Parent Company Condensed Financial Information (Tables) - Parent Company [Member]

The following Parent Company financial statements are provided in accordance with SEC rules, which require such disclosure when the restricted net assets of consolidated subsidiaries exceed 25% of consolidated net assets.

Discover Financial Services

(Parent Company Only)

Condensed Statements of Financial Condition

(dollars in millions)


	December 31,
	2023		2022
	(As Restated)		(As Restated)
Assets
Cash and cash equivalents(1)	$	3,509	$	3,155
Restricted cash	75		20
Notes receivable from subsidiaries(2)	1,650		1,759
Investment in bank subsidiary	12,340		11,279
Investments in non-bank subsidiaries	974		834
Other assets	871		811
Total assets	$	19,419	$	17,858

Liabilities and Stockholders’ Equity
Non-interest-bearing deposit accounts	$	2	$	2


Short-term borrowings from subsidiaries	390		115
Long-term borrowings	4,469		3,487
Accrued expenses and other liabilities	323		359
Total liabilities	5,184		3,963
Stockholders’ equity	14,235		13,895
Total liabilities and stockholders’ equity	$	19,419	$	17,858

(1)The Parent Company had $3.5 billion and $3.1 billion in a money market deposit account at Discover Bank as of December 31, 2023 and 2022, respectively, which is included in cash and cash equivalents. These funds are available to the Parent for liquidity purposes.

(2)The Parent Company had a balance of $1.3 billion representing advances to Discover Bank as of December 31, 2023 and 2022, which is included in notes receivable from subsidiaries.

Discover Financial Services

(Parent Company Only)

Condensed Statements of Comprehensive Income

(dollars in millions)


	For the Years Ended December 31,
	2023		2022		2021
	(As Restated)		(As Restated)		(As Restated)
Interest income	$	240	$	98	$	33
Interest expense	189		189		199
Net interest expense	51		(91)		(166)
Dividends from bank subsidiary	1,700		4,000		3,250
Dividends from non-bank subsidiaries	11		688		—
Other income	4		—		—
Total income	1,766		4,597		3,084
Other expense	(2)		6		10
Income before income tax benefit and equity in undistributed net income of subsidiaries	1,768		4,591		3,074
Income tax benefit (expense)	(7)		25		25
Equity in undistributed net income of subsidiaries	1,035		(300)		2,289
Net income	2,796		4,316		5,388
Other comprehensive (loss) income, net	114		(245)		(139)
Comprehensive income	$	2,910	$	4,071	$	5,249

Discover Financial Services

(Parent Company Only)

Condensed Statements of Cash Flows

(dollars in millions)


	For the Years Ended December 31,
	2023		2022		2021
	(As Restated)		(As Restated)		(As Restated)
Cash flows provided by operating activities
Net income	$	2,796	$	4,316	$	5,388
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed net income of subsidiaries	(1,035)		300		(2,289)
Non-cash dividend from subsidiary	(11)		(188)		—
Stock-based compensation expense	74		89		103
Deferred income taxes	2		(8)		(13)
Depreciation and amortization	4		32		47
Net gains on investments and other assets	(4)		—		—
Changes in assets and liabilities:
Increase in other assets	(65)		(143)		(91)
(Decrease) increase in accrued expenses and other liabilities	(41)		27		24
Net cash provided by operating activities	1,720		4,425		3,169

Cash flows (used for) provided by investing activities(1)

Return of capital from sale of subsidiary	2		—		—
Decrease (increase) in loans to subsidiaries	109		(982)		114
Proceeds from sale of subsidiary	3		—		—
Net cash provided by (used for) investing activities	114		(982)		114

Cash flows used for financing activities
Net increase (decrease) in short-term borrowings from subsidiaries	275		(324)		156
Proceeds from issuance of common stock	12		10		9
Proceeds from issuance of long-term borrowings	993		740		—
Maturities and repayment of long-term borrowings	(15)		(834)		(172)
Purchases of treasury stock	(1,938)		(2,359)		(2,260)



Dividends paid on common and preferred stock	(752)		(703)		(636)
Net cash used for financing activities	(1,425)		(3,470)		(2,903)
Increase (decrease) in cash, cash equivalents and restricted cash	409		(27)		380
Cash, cash equivalents and restricted cash, at beginning of period	3,175		3,202		2,822
Cash, cash equivalents and restricted cash, at end of period	$	3,584	$	3,175	$	3,202

Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	$	3,509	$	3,155	$	3,182
Restricted cash	75		20		20
Cash, cash equivalents and restricted cash, at end of period	$	3,584	$	3,175	$	3,202

Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest expense	$	175	$	159	$	156
Income taxes, net of income tax refunds	$	22	$	(39)	$	(70)

(1)Subsequent to the issuance of the audited financial statements for the year ended December 31, 2021, the Company identified an immaterial classification error within cash flows (used for)/provided by investing activities. The correction of this error had no impact on the net cash (used for)/provided by investing activities. Management has evaluated the materiality of this misstatement and concluded it was not material to the prior period.