Provision for Loan Losses		-		-		-
Total Other Expense		34,242		32,020		26,787
Income Before Income Taxes	$	27,139	$	26,708	$	28,544
Volume
PULSE Network		28,051,978	$	29,128,044	$	28,364,575
Third-Party Issuers		1,446,308		1,340,532		1,711,617
Diners Club International 5		6,465,990		6,240,604		5,227,795
Total Third-Party Payments	$	35,964,276	$	36,709,180	$	35,303,987
Transactions Processed on PULSE Network (000's)		753,201		762,175		713,791

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1	The quarters ended May 31, 2009 and August 31, 2009 include $473 million pre-tax (estimated $295 million after-tax) and $472 million pre-tax (estimated $287 million after-tax), respectively related to the Visa/Mastercard antitrust litigation settlement.
2	Net income available to common stockholders equals net income less dividends and accretion of discount on shares of preferred stock.
3	Based on continuing operations except equity and ROE. Equity includes $1.2 billion of preferred stock and $7.2 billion of common equity as of August 31, 2009.
4	Earnings per share is based on net income available to common stockholders.
5	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.
6	Gross proprietary sales volume on the Discover Network.

7 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. See Reconciliation of GAAP to Managed Data schedule.

8	Balance on a GAAP and Managed basis is the same.
9	Tangible common equity ("TCE"), a non-GAAP financial measure, represents 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 Managed Data schedule.
10	Represents total common equity divided by total managed assets less goodwill and intangibles.
11	Represents total common equity less goodwill and intangibles divided by total managed assets less goodwill and intangibles.
12	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 Managed Data schedule.

13 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.

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DISCOVER FINANCIAL SERVICES

RECONCILIATION OF GAAP TO MANAGED DATA

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.

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, TCE as a percentage of tangible managed assets, TCE as a percentage of net managed loans and TCE per share are included because management believes that common equity excluding goodwill and intangibles is a more meaningful valuation to investors of the true net asset value of the company.

Reserve rate (excluding guaranteed student loans), a non-GAAP financial measure, represents the allowance for loan losses as a percentage of total loans excluding guaranteed student loans. A reconciliation of total loans, a GAAP financial measure, to loans excluding the guaranteed portion of student loans is shown on the pages that follow. A portion of the Company's student loans are 97% guaranteed by the federal government under the Federal Family Education Loan Program. These guaranteed student loans carry little default risk and therefore, are reserved at a significantly lower rate than the remaining portfolio. Management believes that a reserve rate excluding the government guaranteed portion of student loans is a more meaningful valuation to investors of the portion of the portfolio that has a risk of loss.

10

Discover Financial Services
Reconciliation of GAAP to Managed Data 7
(unaudited, dollars in thousands)
	Quarter Ended
	Aug 31, 2009			May 31, 2009			Aug 31, 2008
Interest Income
GAAP Basis	$	833,217		$	857,984		$	681,692
Securitization Adjustments 13		830,864			749,468			956,558
Managed Basis	$	1,664,081		$	1,607,452		$	1,638,250
Interest Expense
GAAP Basis	$	304,401		$	320,005		$	305,643
Securitization Adjustments		88,241			94,058			229,244
Managed Basis	$	392,642		$	414,063		$	534,887
Net Interest Income
GAAP Basis	$	528,816		$	537,979		$	376,049
Securitization Adjustments		742,623			655,410			727,314
Managed Basis	$	1,271,439		$	1,193,389		$	1,103,363
Other Income
GAAP Basis	$	1,315,960		$	1,081,120		$	875,121
Securitization Adjustments		(199,195	)		(188,039	)		(338,124	)
Managed Basis	$	1,116,765		$	893,081		$	536,997
Revenue Net of Interest Expense
GAAP Basis	$	1,844,776		$	1,619,099		$	1,251,170
Securitization Adjustments		543,428			467,371			389,190
Managed Basis	$	2,388,204		$	2,086,470		$	1,640,360
Provision for Loan Losses
GAAP Basis	$	380,999		$	643,861		$	364,838
Securitization Adjustments		543,428			467,371			389,190
Managed Basis	$	924,427		$	1,111,232		$	754,028
Total Assets
GAAP Basis	$	42,698,290		$	41,518,288		$	37,283,548
Securitization Adjustments		25,096,019			23,328,536			28,349,277
Managed Basis	$	67,794,309		$	64,846,824		$	65,632,825
Tangible Assets
GAAP Basis	$	42,245,313		$	41,063,390		$	36,822,429
Securitization Adjustments		25,096,019			23,328,536			28,349,277
Managed Basis	$	67,341,332		$	64,391,926		$	65,171,706
Total Common Equity	$	7,231,463		$	6,263,661		$	6,000,393
Less: Goodwill		255,421			255,421			255,421
Less: Intangibles		197,556			199,477			205,698
Tangible Common Equity	$	6,778,486		$	5,808,763		$	5,539,274
Total Common Equity/Tangible Assets
GAAP Basis		17.1	%		15.3	%		16.3	%
Securitization Adjustments		28.8	%		26.8	%		21.2	%
Managed Basis		10.7	%		9.7	%		9.2	%
Tangible Common Equity/Tangible Assets
GAAP Basis		16.0	%		14.1	%		15.0	%
Securitization Adjustments		27.0	%		24.9	%		19.5	%
Managed Basis		10.1	%		9.0	%		8.5	%
Total Common Equity/Net Loans
GAAP Basis		30.6	%		24.6	%		28.8	%
Securitization Adjustments		28.5	%		26.6	%		20.9	%
Managed Basis		14.7	%		12.8	%		12.1	%
Tangible Common Equity/Net Loans
GAAP Basis		28.7	%		22.8	%		26.6	%
Securitization Adjustments		26.7	%		24.6	%		19.3	%
Managed Basis		13.8	%		11.8	%		11.2	%
Book Value	$	15.45		$	15.40		$	12.51
Less: Goodwill		(0.47	)		(0.53	)		(0.53	)
Less: Intangibles		(0.36	)		(0.41	)		(0.43	)
Less: Preferred Stock		(2.13	)		(2.40	)		0.00
Tangible Common Equity per share	$	12.49		$	12.06		$	11.55
Loan Receivables
Total Loans
GAAP Basis	$	25,489,809		$	27,441,514		$	21,767,483
Securitization Adjustments		25,414,036			23,590,868			28,659,822
Managed Basis	$	50,903,845		$	51,032,382		$	50,427,305
Total Loans - GAAP Basis	$	25,489,809			27,441,514		$	21,767,483
Less: Guaranteed portion of student loans		889,963			448,648			66,302
Total Loans excluding guaranteed portion of student loans	$	24,599,846		$	26,992,866		$	21,701,181
Average Total Loans
GAAP Basis	$	26,380,203		$	28,257,484		$	21,053,804
Securitization Adjustments		24,590,853			22,875,277			27,965,279
Managed Basis	$	50,971,056		$	51,132,761		$	49,019,083
Interest Yield
GAAP Basis		12.10	%		11.54	%		11.41	%
Securitization Adjustments		13.40	%		13.00	%		13.61	%
Managed Basis		12.73	%		12.19	%		12.67	%
Net Yield on Managed Loan Receivables
GAAP Basis		7.95	%		7.55	%		7.11	%
Securitization Adjustments		11.98	%		11.37	%		10.35	%
Managed Basis		9.90	%		9.26	%		8.95	%
Net Principal Charge-off Rate
GAAP Basis		8.05	%		7.53	%		4.76	%
Securitization Adjustments		8.77	%		8.11	%		5.54	%
Managed Basis		8.39	%		7.79	%		5.20	%
Delinquency Rate (over 30 days)
GAAP Basis		4.86	%		4.87	%		3.58	%
Securitization Adjustments		5.35	%		5.32	%		4.06	%
Managed Basis		5.10	%		5.08	%		3.85	%
Delinquency Rate (over 90 days)
GAAP Basis		2.46	%		2.60	%		1.73	%
Securitization Adjustments		2.74	%		2.88	%		2.00	%
Managed Basis		2.60	%		2.73	%		1.88	%
Credit Card Loans
Credit Card Loans
GAAP Basis	$	22,721,603		$	25,312,764		$	20,688,685
Securitization Adjustments		25,414,036			23,590,868			28,659,822
Managed Basis	$	48,135,639		$	48,903,632		$	49,348,507
Average Credit Card Loans
GAAP Basis	$	24,051,037		$	26,233,044		$	20,202,845
Securitization Adjustments		24,590,853			22,875,277			27,965,279
Managed Basis	$	48,641,890		$	49,108,321		$	48,168,124
Interest Yield
GAAP Basis		12.56	%		11.81	%		11.45	%
Securitization Adjustments		13.40	%		13.00	%		13.61	%
Managed Basis		12.99	%		12.37	%		12.70	%
Net Principal Charge-off Rate
GAAP Basis		8.48	%		7.88	%		4.92	%
Securitization Adjustments		8.77	%		8.11	%		5.54	%
Managed Basis		8.63	%		7.99	%		5.28	%
Delinquency Rate (over 30 days)
GAAP Basis		5.27	%		5.15	%		3.72	%
Securitization Adjustments		5.35	%		5.32	%		4.06	%
Managed Basis		5.31	%		5.23	%		3.92	%
Delinquency Rate (over 90 days)
GAAP Basis		2.70	%		2.77	%		1.81	%
Securitization Adjustments		2.74	%		2.88	%		2.00	%
Managed Basis		2.72	%		2.82	%		1.92	%

11

EX-99.2

Exhibit 99.2

Discover Financial Services
GAAP Basis
(unaudited, dollars in thousands,
except per share statistics)	Quarter Ended																					Nine Months Ended
	Aug 31, 2009			May 31, 2009			Feb 28, 2009			Nov 30, 2008			Aug 31, 2008			Aug 31, 2009 vs Aug 31, 2008						Aug 31, 2009			Aug 31, 2008			2009 vs 2008
Earnings Summary
Interest Income	$	833,217		$	857,984		$	815,793		$	736,006		$	681,692		$	151,525			22	%	$	2,506,994		$	1,956,557		$	550,437			28	%
Interest Expense		304,401			320,005			312,720			329,672			305,643			(1,242	)		(0	%)		937,126			958,332			(21,206	)		(2	%)
Net Interest Income		528,816			537,979			503,073			406,334			376,049			152,767			41	%		1,569,868			998,225			571,643			57	%
Other Income 1		1,315,960			1,081,120			1,189,956			1,568,901			875,121			440,839			50	%		3,587,036			2,695,557			891,479			33	%
Revenue Net of Interest Expense		1,844,776			1,619,099			1,693,029			1,975,235			1,251,170			593,606			47	%		5,156,904			3,693,782			1,463,122			40	%
Provision for Loan Losses		380,999			643,861			937,813			714,176			364,838			16,161			4	%		1,962,673			881,439			1,081,234			123	%
Employee Compensation and Benefits		208,528			208,151			219,488			187,306			222,426			(13,898	)		(6	%)		636,167			658,086			(21,919	)		(3	%)
Marketing and Business Development		77,814			102,922			111,433			119,382			137,928			(60,114	)		(44	%)		292,169			411,519			(119,350	)		(29	%)
Information Processing &     Communications		67,679			74,441			74,897			81,543			76,675			(8,996	)		(12	%)		217,017			234,400			(17,383	)		(7	%)
Professional Fees		83,746			74,550			70,123			111,645			82,775			971			1	%		228,419			237,839			(9,420	)		(4	%)
Premises and Equipment		18,437			18,223			18,072			20,676			20,274			(1,837	)		(9	%)		54,732			59,718			(4,986	)		(8	%)
Other Expense		67,634			82,341			65,110			73,530			72,469			(4,835	)		(7	%)		215,085			220,153			(5,068	)		(2	%)
Total Other Expense		523,838			560,628			559,123			594,082			612,547			(88,709	)		(14	%)		1,643,589			1,821,715			(178,126	)		(10	%)
Income Before Income Taxes 1		939,939			414,610			196,093			666,977			273,785			666,154		NM				1,550,642			990,628			560,014			57	%
Tax Expense		362,485			188,810			75,699			223,336			94,885			267,600		NM				626,994			371,356			255,638			69	%
Income From Continuing Operations 1		577,454			225,800			120,394			443,641			178,900			398,554		NM				923,648			619,272			304,376			49	%
Discontinued Operations, Net of Tax 2		0			0			0			(11,306	)		1,153			(1,153	)		(100	%)		0			(123,857	)		123,857			100	%
Net Income 1, 2	$	577,454		$	225,800		$	120,394		$	432,335		$	180,053		$	397,401		NM			$	923,648		$	495,415		$	428,233			86	%
Net Income Available to Common Stockholders 1, 2 , 3	$	559,387		$	209,246		$	120,394		$	432,335		$	180,053		$	379,334		NM			$	889,027		$	495,415		$	393,612			79	%
Effective Tax Rate From Continuing Operations		38.6	%		45.5	%		38.6	%		33.5	%		34.7	%								40.4	%		37.5	%
Balance Sheet Statistics 4
Total Assets	$	42,698,290		$	41,518,288		$	40,606,518		$	39,892,382		$	37,283,548		$	5,414,742			15	%	$	42,698,290		$	37,283,548		$	5,414,742			15	%
Tangible Assets	$	42,245,313		$	41,063,390		$	40,149,699		$	39,433,642		$	36,822,429		$	5,422,884			15	%	$	42,245,313		$	36,822,429		$	5,422,884			15	%
Total Equity	$	8,386,202		$	7,415,640		$	5,999,351		$	5,915,823		$	6,000,393		$	2,385,809			40	%	$	8,386,202		$	6,000,393		$	2,385,809			40	%
Total Common Equity	$	7,231,463		$	6,263,661		$	5,999,351		$	5,915,823		$	6,000,393		$	1,231,070			21	%	$	7,231,463		$	6,000,393		$	1,231,070			21	%
Total Common Equity/Total Assets		16.9	%		15.1	%		14.8	%		14.8	%		16.1	%								16.9	%		16.1	%
Total Common Equity/Net Loans - Owned		31	%		25	%		23	%		25	%		29	%								31	%		29	%
ROE 1, 2		28	%		12	%		8	%		29	%		12	%								17	%		11	%
ROE from Continuing Operations 1		28	%		12	%		8	%		30	%		12	%								17	%		14	%
Allowance for Loan Loss (period end)	$	1,832,360		$	1,986,473		$	1,878,942		$	1,374,585		$	959,769		$	872,591			91	%	$	1,832,360		$	959,769		$	872,591			91	%
Change in Loan Loss Reserves	$	(154,113	)	$	107,531		$	504,357		$	414,816		$	112,994		$	(267,107	)	NM			$	457,775		$	199,844		$	257,931			129	%
Reserve Rate		7.19	%		7.24	%		6.70	%		5.45	%		4.41	%		278		bps				7.19	%		4.41	%		278		bps
Interest-only Strip Receivable (period end)	$	162,252		$	94,670		$	198,536		$	300,120		$	408,649		$	(246,397	)		(60	%)	$	162,252		$	408,649		$	(246,397	)		(60	%)
Net Revaluation of Retained Interests	$	68,880		$	(92,954	)	$	(98,242	)	$	(116,335	)	$	(33,513	)	$	102,393		NM			$	(122,316	)	$	(2,989	)	$	(119,327	)	NM
Per Share Statistics
Basic EPS 1, 2, 5	$	1.09		$	0.43		$	0.25		$	0.90		$	0.38		$	0.71			187	%	$	1.81		$	1.03		$	0.78			76	%
Basic EPS from Continuing Operations 1, 5	$	1.09		$	0.43		$	0.25		$	0.92		$	0.38		$	0.71			187	%	$	1.81		$	1.29		$	0.52			40	%
Diluted EPS 1, 2, 5	$	1.07		$	0.43		$	0.25		$	0.89		$	0.37		$	0.70			189	%	$	1.79		$	1.03		$	0.76			74	%
Diluted EPS from Continuing Operations 1, 5	$	1.07		$	0.43		$	0.25		$	0.92		$	0.37		$	0.70			189	%	$	1.79		$	1.28		$	0.51			40	%
Common Stock Price (period end)	$	13.75		$	9.56		$	5.73		$	10.23		$	16.45		$	(2.70	)		(16	%)	$	13.75		$	16.45		$	(2.70	)		(16	%)
Book Value	$	15.45		$	15.40		$	12.46		$	12.32		$	12.51		$	2.94			24	%	$	15.45		$	12.51		$	2.94			24	%
Ending Common Shares Outstanding (000's)		542,749			481,676			481,459			479,987			479,764			62,985			13	%		542,749			479,764			62,985			13	%
Weighted Average Common Shares Outstanding (000's)		513,098			481,636			480,497			479,931			479,618			33,480			7	%		491,839			479,138			12,701			3	%
Weighted Average Common Shares Outstanding (fully diluted) (000's)		520,579			484,965			485,043			484,558			484,128			36,451			8	%		496,504			483,325			13,179			3	%
Loan Receivables  4
Total Loans - Owned	$	25,489,809		$	27,441,514		$	28,034,208		$	25,216,611		$	21,767,483		$	3,722,326			17	%	$	25,489,809		$	21,767,483		$	3,722,326			17	%
Less: Allowance for Loan Loss (period end)		1,832,360			1,986,473			1,878,942			1,374,585			959,769			872,591			91	%		1,832,360			959,769			872,591			91	%
Net Loans - Owned	$	23,657,449		$	25,455,041		$	26,155,266		$	23,842,026		$	20,807,714		$	2,849,735			14	%	$	23,657,449		$	20,807,714		$	2,849,735			14	%
Average Total Loans - Owned	$	26,380,203		$	28,257,484		$	27,733,143		$	22,945,494		$	21,053,804		$	5,326,399			25	%	$	27,454,927		$	20,820,031		$	6,634,896			32	%
Interest Yield		12.10	%		11.54	%		11.24	%		11.36	%		11.41	%		69		bps				11.62	%		10.72	%		90		bps
Net Principal Charge-off Rate		8.05	%		7.53	%		6.34	%		5.25	%		4.76	%		329		bps				7.30	%		4.36	%		294		bps
Delinquency Rate (over 30 days)		4.86	%		4.87	%		5.04	%		4.35	%		3.58	%		128		bps				4.86	%		3.58	%		128		bps
Delinquency Rate (over 90 days)		2.46	%		2.60	%		2.57	%		2.06	%		1.73	%		73		bps				2.46	%		1.73	%		73		bps
Transactions Processed on Networks (000's)
Discover Network		390,643			366,315			369,647			377,356			388,504			2,139			1	%		1,126,605			1,138,012			(11,407	)		(1	%)
PULSE Network		753,201			762,175			686,527			644,045			713,791			39,410			6	%		2,201,903			2,038,267			163,636			8	%
Total		1,143,844			1,128,490			1,056,174			1,021,401			1,102,295			41,549			4	%		3,328,508			3,176,279			152,229			5	%
Volume
PULSE Network		28,051,978		$	29,128,044		$	27,454,173		$	25,033,235		$	28,364,575		$	(312,597	)		(1	%)		84,634,195		$	80,978,873		$	3,655,322			5	%
Third-Party Issuers		1,446,308			1,340,532			1,362,446			1,538,013			1,711,617			(265,309	)		(16	%)		4,149,286			4,860,566			(711,280	)		(15	%)
Diners Club International 6		6,465,990			6,240,604			6,293,574			7,457,893			5,227,795			1,238,195			24	%		19,000,168			5,227,795			13,772,373		NM
Total Third-Party Payments		35,964,276			36,709,180			35,110,193			34,029,141			35,303,987			660,289			2	%		107,783,649			91,067,234			16,716,415			18	%
Discover Network - Proprietary 7		23,579,434			21,972,596			22,424,367			22,875,272			25,117,321			(1,537,887	)		(6	%)		67,976,397			72,813,171			(4,836,774	)		(7	%)
Total	$	59,543,710		$	58,681,776		$	57,534,560		$	56,904,413		$	60,421,308		$	(877,598	)		(1	%)	$	175,760,046		$	163,880,405		$	11,879,641			7	%

Discover Financial Services
Managed Basis 8
(unaudited, dollars in thousands)
	Quarter Ended															Aug 31, 2009						Nine Months Ended
	Aug 31, 2009			May 31, 2009			Feb 28, 2009			Nov 30, 2008			Aug 31, 2008			vs Aug 31, 2008						Aug 31, 2009			Aug 31, 2008			2009 vs 2008
Earnings Summary
Interest Income	$	1,664,081		$	1,607,452		$	1,603,849		$	1,682,267		$	1,638,250		$	25,831			2	%	$	4,875,382		$	4,863,562		$	11,820			0	%
Interest Expense		392,642			414,063			438,417			602,450			534,887			(142,245	)		(27	%)		1,245,122			1,754,469			(509,347	)		(29	%)
Net Interest Income		1,271,439			1,193,389			1,165,432			1,079,817			1,103,363			168,076			15	%		3,630,260			3,109,093			521,167			17	%
Other Income 1		1,116,765			893,081			923,457			1,287,213			536,997			579,768			108	%		2,933,303			1,665,883			1,267,420			76	%
Revenue Net of Interest Expense		2,388,204			2,086,470			2,088,889			2,367,030			1,640,360			747,844			46	%		6,563,563			4,774,976			1,788,587			37	%
Provision for Loan Losses		924,427			1,111,232			1,333,673			1,105,971			754,028			170,399			23	%		3,369,332			1,962,633			1,406,699			72	%
Employee Compensation and Benefits		208,528			208,151			219,488			187,306			222,426			(13,898	)		(6	%)		636,167			658,086			(21,919	)		(3	%)
Marketing and Business Development		77,814			102,922			111,433			119,382			137,928			(60,114	)		(44	%)		292,169			411,519			(119,350	)		(29	%)
Information Processing &     Communications		67,679			74,441			74,897			81,543			76,675			(8,996	)		(12	%)		217,017			234,400			(17,383	)		(7	%)
Professional Fees		83,746			74,550			70,123			111,645			82,775			971			1	%		228,419			237,839			(9,420	)		(4	%)
Premises and Equipment		18,437			18,223			18,072			20,676			20,274			(1,837	)		(9	%)		54,732			59,718			(4,986	)		(8	%)
Other Expense		67,634			82,341			65,110			73,530			72,469			(4,835	)		(7	%)		215,085			220,153			(5,068	)		(2	%)
Total Other Expense		523,838			560,628			559,123			594,082			612,547			(88,709	)		(14	%)		1,643,589			1,821,715			(178,126	)		(10	%)
Income Before Income Taxes 1		939,939			414,610			196,093			666,977			273,785			666,154		NM				1,550,642			990,628			560,014			57	%
Tax Expense		362,485			188,810			75,699			223,336			94,885			267,600		NM				626,994			371,356			255,638			69	%
Income From Continuing Operations 1		577,454			225,800			120,394			443,641			178,900			398,554		NM				923,648			619,272			304,376			49	%
Discontinued Operations, Net of Tax 2		0			0			0			(11,306	)		1,153			(1,153	)		(100	%)		0			(123,857	)		123,857			100	%
Net Income 1, 2	$	577,454		$	225,800		$	120,394		$	432,335		$	180,053		$	397,401		NM			$	923,648		$	495,415		$	428,233			86	%
Balance Sheet Statistics 4
Total Assets	$	67,794,309		$	64,846,824		$	63,231,657		$	65,620,476		$	65,632,825		$	2,161,484			3	%	$	67,794,309		$	65,632,825		$	2,161,484			3	%
Tangible Managed Assets	$	67,341,332		$	64,391,926		$	62,774,838		$	65,161,736		$	65,171,706		$	2,169,626			3	%	$	67,341,332		$	65,171,706		$	2,169,626			3	%
Total Equity 9	$	8,386,202		$	7,415,640		$	5,999,351		$	5,915,823		$	6,000,393		$	2,385,809			40	%	$	8,386,202		$	6,000,393		$	2,385,809			40	%
Total Common Equity 9	$	7,231,463		$	6,263,661		$	5,999,351		$	5,915,823		$	6,000,393		$	1,231,070			21	%	$	7,231,463		$	6,000,393		$	1,231,070			21	%
Tangible Common Equity 9, 10	$	6,778,486		$	5,808,763		$	5,542,532		$	5,457,083		$	5,539,274		$	1,239,212			22	%	$	6,778,486		$	5,539,274		$	1,239,212			22	%
Total Common Equity/Tangible Managed Assets 11		10.7	%		9.7	%		9.6	%		9.1	%		9.2	%								10.7	%		9.2	%
Tangible Common Equity/Tangible Managed Assets 10, 12		10.1	%		9.0	%		8.8	%		8.4	%		8.5	%								10.1	%		8.5	%
Tangible Common Equity/Net Loans - Managed 10		13.8	%		11.8	%		11.3	%		11.0	%		11.2	%								13.8	%		11.2	%
Tangible Common Equity per share 10	$	12.49		$	12.06		$	11.51		$	11.37		$	11.55		$	0.94			8	%	$	12.49		$	11.55		$	0.94			8	%
Net Yield on Managed Loan Receivables		9.90	%		9.26	%		9.11	%		8.56	%		8.95	%		95		bps				9.42	%		8.54	%		88		bps
Return on Managed Loan Receivables 1		4.49	%		1.75	%		0.94	%		3.52	%		1.45	%		304		bps				2.40	%		1.70	%		70		bps
Reserve Rate (excluding guaranteed student loans) 13		7.45	%		7.36	%		6.78	%		5.48	%		4.42	%		303		bps				7.45	%		4.42	%		303		bps
Loan Receivables 4
Total Loans - Managed	$	50,903,845		$	51,032,382		$	50,888,704		$	51,095,278		$	50,427,305		$	476,540			1	%	$	50,903,845		$	50,427,305		$	476,540			1	%
Less: Allowance for Loan Loss (period end)		1,832,360			1,986,473			1,878,942			1,374,585			959,769			872,591			91	%		1,832,360			959,769			872,591			91	%
Net Loans - Managed	$	49,071,485		$	49,045,909		$	49,009,762		$	49,720,693		$	49,467,536		$	(396,051	)		(1	%)	$	49,071,485		$	49,467,536		$	(396,051	)		(1	%)
Average Total Loans - Managed	$	50,971,056		$	51,132,761		$	51,877,845		$	50,707,090		$	49,019,083		$	1,951,973			4	%	$	51,323,201		$	48,449,945		$	2,873,256			6	%
Managed Interest Yield		12.73	%		12.19	%		12.17	%		12.65	%		12.67	%		6		bps				12.36	%		12.59	%		(23	)	bps
Managed Net Principal Charge-off Rate		8.39	%		7.79	%		6.48	%		5.48	%		5.20	%		319		bps				7.56	%		4.84	%		272		bps
Managed Delinquency Rate (over 30 days)		5.10	%		5.08	%		5.25	%		4.56	%		3.85	%		125		bps				5.10	%		3.85	%		125		bps
Managed Delinquency Rate (over 90 days)		2.60	%		2.73	%		2.69	%		2.17	%		1.88	%		72		bps				2.60	%		1.88	%		72		bps
Total Discover Card Volume	$	23,955,402		$	24,336,751		$	23,964,577		$	25,318,553		$	28,611,680		$	(4,656,278	)		(16	%)	$	72,256,730		$	80,415,502		$	(8,158,772	)		(10	%)
Discover Card Sales Volume	$	22,768,927		$	21,494,174		$	21,293,757		$	22,025,264		$	24,601,611		$	(1,832,684	)		(7	%)	$	65,556,858		$	70,214,515		$	(4,657,657	)		(7	%)
Segment - Income Before Income Taxes
U.S. Card 1	$	912,800		$	387,902		$	167,167		$	646,427		$	245,241		$	667,559		NM			$	1,467,869		$	929,767		$	538,102			58	%
Third-Party Payments		27,139			26,708			28,926			20,550			28,544			(1,405	)		(5	%)		82,773			60,861			21,912			36	%
Total 1	$	939,939		$	414,610		$	196,093		$	666,977		$	273,785		$	666,154		NM			$	1,550,642		$	990,628		$	560,014			57	%

Discover Financial Services
U.S. Card Segment
Managed Basis 8
(unaudited, dollars in thousands)
	Quarter Ended															Aug 31, 2009						Nine Months Ended
	Aug 31, 2009			May 31, 2009			Feb 28, 2009			Nov 30, 2008			Aug 31, 2008			vs Aug 31, 2008						Aug 31, 2009			Aug 31, 2008			2009 vs 2008
Earnings Summary
Interest Income	$	1,663,886		$	1,607,114		$	1,603,362		$	1,680,925		$	1,637,588		$	26,298			2	%	$	4,874,362		$	4,861,739		$	12,623			0	%
Interest Expense		392,592			414,002			438,338			602,386			534,870			(142,278	)		(27	%)		1,244,932			1,754,450			(509,518	)		(29	%)
Net Interest Income		1,271,294			1,193,112			1,165,024			1,078,539			1,102,718			168,576			15	%		3,629,430			3,107,289			522,141			17	%
Other Income 1		1,055,529			834,630			863,223			1,234,100			482,311			573,218			119	%		2,753,382			1,539,796			1,213,586			79	%
Revenue Net of Interest Expense		2,326,823			2,027,742			2,028,247			2,312,639			1,585,029			741,794			47	%		6,382,812			4,647,085			1,735,727			37	%
Provision for Loan Losses		924,427			1,111,232			1,333,673			1,105,971			754,028			170,399			23	%		3,369,332			1,962,633			1,406,699			72	%
Total Other Expense		489,596			528,608			527,407			560,241			585,760			(96,164	)		(16	%)		1,545,611			1,754,685			(209,074	)		(12	%)
Income Before Income Taxes 1	$	912,800		$	387,902		$	167,167		$	646,427		$	245,241		$	667,559		NM			$	1,467,869		$	929,767		$	538,102			58	%
Net Yield on Managed Loan Receivables		9.90	%		9.26	%		9.11	%		8.55	%		8.95	%		95		bps				9.42	%		8.54	%		88		bps
Pretax Return on Managed Loan Receivables 1		7.10	%		3.01	%		1.31	%		5.13	%		1.99	%		511		bps				3.81	%		2.55	%		126		bps
Loan Receivables
Total Loans - Managed	$	50,903,845		$	51,032,382		$	50,888,704		$	51,095,278		$	50,427,305		$	476,540			1	%	$	50,903,845		$	50,427,305		$	476,540			1	%
Average Total Loans - Managed	$	50,971,056		$	51,132,761		$	51,877,845		$	50,707,090		$	49,019,083		$	1,951,973			4	%	$	51,323,201		$	48,449,945		$	2,873,256			6	%
Managed Interest Yield		12.73	%		12.19	%		12.17	%		12.65	%		12.67	%		6		bps				12.36	%		12.59	%		(23	)	bps
Managed Net Principal Charge-off Rate		8.39	%		7.79	%		6.48	%		5.48	%		5.20	%		319		bps				7.56	%		4.84	%		272		bps
Managed Delinquency Rate (over 30 days)		5.10	%		5.08	%		5.25	%		4.56	%		3.85	%		125		bps				5.10	%		3.85	%		125		bps
Managed Delinquency Rate (over 90 days)		2.60	%		2.73	%		2.69	%		2.17	%		1.88	%		72		bps				2.60	%		1.88	%		72		bps
Credit Card Loans
Credit Card Loans - Managed	$	48,135,639		$	48,903,632		$	49,011,177		$	49,692,974		$	49,348,507		$	(1,212,868	)		(2	%)	$	48,135,639		$	49,348,507		$	(1,212,868	)		(2	%)
Average Credit Card Loans - Managed	$	48,641,890		$	49,108,321		$	50,254,235		$	49,420,412		$	48,168,124		$	473,766			1	%	$	49,328,104		$	47,835,442		$	1,492,662			3	%
Managed Interest Yield		12.99	%		12.37	%		12.28	%		12.72	%		12.70	%		29		bps				12.54	%		12.62	%		(8	)	bps
Managed Net Principal Charge-off Rate		8.63	%		7.99	%		6.61	%		5.59	%		5.28	%		335		bps				7.74	%		4.90	%		284		bps
Managed Delinquency Rate (over 30 days)		5.31	%		5.23	%		5.41	%		4.66	%		3.92	%		139		bps				5.31	%		3.92	%		139		bps
Managed Delinquency Rate (over 90 days)		2.72	%		2.82	%		2.78	%		2.22	%		1.92	%		80		bps				2.72	%		1.92	%		80		bps
Total Discover Card Volume	$	23,955,402		$	24,336,751		$	23,964,577		$	25,318,553		$	28,611,680		$	(4,656,278	)		(16	%)	$	72,256,730		$	80,415,502		$	(8,158,772	)		(10	%)
Discover Card Sales Volume	$	22,768,927		$	21,494,174		$	21,293,757		$	22,025,264		$	24,601,611		$	(1,832,684	)		(7	%)	$	65,556,858		$	70,214,515		$	(4,657,657	)		(7	%)

Discover Financial Services
Third-Party Payments Segment
(unaudited, dollars in thousands)
	Quarter Ended										Aug 31, 2009						Nine Months Ended
	Aug 31, 2009		May 31, 2009		Feb 28, 2009		Nov 30, 2008		Aug 31, 2008		vs Aug 31, 2008						Aug 31, 2009		Aug 31, 2008		2009 vs 2008
Earnings Summary
Interest Income	$	195	$	338	$	487	$	1,342	$	662	$	(467	)		(71	%)	$	1,020	$	1,823	$	(803	)		(44	%)
Interest Expense		50		61		79		64		17		33		NM				190		19		171		NM
Net Interest Income		145		277		408		1,278		645		(500	)		(78	%)		830		1,804		(974	)		(54	%)
Other Income		61,236		58,451		60,234		53,113		54,686		6,550			12	%		179,921		126,087		53,834			43	%
Revenue Net of Interest Expense		61,381		58,728		60,642		54,391		55,331		6,050			11	%		180,751		127,891		52,860			41	%
Provision for Loan Losses		-		-		-		-		-		-		NM				-		-		-		NM
Total Other Expense		34,242		32,020		31,716		33,841		26,787		7,455			28	%		97,978		67,030		30,948			46	%
Income Before Income Taxes	$	27,139	$	26,708	$	28,926	$	20,550	$	28,544	$	(1,405	)		(5	%)	$	82,773	$	60,861	$	21,912			36	%
Volume
PULSE Network		28,051,978	$	29,128,044	$	27,454,173	$	25,033,235	$	28,364,575	$	(312,597	)		(1	%)		84,634,195	$	80,978,873	$	3,655,322			5	%
Third-Party Issuers		1,446,308		1,340,532		1,362,446		1,538,013		1,711,617		(265,309	)		(16	%)		4,149,286		4,860,566		(711,280	)		(15	%)
Diners Club International 6		6,465,990		6,240,604		6,293,574		7,457,893		5,227,795		1,238,195			24	%		19,000,168		5,227,795		13,772,373		NM
Total Third-Party Payments	$	35,964,276	$	36,709,180	$	35,110,193	$	34,029,141	$	35,303,987	$	660,289			2	%	$	107,783,649	$	91,067,234	$	16,716,415			18	%
Transactions Processed on PULSE Network (000's)		753,201		762,175		686,527		644,045		713,791		39,410			6	%		2,201,903		2,038,267		163,636			8	%

1	The quarters ended November 30, 2008, February 28, 2009, May 31, 2009 and August 31, 2009 include $864 million pre-tax (estimated $535 million after-tax), $475 million pre-tax (estimated $297 million after-tax), $473 million pre-tax (estimated $295 million after-tax), and $472 million pre-tax (estimated $287 million after-tax), respectively related to the Visa/Mastercard antitrust litigation settlement.
2	The nine months ended August 31, 2008 includes a loss from discontinued operations, net of tax, of $124 million consisting of a $153 million loss related to the sale of the Goldfish business partially offset by income of $29 million related to the Goldfish business operations.
3	Net income available to common stockholders equals net income less dividends and accretion of discount on shares of preferred stock.
4	Based on continuing operations except equity and ROE. Equity includes $1.2 billion of preferred stock and $7.2 billion of common equity as of August 31, 2009.
5	Earnings per share is based on net income available to common stockholders.

6	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.
7	Gross proprietary sales volume on the Discover Network.

8 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. See Reconciliation of GAAP to Managed Data schedule.

9	Balance on a GAAP and Managed basis is the same.
10	Tangible common equity ("TCE"), a non-GAAP financial measure, represents 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 Managed Data schedule.
11	Represents total common equity divided by total managed assets less goodwill and intangibles.
12	Represents total common equity less goodwill and intangibles divided by total managed assets less goodwill and intangibles.

13 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 Managed Data schedule.

14 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.

DISCOVER FINANCIAL SERVICES

RECONCILIATION OF GAAP TO MANAGED DATA

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.

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, TCE as a percentage of tangible managed assets, TCE as a percentage of net managed loans and TCE per share are included because management believes that common equity excluding goodwill and intangibles is a more meaningful valuation to investors of the true net asset value of the company.

Reserve rate (excluding guaranteed student loans), a non-GAAP financial measure, represents the allowance for loan losses as a percentage of total loans excluding guaranteed student loans. A reconciliation of total loans, a GAAP financial measure, to loans excluding the guaranteed portion of student loans is shown on the pages that follow. A portion of the Company's student loans are 97% guaranteed by the federal government under the Federal Family Education Loan Program. These guaranteed student loans carry little default risk and therefore, are reserved at a significantly lower rate than the remaining portfolio. Management believes that a reserve rate excluding the government guaranteed portion of student loans is a more meaningful valuation to investors of the portion of the portfolio that has a risk of loss.

Discover Financial Services
Reconciliation of GAAP to Managed Data 8
(unaudited, dollars in thousands)
	Quarter Ended															Nine Months Ended
	Aug 31, 2009			May 31, 2009			Feb 28, 2009			Nov 30, 2008			Aug 31, 2008			Aug 31, 2009			Aug 31, 2008
Interest Income
GAAP Basis	$	833,217		$	857,984		$	815,793		$	736,006		$	681,692		$	2,506,994		$	1,956,557
Securitization Adjustments 14		830,864			749,468			788,056			946,261			956,558			2,368,388			2,907,005
Managed Basis	$	1,664,081		$	1,607,452		$	1,603,849		$	1,682,267		$	1,638,250		$	4,875,382		$	4,863,562
Interest Expense
GAAP Basis	$	304,401		$	320,005		$	312,720		$	329,672		$	305,643		$	937,126		$	958,332
Securitization Adjustments		88,241			94,058			125,697			272,778			229,244			307,996			796,137
Managed Basis	$	392,642		$	414,063		$	438,417		$	602,450		$	534,887		$	1,245,122		$	1,754,469
Net Interest Income
GAAP Basis	$	528,816		$	537,979		$	503,073		$	406,334		$	376,049		$	1,569,868		$	998,225
Securitization Adjustments		742,623			655,410			662,359			673,483			727,314			2,060,392			2,110,868
Managed Basis	$	1,271,439		$	1,193,389		$	1,165,432		$	1,079,817		$	1,103,363		$	3,630,260		$	3,109,093
Other Income
GAAP Basis	$	1,315,960		$	1,081,120		$	1,189,956		$	1,568,901		$	875,121		$	3,587,036		$	2,695,557
Securitization Adjustments		(199,195	)		(188,039	)		(266,499	)		(281,688	)		(338,124	)		(653,733	)		(1,029,674	)
Managed Basis	$	1,116,765		$	893,081		$	923,457		$	1,287,213		$	536,997		$	2,933,303		$	1,665,883
Revenue Net of Interest Expense
GAAP Basis	$	1,844,776		$	1,619,099		$	1,693,029		$	1,975,235		$	1,251,170		$	5,156,904		$	3,693,782
Securitization Adjustments		543,428			467,371			395,860			391,795			389,190			1,406,659			1,081,194
Managed Basis	$	2,388,204		$	2,086,470		$	2,088,889		$	2,367,030		$	1,640,360		$	6,563,563		$	4,774,976
Provision for Loan Losses
GAAP Basis	$	380,999		$	643,861		$	937,813		$	714,176		$	364,838		$	1,962,673		$	881,439
Securitization Adjustments		543,428			467,371			395,860			391,795			389,190			1,406,659			1,081,194
Managed Basis	$	924,427		$	1,111,232		$	1,333,673		$	1,105,971		$	754,028		$	3,369,332		$	1,962,633
Total Assets
GAAP Basis	$	42,698,290		$	41,518,288		$	40,606,518		$	39,892,382		$	37,283,548		$	42,698,290		$	37,283,548
Securitization Adjustments		25,096,019			23,328,536			22,625,139			25,728,094			28,349,277			25,096,019			28,349,277
Managed Basis	$	67,794,309		$	64,846,824		$	63,231,657		$	65,620,476		$	65,632,825		$	67,794,309		$	65,632,825
Tangible Assets
GAAP Basis	$	42,245,313		$	41,063,390		$	40,149,699		$	39,433,642		$	36,822,429		$	42,245,313		$	36,822,429
Securitization Adjustments		25,096,019			23,328,536			22,625,139			25,728,094			28,349,277			25,096,019			28,349,277
Managed Basis	$	67,341,332		$	64,391,926		$	62,774,838		$	65,161,736		$	65,171706		$	67,341,332		$	65,171,706
Total Common Equity	$	7,231,463		$	6,263,661		$	5,999,351		$	5,915,823		$	6,000,393		$	7,231,463		$	6,000,393
Less: Goodwill		255,421			255,421			255,421			255,421			255,421			255,421			255,421
Less: Intangibles		197,556			199,477			201,398			203,319			205,698			197,556			205,698
Tangible Common Equity	$	6,778,486		$	5,808,763		$	5,542,532		$	5,457,083		$	5,539,274		$	6,778,486		$	5,539,274
Total Common Equity/Tangible Assets
GAAP Basis		17.1	%		15.3	%		14.9	%		15.0	%		16.3	%		17.1	%		16.3	%
Securitization Adjustments		28.8	%		26.8	%		26.5	%		23.0	%		21.2	%		28.8	%		21.2	%
Managed Basis		10.7	%		9.7	%		9.6	%		9.1	%		9.2	%		10.7	%		9.2	%
Tangible Common Equity/Tangible Assets
GAAP Basis		16.0	%		14.1	%		13.8	%		13.8	%		15.0	%		16.0	%		15.0	%
Securitization Adjustments		27.0	%		24.9	%		24.5	%		21.2	%		19.5	%		27.0	%		19.5	%
Managed Basis		10.1	%		9.0	%		8.8	%		8.4	%		8.5	%		10.1	%		8.5	%
Total Common Equity/Net Loans
GAAP Basis		30.6	%		24.6	%		22.9	%		24.8	%		28.8	%		30.6	%		28.8	%
Securitization Adjustments		28.5	%		26.6	%		26.3	%		22.9	%		20.9	%		28.5	%		20.9	%
Managed Basis		14.7	%		12.8	%		12.2	%		11.9	%		12.1	%		14.7	%		12.1	%
Tangible Common Equity/Net Loans
GAAP Basis		28.7	%		22.8	%		21.2	%		22.9	%		26.6	%		28.7	%		26.6	%
Securitization Adjustments		26.7	%		24.6	%		24.3	%		21.1	%		19.3	%		26.7	%		19.3	%
Managed Basis		13.8	%		11.8	%		11.3	%		11.0	%		11.2	%		13.8	%		11.2	%
Book Value	$	15.45		$	15.40		$	12.46			12.32		$	12.51		$	15.45		$	12.51
Less: Goodwill		(0.47	)		(0.53	)		(0.53	)		(0.53	)		(0.53	)		(0.47	)		(0.53	)
Less: Intangibles		(0.36	)		(0.41	)		(0.42	)		(0.42	)		(0.43	)		(0.36	)		(0.43	)
Less: Preferred Stock		(2.13	)		(2.40	)		0.00			0.00			0.00			(2.13	)		0.00
Tangible Common Equity per share	$	12.49		$	12.06		$	11.51		$	11.37		$	11.55		$	12.49		$	11.55
Loan Receivables
Total Loans
GAAP Basis	$	25,489,809		$	27,441,514		$	28,034,208		$	25,216,611		$	21,767,483		$	25,489,809		$	21,767,483
Securitization Adjustments		25,414,036			23,590,868			22,854,496			25,878,667			28,659,822			25,414,036			28,659,822
Managed Basis	$	50,903,845		$	51,032,382		$	50,888,704		$	51,095,278		$	50,427,305		$	50,903,845		$	50,427,305
Total Loans - GAAP Basis	$	25,489,809			27,441,514		$	28,034,208		$	25,216,611		$	21,767,483		$	25,489,809		$	21,767,483
Less: Guaranteed portion of student   loans		889,963			448,648			334,847			152,135			66,302			889,963			66,302
Total Loans excluding guaranteed portion of student loans	$	24,599,846		$	26,992,866		$	27,699,361		$	25,064,476		$	21,701,181		$	24,599,846		$	21,701,181
Average Total Loans
GAAP Basis	$	26,380,203		$	28,257,484		$	27,733,143		$	22,945,494		$	21,053,804		$	27,454,927		$	20,820,031
Securitization Adjustments		24,590,853			22,875,277			24,144,702			27,761,596			27,965,279			23,868,274			27,629,914
Managed Basis	$	50,971,056		$	51,132,761		$	51,877,845		$	50,707,090		$	49,019,083		$	51,323,201		$	48,449,945
Interest Yield
GAAP Basis		12.10	%		11.54	%		11.24	%		11.36	%		11.41	%		11.62	%		10.72	%
Securitization Adjustments		13.40	%		13.00	%		13.24	%		13.71	%		13.61	%		13.22	%		14.00	%
Managed Basis		12.73	%		12.19	%		12.17	%		12.65	%		12.67	%		12.36	%		12.59	%
Net Yield on Managed Loan Receivables
GAAP Basis		7.95	%		7.55	%		7.36	%		7.12	%		7.11	%		7.62	%		6.38	%
Securitization Adjustments		11.98	%		11.37	%		11.13	%		9.76	%		10.35	%		11.50	%		10.17	%
Managed Basis		9.90	%		9.26	%		9.11	%		8.56	%		8.95	%		9.42	%		8.54	%
Net Principal Charge-off Rate
GAAP Basis		8.05	%		7.53	%		6.34	%		5.25	%		4.76	%		7.30	%		4.36	%
Securitization Adjustments		8.77	%		8.11	%		6.65	%		5.68	%		5.54	%		7.85	%		5.21	%
Managed Basis		8.39	%		7.79	%		6.48	%		5.48	%		5.20	%		7.56	%		4.84	%
Delinquency Rate (over 30 days)
GAAP Basis		4.86	%		4.87	%		5.04	%		4.35	%		3.58	%		4.86	%		3.58	%
Securitization Adjustments		5.35	%		5.32	%		5.52	%		4.77	%		4.06	%		5.35	%		4.06	%
Managed Basis		5.10	%		5.08	%		5.25	%		4.56	%		3.85	%		5.10	%		3.85	%
Delinquency Rate (over 90 days)
GAAP Basis		2.46	%		2.60	%		2.57	%		2.06	%		1.73	%		2.46	%		1.73	%
Securitization Adjustments		2.74	%		2.88	%		2.83	%		2.27	%		2.00	%		2.74	%		2.00	%
Managed Basis		2.60	%		2.73	%		2.69	%		2.17	%		1.88	%		2.60	%		1.88	%
Credit Card Loans
Credit Card Loans
GAAP Basis	$	22,721,603		$	25,312,764		$	26,156,681		$	23,814,307		$	20,688,685		$	22,721,603		$	20,688,685
Securitization Adjustments		25,414,036			23,590,868			22,854,496			25,878,667			28,659,822			25,414,036			28,659,822
Managed Basis	$	48,135,639		$	48,903,632		$	49,011,177		$	49,692,974		$	49,348,507		$	48,135,639		$	49,348,507
Average Credit Card Loans
GAAP Basis	$	24,051,037		$	26,233,044		$	26,109,533		$	21,658,816		$	20,202,845		$	25,459,830		$	20,205,528
Securitization Adjustments		24,590,853			22,875,277			24,144,702			27,761,596			27,965,279			23,868,274			27,629,914
Managed Basis	$	48,641,890		$	49,108,321		$	50,254,235		$	49,420,412		$	48,168,124		$	49,328,104		$	47,835,442
Interest Yield
GAAP Basis		12.56	%		11.81	%		11.39	%		11.45	%		11.45	%		11.91	%		10.73	%
Securitization Adjustments		13.40	%		13.00	%		13.24	%		13.71	%		13.61	%		13.22	%		14.00	%
Managed Basis		12.99	%		12.37	%		12.28	%		12.72	%		12.70	%		12.54	%		12.62	%
Net Principal Charge-off Rate
GAAP Basis		8.48	%		7.88	%		6.58	%		5.47	%		4.92	%		7.63	%		4.47	%
Securitization Adjustments		8.77	%		8.11	%		6.65	%		5.68	%		5.54	%		7.85	%		5.21	%
Managed Basis		8.63	%		7.99	%		6.61	%		5.59	%		5.28	%		7.74	%		4.90	%
Delinquency Rate (over 30 days)
GAAP Basis		5.27	%		5.15	%		5.32	%		4.55	%		3.72	%		5.27	%		3.72	%
Securitization Adjustments		5.35	%		5.32	%		5.52	%		4.77	%		4.06	%		5.35	%		4.06	%
Managed Basis		5.31	%		5.23	%		5.41	%		4.66	%		3.92	%		5.31	%		3.92	%
Delinquency Rate (over 90 days)
GAAP Basis		2.70	%		2.77	%		2.73	%		2.16	%		1.81	%		2.70	%		1.81	%
Securitization Adjustments		2.74	%		2.88	%		2.83	%		2.27	%		2.00	%		2.74	%		2.00	%
Managed Basis		2.72	%		2.82	%		2.78	%		2.22	%		1.92	%		2.72	%		1.92	%