Discover 2011 Annual Report Download - page 157

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145
The following tables provide changes in the Company’s Level 3 assets and liabilities measured at fair value on a
recurring basis. Net transfers into and/or out of Level 3 are presented using beginning of the period fair values excluding
purchases and other settlements.
Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis
(dollars in thousands)
For the Year Ended
November 30, 2011
Assets
Equity securities
Available-for-sale
investment securities
Balance at
November 30,
2010
$17
$17
Total Realized
and Unrealized
Gains (Losses)
$ 144
$ 144
Sales
$ (161)
$ (161)
Net Transfers
Into and/
or (Out of)
Level 3
$—
$—
Balance at
November 30,
2011
$—
$—
Change in unrealized
gains (losses) related to
financial instruments
held at November 30, 2011
$—
$—
For the Year Ended
November 30, 2010
Assets
Certificated retained
interest in DCENT
Credit card asset-
backed securities of
other issuers
Asset-backed
commercial paper
notes
Equity securities
Available-for-sale
investment
securities
Cash collateral
accounts
Interest-only strip
receivable
Amounts due
from asset
securitization
Balance at
November 30,
2009
$ 2,204,969
381,705
58,792
—
$ 2,645,466
$ 822,585
117,579
$ 940,164
Derecognition
of assets upon
adoption
of Statement
No. 167
$ (2,204,969)
—
—
—
$ (2,204,969)
$ (822,585)
(117,579)
$ (940,164)
Total Realized
and Unrealized
Gains (Losses)
$—
—
12,101
—
$ 12,101
$—
—
$—
(1)
Sales
$—
—
(70,893)
—
$(70,893)
$—
—
$—
Net Transfers
Into and/
or (Out
of) Level 3
$—
(381,705)
—
17
$ (381,688)
$—
—
$—
(2)
Balance at
November
30, 2010
$—
—
—
17
$17
$—
—
$—
Change in unrealized
gains (losses) related to
financial instruments
held at
November 30, 2010
$—
—
—
—
$—
$—
—
$—
(1) Reflects unrealized pretax gains recorded in other comprehensive income in the consolidated statement of financial condition.
(2) During the first quarter of 2010, the Company reclassified $382 million of credit card asset-backed securities of other issuers from Level 3 to Level 2, as
the valuation of these securities could be supported with observable inputs due to higher levels of market activity on these securities than had occurred in
recent quarters.
The following are the amounts recognized in earnings and other comprehensive income related to assets categorized as
Level 3 during the respective periods (in thousands):
Interest income – interest accretion
Other income – gain (loss) on investment securities
Securitization income – net revaluation of retained interests
Amount recorded in earnings
Unrealized (losses) recorded in other comprehensive income, pre-tax
Total realized and unrealized gains (losses)
For the Years Ended November 30,
2011
$—
146
—
146
(2)
$ 144
2010
$—
19,556
—
19,556
(7,455)
$ 12,101
2009
$ 15,569
(2,837)
(160,087)
(147,355)
(14,909)
$(162,264)
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