Discover 2010 Annual Report Download - page 82

Average Balance Sheet Analysis
2010 2009 (As Adjusted1) 2008 (As Adjusted1)
Average
Balance Rate Interest
Average
Balance Rate Interest
Average
Balance Rate Interest
Assets
Interest-earning assets:
Cash and cash equivalents.......................... $ 9,628,759 0.25%$ 24,319 $ 8,854,380 0.56%$ 50,024 $ 8,374,905 2.64%$ 220,744
Restricted cash .......................................... 2,124,343 0.16% 3,419 2,438,438 0.75% 18,195 2,770,260 3.43% 95,060
Other short-term investments ....................... 235,549 1.03% 2,435 662,979 0.59% 3,883 — — —
Investment securities................................... 1,688,453 1.55% 26,222 485,117 5.20% 25,230 194,674 2.75% 5,352
Loan receivables:(2) ....................................
Credit card(3) ...................................... 45,616,791 12.79% 5,836,002 48,844,325 12.63% 6,169,303 48,229,519 12.63% 6,090,218
Other(4) ............................................. 4,292,396 5.91% 253,821 2,285,792 7.37% 168,517 781,629 10.20% 79,695
Total loan receivables .......................... 49,909,187 12.20% 6,089,823 51,130,117 12.40% 6,337,820 49,011,148 12.59% 6,169,913
Total interest-earning assets .................. 63,586,291 9.67% 6,146,218 63,571,031 10.12% 6,435,152 60,350,987 10.76% 6,491,069
Allowance for loan losses ........................... (3,870,545) (3,550,229) (2,033,339)
Other assets ............................................. 3,978,625 3,139,709 2,521,878
Assets from discontinued operations ............. — — 1,321,595
Total assets ........................................ $63,694,371 $63,160,511 $62,161,121
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Interest-bearing deposits:
Time deposits(5) ...................................... $27,274,405 3.84% 1,046,108 $24,748,485 4.52% 1,117,396 $21,208,003 5.01% 1,062,741
Savings deposits .................................... 7,262,870 1.43% 104,134 4,349,107 1.59% 69,288 4,439,434 3.07% 136,271
Other interest-bearing deposits................. 21,178 1.24% 262 25,998 1.54% 400 40,337 1.05% 424
Total interest-bearing deposits(6)................ 34,558,453 3.33% 1,150,504 29,123,590 4.08% 1,187,084 25,687,774 4.67% 1,199,436
Borrowings:
Short-term borrowings ............................ 410 0.24% 1 837,452 0.30% 2,538 37,660 0.91% 343
Securitized borrowings ........................... 17,247,078 1.58% 272,535 22,720,700 1.56% 354,215 26,897,712 3.80% 1,023,320
Other long-term borrowings(5) .................. 2,736,017 5.85% 159,948 1,648,735 3.74% 61,662 1,919,147 4.60% 88,225
Total borrowings.................................... 19,983,505 2.16% 432,484 25,206,887 1.66% 418,415 28,854,519 3.85% 1,111,888
Total interest-bearing liabilities ................. 54,541,958 2.90% 1,582,988 54,330,477 2.96% 1,605,499 54,542,293 4.24% 2,311,324
Liabilities of discontinued operations............. — — 968,406
Other liabilities and stockholders’ equity ....... 9,152,413 8,830,034 6,650,422
Total liabilities and stockholders’ equity ..... $63,694,371 $63,160,511 $62,161,121
Net interest income................................. $4,563,230 $4,829,653 $4,179,745
Net interest margin(7) ..................................... 9.14% 9.45% 8.53%
Net yield on interest-earning assets(8) ............... 7.18% 7.60% 6.93%
Interest rate spread(9) ..................................... 6.77% 7.16% 6.52%
(1) Information related to restricted cash, investment securities, credit card loan receivables, allowance for loan losses, other assets, securitized borrowings, other long-term borrowings and other
liabilities and stockholders’ equity are presented on an as adjusted basis. No adjustments have been made for cash and cash equivalents, other short-term investments, other loan receivables,
interest-bearing deposits, short-term borrowings and other long-term borrowings. See “ – Reconciliations of GAAP to As Adjusted Data.”
(2) Average balances of loan receivables include non-accruing loans, which are included in the yield calculations. If the non-accruing loan balances were excluded, there would not be a material
impact on the amounts reported above.
(3) Interest income on credit card loans includes $173 million, $187 million as adjusted and $115 million as adjusted of amortization of balance transfer fees for the years ended November 30, 2010,
2009 and 2008, respectively.
(4) Includes student loans held for sale.
(5) Includes the impact of interest rate swap agreements used to change a portion of fixed-rate funding to floating-rate funding.
(6) Includes the impact of FDIC insurance premiums and special assessments.
(7) Net interest margin represents net interest income as a percentage of average total loan receivables.
(8) Net yield on interest-earning assets represents net interest income as a percentage of total interest-earning assets.
(9) Interest rate spread represents the difference between the rate on total interest-earning assets and the rate on total interest-bearing liabilities.
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