Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2013

Insurance business

Operating Results Of Discontinued Operations

The following summarizes the operating results of our discontinued Insurance business for the periods presented:

Three Months Ended March 31,	2013		2012
	(in millions)
Net interest income and other revenues(1)	$	72	$	77
Income (loss) from discontinued operations before income tax	13		(10		)

⁽¹⁾  Interest expense, which is included as a component of net interest income, was allocated to discontinued operations in accordance with our existing internal transfer pricing policy. This policy uses match funding based on the expected lives of the assets and liabilities of the business at the time of origination, subject to periodic review, as demonstrated by the expected cash flows and re-pricing characteristics of the underlying assets.

Summary of Assets and Liabilities of Disposal Group Held for Sale

The following summarizes the assets and liabilities which are part of our discontinued Insurance operations at March 31, 2013 and December 31, 2012, which are reported as a component of Assets of discontinued operations and Liabilities of discontinued operations in our consolidated balance sheet.

	March 31, 2013		December 31, 2012
	(in millions)
Cash	$	—	$	2
Interest bearing deposits with banks	—		29
Available-for-sale securities	—		1,411
Other assets	—		226
Assets of discontinued operations	$	—	$	1,668
Insurance policy and claim reserves	$	—	$	988
Other liabilities	1		224
Liabilities of discontinued operations	$	1	$	1,212

Commercial Business

Operating Results Of Discontinued Operations

The following summarizes the operating results of our discontinued Commercial business for the periods presented:

Three Months Ended March 31,	2013		2012
	(in millions)
Net interest income and other revenues(1)	$	1	$	20
Income from discontinued operations before income tax	1		19

⁽¹⁾  Interest expense, which is included as a component of net interest income, was allocated to discontinued operations in accordance with our existing internal transfer pricing policy. This policy uses match funding based on the expected lives of the assets and liabilities of the business at the time of origination, subject to periodic review, as demonstrated by the expected cash flows and re-pricing characteristics of the underlying assets.

Card and Retail Services

Operating Results Of Discontinued Operations

The following summarizes the operating results of our discontinued Card and Retail Services business for the periods presented:

Three Months Ended March 31,	2013			2012
	(in millions)
Net interest income and other revenues(1)(2)	$	—		$	925
Income (loss) from discontinued operations before income tax(2)(3)	(133		)	548

⁽¹⁾  Interest expense, which is included as a component of net interest income, was allocated to discontinued operations in accordance with our existing internal transfer pricing policy. This policy uses match funding based on the expected lives of the assets and liabilities of the business at the time of origination, subject to periodic review, as demonstrated by the expected cash flows and re-pricing characteristics of the underlying assets.

⁽²⁾  For the three months ended March 31, 2012, amounts include a gain of $79 million resulting from the sale of account relationships to HSBC Bank USA which we had previously purchased from HSBC Bank USA in July 2004.

⁽³⁾  For the three months ended March 31, 2013, amount reflects an incremental expense of $100 million recorded based on additional information received relating to actions taken and to be taken in connection with an industry review of enhancement services products. We continue to review information relating to our enhancement services products. As additional information becomes available, further adjustments may be required. Additionally for the three months ended March 31, 2013, the amount also includes expenses related to activities to complete the separation of the credit card operational infrastructure between us and Capital One. We expect costs associated with the separation of the credit card operational infrastructure to continue through the remainder of 2013

Summary of Assets and Liabilities of Disposal Group Held for Sale

The following summarizes the assets and liabilities of our discontinued Card and Retail Services business at March 31, 2013 and December 31, 2012 which are reported as a component of Assets of discontinued operations and Liabilities of discontinued operations in our consolidated balance sheet.

	March 31, 2013		December 31, 2012
	(in millions)
Cash	$	43	$	197
Other assets	47		84
Assets of discontinued operations	$	90	$	281
Other liabilities(1)	$	218	$	283
Liabilities of discontinued operations	$	218	$	283

⁽¹⁾  At March 31, 2013 and December 31, 2012, other liabilities primarily consists of amounts due to Capital One for cash collections we have received on customer accounts while we continue to service these accounts on an interim basis. Additionally at March 31, 2013 and December 31, 2012, other liabilities also includes $159 million and $59 million, respectively, with respect to enhancement services products as discussed above.