Discover 2011 Annual Report Download - page 143

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Cash Flows. The Company expects to contribute approximately $1.3 million to its postretirement benefit plans for 2012.
Expected benefit payments associated with the Company’s pension and postretirement benefit plans for the next five years
and in aggregate for the years thereafter are as follows (dollars in thousands):
2012
2013
2014
2015
2016
Following five years thereafter
Pension
$ 12,514
$ 12,881
$ 13,411
$ 13,820
$ 14,582
$ 89,801
Postretirement
$ 1,343
$ 1,494
$ 1,648
$ 1,792
$ 1,932
$ 11,968
Discover 401(k) Awards. Under the Discover 401(k) Plan, eligible U.S. employees of the Company receive 401(k)
matching contributions. Effective January 1, 2009, eligible employees also receive fixed employer contributions and, if eligible,
employer transition credit contributions. The pretax expense associated with the 401(k) match for the years ended
November 30, 2011, 2010 and 2009 was $37.5 million, $31.7 million, and $33.7 million, respectively.
14. Common and Preferred Stock
Stock Repurchase Program
On June 15, 2011, our Board of Directors approved a share repurchase program authorizing the repurchase of up to $1
billion of our outstanding shares of common stock. This share repurchase program expires on June 14, 2013 and may be
terminated at any time. For the year ended November 30, 2011, the Company repurchased 18,025,119 shares for $425 million.
Senior Preferred Stock and Warrant
On March 13, 2009, the Company issued and sold to the United States Department of the Treasury (the “U.S. Treasury”)
under the Capital Purchase Program (i) 1,224,558 shares of the Company's Fixed Rate Cumulative Perpetual Preferred Stock,
Series A (the “senior preferred stock”) and (ii) a ten-year warrant to purchase 20,500,413 shares of the Company's common
stock, par value $0.01 per share, (the “warrant”) for an aggregate purchase price of $1.225 billion. Of the aggregate amount of
$1.225 billion received, approximately $1.15 billion was attributable to the senior preferred stock and approximately $75
million was attributable to the warrant, based on the relative fair values of these instruments on the date of issuance. The value
of the warrant was initially scheduled to accrete over a period of five years through a reduction to retained earnings on an
effective yield basis.
On April 21, 2010, the Company completed the repurchase of all the outstanding shares of the senior preferred stock for
$1.2 billion, at which time the Company also accelerated the accretion of the remaining discount on the senior preferred stock
of $61 million. On July 7, 2010, the Company repurchased the warrant from the U.S Treasury for $172 million.
Common Stock Issuance
During the year ended November 30, 2009, the Company raised approximately $534 million in capital through the
issuance of 60,054,055 shares of common stock, par value of $0.01, at a public offering price of $9.25 per share ($8.89 per
share, net of underwriter discounts and commissions). This included 6,000,000 shares sold pursuant to the over-allotment
option granted to the underwriters.
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