Discover 2009 Annual Report Download - page 138

Participation in the CPP restricts the Company’s ability to increase dividends on its common stock above historical levels
($0.06 per share) or to repurchase its common stock until three years have elapsed, unless (i) all of the senior preferred
stock issued to the U.S. Treasury is redeemed, (ii) all of the senior preferred stock issued to the U.S. Treasury has been
transferred to third parties, or (iii) the Company receives the consent of the U.S. Treasury. Participation in the CPP has
required the Company to adopt the U.S. Treasury’s standards for executive compensation and corporate governance for
the period during which the U.S. Treasury holds equity issued under the CPP.
16. Changes in Accumulated Other Comprehensive Income (Loss)
Changes in each component of accumulated other comprehensive income (loss) were as follows (dollars in thousands):
Net
Unrealized
Gains
(Losses)
on
Securities
Foreign
Currency
Translation
Adjustment
Adjustments
Related to
Pension and
Other Post
Retirement
Benefits
Accumulated
Other
Comprehensive
Income (Loss)
Balance at November 30, 2006 ...................................................................................... $ 203 $129,984 $ (201) $ 129,986
Net unrealized losses on investment securities, net of tax benefit of $1,894(1) ....................... (3,264) — — (3,264)
Foreign currency translation, net of tax(2) ........................................................................ — (81,626) — (81,626)
Minimum pension liability adjustment, net of tax(3) ........................................................... — — 69 69
Adoption of FASB Statement No. 158, net of tax of $7,654(4)............................................ — — (13,133) (13,133)
Balance at November 30, 2007 ...................................................................................... (3,061) 48,358 (13,265) 32,032
Net unrealized losses on investment securities, net of tax benefit of $29,124(1) ..................... (50,158) — — (50,158)
Foreign currency translation, net of tax(2) ........................................................................ — (21,282) — (21,282)
Realization of foreign currency translation upon sale of Goldfish business ........................... — (27,076) — (27,076)
Amortization of losses related to pension and postretirement benefits, net of tax(5) ................. — — 146 146
Balance at November 30, 2008 ...................................................................................... (53,219) — (13,119) (66,338)
Net unrealized losses on investment securities, net of tax benefit of $5,594(1) ....................... (8,527) — — (8,527)
Amortization of losses related to pension and postretirement benefits, net of tax benefit of
$46,335(5) ............................................................................................................. — — (79,953) (79,953)
Balance at November 30, 2009 ...................................................................................... $(61,746) $ — $(93,072) $(154,818)
(1) Represents the difference between the fair value and amortized cost of available-for-sale investment securities.
(2) Represents translation gains and losses relating to the Company’s Goldfish business resulting from the change in exchange rates, primarily of the British pound, and the related tax effects.
(3) Represents additional minimum liability related to unfunded pension plans in accordance with FASB Statement of Financial Accounting Standards No. 87, Employers’ Accounting for Pensions
(codified within ASC 715).
(4) Represents accumulated adjustment to initially apply the recognition provisions of Statement No. 158 (ASC 715-30-25) which the Company adopted as of November 30, 2007.
(5) Represents amortization of losses related to pension and postretirement benefits in accordance with ASC 715-30-25.
17. Fee Products
Income from fee products includes the following components (dollars in thousands):
For the Years Ended November 30,
2009 2008 2007
Debt deferment/debt cancellation......................................................................................................................... $125,621 $ 93,835 $ 73,949
Identity theft protection........................................................................................................................................ 92,557 80,840 66,325
Other fee products ............................................................................................................................................. 76,888 75,130 74,298
Total fee products ........................................................................................................................................... $295,066 $249,805 $214,572
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