Discover 2010 Annual Report Download - page 126

Download and view the complete annual report

Please find page 126 of the 2010 Discover annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 185

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185

The following table summarizes certain cash flow information related to the securitized pool of loan receivables (dollars
in millions):
For the Years Ended
November 30,
2009 2008
Proceeds from third-party investors in new credit card securitizations.............................................................................................. $ 3,543 $ 5,562
Proceeds from collections reinvested in previous credit card securitizations ...................................................................................... $46,753 $57,495
Contractual servicing fees received............................................................................................................................................ $ 490 $ 556
Cash flows received from retained interests................................................................................................................................. $ 1,980 $ 2,777
Purchases of previously transferred credit card receivables (securitization maturities)......................................................................... $ 5,739 $ 7,739
Key estimates used in measuring the fair value of the interest-only strip receivable at the date of securitization that
resulted from credit card securitizations completed were as follows:
For the Years Ended
November 30,
2009 2008
Weighted average life (in months)..................................................................................................................... 1.8 – 4.8 3.0 – 5.1
Payment rate (rate per month) .......................................................................................................................... 17.18% – 18.16% 18.85% – 19.80%
Principal charge-offs (rate per annum) ............................................................................................................... 9.66% – 9.83% 5.10% – 5.65%
Discount rate (rate per annum) ......................................................................................................................... 16.00% – 17.00% 12.00%
The tables below present quantitative information about delinquencies, net principal charge-offs and components of
managed credit card loans, which includes owned and securitized credit card loans (dollars in millions):
November 30,
2009
Loans Outstanding:
Managed credit card loans............................................................................................................................................................ $47,465
Less: Securitized credit card loans................................................................................................................................................... 27,235
Owned credit card loans............................................................................................................................................................... $20,230
Loans Over 30 Days Delinquent:
Managed credit card loans............................................................................................................................................................ $ 2,657
Less: Securitized credit card loans................................................................................................................................................... 1,540
Owned credit card loans............................................................................................................................................................... $ 1,117
For the Year Ended
November 30, 2009
Average Loans:
Managed credit card loans................................................................................................................................................... $48,855
Less: Securitized credit card loans.......................................................................................................................................... 24,588
Owned credit card loans...................................................................................................................................................... $24,267
Net Principal Charge-offs:
Managed credit card loans................................................................................................................................................... $ 3,907
Less: Securitized credit card loans.......................................................................................................................................... 1,996
Owned credit card loans...................................................................................................................................................... $ 1,911
-115-