Discover 2011 Annual Report Download - page 163

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151
November 30, 2009
Interest income
Credit card
Private student loans
Personal loans
Other
Total interest income
Interest expense
Net interest income (expense)
Provision for loan losses
Other income(2)
Other expense
Income (loss) before income tax
expense
Managed Basis
Direct Banking
$ 6,151,759
25,906
139,247
143,062
6,459,974
1,648,198
4,811,776
4,358,341
3,677,881
2,116,962
$ 2,014,354
Payment
Services
$—
—
—
1,098
1,098
222
876
—
239,794
134,126
$ 106,544
Total
$ 6,151,759
25,906
139,247
144,160
6,461,072
1,648,420
4,812,652
4,358,341
3,917,675
2,251,088
$ 2,120,898
Securitization
Adjustment(1)
$(3,315,992)
—
—
—
(3,315,992)
(397,136)
(2,918,856)
(1,995,936)
922,920
—
$—
GAAP Basis
Total
$ 2,835,767
25,906
139,247
144,160
3,145,080
1,251,284
1,893,796
2,362,405
4,840,595
2,251,088
$ 2,120,898
(1) Reflects the effect of loan securitizations by recharacterizing as securitization income the portions of the following items that relate to the securitized
loans: interest income, interest expense, provision for loan losses, discount and interchange revenue and loan fee revenues. Securitization income is
reported in other income. See further discussion of securitization adjustments in "Management's Discussion and Analysis - Reconciliations of GAAP to
Non-GAAP As-Adjusted Data."
(2) The Direct Banking segment includes income of $1.9 billion related to the Visa and MasterCard antitrust litigation settlement. See further discussion
of settlement in "Management's Discussion and Analysis - Reconciliations of GAAP to Non-GAAP As-Adjusted Data."
25. Related Party Transactions
In the ordinary course of business, the Company offers consumer loan products to its directors, executive officers and
certain members of their families. These products are offered on substantially the same terms as those prevailing at the time for
comparable transactions with unrelated parties, and these receivables are included in the loan receivables in the Company's
consolidated statements of financial condition. They were not material to the Company's financial position or results of
operations.
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