Discover 2011 Annual Report Download - page 167

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27. Subsequent Events
Sales of loans held-for-sale. On December 9, 2011, Discover Bank entered into definitive agreements to sell
substantially all of its remaining $714 million of federal student loans currently classified as loans held for sale. The majority
of these loans were pledged as collateral against a long-term borrowing and, as part of this transaction, these borrowings are
expected to be assumed by the purchaser. These transactions, which are subject to customary closing conditions, including the
receipt of governmental approvals, are expected to close in February 2012.
Cash Dividend. On January 19, 2012, we paid a cash dividend of $0.10 per share of common stock.
28. Quarterly Results (unaudited) (dollars in thousands, except per share data):
Interest income
Interest expense
Net interest income
Provision for loan
losses
(Loss) gain on
investments
Other income
Other expense
Income (loss) before income
tax expense
Income tax expense (benefit)
Net income (loss)
Net income (loss)
allocated to common
stockholders(1)
Basic earnings (loss) per
share(1)
Diluted earnings (loss)
per share(1)
November 30,
2011
$ 1,619,805
359,792
1,260,013
320,587
—
546,743
668,468
817,701
305,122
$ 512,579
$ 507,077
$ 0.95
$ 0.95
August 31,
2011
$ 1,599,092
362,053
1,237,039
99,514
(3,614)
555,577
642,407
1,047,081
398,263
$ 648,818
$ 641,772
$ 1.18
$ 1.18
May 31,
2011
$ 1,573,278
379,979
1,193,299
175,540
(149)
543,993
635,144
926,459
326,040
$ 600,419
$ 593,488
$ 1.09
$ 1.09
February 28,
2011
$ 1,552,964
382,728
1,170,236
417,709
141
562,483
595,148
720,003
255,111
$ 464,892
$ 459,428
$ 0.84
$ 0.84
November 30,
2010
$ 1,499,347
375,506
1,123,841
382,670
—
472,135
628,075
585,231
235,589
$ 349,642
$ 346,517
$ 0.64
$ 0.64
August 31,
2010
$ 1,535,939
389,137
1,146,802
712,565
18,951
545,193
566,238
432,143
171,526
$ 260,617
$ 258,194
$ 0.47
$ 0.47
May 31,
2010
$ 1,551,782
404,621
1,147,161
724,264
—
512,844
513,548
422,193
164,126
$ 258,067
$ 184,590
$ 0.34
$ 0.33
February 28,
2010
$ 1,559,150
413,724
1,145,426
1,387,206
180
545,696
474,804
(170,708)
(67,170)
$ (103,538)
$ (122,233)
$ (0.22)
$ (0.22)
(1) Because the inputs to net income allocated to common stockholders and earnings per share are calculated using weighted averages for the quarter, the sum of all four quarters
may differ from the year to date amounts in the consolidated statements of income.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief
Financial Officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), which are designed to
ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by
us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required
disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective as of the end of the period covered by this report.
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