Discover 2011 Annual Report Download - page 135

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Maturities. Long-term borrowings had the following maturities at November 30, 2011 (dollars in thousands):
Year
Due in 2012
Due in 2013
Due in 2014
Due in 2015
Due in 2016
Thereafter
Total
Discover Financial
Services
(Consolidated)
$ 3,326,416
5,616,755
2,789,761
600,288
399,997
5,553,961
$ 18,287,178
Discover Financial
Services
(Parent Company Only)
$—
—
—
—
—
809,404
$ 809,404
As of November 30, 2011, the Company had an unsecured credit agreement that was effective through May 2012;
however, the commitment was terminated by the Company effective December 16, 2011 due to the availability of other sources
of contingent liquidity. The agreement previously provided for a revolving credit commitment of up to $2.4 billion (of which
the Company could borrow up to 30% and Discover Bank could borrow up to 100% of the total commitment). As of
November 30, 2011, the Company had no outstanding balances due under the facility. The credit agreement provided for a
commitment fee on the unused portion of the facility, which could range from 0.07% to 0.175% depending on the index debt
ratings. Loans outstanding under the credit facility would have borne interest at a margin above the Federal Funds rate, LIBOR,
the EURIBOR or the Euro Reference rate. The terms of the credit agreement included various affirmative and negative
covenants, including financial covenants related to the maintenance of certain capitalization and tangible net worth levels, and
certain double leverage, delinquency and Tier 1 capital to managed loans ratios. The credit agreement also included customary
events of default with corresponding grace periods, including, without limitation, payment defaults, cross-defaults to other
agreements evidencing indebtedness for borrowed money and bankruptcy-related defaults.
The Company also has access to committed undrawn capacity through private securitizations to support the funding of
its credit card loan receivables. As of November 30, 2011, the total commitment of secured credit facilities through private
providers was $7 billion, of which $250 million had been used and was included in long-term borrowings at November 30,
2011. Access to the unused portions of the secured credit facilities is dependent upon the agreement with each of the providers
which have various expirations in fiscal years 2013, 2014 and 2015. Borrowings outstanding under each facility bear interest at
a margin above LIBOR or the asset-backed commercial paper costs of each individual conduit provider. The terms of each
agreement provide for a commitment fee to be paid on the unused capacity, and include various affirmative and negative
covenants, including performance metrics and legal requirements similar to those required to issue any term securitization
transaction.
Short-Term Borrowings. Short-term borrowings consist of overnight Federal Funds purchased with original maturities
less than one year. Total short-term borrowings as of November 30, 2011 were $50 million and the weighted-average interest
rate was 0.08%. There were no outstanding short-term borrowings as of November 30, 2010.
12. Stock-Based Compensation Plans
The Company has two stock-based compensation plans: the Discover Financial Services Omnibus Incentive Plan and the
Discover Financial Services Directors' Compensation Plan.
Omnibus Incentive Plan. The Discover Financial Services Omnibus Incentive Plan (“Omnibus Plan”), which is
stockholder-approved, provides for the award of stock options, stock appreciation rights, restricted stock, restricted stock units
(“RSUs”), performance stock units (“PSUs”) and other stock-based and/or cash awards (collectively, “Awards”). Currently, the
Company does not have any stock appreciation rights and restricted stock outstanding. The total number of shares that may be
granted is 45 million shares, subject to adjustments for certain transactions as described in the Omnibus Plan document. Shares
granted under the Omnibus Plan may be the following: (i) authorized but unissued shares, and (ii) treasury shares that the
Company acquires in the open market, in private transactions or otherwise.
Directors' Compensation Plan. The Discover Financial Services Directors' Compensation Plan (the “Directors'
Compensation Plan”), which is stockholder-approved, permits the grant of RSUs to non-employee directors. The total number
of units available for grant under the Directors' Compensation Plan equals the excess, if any, of (i) 1,000,000 shares over (ii) the
sum of (a) the number of shares subject to outstanding awards granted under the Directors' Compensation Plan and (b) the
number of shares previously issued pursuant to the Directors' Compensation Plan. Shares of stock that are issuable pursuant to
the awards granted under the Directors' Compensation Plan may be authorized but unissued shares, treasury shares or shares
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