Document


DISCOVER FINANCIAL SERVICES																		Exhibit 99.2
EARNINGS SUMMARY
(unaudited, in millions, except per share statistics)
	Quarter Ended													Twelve Months Ended
	Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Dec 31, 2022 vs. Dec 31, 2021			Dec 31, 2022		Dec 31, 2021		2022 vs. 2021
EARNINGS SUMMARY
Interest Income	$3,856		$3,357		$2,915		$2,736		$2,742		$1,114	41	%	$12,864		$10,651		$2,213	21	%
Interest Expense	789		514		305		257		259		530	NM		1,865		1,134		731	64	%
Net Interest Income	3,067		2,843		2,610		2,479		2,483		584	24	%	10,999		9,517		1,482	16	%
Discount/Interchange Revenue	1,165		1,157		1,133		955		1,042		123	12	%	4,410		3,733		677	18	%
Rewards Cost	797		811		743		635		697		100	14	%	2,986		2,509		477	19	%
Discount and Interchange Revenue, net	368		346		390		320		345		23	7	%	1,424		1,224		200	16	%
Protection Products Revenue	44		42		42		44		36		8	22	%	172		165		7	4	%
Loan Fee Income	182		168		142		140		131		51	39	%	632		464		168	36	%
Transaction Processing Revenue	66		65		61		57		60		6	10	%	249		227		22	10	%
Gains (Losses) on Equity Investments	(6)		(4)		(42)		(162)		(138)		132	96	%	(214)		424		(638)	NM
Other Income	11		19		21		24		19		(8)	(42	%)	75		66		9	14	%
Total Non-Interest Income	665		636		614		423		453		212	47	%	2,338		2,570		(232)	(9	%)

Revenue Net of Interest Expense	3,732		3,479		3,224		2,902		2,936		796	27	%	13,337		12,087		1,250	10	%

Provision for Credit Losses	883		773		549		154		263		620	NM		2,359		218		2,141	NM

Employee Compensation and Benefits	573		551		515		500		499		74	15	%	2,139		1,986		153	8	%
Marketing and Business Development	313		276		254		192		271		42	15	%	1,035		810		225	28	%
Information Processing & Communications	143		124		121		125		125		18	14	%	513		500		13	3	%
Professional Fees	264		241		189		177		230		34	15	%	871		797		74	9	%
Premises and Equipment	48		22		24		24		23		25	109	%	118		92		26	28	%
Other Expense	154		174		120		112		164		(10)	(6	%)	560		620		(60)	(10	%)
Total Operating Expense	1,495		1,388		1,223		1,130		1,312		183	14	%	5,236		4,805		431	9	%

Income/ (Loss) Before Income Taxes	1,354		1,318		1,452		1,618		1,361		(7)	(1	%)	5,742		7,064		(1,322)	(19	%)
Tax Expense	321		312		341		376		294		27	9	%	1,350		1,615		(265)	(16	%)
Net Income/ (Loss)	$1,033		$1,006		$1,111		$1,242		$1,067		($34)	(3	%)	$4,392		$5,449		($1,057)	(19	%)
Net Income/ (Loss) Allocated to Common Stockholders	$1,027		$967		$1,105		$1,205		$1,062		($35)	(3	%)	$4,304		$5,351		($1,047)	(20	%)

Effective Tax Rate	23.7	%	23.6	%	23.5	%	23.3	%	21.6	%				23.5	%	22.9	%

Net Interest Margin	11.27	%	11.05	%	10.94	%	10.85	%	10.81	%	46	bps		11.04	%	10.76	%	28	bps
Operating Efficiency	40.0	%	39.9	%	37.9	%	38.9	%	44.7	%	(470)	bps		39.3	%	39.8	%	(50)	bps
ROE	28	%	29	%	32	%	37	%	32	%				31	%	43	%
ROCE	30	%	30	%	35	%	39	%	35	%				33	%	46	%
Capital Returned to Common Stockholders	$743		$350		$742		$1,067		$895		($152)	(17	%)	$2,902		$2,715		$187	7	%
Payout Ratio	72	%	36	%	67	%	89	%	84	%				67	%	51	%

Ending Common Shares Outstanding	267		273		275		281		288		(21)	(7	%)	267		288		(21)	(7	%)
Weighted Average Common Shares Outstanding	272		273		279		285		291		(19)	(7	%)	277		300		(23)	(8	%)
Weighted Average Common Shares Outstanding (fully diluted)	273		274		279		285		292		(19)	(7	%)	278		300		(22)	(7	%)

PER SHARE STATISTICS
Basic EPS	$3.77		$3.54		$3.96		$4.23		$3.64		$0.13	4	%	$15.52		$17.85		($2.33)	(13	%)
Diluted EPS	$3.77		$3.54		$3.96		$4.22		$3.64		$0.13	4	%	$15.50		$17.83		($2.33)	(13	%)
Common Dividends Declared Per Share	$0.60		$0.60		$0.60		$0.50		$0.50		$0.10	20	%	$2.30		$1.88		$0.42	22	%
Common Stock Price (period end)	$97.83		$90.92		$94.58		$110.19		$115.56		($17.73)	(15	%)	$97.83		$115.56		($17.73)	(15	%)
Book Value per share	$54.57		$52.29		$50.00		$47.81		$46.50		$8.07	17	%	$54.57		$46.50		$8.07	17	%
Note: See Glossary of Financial Terms for definitions of financial terms


DISCOVER FINANCIAL SERVICES
BALANCE SHEET SUMMARY
(unaudited, in millions)
	Quarter Ended
	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Dec 31, 2022 vs. Dec 31, 2021
BALANCE SHEET SUMMARY
Assets
Cash and Investment Securities	$21,105	$18,767	$17,007	$15,620	$18,236	$2,869	16	%
Total Loan Receivables	112,120	104,908	99,301	93,471	93,684	18,436	20	%
Allowance for Credit Losses	(7,374)	(7,061)	(6,757)	(6,647)	(6,822)	(552)	(8	%)
Net Loan Receivables	104,746	97,847	92,544	86,824	86,862	17,884	21	%
Premises and Equipment, net	1,003	1,015	984	984	983	20	2	%
Goodwill and Intangible Assets, net	255	255	255	255	255	—	—	%
Other Assets	4,519	4,002	3,810	3,729	3,906	613	16	%
Total Assets	$131,628	$121,886	$114,600	$107,412	$110,242	$21,386	19	%

Liabilities & Stockholders' Equity
Certificates of Deposits 1	$16,124	$14,505	$13,543	$13,518	$14,391	$1,733	12	%
Savings, Money Market, and Other Deposits 1, 2	54,397	51,743	49,655	50,185	47,548	6,849	14	%
Total Direct to Consumer Deposits 1, 2	70,521	66,248	63,198	63,703	61,939	8,582	14	%
Brokered Deposits and Other Deposits	21,115	16,649	13,214	8,779	10,454	10,661	102	%
Deposits	91,636	82,897	76,412	72,482	72,393	19,243	27	%
Securitized Borrowings 3	10,259	11,092	9,099	7,715	9,539	720	8	%
Other Borrowings 3	9,849	9,085	10,886	9,417	10,688	(839)	(8	%)
Borrowings	20,108	20,177	19,985	17,132	20,227	(119)	(1	%)
Accrued Expenses and Other Liabilities	5,294	4,526	4,439	4,365	4,214	1,080	26	%
Total Liabilities	117,038	107,600	100,836	93,979	96,834	20,204	21	%
Total Equity	14,590	14,286	13,764	13,433	13,408	1,182	9	%
Total Liabilities and Stockholders' Equity	$131,628	$121,886	$114,600	$107,412	$110,242	$21,386	19	%

LIQUIDITY
Liquidity Portfolio	$19,798	$16,042	$16,204	$14,910	$14,959	$4,839	32	%
Private Asset-backed Securitizations	3,500	3,500	3,500	3,750	3,500	—	—	%
Federal Home Loan Bank Borrowing Capacity	1,712	2,078	12	1,505	150	1,562	NM
Federal Reserve Discount Window 4	42,268	39,888	36,463	34,393	34,254	8,014	23	%
Undrawn Credit Facilities 4	47,480	45,466	39,975	39,648	37,904	9,576	25	%
Total Liquidity	$67,278	$61,508	$56,179	$54,558	$52,863	$14,415	27	%

1 Includes Affinity relationships

2 Savings, Money Market, and Other Deposits and reflects both interest-bearing and non-interest bearing direct to consumer deposits

3 Includes short-term and long-term borrowings

4 Excludes investments pledged to the Federal Reserve, which is included within the liquidity portfolio

Note: See Glossary of Financial Terms for definitions of financial terms


DISCOVER FINANCIAL SERVICES
BALANCE SHEET STATISTICS
(unaudited, in millions)
	Quarter Ended
	Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Dec 31, 2022 vs. Dec 31, 2021
BALANCE SHEET STATISTICS
Total Common Equity	$13,534		$13,230		$12,708		$12,377		$12,352		$1,182	10	%
Total Common Equity/Total Assets	10.3	%	10.9	%	11.1	%	11.5	%	11.2	%
Total Common Equity/Net Loans	12.9	%	13.5	%	13.7	%	14.3	%	14.2	%

Tangible Assets	$131,373		$121,631		$114,345		$107,157		$109,987		$21,386	19	%
Tangible Common Equity 1	$13,279		$12,975		$12,453		$12,122		$12,097		$1,182	10	%
Tangible Common Equity/Tangible Assets 1	10.1	%	10.7	%	10.9	%	11.3	%	11.0	%
Tangible Common Equity/Net Loans 1	12.7	%	13.3	%	13.5	%	14.0	%	13.9	%
Tangible Common Equity per share 1	$49.66		$47.49		$45.24		$43.14		$41.96		$7.70	18	%

	Basel III
	Quarter Ended
REGULATORY CAPITAL RATIOS 2	Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021
Total Risk Based Capital Ratio	16.0	%	16.7	%	17.0	%	17.6	%	17.6	%
Tier 1 Risk Based Capital Ratio	14.3	%	14.9	%	15.2	%	15.8	%	15.8	%
Tier 1 Leverage Ratio	12.7	%	13.4	%	13.9	%	13.7	%	13.9	%
Common Equity Tier 1 Capital Ratio	13.3	%	13.9	%	14.2	%	14.7	%	14.8	%

1 Tangible Common Equity ("TCE") is a non-GAAP measure. The Company believes TCE is a more meaningful measure to investors of the net asset value of the Company. For corresponding reconciliation of TCE to a GAAP financial measure see Reconciliation of GAAP to non-GAAP Data schedule

2 Based on the final rule published September 30, 2020. Capital ratios reflect delay in the recognition of the impact of CECL reserves on regulatory capital for two years in accordance with the final rule

Note: See Glossary of Financial Terms for definitions of financial terms


DISCOVER FINANCIAL SERVICES
AVERAGE BALANCE SHEET
(unaudited, in millions)
	Quarter Ended
	Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Dec 31, 2022 vs. Dec 31, 2021
AVERAGE BALANCES
Assets
Cash and Investment Securities	$19,529		$16,057		$14,409		$15,028		$17,309		$2,220	13	%
Restricted Cash	393		853		40		774		1,164		(771)	(66	%)
Credit Card Loans	86,396		81,445		75,917		73,042		71,865		14,531	20	%
Private Student Loans	10,284		10,132		10,164		10,381		10,094		190	2	%
Personal Loans	7,871		7,408		6,981		6,909		6,923		948	14	%
Other Loans	3,485		3,050		2,674		2,359		2,213		1,272	57	%
Total Loans	108,036		102,035		95,736		92,691		91,095		16,941	19	%
Total Interest Earning Assets	127,958		118,945		110,185		108,493		109,568		18,390	17	%
Allowance for Credit Losses	(7,059)		(6,758)		(6,644)		(6,818)		(6,847)		(212)	(3	%)
Other Assets	6,235		5,923		5,874		6,248		6,379		(144)	(2	%)
Total Assets	$127,134		$118,110		$109,415		$107,923		$109,100		$18,034	17	%

Liabilities and Stockholders' Equity
Non-Interest-bearing Direct to Consumer Deposits 1	$1,062		$1,122		$1,136		$1,090		$1,016		$46	5	%
Certificates of Deposits 1	$15,189		$14,029		$13,391		$14,035		$14,606		$583	4	%
Savings, Money Market, and Other Deposits 1	51,703		49,332		48,504		47,426		46,213		5,490	12	%
Interest-bearing Direct to Consumer Deposits 1	66,892		63,361		61,895		61,461		60,819		6,073	10	%
Brokered Deposits and Other Deposits	19,165		14,722		10,031		9,157		9,834		9,331	95	%
Total Interest-bearing Deposits	86,057		78,083		71,926		70,618		70,653		15,404	22	%
Securitized Borrowings 2	9,954		10,246		8,262		7,739		9,119		835	9	%
Other Borrowings 2	9,636		9,185		9,325		10,099		9,721		(85)	(1	%)
Total Interest-bearing Liabilities	105,647		97,514		89,513		88,456		89,493		16,154	18	%
Other Liabilities & Stockholders' Equity	20,425		19,474		18,766		18,377		18,591		1,834	10	%
Total Liabilities and Stockholders' Equity	$127,134		$118,110		$109,415		$107,923		$109,100		$18,034	17	%

AVERAGE YIELD
Assets
Cash and Investment Securities	3.45	%	2.31	%	1.46	%	1.09	%	1.01	%	244	bps
Restricted Cash	2.73	%	2.25	%	0.41	%	0.02	%	0.03	%	270	bps
Credit Card Loans	14.50	%	13.56	%	12.81	%	12.59	%	12.50	%	200	bps
Private Student Loans	9.02	%	8.26	%	7.74	%	7.41	%	7.37	%	165	bps
Personal Loans	12.04	%	11.83	%	11.84	%	12.09	%	12.36	%	(32)	bps
Other Loans	6.16	%	5.70	%	5.47	%	5.60	%	5.39	%	77	bps
Total Loans	13.53	%	12.67	%	12.00	%	11.80	%	11.75	%	178	bps
Total Interest Earning Assets	11.96	%	11.20	%	10.61	%	10.23	%	9.93	%	203	bps

AVERAGE RATES
Liabilities and Stockholders' Equity
Certificates of Deposits 1	1.83	%	1.31	%	1.04	%	1.02	%	1.07	%	76	bps
Savings, Money Market, and Other Deposits 1	2.76	%	1.60	%	0.68	%	0.50	%	0.42	%	234	bps
Interest-bearing Direct to Consumer Deposits 1	2.55	%	1.53	%	0.75	%	0.62	%	0.58	%	197	bps
Brokered Deposits and Other Deposits	3.50	%	2.71	%	2.28	%	2.03	%	2.16	%	134	bps
Total Interest-bearing Deposits	2.76	%	1.76	%	0.97	%	0.80	%	0.80	%	196	bps
Securitized Borrowings 2	3.33	%	2.79	%	1.87	%	1.29	%	1.09	%	224	bps
Other Borrowings 2	4.37	%	4.17	%	3.97	%	3.75	%	3.75	%	62	bps
Total Interest-bearing Liabilities	2.96	%	2.09	%	1.36	%	1.18	%	1.15	%	181	bps
Net Interest Margin	11.27	%	11.05	%	10.94	%	10.85	%	10.81	%	46	bps
Net Yield on Interest-earning Assets	9.51	%	9.48	%	9.50	%	9.27	%	8.99	%	52	bps

1 Includes Affinity relationships
2 Includes short-term and long-term borrowings
Note: See Glossary of Financial Terms for definitions of financial terms


DISCOVER FINANCIAL SERVICES
LOAN STATISTICS
(unaudited, in millions)
	Quarter Ended													Twelve Months Ended
	Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Dec 31, 2022 vs. Dec 31, 2021			Dec 31, 2022		Dec 31, 2021		2022 vs. 2021
TOTAL LOAN RECEIVABLES
Ending Loans 1	$112,120		$104,908		$99,301		$93,471		$93,684		$18,436	20	%	$112,120		$93,684		$18,436	20	%
Average Loans 1	$108,036		$102,035		$95,736		$92,691		$91,095		$16,941	19	%	$99,673		$88,421		$11,252	13	%

Interest Yield	13.53	%	12.67	%	12.00	%	11.80	%	11.75	%	178	bps		12.54	%	11.82	%	72	bps
Gross Principal Charge-off Rate	2.87	%	2.56	%	2.76	%	2.64	%	2.36	%	51	bps		2.71	%	2.87	%	(16)	bps
Net Principal Charge-off Rate	2.13	%	1.71	%	1.80	%	1.61	%	1.37	%	76	bps		1.82	%	1.84	%	(2)	bps
Delinquency Rate (30 or more days)	2.30	%	1.94	%	1.63	%	1.64	%	1.55	%	75	bps		2.30	%	1.55	%	75	bps
Delinquency Rate (90 or more days)	0.98	%	0.80	%	0.70	%	0.72	%	0.66	%	32	bps		0.98	%	0.66	%	32	bps
Gross Principal Charge-off Dollars	$781		$659		$659		$603		$543		$238	44	%	$2,702		$2,534		$168	7	%
Net Principal Charge-off Dollars	$581		$439		$429		$368		$313		$268	86	%	$1,817		$1,631		$186	11	%
Net Interest and Fee Charge-off Dollars	$126		$98		$92		$87		$70		$56	80	%	$403		$361		$42	12	%
Loans Delinquent 30 or more days	$2,578		$2,034		$1,621		$1,537		$1,451		$1,127	78	%	$2,578		$1,451		$1,127	78	%
Loans Delinquent 90 or more days	$1,101		$837		$694		$678		$618		$483	78	%	$1,101		$618		$483	78	%

Allowance for Credit Losses (period end)	$7,374		$7,061		$6,757		$6,647		$6,822		$552	8	%	$7,374		$6,822		$552	8	%
Reserve Change Build/ (Release) 2	$313		$304		$110		($175)		($39)		$352			$552		($1,404)		$1,956
Reserve Rate	6.58	%	6.73	%	6.80	%	7.11	%	7.28	%	(70)	bps		6.58	%	7.28	%	(70)	bps

CREDIT CARD LOANS
Ending Loans	$90,113		$83,630		$79,237		$73,783		$74,369		$15,744	21	%	$90,113		$74,369		$15,744	21	%
Average Loans	$86,396		$81,445		$75,917		$73,042		$71,865		$14,531	20	%	$79,243		$69,365		$9,878	14	%

Interest Yield	14.50	%	13.56	%	12.81	%	12.59	%	12.50	%	200	bps		13.42	%	12.57	%	85	bps
Gross Principal Charge-off Rate	3.20	%	2.88	%	3.10	%	3.00	%	2.63	%	57	bps		3.05	%	3.25	%	(20)	bps
Net Principal Charge-off Rate	2.37	%	1.92	%	2.01	%	1.84	%	1.50	%	87	bps		2.05	%	2.09	%	(4)	bps
Delinquency Rate (30 or more days)	2.53	%	2.11	%	1.76	%	1.77	%	1.66	%	87	bps		2.53	%	1.66	%	87	bps
Delinquency Rate (90 or more days)	1.14	%	0.92	%	0.80	%	0.83	%	0.76	%	38	bps		1.14	%	0.76	%	38	bps
Gross Principal Charge-off Dollars	$697		$592		$587		$541		$477		$220	46	%	$2,417		$2,255		$162	7	%
Net Principal Charge-off Dollars	$516		$395		$381		$331		$272		$244	90	%	$1,623		$1,447		$176	12	%
Loans Delinquent 30 or more days	$2,278		$1,761		$1,392		$1,305		$1,232		$1,046	85	%	$2,278		$1,232		$1,046	85	%
Loans Delinquent 90 or more days	$1,028		$770		$633		$613		$562		$466	83	%	$1,028		$562		$466	83	%

Allowance for Credit Losses (period end)	$5,883		$5,561		$5,307		$5,120		$5,273		$610	12	%	$5,883		$5,273		$610	12	%
Reserve Change Build/ (Release) 2	$322		$254		$187		($153)		($25)		$347			$610		($1,218)		$1,828
Reserve Rate	6.53	%	6.65	%	6.70	%	6.94	%	7.09	%	(56)	bps		6.53	%	7.09	%	(56)	bps
Total Discover Card Volume	$59,153		$58,561		$57,384		$49,379		$53,983		$5,170	10	%	$224,477		$192,755		$31,722	16	%
Discover Card Sales Volume	$55,663		$54,793		$53,860		$46,329		$51,308		$4,355	8	%	$210,645		$182,125		$28,520	16	%
Rewards Rate	1.42	%	1.47	%	1.37	%	1.36	%	1.35	%	7	bps		1.41	%	1.37	%	4	bps

1 Total Loans includes Home Equity and other loans
2 Excludes any build/release of the liability for expected credit losses on unfunded commitments as the offset is recorded in accrued expenses and other liabilities in the Company's condensed consolidated statements of financial condition
Note: See Glossary of Financial Terms for definitions of financial terms


DISCOVER FINANCIAL SERVICES
LOAN STATISTICS
(unaudited, in millions)
	Quarter Ended													Twelve Months Ended
	Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Dec 31, 2022 vs. Dec 31, 2021			Dec 31, 2022		Dec 31, 2021		2022 vs. 2021
PRIVATE STUDENT LOANS
Organic Student Loans	$9,718		$9,722		$9,412		$9,614		$9,367		$351	4	%	$9,718		$9,367		$351	4	%
Purchased Student Loans	590		627		662		700		746		(156)	(21	%)	590		746		(156)	(21	%)
Total Private Student Loans	$10,308		$10,349		$10,074		$10,314		$10,113		$195	2	%	$10,308		$10,113		$195	2	%

Interest Yield	9.02	%	8.26	%	7.74	%	7.41	%	7.37	%	165	bps		8.11	%	7.38	%	73	bps
Net Principal Charge-off Rate	1.33	%	0.91	%	1.08	%	0.69	%	0.80	%	53	bps		1.00	%	0.63	%	37	bps
Delinquency Rate (30 or more days)	2.05	%	1.94	%	1.66	%	1.62	%	1.55	%	50	bps		2.05	%	1.55	%	50	bps

Reserve Rate	8.14	%	8.01	%	8.26	%	8.43	%	8.33	%	(19)	bps		8.14	%	8.33	%	(19)	bps

PERSONAL LOANS
Ending Loans	$7,998		$7,674		$7,145		$6,904		$6,936		$1,062	15	%	$7,998		$6,936		$1,062	15	%

Interest Yield	12.04	%	11.83	%	11.84	%	12.09	%	12.36	%	(32)	bps		11.95	%	12.64	%	(69)	bps
Net Principal Charge-off Rate	1.49	%	1.14	%	1.21	%	1.12	%	1.21	%	28	bps		1.25	%	1.73	%	(48)	bps
Delinquency Rate (30 or more days)	0.80	%	0.69	%	0.63	%	0.69	%	0.69	%	11	bps		0.80	%	0.69	%	11	bps

Reserve Rate	7.44	%	8.08	%	8.01	%	8.88	%	9.54	%	(210)	bps		7.44	%	9.54	%	(210)	bps



Note: See Glossary of Financial Terms for definitions of financial terms


DISCOVER FINANCIAL SERVICES
SEGMENT RESULTS AND VOLUME STATISTICS
(unaudited, in millions)
	Quarter Ended													Twelve Months Ended
	Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Mar 31, 2022		Dec 31, 2021		Dec 31, 2022 vs. Dec 31, 2021			Dec 31, 2022		Dec 31, 2021		2022 vs. 2021
DIGITAL BANKING
Interest Income	$3,856		$3,357		$2,915		$2,736		$2,742		$1,114	41	%	$12,864		$10,651		$2,213	21	%
Interest Expense	789		514		305		257		259		530	NM		1,865		1,134		731	64	%
Net Interest Income	3,067		2,843		2,610		2,479		2,483		584	24	%	10,999		9,517		1,482	16	%
Non-Interest Income	578		541		557		486		497		81	16	%	2,162		1,781		381	21	%
Revenue Net of Interest Expense	3,645		3,384		3,167		2,965		2,980		665	22	%	13,161		11,298		1,863	16	%
Provision for Credit Losses	883		773		549		154		263		620	NM		2,359		218		2,141	NM
Total Operating Expense	1,445		1,346		1,186		1,092		1,259		186	15	%	5,069		4,549		520	11	%
Income/ (Loss) Before Income Taxes	$1,317		$1,265		$1,432		$1,719		$1,458		($141)	(10	%)	$5,733		$6,531		($798)	(12	%)

Net Interest Margin	11.27	%	11.05	%	10.94	%	10.85	%	10.81	%	46	bps		11.04	%	10.76	%	28	bps
Pretax Return on Loan Receivables	4.84	%	4.91	%	5.99	%	7.52	%	6.35	%	(151)	bps		5.75	%	7.39	%	(164)	bps

Allowance for Credit Losses (period end)	$7,374		$7,061		$6,757		$6,647		$6,822		$552	8	%	$7,374		$6,822		$552	8	%
Reserve Change Build/ (Release)	$313		$304		$110		($175)		($39)		$352			$552		($1,404)		$1,956

PAYMENT SERVICES
Interest Income	$—		$—		$—		$—		$—		$—	NM		$—		$—		$—	NM
Interest Expense	—		—		—		—		—		—	NM		—		—		—	NM
Net Interest Income	—		—		—		—		—		—	NM		—		—		—	NM
Non-Interest Income/ (Loss)	87		95		57		(63)		(44)		131	NM		176		789		(613)	(78	%)
Revenue Net of Interest Expense	87		95		57		(63)		(44)		131	NM		176		789		(613)	(78	%)
Provision for Credit Losses	—		—		—		—		—		—	NM		—		—		—	NM
Total Operating Expense	50		42		37		38		53		(3)	(6	%)	167		256		(89)	(35	%)
Income/ (Loss) Before Income Taxes	$37		$53		$20		($101)		($97)		$134	138	%	$9		$533		($524)	(98	%)

TRANSACTIONS PROCESSED ON NETWORKS
Discover Network	946		924		916		831		914		32	4	%	3,617		3,259		358	11	%
PULSE Network	1,666		1,611		1,524		1,399		1,508		158	10	%	6,200		5,632		568	10	%
Total	2,612		2,535		2,440		2,230		2,422		190	8	%	9,817		8,891		926	10	%

NETWORK VOLUME
PULSE Network	$66,807		$63,437		$62,992		$59,836		$64,787		$2,020	3	%	$253,072		$247,913		$5,159	2	%
Network Partners	10,433		11,894		11,532		10,683		11,233		(800)	(7	%)	44,542		40,707		3,835	9	%
Diners Club International 1	9,155		8,793		8,381		7,176		7,367		1,788	24	%	33,505		25,937		7,568	29	%
Total Payment Services	86,395		84,124		82,905		77,695		83,387		3,008	4	%	331,119		314,557		16,562	5	%
Discover Network - Proprietary	58,138		56,633		55,838		48,129		53,197		4,941	9	%	218,738		188,960		29,778	16	%
Total	$144,533		$140,757		$138,743		$125,824		$136,584		$7,949	6	%	$549,857		$503,517		$46,340	9	%

1 Volume is derived from data provided by licencees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment
Note: See Glossary of Financial Terms for definitions of financial terms


DISCOVER FINANCIAL SERVICES - GLOSSARY OF FINANCIAL TERMS

Balance Sheet & Regulatory Capital Terms
Liquidity Portfolio represents cash and cash equivalents (excluding cash-in-process) and other investments

Regulatory Capital Ratios are preliminary
•			Total Risk Based Capital Ratio represents total capital divided by risk-weighted assets
•			Tier 1 Capital Ratio represents tier 1 capital divided by risk-weighted assets
•			Tier 1 Leverage Ratio represents tier 1 capital divided by average total assets
•			Common Equity Tier 1 Capital Ratio represents common equity tier 1 capital divided by risk weighted assets

Tangible Assets represents total assets less goodwill and intangibles

Tangible Common Equity ("TCE"), a non-GAAP financial measure, represents total common equity less goodwill and intangibles. The Company believes TCE is a meaningful measure to investors of the net asset value of the Company. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of GAAP to Non-GAAP Data

Tangible Common Equity/Net Loans, a non-GAAP measure, represents TCE divided by total loans less the allowance for credit losses (period end)

Tangible Common Equity per Share, a non-GAAP measure, represents TCE divided by ending common shares outstanding

Tangible Common Equity/Tangible Assets, a non-GAAP measure, represents TCE divided by total assets less goodwill and intangibles

Undrawn Credit Facilities represents asset-backed conduit funding facilities and Federal Reserve discount window (excluding investments pledged to the Federal Reserve, which are included within the liquidity investment portfolio)

Credit Related Terms
Delinquency Rate (30 or more days) represents loans delinquent thirty days or more divided by ending loans (total or respective product loans, as appropriate)

Delinquency Rate (90 or more days) represents loans delinquent ninety days or more divided by ending loans (total or respective product loans, as appropriate)

Gross Principal Charge-off Rate represents gross principal charge-off dollars (annualized) divided by average loans for the reporting period (total or respective product loans, as appropriate)

Net Principal Charge-off Rate represents net principal charge-off dollars (annualized) divided by average loans for the reporting period (total or respective product loans, as appropriate)

Reserve Rate represents the allowance for credit losses divided by total loans (total or respective product loans, as appropriate)

Earnings and Shareholder Return Terms
Book Value per share represents total equity divided by ending common shares outstanding

Capital Returned to Common Stockholders represents common stock dividends declared and treasury share repurchases, excluding common stock issued under employee benefit plans and stock based compensation

Earnings Per Share represents net income allocated to common stockholders divided by the weighted average common shares outstanding

Interest Yield represents interest income on loan receivables (annualized) divided by average loans for the reporting period (total or respective product loans, as appropriate)

Net Income Allocated to Common Stockholders represents net income less preferred stock dividends and income allocated to participating securities

Net Interest Margin represents net interest income (annualized) divided by average total loans for the period

Net Yield on Interest Earning Assets represents net interest income (annualized) divided by average total interest earning assets for the period

Operating Efficiency represents total operating expense divided by revenue net of interest expense

Pretax Return on Loan Receivables represents income before income taxes (annualized) divided by total average loans for the period

Payout Ratio represents capital returned to common stockholders divided by net income allocated to common stockholders

Return on Equity represents net income (annualized) divided by average total equity for the reporting period

Rewards Rate represents Credit Card rewards cost divided by Discover Card sales volume

Volume Terms
Discover Card Sales Volume represents Discover card activity related to sales net of returns

Discover Card Volume represents Discover card activity related to sales net of returns, balance transfers, cash advances and other activity

Discover Network Proprietary Volume represents gross Discover Card sales volume on the Discover Network


DISCOVER FINANCIAL SERVICES
RECONCILIATION OF GAAP TO NON-GAAP DATA
(unaudited, in millions)
	Quarter Ended
	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021
GAAP Total Common Equity	$13,534	$13,230	$12,708	$12,377	$12,352
Less: Goodwill	(255)	(255)	(255)	(255)	(255)
Less: Intangibles	—	—	—	—	—
Tangible Common Equity 1	$13,279	$12,975	$12,453	$12,122	$12,097

GAAP Book Value Per Share	$54.57	$52.29	$50.00	$47.81	$46.50
Less: Goodwill	(0.96)	(0.94)	(0.92)	(0.91)	(0.88)
Less: Intangibles	—	—	—	—	—
Less: Preferred Stock	(3.95)	(3.86)	(3.84)	(3.76)	(3.66)
Tangible Common Equity Per Share	$49.66	$47.49	$45.24	$43.14	$41.96

1 Tangible Common Equity ("TCE"), a non-GAAP financial measure, represents common equity less goodwill and intangibles. A reconciliation of TCE to common equity, a GAAP financial measure, is shown above. Other financial services companies may also use TCE and definitions may vary, so users of this information are advised to exercise caution in comparing TCE of different companies. TCE is included because management believes that common equity excluding goodwill and intangibles is a more meaningful measure to investors of the true net asset value of the Company

Note: See Glossary of Financial Terms for definitions of financial terms