DFS Furniture Annual Report 2007

Plain-text annual report

Our vision is to be the most rewarding relationship consumers and businesses have with a ﬁ nancial services company. We help people spend smarter, manage debt better and save more so they achieve a brighter ﬁ nancial future. DISCOV E R F I NANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 DISCOVER FINANCIAL SERVICES (NYSE: DFS) is a leading credit card issuer and electronic payment services company with one of the most recognized brands in U.S. ﬁ nancial services. Discover is one of the largest card issuers in the United States. The company pioneered cash rewards and remains the industry leader with a broad range of rewards cards, including the Discover More Card (Cashback Bonus for all purchases), Discover Open Road Card (enhanced rewards for gasoline/automotive purchases), Miles by Discover Card (travel rewards), Discover Business Card (additional rewards for business purchases), and Discover Motiva Card (rewards for on-time payments). Discover also owns and operates the Discover Network, with millions of merchant and cash access locations, and PULSE Network, one of the nation’s leading ATM/debit networks. Discover also operates the Goldfish credit card business in the United Kingdom (under contract to be sold to Barclays Bank PLC in 2008). DISCOVER’S BUSINESS SEGMENTS U.S. Card: Discover Card offers a number of consumer and business credit cards. The segment has $48 billion in managed loans and $90 billion of annual spending. Our card products enable cardmembers to earn meaningful rewards quickly and easily, while giving them more account control and information to use credit smarter. The U.S. Card segment also includes Discover Bank, which offers personal loans, student loans, gift cards, certiﬁ cates of deposit and money market accounts. Discover Card acceptance and connectivity are provided by our Discover Network. Third-Party Payments: Discover’s Third-Party Payments segment consists of PULSE Network and Discover Network activities with issuers other than Discover Bank. PULSE Network is one of the nation’s leading electronic funds transfer networks. It serves more than 4,500 banks, credit unions and savings institutions across the country, and links cardholders with more than 265,000 ATMs, as well as point-of-sale terminals at retail locations nationwide. Discover Network is a comprehensive and secure payments network that markets and supports a full range of credit, debit and prepaid cards. Discover Network also provides customer-centric tools and programs designed to help issuers, acquirers and merchants drive loyalty, increase transaction volume and run their businesses more effectively. International Card : Discover operates Goldﬁ sh, issuer of one of the United Kingdom’s leading rewards credit cards. This segment will be reported as a discontinued operation beginning with the ﬁ rst quarter of 2008. U.S. CARD MANAGED LOANS [ IN BILLIONS ] $44.4 $45.8 $48.2 2007 TOTAL NETWORK VOLUME*= $185.5 BILLION [ IN BILLIONS ] Discover Network (U.S. Card) Discover Network (Third-Party) PULSE $93.8 $5.5 $86.2 2005 2006 2007 * Includes credit, debit and prepaid volume Discover. A Different Kind of Financial Services Company. 0 9 6 8 2 8 6 7 4 7 1 7 0 7 8 6 Discover Financial Services became an independent, public company in 2007, but the company’s roots go back to 1986 when the Discover Card was ﬁ rst introduced, making Discover a new public company with a 22-year history of success. Discover is the only credit card issuer that operates its own U.S. payments networks with both credit and debit functionality. Our unique business model gives Discover advantages over other credit card issuers and network operators because we have a broad spectrum of products and maintain direct relationships with consumers, major merchants, merchant acquirers and other ﬁ nancial institutions. Those relationships—and our experience as both a credit card issuer and network operator— give us insight into the needs of consumers and businesses, and put us in excellent position to help them achieve their goals with an array of ﬁ nancial products and 8 5 services, today and in the future. 1 5 6 4 3 4 8 3 4 3 9 2 4 2 8 1 3 1 9 7 4 1 6 8 9 1 7 8 9 1 8 8 9 1 9 8 9 1 0 9 9 1 1 9 9 1 2 9 9 1 3 9 9 1 4 9 9 1 5 9 9 1 6 9 9 1 7 9 9 1 8 9 9 1 9 9 9 1 0 0 0 2 1 0 0 2 2 0 0 2 3 0 0 2 4 0 0 2 5 0 0 2 6 0 0 2 7 0 0 2 U.S. CARD NET SALES VOLUME [ $ IN BILLIONS ] To Our Shareholders, n 1986, Discover pioneered cash rewards and no annual fee credit cards, and also established the ﬁ rst successful new credit card network in decades. Today, Discover has one of the most recognized brands in U.S. ﬁ nancial services, is one of the largest card issuers, and operates two large and fast-growing payments networks. On June 30, 2007, Discover became a public company as a result of our spin-off from Morgan Stanley, and we look forward to building upon Discover’s proud heritage and many strengths to take advantage of new opportunities in the ﬁ nancial services industry. I am proud of Discover’s many accomplishments in 2007, including the following: Achieved U.S. Card pretax proﬁ t of $1.5 billion and Third-Party Payments pretax proﬁ t of $37 million; Grew U.S. credit card sales by 4% to $90.3 billion and total U.S. managed loans by 5% to $48.2 billion; Continued strong credit results, achieving a managed U.S. credit card charge-off rate of 3.84%; Increased third-party volume on our debit and credit networks by 25% to $91.7 billion; and Made signiﬁ cant progress on our new business model to expand merchant acceptance of Discover Network cards. 2 DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 “ Every action and interaction at Discover is guided by our values: Doing the right thing, Innovation, Simplicity, Collaboration, Openness, Volunteerism, Enthusiasm and Respect. ” David Nelms Chief Executive Officer In total, Discover reported net income of $589 million, or $1.23 per share, including a non-cash impairment charge of $279 million after tax related to the company’s International Card business. Without the charge, net income would have been $868 million, or $1.81 per share. While our dedicated U.K. employees achieved important progress in our Goldﬁ sh business, the funding and operating environment there continues to be a challenge. Accordingly, on February 7, 2008, Discover announced an agreement for Barclays Bank PLC to acquire Discover’s U.K. credit card business. The transaction frees up capital, enhances Discover’s net income, and brings even sharper focus to our proﬁ table and growing U.S. Card and Third-Party Payments businesses. The sale is expected to close in our second quarter. Looking ahead, I am very optimistic about Discover’s future as a public company. Our U.S. Card business has high margins with strong cash ﬂ ows and numerous strengths, including an established brand, leadership positions in rewards and customer service, and sophisticated marketing and risk management programs. We also have opportunities to offer additional ﬁ nancial services that leverage our brand, capabilities and large customer base. DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 3 In our payments business, we have achieved strong and accelerating volume growth in both debit and third-party credit, which we believe signiﬁ cantly increases future growth opportunities for Discover. In addition, Discover has a strong balance sheet with established sources of liquidity, and we have a senior management team of experienced leaders. As I write, concerns about the U.S. economy and U.S. consumer credit quality continue to rise. Over the last ﬁ ve years, Discover has enhanced its credit policies and practices, tightened underwriting standards, enhanced account management efforts, and leveraged state-of-the-art databases and analytic tools to provide for a strong credit foundation. In 2007, our U.S. Card business achieved its lowest managed 30+ days delinquency rate in more than 15 years—an important indication of strong credit quality. Given our established cardmember base (80% of our U.S. loans are on accounts that have been open for ﬁ ve years or more), we are well positioned to maintain proﬁ tability through the current credit cycle and to continue prudent growth. In 2008, Discover will focus on the following priorities: growing U.S. Card loans, earning a good return on those loans, maintaining our strong credit foundation, growing our payments business, broadening acceptance and increasing efﬁ ciency. 4 DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 “ We are very proud of Discover’s position as an industry leader in cash rewards and customer service. ” Roger Hochschild President and Chief Operating Officer “ Our emphasis on credit quality is part of responsible lending and it contributes to Discover’s solid ﬁ nancial results. ” Roy Guthrie Chief Financial Officer 2007 was a landmark year for Discover, and I would like to acknowledge those who helped make it possible: Our customers: We are fortunate to have cardmembers who are extremely loyal to the Discover brand, and network partners who value collaboration and innovation. Our employees: Their commitment and “customer-first” attitude helped make Discover successful in the past, and they are the key to our success in the future. Our new Board of Directors, led by our Chairman, Dennis D. Dammerman: We are very pleased to have attracted such a highly qualiﬁ ed group of individuals to serve on our board. Their experience and guidance will be of signiﬁ cant value to Discover as we continue to grow our business as an independent company. With the help of Discover’s dedicated employees and strong leadership, and with an eye toward fulﬁ lling our vision of being the most rewarding relationship consumers and businesses have with a ﬁ nancial services company, I am conﬁ dent we can make progress on each of our priorities in 2008 and be successful in our ﬁ rst full year as a public company. David Nelms Chief Executive Ofﬁ cer DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 5 More Rewarding Relationships. Discover is a leader when it comes to cash rewards in the credit card industry. In fact, since the launch of the Discover Card in 1986, Discover Cardmembers have earned more than $7 billion in Cashback Bonus. And the rewards of a relationship with Discover don’t stop there. Consumers and businesses also reap rewards in terms of no annual fees, competitive interest rates, superior customer service, an award-winning Web site, valuable offers from retail partners and complete fraud protection. 6 DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 D I S C O V E R C A R D , P. O . B O X 1 5 1 5 6 W I L M I N G T O N D E 1 9 8 5 0 - 5 1 5 6 U S A D I S C O V W O R K E T W O R K N E T W O R K D I S C O V E R ® N E T W R K D I S C O V E R ® N E T W O R K D I S C W O R K D I S C O V E R ® N E T W O R K D S C O V E R ® N E T W O R K N E T W O R K O V E R ® N E T W O R K D I S C O V E R ® N E D I S C O D I S C K D I “It’s so much fun to see our rewards pile up as the year goes on and think about the great things we can get.” Ed L. Bronx, New York ® More ways to earn Cashback Bonus than ever before. Throughout its history, Discover has been a leading innovator and driver of change in the credit card industry. Our pioneering accomplishments include the introduction of the ﬁ rst cash reward program, known as Cashback Bonus. The Discover Card also was the ﬁ rst no-fee cash reward card to offer unlimited rewards, and Discover was one of the earliest companies to offer 24/7 customer service and secure account numbers for online purchases. REWARDS THE WAY YOU WANT THEM CASHBACK BONUS In more than 15 popular categories that change each season AUTOMATIC REWARDS Up to 1% Cashback Bonus on everyday purchases, automatically SHOP DISCOVER 5% to 20% Cashback Bonus through our exclusive online shopping site MAXIMUM REDEMPTION Increase, even double, rewards when you redeem for gift cards from our brand-name partners DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 7 Innovative Products. Smart Customers. Discover has a history of providing innovative products and services. Leveraging our heritage of strong issuer and network capabilities, brand position and innovative rewards solutions, we offer rewards on every purchase, unique cash access at the point of purchase and advanced fraud protection—making Discover the right ﬁ nancial services company for smart customers. D I S C O V E R C A R D , P. O . B O X 1 5 1 5 6 W I L M I N G T O N D E 1 9 8 5 0 - 5 1 5 6 U S A R K D I S C O V E R ® N E T W O R K D I S C D I S C O V E R ® N E T W D I S C O V W O R K D I S C O V E R ® N E T W O R K D S C O V E R ® N E T W O R K N E T W O R K O V E R ® N E T W O R K D I S C O V E R ® N E W O R K D I S C O E T W O R K D I S C N E T W O R K K D I “Last year I stopped using cash all together and went to only using my Discover Card. It’s a great way to track where my money is going and build my Cashback Bonus quickly.” Kelley C. Ashburn, Virginia ® 8 DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 Giving consumers the credit they deserve with products that ﬁ t their lifestyles. Kiplinger’s, MONEY ® and others have recognized certain card offers from Discover Card as being among the best in a broad range of categories—including cash rewards, travel, gasoline/automotive, business and gift cards. And the Discover Motiva Card has been singled out as one of the best new credit card products for 2008. DISCOVER MORE CARD Maximum Cash Rewards for All Your Purchases DISCOVER OPEN ROAD CARD Save at the Pump and Everywhere Else DISCOVER MOTIVA CARD Cash Rewards for On-Time Payments MILES BY DISCOVER CARD Flexible Miles and Unrestricted Travel DISCOVER BUSINESS CARD Cash Rewards for All Business Purchases DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 9 Beyond Customer Expectations. One of the biggest rewards of a relationship with Discover is superior customer service. Discover employees at call centers across the United States welcome calls as opportunities to get to know Discover Cardmembers, merchants and ﬁ nancial institutions better and to share information about the beneﬁ ts of Discover products and services. As a result, Discover received the 2007 World Class Customer Satisfaction Award for call center satisfaction as measured by the Service Quality D I S C O V E R C A R D , P. O . B O X 1 5 1 5 6 W I L M I N G T O N D E 1 9 8 5 0 - 5 1 5 6 U S A D I S C O V W O R K E T W O R K N E T W O R K D I S C O V E R ® N E T W R K D I S C O V E R ® N E T W O R K D I S C O V E R ® N E T W O R K D I S C O V E R ® N E W O R K D I S C O V E R ® N E T W O R K D S C O V E R ® N E T W O R K N E T W O R K D I S C O D I S C K D I “We’ve received wonderful and friendly service from Discover Card. Thank you for your dedication to pleasing your customer.” Kurt M. Santa Maria, California ® 10 DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 Measurement Group, and has ranked #1 in customer loyalty among leading credit card brands in the Brand Keys Customer Loyalty Engagement Index report for 10 years in a row. Discover Network Relationship Managers bring that same level of commitment to our merchants, ﬁ nancial institutions and partners. Utah West Valley Salt Lake City Sandy Arizona Phoenix Illinois Riverwoods Tennessee Memphis Committed to delivering the best customer service in America. Texas Houston Ohio New Albany Delaware Dover New Castle Greenwood DISCOVER BUSINESS CENTERS In addition to our headquarters in Riverwoods, IL, Discover operates business centers across the United States—each with its own specialized functions. DISCOVER CALL CENTERS Discover’s highly skilled customer service agents, all based in the United States, are measured on their ability to provide useful information to the customer and on how the customer rates the experience. DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 11 Leading Payments Networks. Discover owns and operates two payments networks: Discover Network, a comprehensive payments network that supports multiple card products, merchants, acquirers and issuers; and PULSE Network, one of the leading ATM/debit networks. Together, these two networks support billions of ﬁ nancial transactions each year, giving consumers more ways to pay and helping the business partners of Discover Network and PULSE Network grow and operate their businesses more effectively. 12 DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 D I S C O V E R C A R D , P. O . B O X 1 5 1 5 6 W I L M I N G T O N D E 1 9 8 5 0 - 5 1 5 6 U S A D I S C O V W O R K E T W O R K N E T W O R K D I S C O V E R ® N E T W R K D I S C O V E R ® N E T W O R K D I S C W O R K D I S C O V E R ® N E T W O R K D S C O V E R ® N E T W O R K N E T W O R K O V E R ® N E T W O R K D I S C O V E R ® N E D I S C O D I S C K D I “As the largest HVAC/R wholesaler in the Southeast, we’ve always been happy to accept Discover Card. Now it’s integrated with other cards, which means one contact person and one statement. It’s great!” Cathie Lanser, C.C. Dickson Co. Rock Hill, South Carolina ® PULSE NETWORK is one of the nation’s leading electronic funds transfer networks. It serves more than 4,500 banks, credit unions and savings institutions across ® the United States. The network links cardholders with more than 265,000 ATMs, as well as POS terminals at retail locations nationwide. Billions of ﬁ nancial transactions each year. DISCOVER NETWORK markets and supports a comprehensive suite of credit, debit and prepaid cards, including network support for Discover Card. Discover’s unique approach to building strong relationships allows us to connect partners and create mutually beneﬁ cial programs that help our acquirers, merchants and issuers increase loyalty and build their businesses. INTERNATIONAL ACCEPTANCE Discover Network offers acceptance at millions of merchant and cash access locations throughout the United States, Canada, Mexico and the Caribbean. We are also opening new doors for Discover Network Cardholders through reciprocal acceptance Y L 0 000 JPC 000 YL 0000 JPC 000 YL 0000 JPC 000 YL 0000 JPC 000 YL 0000 JPC 000 YL 0000 JPC 000YL 0000 JPC 000 YL 0000 JPC000 Y L 0 0 0 C J P 0000 L Y 0 0 0 C P J 0 0 0 0 L Y 0 0 0 C P J 0 0 0 0 L Y 0 0 0 C P J 0 0 0 0 L Y 0 0 0 C P J 0 0 0 0 L Y 0 0 0 C P J 0 0 0 0 L Y 0 0 0 C P J 0 0 0 0 0 0 0 0 J P C 0 0 0 Y L 0 0 0 0 J P C 0 0 0 Y L 0 0 0 0 J P C 0 0 0 Y L 0 0 0 0 J P C 0 0 0 Y L 0 0 0 0 J P C 0 0 0 Y L 0 0 0 0 J P C 0 0 0 Y L 0000 JP C 0 0 0 agreements with China UnionPay L Y YL0000JPC000YL0000JPC000YL0000JPC000YL0000JPC000YL0000JPC000YL0000JPC000YL0000JPC000YL0000JPC000 in China and JCB in Japan. DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 13 A MORE REWARDING WAY TO WORK. Ask any Discover employee what they like about the company, and the ﬁ rst answer is almost always “the people.” They are responsible for the company’s strong brand, high customer satisfaction and loyalty ratings, and reputation as a leading ﬁ nancial services company. Our focus on the customer made Discover successful in the past, and we look forward to building even more rewarding relationships with consumers and businesses in the future. 14 DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 COMMITMENT TO OUR COMMUNITIES. Volunteerism is one of our company’s values, and we are very proud of the Discover employees who participate in employee giving and volunteer programs to strengthen the communities where we live and work. Last year, Discover and its employees contributed more than $6 million to charitable organizations through company contributions and individual gifts. In addition, our employees donated more than 30,000 hours of their time to non-proﬁ t organizations in their communities through volunteer efforts. DISCOVER’S VALUES. The Discover Values play an important role in deﬁ ning the culture at Discover. Each of the Discover Values represents a core belief about performance for the organization collectively and for each of our employees. At Discover, we believe in and we practice: D oing the right thing I nnovation S implicity C ollaboration Openness Volunteerism Enthusiasm R espect DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 15 FINANCIAL HIGHLIGHTS (1) (Millions, except per share amounts and employees) Net revenues Net income Diluted earnings per common share (2) Return on equity Cash dividends declared per common share CONSOLIDATED 2007 CONSOLIDATED 2006 $ $ $ $ 5,052 589 1.23 10% 0.06 $ $ $ 5,057 1,077 2.26 20% – Weighted average shares outstanding (fully diluted, 000s) 478,879 477,236 Total assets Shareholders’ equity Managed loans (3) Total network volume Managed credit card interest yield (3) Managed credit card net principal charge-off rate (3) Managed credit card delinquency rate (over 30 days) (3) Number of employees $ $ $ $ 37,376 5,599 52,554 $ $ $ 29,067 5,775 50,446 185,511 $ 163,016 12.44% 4.08% 3.73% 12,800 12.36% 4.08% 3.50% 14,000 CONSOLIDATED NET INCOME ($ millions) DILUTED EARNINGS PER COMMON SHARE (2) RETURN ON EQUITY NET INCOME ($ millions) DILUTED EARNINGS PER COMMON SHARE (2) RETURN ON EQUITY PRO FORMA EXCLUDING INTERNATIONAL CARD SEGMENT (4) $1,077 $2.26 $578 $589 $1.21 $1.23 13% 20% 10% $1,133 $974 $2.37 $2.03 21% 17% $600 $1.26 14% 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 2005 2006 2007 (1) Financial results in 2005 and 2006 include the impact of changes in U.S. bankruptcy regulations that took effect in late 2005. (2) Diluted EPS for 2005 and 2006 are calculated based on the 477,235,927 shares of common stock distributed by Morgan Stanley on July 2, 2007. (3) Financial information presented on a managed basis in this Summary Annual Report assumes that loans that have been securitized were not sold and presents ﬁ nancial information on these loans in a manner similar to the way ﬁ nancial information on loans that have not been sold is presented. For more information, and a detailed reconciliation, please refer to the accompanying document titled “Financial Annual Report.” (4 ) Reﬂ ects pro forma results excluding the International Card segment as reported in company ﬁ lings and using estimated tax rates for the periods indicated. For more information, and a detailed reconciliation, please refer to the accompanying document titled “Financial Annual Report.” 16 DISCOVER FINANCIAL SERVICES SUMMARY ANNUAL REPORT 2007 BOARD OF DIRECTORS EXECUTIVE OFFICERS Dennis D. Dammerman Dennis D. Dammerman Chairman, Discover Financial Services. Retired Vice Chairman, General Electric Company Jeffrey S. Aronin Jeffrey S. Aronin President and CEO, Ovation Pharmaceuticals, Inc. Mary K. Bush Mary K. Bush President, Bush International David W. Nelms David W. Nelms [1] Chief Executive Ofﬁ cer Roger C. Hochschild Roger C. Hochschild [2] President and Chief Operating Ofﬁ cer Roy A. Guthrie Roy A. Guthrie [3] Executive Vice President, Chief Financial Ofﬁ cer Gregory C. Case Gregory C. Case President and CEO, Aon Robert M. Devlin Robert M. Devlin Chairman, Curragh Capital Partners Kathryn McNamara Corley [4] Kathryn McNamara Corley Senior Vice President, General Counsel and Secretary Margaret H. Georgiadis Margaret H. Georgiadis [5] Executive Vice President, Chief Marketing Ofﬁ cer Philip A. Laskawy Philip A. Laskawy Retired Chairman and CEO, Ernst & Young LLP Charlotte M. Hogg Charlotte M. Hogg [ NOT SHOWN ] Senior Vice President, International Michael H. Moskow Michael H. Moskow Retired CEO, Federal Reserve Bank of Chicago David W. Nelms David W. Nelms CEO, Discover Financial Services Michael L. Rankowitz Michael L. Rankowitz Retired, senior advisor to Morgan Stanley E. Follin Smith E. Follin Smith Retired Executive Vice President, CFO and CAO, Constellation Energy Group Lawrence A. Weinbach Lawrence A. Weinbach Partner, Yankee Hill Capital Management LLC Carlos Minetti Carlos Minetti [6] Executive Vice President, Cardmember Services and Consumer Banking Diane E. Offereins Diane E. Offereins [7] Executive Vice President, Chief Technology Ofﬁ cer James V. Panzarino James V. Panzarino [8] Senior Vice President, Chief Credit Risk Ofﬁ cer Harit Talwar [9] Harit Talwar Executive Vice President, Discover Network PRIMARY INVESTOR CONTACT Investor Relations Investor Relations Phone: 1-224-405-4555 Phone: 1-224-405-4555 investorrelations@discover.com investorrelations@discover.com TRANSFER AGENT Mellon Investor Services LLC Mellon Investor Services LLC 200 W. Monroe Street 200 W. Monroe Street Suite 1590 Suite 1590 Chicago, IL 60606 Chicago, IL 60606 Phone: 1-866-258-6590 Phone: 1-866-258-6590 Corporate Web site: Corporate Web site: www.melloninvestor.com/ISD www.melloninvestor.com/ISD ANNUAL SHAREHOLDERS’ MEETING The 2008 Annual Meeting of The 2008 Annual Meeting of Shareholders of Discover Shareholders of Discover Financial Services will be held Financial Services will be held on Thursday, April 10, 2008, on Thursday, April 10, 2008, at 9:00 CT at the at 9:00 amam CT at the company’s headquarters at company’s headquarters at 2500 Lake Cook Road, 2500 Lake Cook Road, Riverwoods, IL 60015. Riverwoods, IL 60015. Cashback Bonus, , More, More, Discover, Cashback Bonus Discover, Motiva, Open Road, PULSE and Motiva, Open Road, PULSE and the other trademarks, logos and the other trademarks, logos and service marks used in this Summary service marks used in this Summary Annual Report are the trademarks Annual Report are the trademarks of Discover Financial Services or of Discover Financial Services or their respective third-party owners. their respective third-party owners. D E S G N I : P E N T A G R A M [5] [6] [9] [4] [1] [2] [8] [7] [3] 2500 Lake Cook Road Riverwoods, IL 60015 www.discoverﬁ nancial.com C L L s e c i v r e S S F D 8 0 0 2 ©

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