a6051080ex99

a6051080ex99_2.htm

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.

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.

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	%