<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 23, 1996
Dean Witter, Discover & Co.
---------------------------
(Exact name of Registrant as specified
in its charter)
Delaware 1-11758 36-3145972
-------------------------------------------------------------------------
(state or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
Two World Trade Center, New York, New York 10048
------------------------------------------------
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (212) 392-2222
--------------
-------------------------------------------------------------------------
(Former address, if changed since last report.)
<PAGE>
Item 5. Other Events
- ---------------------
On October 23, 1996, Dean Witter, Discover & Co. (the "Registrant")
released financial information with respect to the quarter and nine months ended
September 30, 1996. A copy of the press release containing such financial
information is annexed as Exhibit 99.1 to this Report and by this reference
incorporated herein and made a part hereof.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
- --------------------------------------------------------------------------
99.1 Press release of the Registrant dated October 23, 1996
containing financial information for the quarter and
nine months ended September 30, 1996.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
DEAN WITTER, DISCOVER & CO.
-----------------------------------
(Registrant)
By: /s/ Ronald T. Carman
-----------------------------------
Ronald T. Carman
Senior Vice President
Dated: October 23, 1996
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DEAN WITTER, DISCOVER & CO.
EXHIBITS
TO CURRENT REPORT ON
FORM 8-K DATED OCTOBER 23, 1996
Commission File Number 1-11758
<PAGE>
Exhibit Index
-------------
Exhibit No. Description Page
- ------------- ----------- ----
99.1 Press release of the Registrant dated
October 23, 1996 containing financial
information for the quarter and nine
months ended September 30, 1996.
<PAGE>
Timothy Lee
Corporate Communications
212-392-8709
Amy Pappas
Investor Relations
212-392-6171
DEAN WITTER DISCOVER THIRD QUARTER EARNINGS PER SHARE UP 15%
NEW YORK, October 23 -- Dean Witter, Discover & Co. today
reported third quarter earnings per share of $1.41 on a
fully diluted basis, a 15 percent increase from $1.23 in the
third quarter of last year. Net income was $239.0 million,
up 9 percent from $218.7 million for the third quarter of
1995. Net operating revenues were $1.53 billion, a 5
percent advance over last year's third quarter $1.45
billion. Return on equity was 18.6 percent for the last
twelve months.
Securities earnings of $119.0 million were 12 percent higher
than the $106.7 million in the third quarter a year ago.
Credit Services earnings rose 7 percent to $120.0 million
from $112.0 million for last year's third quarter.
"We are very pleased with these results," said Philip J.
Purcell, Chairman and Chief Executive Officer. "Earnings
were up strongly in Securities. We continued to grow our
assets under management and our expense discipline has been
superb. In Credit Services, revenue growth remained strong
and earnings were up, despite the industry-wide trend of
rising credit card write-offs.
"In July, we announced several steps designed to offset the
costs of rising write-offs. We continued to intensify these
efforts, and these latest measures include higher over-limit
fees, tightened terms on late fees and selective repricing
of delinquent accounts. The steps we had previously taken
have had a positive impact and along with these additional
measures we expect an even greater impact in the fourth
quarter and into next year."
Earnings per share for the first nine months of the year
increased 10 percent to $4.21 on a fully diluted basis
compared to $3.83 for the same period of 1995. Net income
for the same nine months reached a record $723.6 million, up
7 percent from last year's $678.3 million. Year-to-date net
operating revenues increased 9 percent over last year to
$4.62 billion.
1
<PAGE>
SECURITIES
The Company's Securities business continued to post strong results.
Third quarter asset management and administration fees
increased 15 percent from last year's third quarter to
$289.8 million. Assets under management and administration
rose to a record $86.5 billion, up $10.1 billion over the
end of last year's third quarter and up $7.0 billion from
1995 year end.
The number of account executives rose by 667 from last
year's third quarter to 8,900, the sixth consecutive
quarterly increase. Total client assets increased by over
$5 billion during the quarter to $239.7 billion and were 12
percent above September 30, 1995. We added 139,000 client
accounts in the quarter and 466,000 for the year-to-date --
the highest nine month total in Dean Witter's history.
The profit margin increased to 15.0 percent from 13.8
percent a year ago.
Net operating revenues of $794.2 million were 3 percent
greater than the third quarter of last year. Operating
expenses of $593.3 million were 1 percent below 1995's third
quarter. Securities again achieved an outstanding 39.0
percent return on equity for the trailing twelve months.
CREDIT SERVICES
Credit Services key drivers continued to indicate strong
across-the-board business growth.
Managed loans were up $5.6 billion to $33.8 billion, a 20
percent increase from the third quarter of 1995.
Merchant and cardmember fees were $462.8 million, on a
managed loan basis, up 44 percent over last year's third
quarter. The increase was due to higher transaction volume
and to pricing actions taken over the year's first nine
months.
Net interest income rose 17 percent over last year's third
quarter to $756.6 million, largely due to loan growth.
General purpose credit card accounts reached 38.4 million at
quarter end, up 3.8 million, or 11 percent, over a year ago.
The NOVUS Network of merchant establishments, serving the
Discover, Private Issue and BRAVO Cards, enrolled more than
100,000 merchant locations during the quarter and has
enrolled 320,000 locations during the year's first nine
months.
2
<PAGE>
NOVUS Services launched the National Alliance For Species
Survival Card, its first affinity card. It is a co-branded
program with the American Zoo and Aquarium Association.
Net operating revenues rose 8 percent to a record $731.8
million from the third quarter of 1995 despite a 65 percent
increase in the provision for loan losses. The increase in
the provision was due primarily to higher write-offs. The
benefit from a revision in the Company's reserve estimates
for loans intended to be securitized was approximately
offset by increases in reserves for on-balance sheet loans.
Operating expenses increased 8 percent to $539.7 million
from the third quarter of last year.
"We clearly have two excellent, growing businesses," Purcell
said. "It's our job to make sure the growth and the strong
profits continue."
3
<PAGE>
DEAN WITTER, DISCOVER & CO.
Financial Summary
(in millions, except share data)
(unaudited)
Three Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Total revenues
Credit Services $ 1,306.2 $ 1,114.3 17%
Securities 917.2 904.3 1%
----------- -----------
Total Dean Witter, Discover & Co. $ 2,223.4 $ 2,018.6 10%
=========== ===========
Net operating revenues (1)
Credit Services $ 731.8 $ 676.6 8%
Securities 794.2 774.6 3%
----------- -----------
Total Dean Witter, Discover & Co. $ 1,526.0 $ 1,451.2 5%
=========== ===========
Net income
Credit Services $ 120.0 $ 112.0 7%
Securities 119.0 106.7 12%
----------- -----------
Total Dean Witter, Discover & Co. $ 239.0 $ 218.7 9%
=========== ===========
Earnings per share:
Primary net income per share $ 1.42 $ 1.24 15%
Primary avg common shares o/s (2) 168,862,776 176,506,874
Fully diluted net income per share $ 1.41 $ 1.23 15%
Fully diluted avg common shares o/s (2) 169,218,102 177,259,935
Common shares o/s at period end 161,283,203 170,822,080
(1) Net operating revenues is total revenues minus interest expense and the
provision for losses on receivables.
(2) Primary dilution is based on average share price for the period. Fully
diluted is based on the higher of
average or ending share price for the period.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Financial Summary
(in millions, except share data)
(unaudited)
Nine Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Total revenues
Credit Services $ 3,719.0 $ 3,127.8 19%
Securities 2,866.2 2,678.9 7%
----------- -----------
Total Dean Witter, Discover & Co. $ 6,585.2 $ 5,806.7 13%
=========== ===========
Net operating revenues (1)
Credit Services $ 2,115.6 $ 1,974.8 7%
Securities 2,499.6 2,268.9 10%
----------- -----------
Total Dean Witter, Discover & Co. $ 4,615.2 $ 4,243.7 9%
=========== ===========
Net income
Credit Services $ 347.7 $ 384.6 (10%)
Securities 375.9 293.7 28%
----------- -----------
Total Dean Witter, Discover & Co. $ 723.6 $ 678.3 7%
=========== ===========
Earnings per share:
Primary net income per share $ 4.21 $ 3.87 9%
Primary avg common shares o/s (2) 171,706,822 175,173,650
Fully diluted net income per share $ 4.21 $ 3.83 10%
Fully diluted avg common shares o/s (2) 171,865,248 176,934,268
Common shares o/s at period end 161,283,203 170,822,080
(1) Net operating revenues is total revenues minus interest expense and the
provision for losses on receivables.
(2) Primary dilution is based on average share price for the period. Fully
diluted is based on the higher of
average or ending share price for the period.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Consolidated Income Data
(in millions, except share data)
(unaudited, Managed loan basis)
Three Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 462.8 $ 322.5 44%
Commissions 264.3 266.2 (1%)
Asset management and admin. fees 289.8 251.7 15%
Servicing fees 0.0 0.0 --
Principal transactions 107.0 121.6 (12%)
Investment banking 45.7 45.1 1%
Other 20.7 16.3 27%
----------- -----------
Total non-interest revenues 1,190.3 1,023.4 16%
----------- -----------
Interest revenue 1,426.7 1,280.1 11%
Interest expense 599.5 554.1 8%
----------- -----------
Net interest income 827.2 726.0 14%
Provision for losses on receivables 491.5 298.2 65%
----------- -----------
Net credit income 335.7 427.8 (22%)
----------- -----------
Net operating revenues 1,526.0 1,451.2 5%
----------- -----------
Employee compensation and benefits 525.8 511.5 3%
Marketing and business development 209.9 204.4 3%
Info. processing and communications 190.2 169.9 12%
Facilities and equipment 63.8 60.8 5%
Other 143.3 148.9 (4%)
----------- -----------
Total non-interest expenses 1,133.0 1,095.5 3%
----------- -----------
Income before income taxes 393.0 355.7 10%
Income tax expense 154.0 137.0 12%
----------- -----------
Net income $ 239.0 $ 218.7 9%
=========== ===========
Primary net income per share $ 1.42 $ 1.24 15%
Primary avg common shares o/s 168,862,776 176,506,874
Fully diluted net income per share $ 1.41 $ 1.23 15%
Fully diluted avg common shares o/s 169,218,102 177,259,935
Oper exp as a % of net oper revenues 74.2% 75.5%
Effective tax rate 39.2% 38.5%
<PAGE>
DEAN WITTER, DISCOVER & CO.
Consolidated Income Data
(in millions, except share data)
(unaudited, Managed loan basis)
Nine Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 1,249.8 $ 892.9 40%
Commissions 868.8 748.7 16%
Asset management and admin. fees 850.5 748.2 14%
Servicing fees 0.0 0.0 --
Principal transactions 340.4 367.8 (7%)
Investment banking 168.0 132.7 27%
Other 79.0 69.4 14%
----------- -----------
Total non-interest revenues 3,556.5 2,959.7 20%
----------- -----------
Interest revenue 4,148.0 3,676.3 13%
Interest expense 1,761.9 1,642.9 7%
----------- -----------
Net interest income 2,386.1 2,033.4 17%
Provision for losses on receivables 1,327.4 749.4 77%
----------- -----------
Net credit income 1,058.7 1,284.0 (18%)
----------- -----------
Net operating revenues 4,615.2 4,243.7 9%
----------- -----------
Employee compensation and benefits 1,649.0 1,484.7 11%
Marketing and business development 603.2 511.1 18%
Info. processing and communications 558.2 496.0 13%
Facilities and equipment 188.7 173.6 9%
Other 434.6 475.0 (9%)
----------- -----------
Total non-interest expenses 3,433.7 3,140.4 9%
----------- -----------
Income before income taxes 1,181.5 1,103.3 7%
Income tax expense 457.9 425.0 8%
----------- -----------
Net income $ 723.6 $ 678.3 7%
=========== ===========
Primary net income per share $ 4.21 $ 3.87 9%
Primary avg common shares o/s 171,706,822 175,173,650
Fully diluted net income per share $ 4.21 $ 3.83 10%
Fully diluted avg common shares o/s 171,865,248 176,934,268
Oper exp as a % of net oper revenues 74.4% 74.0%
Effective tax rate 38.8% 38.5%
<PAGE>
DEAN WITTER, DISCOVER & CO.
Credit Services Summarized Income Data
(in millions)
(unaudited, Managed loan basis)
Three Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 462.8 $ 322.5 44%
Servicing fees 0.0 0.0 --
Other 1.1 0.9 --
----------- -----------
Total non-interest revenues 463.9 323.4 43%
----------- -----------
Interest revenue 1,235.9 1,075.8 15%
Interest expense 479.3 426.8 12%
----------- -----------
Net interest income 756.6 649.0 17%
Provision for loan losses 488.7 295.8 65%
----------- -----------
Net credit income 267.9 353.2 (24%)
----------- -----------
Net operating revenues 731.8 676.6 8%
----------- -----------
Employee compensation and benefits 129.8 112.3 16%
Marketing and business development 187.5 187.6 --
Info. processing and communications 123.6 107.2 15%
Facilities and equipment 15.6 13.5 16%
Other 83.2 77.1 8%
----------- -----------
Total non-interest expenses 539.7 497.7 8%
----------- -----------
Income before income taxes 192.1 178.9 7%
Income tax expense 72.1 66.9 8%
----------- -----------
Net income $ 120.0 $ 112.0 7%
=========== ===========
Oper exp as a % of net oper revenues 73.7% 73.6%
Profit margin (1) 16.4% 16.6%
Effective tax rate 37.5% 37.4%
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Credit Services Summarized Income Data
(in millions)
(unaudited, Managed loan basis)
Nine Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 1,249.8 $ 892.9 40%
Servicing fees 0.0 0.0 --
Other 7.4 1.6 --
----------- -----------
Total non-interest revenues 1,257.2 894.5 41%
----------- -----------
Interest revenue 3,581.1 3,062.6 17%
Interest expense 1,404.0 1,240.4 13%
----------- -----------
Net interest income 2,177.1 1,822.2 19%
Provision for loan losses 1,318.7 741.9 78%
----------- -----------
Net credit income 858.4 1,080.3 (21%)
----------- -----------
Net operating revenues 2,115.6 1,974.8 7%
----------- -----------
Employee compensation and benefits 373.3 319.4 17%
Marketing and business development 525.9 444.1 18%
Info. processing and communications 354.9 303.5 17%
Facilities and equipment 45.8 37.4 22%
Other 263.1 253.6 4%
----------- -----------
Total non-interest expenses 1,563.0 1,358.0 15%
----------- -----------
Income before income taxes 552.6 616.8 (10%)
Income tax expense 204.9 232.2 (12%)
----------- -----------
Net income $ 347.7 $ 384.6 (10%)
=========== ===========
Oper exp as a % of net oper revenues 73.9% 68.8%
Profit margin (1) 16.4% 19.5%
Effective tax rate 37.1% 37.6%
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Securities Summarized Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
Three Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Commissions $ 264.3 $ 266.2 (1%)
Asset management and admin. fees 289.8 251.7 15%
Principal transactions 107.0 121.6 (12%)
Investment banking 45.7 45.1 1%
Other 19.6 15.4 27%
----------- -----------
Total non-interest revenues 726.4 700.0 4%
----------- -----------
Interest revenue 190.8 204.3 (7%)
Interest expense 120.2 127.2 (6%)
----------- -----------
Net interest income 70.6 77.1 (8%)
Provision for losses on receivables 2.8 2.5 12%
----------- -----------
Net credit income 67.8 74.6 (9%)
----------- -----------
Net operating revenues 794.2 774.6 3%
----------- -----------
Employee compensation and benefits 396.0 399.2 (1%)
Marketing and business development 22.4 16.8 33%
Info. processing and communications 66.6 62.7 6%
Facilities and equipment 48.2 47.3 2%
Other 60.1 71.8 (16%)
----------- -----------
Total non-interest expenses 593.3 597.8 (1%)
----------- -----------
Income before income taxes 200.9 176.8 14%
Income tax expense 81.9 70.1 17%
----------- -----------
Net income $ 119.0 $ 106.7 12%
=========== ===========
Oper exp as a % of net oper revenues 74.7% 77.2%
Profit margin (1) 15.0% 13.8%
Effective tax rate 40.8% 39.6%
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Securities Summarized Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
Nine Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Commissions $ 868.8 $ 748.7 16%
Asset management and admin. fees 850.5 748.2 14%
Principal transactions 340.4 367.8 (7%)
Investment banking 168.0 132.7 27%
Other 71.6 67.8 6%
----------- -----------
Total non-interest revenues 2,299.3 2,065.2 11%
----------- -----------
Interest revenue 566.9 613.7 (8%)
Interest expense 357.9 402.4 (11%)
----------- -----------
Net interest income 209.0 211.3 (1%)
Provision for losses on receivables 8.7 7.6 14%
----------- -----------
Net credit income 200.3 203.7 (2%)
----------- -----------
Net operating revenues 2,499.6 2,268.9 10%
----------- -----------
Employee compensation and benefits 1,275.7 1,165.3 9%
Marketing and business development 77.3 67.0 15%
Info. processing and communications 203.3 192.5 6%
Facilities and equipment 142.9 136.2 5%
Other 171.5 221.4 (23%)
----------- -----------
Total non-interest expenses 1,870.7 1,782.4 5%
----------- -----------
Income before income taxes 628.9 486.5 29%
Income tax expense 253.0 192.8 31%
----------- -----------
Net income $ 375.9 $ 293.7 28%
=========== ===========
Oper exp as a % of net oper revenues 74.8% 78.6%
Profit margin (1) 15.0% 12.9%
Effective tax rate 40.2% 39.6%
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
9/30/96 6/30/96 3/31/96
----------- ----------- -----------
Merchant and cardmember fees $ 462.8 $ 419.5 $ 367.5
Commissions 264.3 303.8 300.7
Asset management and admin. fees 289.8 285.8 274.9
Servicing fees 0.0 0.0 0.0
Principal transactions 107.0 114.5 118.9
Investment banking 45.7 57.6 64.7
Other 20.7 33.5 24.8
----------- ----------- -----------
Total non-interest revenues 1,190.3 1,214.7 1,151.5
----------- ----------- -----------
Interest revenue 1,426.7 1,366.7 1,354.6
Interest expense 599.5 582.8 579.6
----------- ----------- -----------
Net interest income 827.2 783.9 775.0
Provision for losses on receivables 491.5 456.9 379.0
----------- ----------- -----------
Net credit income 335.7 327.0 396.0
----------- ----------- -----------
Net operating revenues 1,526.0 1,541.7 1,547.5
----------- ----------- -----------
Employee compensation and benefits 525.8 552.9 570.3
Marketing and business development 209.9 201.4 191.9
Info. processing and communications 190.2 185.9 182.1
Facilities and equipment 63.8 63.7 61.2
Other 143.3 149.7 141.6
----------- ----------- -----------
Total non-interest expenses 1,133.0 1,153.6 1,147.1
----------- ----------- -----------
Income before income taxes 393.0 388.1 400.4
Income tax expense 154.0 149.3 154.6
----------- ----------- -----------
Net income $ 239.0 $ 238.8 $ 245.8
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
12/31/95 9/30/95 6/30/95
----------- ----------- -----------
Merchant and cardmember fees $ 379.7 $ 322.5 $ 298.8
Commissions 273.8 266.2 247.9
Asset management and admin. fees 258.6 251.7 251.0
Servicing fees 0.0 0.0 0.0
Principal transactions 111.1 121.6 120.8
Investment banking 48.8 45.1 48.7
Other 24.1 16.3 26.1
----------- ----------- -----------
Total non-interest revenues 1,096.1 1,023.4 993.3
----------- ----------- -----------
Interest revenue 1,337.9 1,280.1 1,240.9
Interest expense 580.5 554.1 566.9
----------- ----------- -----------
Net interest income 757.4 726.0 674.0
Provision for losses on receivables 421.3 298.2 242.4
----------- ----------- -----------
Net credit income 336.1 427.8 431.6
----------- ----------- -----------
Net operating revenues 1,432.2 1,451.2 1,424.9
----------- ----------- -----------
Employee compensation and benefits 496.9 511.5 489.5
Marketing and business development 224.0 204.4 159.0
Info. processing and communications 191.5 169.9 171.7
Facilities and equipment 61.9 60.8 58.4
Other 165.3 148.9 161.0
----------- ----------- -----------
Total non-interest expenses 1,139.6 1,095.5 1,039.6
----------- ----------- -----------
Income before income taxes 292.6 355.7 385.3
Income tax expense 114.5 137.0 147.8
----------- ----------- -----------
Net income $ 178.1 $ 218.7 $ 237.5
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
3/31/95 12/31/94 9/30/94
----------- ----------- -----------
Merchant and cardmember fees $ 271.6 $ 300.3 $ 264.7
Commissions 234.6 211.6 208.2
Asset management and admin. fees 245.5 245.3 243.9
Servicing fees 0.0 0.0 0.0
Principal transactions 125.4 121.6 105.8
Investment banking 38.9 41.1 32.5
Other 27.0 30.8 12.5
----------- ----------- -----------
Total non-interest revenues 943.0 950.7 867.6
----------- ----------- -----------
Interest revenue 1,155.3 1,095.7 980.7
Interest expense 521.9 484.2 397.5
----------- ----------- -----------
Net interest income 633.4 611.5 583.2
Provision for losses on receivables 208.8 304.0 210.1
----------- ----------- -----------
Net credit income 424.6 307.5 373.1
----------- ----------- -----------
Net operating revenues 1,367.6 1,258.2 1,240.7
----------- ----------- -----------
Employee compensation and benefits 483.7 428.1 432.7
Marketing and business development 147.7 201.7 167.5
Info. processing and communications 154.4 164.4 146.2
Facilities and equipment 54.4 57.7 58.1
Other 165.1 173.8 136.0
----------- ----------- -----------
Total non-interest expenses 1,005.3 1,025.7 940.5
----------- ----------- -----------
Income before income taxes 362.3 232.5 300.2
Income tax expense 140.2 92.5 115.7
----------- ----------- -----------
Net income $ 222.1 $ 140.0 $ 184.5
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
9/30/96 6/30/96 3/31/96
----------- ----------- -----------
Merchant and cardmember fees $ 462.8 $ 419.5 $ 367.5
Servicing fees 0.0 0.0 0.0
Other 1.1 1.2 5.1
----------- ----------- -----------
Total non-interest revenues 463.9 420.7 372.6
----------- ----------- -----------
Interest revenue 1,235.9 1,176.8 1,168.4
Interest expense 479.3 460.7 464.0
----------- ----------- -----------
Net interest income 756.6 716.1 704.4
Provision for loan losses 488.7 454.0 376.0
----------- ----------- -----------
Net credit income 267.9 262.1 328.4
----------- ----------- -----------
Net operating revenues 731.8 682.8 701.0
----------- ----------- -----------
Employee compensation and benefits 129.8 119.3 124.2
Marketing and business development 187.5 174.0 164.4
Info. processing and communications 123.6 116.9 114.4
Facilities and equipment 15.6 15.4 14.8
Other 83.2 94.1 85.8
----------- ----------- -----------
Total non-interest expenses 539.7 519.7 503.6
----------- ----------- -----------
Income before income taxes 192.1 163.1 197.4
Income tax expense 72.1 59.7 73.1
----------- ----------- -----------
Net income $ 120.0 $ 103.4 $ 124.3
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
12/31/95 9/30/95 6/30/95
----------- ----------- -----------
Merchant and cardmember fees $ 379.7 $ 322.5 $ 298.8
Servicing fees 0.0 0.0 0.0
Other 1.0 0.9 0.4
----------- ----------- -----------
Total non-interest revenues 380.7 323.4 299.2
----------- ----------- -----------
Interest revenue 1,131.5 1,075.8 1,025.2
Interest expense 453.7 426.8 418.9
----------- ----------- -----------
Net interest income 677.8 649.0 606.3
Provision for loan losses 415.6 295.8 240.5
----------- ----------- -----------
Net credit income 262.2 353.2 365.8
----------- ----------- -----------
Net operating revenues 642.9 676.6 665.0
----------- ----------- -----------
Employee compensation and benefits 119.2 112.3 104.8
Marketing and business development 201.2 187.6 132.0
Info. processing and communications 115.5 107.2 105.4
Facilities and equipment 13.7 13.5 12.1
Other 89.2 77.1 85.4
----------- ----------- -----------
Total non-interest expenses 538.8 497.7 439.7
----------- ----------- -----------
Income before income taxes 104.1 178.9 225.3
Income tax expense 41.8 66.9 84.7
----------- ----------- -----------
Net income $ 62.3 $ 112.0 $ 140.6
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
3/31/95 12/31/94 9/30/94
----------- ----------- -----------
Merchant and cardmember fees $ 271.6 $ 300.3 $ 264.7
Servicing fees 0.0 0.0 0.0
Other 0.3 0.3 0.2
----------- ----------- -----------
Total non-interest revenues 271.9 300.6 264.9
----------- ----------- -----------
Interest revenue 961.6 912.0 842.2
Interest expense 394.7 362.2 312.7
----------- ----------- -----------
Net interest income 566.9 549.8 529.5
Provision for loan losses 205.6 300.7 207.9
----------- ----------- -----------
Net credit income 361.3 249.1 321.6
----------- ----------- -----------
Net operating revenues 633.2 549.7 586.5
----------- ----------- -----------
Employee compensation and benefits 102.3 97.2 95.4
Marketing and business development 124.5 177.7 146.8
Info. processing and communications 90.9 95.7 85.4
Facilities and equipment 11.8 11.5 11.3
Other 91.1 83.3 71.6
----------- ----------- -----------
Total non-interest expenses 420.6 465.4 410.5
----------- ----------- -----------
Income before income taxes 212.6 84.3 176.0
Income tax expense 80.6 32.4 66.4
----------- ----------- -----------
Net income $ 132.0 $ 51.9 $ 109.6
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
9/30/96 6/30/96 3/31/96
----------- ----------- -----------
Commissions $ 264.3 $ 303.8 $ 300.7
Asset management and admin. fees 289.8 285.8 274.9
Principal transactions 107.0 114.5 118.9
Investment banking 45.7 57.6 64.7
Other 19.6 32.3 19.7
----------- ----------- -----------
Total non-interest revenues 726.4 794.0 778.9
----------- ----------- -----------
Interest revenue 190.8 189.9 186.2
Interest expense 120.2 122.1 115.6
----------- ----------- -----------
Net interest income 70.6 67.8 70.6
Provision for losses on receivables 2.8 2.9 3.0
----------- ----------- -----------
Net credit income 67.8 64.9 67.6
----------- ----------- -----------
Net operating revenues 794.2 858.9 846.5
----------- ----------- -----------
Employee compensation and benefits 396.0 433.6 446.1
Marketing and business development 22.4 27.4 27.5
Info. processing and communications 66.6 69.0 67.7
Facilities and equipment 48.2 48.3 46.4
Other 60.1 55.6 55.8
----------- ----------- -----------
Total non-interest expenses 593.3 633.9 643.5
----------- ----------- -----------
Income before income taxes 200.9 225.0 203.0
Income tax expense 81.9 89.6 81.5
----------- ----------- -----------
Net income $ 119.0 $ 135.4 $ 121.5
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
12/31/95 9/30/95 6/30/95
----------- ----------- -----------
Commissions $ 273.8 $ 266.2 $ 247.9
Asset management and admin. fees 258.6 251.7 251.0
Principal transactions 111.1 121.6 120.8
Investment banking 48.8 45.1 48.7
Other 23.1 15.4 25.7
----------- ----------- -----------
Total non-interest revenues 715.4 700.0 694.1
----------- ----------- -----------
Interest revenue 206.4 204.3 215.7
Interest expense 126.9 127.2 148.0
----------- ----------- -----------
Net interest income 79.5 77.1 67.7
Provision for losses on receivables 5.6 2.5 1.9
----------- ----------- -----------
Net credit income 73.9 74.6 65.8
----------- ----------- -----------
Net operating revenues 789.3 774.6 759.9
----------- ----------- -----------
Employee compensation and benefits 377.7 399.2 384.7
Marketing and business development 22.8 16.8 27.0
Info. processing and communications 76.0 62.7 66.3
Facilities and equipment 48.2 47.3 46.3
Other 76.1 71.8 75.6
----------- ----------- -----------
Total non-interest expenses 600.8 597.8 599.9
----------- ----------- -----------
Income before income taxes 188.5 176.8 160.0
Income tax expense 72.7 70.1 63.1
----------- ----------- -----------
Net income $ 115.8 $ 106.7 $ 96.9
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
3/31/95 12/31/94 9/30/94
----------- ----------- -----------
Commissions $ 234.6 $ 211.6 $ 208.2
Asset management and admin. fees 245.5 245.3 243.9
Principal transactions 125.4 121.6 105.8
Investment banking 38.9 41.1 32.5
Other 26.7 30.5 12.3
----------- ----------- -----------
Total non-interest revenues 671.1 650.1 602.7
----------- ----------- -----------
Interest revenue 193.7 183.7 138.5
Interest expense 127.2 122.0 84.8
----------- ----------- -----------
Net interest income 66.5 61.7 53.7
Provision for losses on receivables 3.2 3.3 2.2
----------- ----------- -----------
Net credit income 63.3 58.4 51.5
----------- ----------- -----------
Net operating revenues 734.4 708.5 654.2
----------- ----------- -----------
Employee compensation and benefits 381.4 330.9 337.3
Marketing and business development 23.2 24.0 20.7
Info. processing and communications 63.5 68.7 60.8
Facilities and equipment 42.6 46.2 46.8
Other 74.0 90.5 64.4
----------- ----------- -----------
Total non-interest expenses 584.7 560.3 530.0
----------- ----------- -----------
Income before income taxes 149.7 148.2 124.2
Income tax expense 59.6 60.1 49.3
----------- ----------- -----------
Net income $ 90.1 $ 88.1 $ 74.9
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Consolidated Income Data
(in millions, except share data)
(unaudited, GAAP basis)
Three Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 379.5 $ 285.8 33%
Commissions 264.3 266.2 (1%)
Asset management and admin. fees 289.8 251.7 15%
Servicing fees 222.7 187.8 19%
Principal transactions 107.0 121.6 (12%)
Investment banking 45.7 45.1 1%
Other 20.7 16.2 28%
----------- -----------
Total non-interest revenues 1,329.7 1,174.4 13%
----------- -----------
Interest revenue 893.7 844.2 6%
Interest expense 390.4 374.7 4%
----------- -----------
Net interest income 503.3 469.5 7%
Provision for losses on receivables 307.0 192.7 59%
----------- -----------
Net credit income 196.3 276.8 (29%)
----------- -----------
Net operating revenues 1,526.0 1,451.2 5%
----------- -----------
Employee compensation and benefits 525.8 511.5 3%
Marketing and business development 209.9 204.4 3%
Info. processing and communications 190.2 169.9 12%
Facilities and equipment 63.8 60.8 5%
Other 143.3 148.9 (4%)
----------- -----------
Total non-interest expenses 1,133.0 1,095.5 3%
----------- -----------
Income before income taxes 393.0 355.7 10%
Income tax expense 154.0 137.0 12%
----------- -----------
Net income $ 239.0 $ 218.7 9%
=========== ===========
Primary net income per share $ 1.42 $ 1.24 15%
Primary avg common shares o/s 168,862,776 176,506,874
Fully diluted net income per share $ 1.41 $ 1.23
Fully diluted avg common shares o/s 169,218,102 177,259,935 15%
Oper exp as a % of net oper revenues 74.2% 75.5%
Effective tax rate 39.2% 38.5%
<PAGE>
DEAN WITTER, DISCOVER & CO.
Consolidated Income Data
(in millions, except share data)
(unaudited, GAAP basis)
Nine Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 1,045.6 $ 791.7 32%
Commissions 868.8 748.7 16%
Asset management and admin. fees 850.5 748.2 14%
Servicing fees 614.5 534.3 15%
Principal transactions 340.4 367.8 (7%)
Investment banking 168.0 132.7 27%
Other 79.0 69.3 14%
----------- -----------
Total non-interest revenues 3,966.8 3,392.7 17%
----------- -----------
Interest revenue 2,618.4 2,414.0 8%
Interest expense 1,160.8 1,112.0 4%
----------- -----------
Net interest income 1,457.6 1,302.0 12%
Provision for losses on receivables 809.2 451.0 79%
----------- -----------
Net credit income 648.4 851.0 (24%)
----------- -----------
Net operating revenues 4,615.2 4,243.7 9%
----------- -----------
Employee compensation and benefits 1,649.0 1,484.7 11%
Marketing and business development 603.2 511.1 18%
Info. processing and communications 558.2 496.0 13%
Facilities and equipment 188.7 173.6 9%
Other 434.6 475.0 (9%)
----------- -----------
Total non-interest expenses 3,433.7 3,140.4 9%
----------- -----------
Income before income taxes 1,181.5 1,103.3 7%
Income tax expense 457.9 425.0 8%
----------- -----------
Net income $ 723.6 $ 678.3 7%
=========== ===========
Primary net income per share $ 4.21 $ 3.87 9%
Primary avg common shares o/s 171,706,822 175,173,650
Fully diluted net income per share $ 4.21 $ 3.83 10%
Fully diluted avg common shares o/s 171,865,248 176,934,268
Oper exp as a % of net oper revenues 74.4% 74.0%
Effective tax rate 38.8% 38.5%
<PAGE>
DEAN WITTER, DISCOVER & CO.
Credit Services Summarized Income Data
(in millions)
(unaudited, GAAP basis)
Three Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees (1) $ 379.5 $ 285.8 33%
Servicing fees (1) 222.7 187.8 19%
Other 1.1 0.8 --
----------- -----------
Total non-interest revenues 603.3 474.4 27%
----------- -----------
Interest revenue (1) 702.9 639.9 10%
Interest expense (1) 270.2 247.5 9%
----------- -----------
Net interest income 432.7 392.4 10%
Provision for loan losses (1) 304.2 190.2 60%
----------- -----------
Net credit income 128.5 202.2 (36%)
----------- -----------
Net operating revenues 731.8 676.6 8%
----------- -----------
Employee compensation and benefits 129.8 112.3 16%
Marketing and business development 187.5 187.6 --
Info. processing and communications 123.6 107.2 15%
Facilities and equipment 15.6 13.5 16%
Other 83.2 77.1 8%
----------- -----------
Total non-interest expenses 539.7 497.7 8%
----------- -----------
Income before income taxes 192.1 178.9 7%
Income tax expense 72.1 66.9 8%
----------- -----------
Net income $ 120.0 $ 112.0 7%
=========== ===========
Oper exp as a % of net oper revenues 73.7% 73.6%
Profit margin (2) 16.4% 16.6%
Effective tax rate 37.5% 37.4%
(1) Period-to-period comparisons for these line items are significantly
affected by the relative levels of securitized assets.
For comparative information on a managed loan basis, see previous pages.
(2) Profit margin is defined as net income as a percentage
of net operating revenues.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Credit Services Summarized Income Data
(in millions)
(unaudited, GAAP basis)
Nine Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees (1) $ 1,045.6 $ 791.7 32%
Servicing fees (1) 614.5 534.3 15%
Other 7.4 1.5 --
----------- -----------
Total non-interest revenues 1,667.5 1,327.5 26%
----------- -----------
Interest revenue (1) 2,051.5 1,800.3 14%
Interest expense (1) 802.9 709.6 13%
----------- -----------
Net interest income 1,248.6 1,090.7 14%
Provision for loan losses (1) 800.5 443.4 81%
----------- -----------
Net credit income 448.1 647.3 (31%)
----------- -----------
Net operating revenues 2,115.6 1,974.8 7%
----------- -----------
Employee compensation and benefits 373.3 319.4 17%
Marketing and business development 525.9 444.1 18%
Info. processing and communications 354.9 303.5 17%
Facilities and equipment 45.8 37.4 22%
Other 263.1 253.6 4%
----------- -----------
Total non-interest expenses 1,563.0 1,358.0 15%
----------- -----------
Income before income taxes 552.6 616.8 (10%)
Income tax expense 204.9 232.2 (12%)
----------- -----------
Net income $ 347.7 $ 384.6 (10%)
=========== ===========
Oper exp as a % of net oper revenues 73.9% 68.8%
Profit margin (2) 16.4% 19.5%
Effective tax rate 37.1% 37.6%
(1) Period-to-period comparisons for these line items are significantly
affected by the relative levels of securitized assets.
For comparative information on a managed loan basis, see previous pages.
(2) Profit margin is defined as net income as a percentage
of net operating revenues.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Securities Summarized Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
Three Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Commissions $ 264.3 $ 266.2 (1%)
Asset management and admin. fees 289.8 251.7 15%
Principal transactions 107.0 121.6 (12%)
Investment banking 45.7 45.1 1%
Other 19.6 15.4 27%
----------- -----------
Total non-interest revenues 726.4 700.0 4%
----------- -----------
Interest revenue 190.8 204.3 (7%)
Interest expense 120.2 127.2 (6%)
----------- -----------
Net interest income 70.6 77.1 (8%)
Provision for losses on receivables 2.8 2.5 12%
----------- -----------
Net credit income 67.8 74.6 (9%)
----------- -----------
Net operating revenues 794.2 774.6 3%
----------- -----------
Employee compensation and benefits 396.0 399.2 (1%)
Marketing and business development 22.4 16.8 33%
Info. processing and communications 66.6 62.7 6%
Facilities and equipment 48.2 47.3 2%
Other 60.1 71.8 (16%)
----------- -----------
Total non-interest expenses 593.3 597.8 (1%)
----------- -----------
Income before income taxes 200.9 176.8 14%
Income tax expense 81.9 70.1 17%
----------- -----------
Net income $ 119.0 $ 106.7 12%
=========== ===========
Oper exp as a % of net oper revenues 74.7% 77.2%
Profit margin (1) 15.0% 13.8%
Effective tax rate 40.8% 39.6%
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Securities Summarized Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
Nine Months %
Ended September 30, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Commissions $ 868.8 $ 748.7 16%
Asset management and admin. fees 850.5 748.2 14%
Principal transactions 340.4 367.8 (7%)
Investment banking 168.0 132.7 27%
Other 71.6 67.8 6%
----------- -----------
Total non-interest revenues 2,299.3 2,065.2 11%
----------- -----------
Interest revenue 566.9 613.7 (8%)
Interest expense 357.9 402.4 (11%)
----------- -----------
Net interest income 209.0 211.3 (1%)
Provision for losses on receivables 8.7 7.6 14%
----------- -----------
Net credit income 200.3 203.7 (2%)
----------- -----------
Net operating revenues 2,499.6 2,268.9 10%
----------- -----------
Employee compensation and benefits 1,275.7 1,165.3 9%
Marketing and business development 77.3 67.0 15%
Info. processing and communications 203.3 192.5 6%
Facilities and equipment 142.9 136.2 5%
Other 171.5 221.4 (23%)
----------- -----------
Total non-interest expenses 1,870.7 1,782.4 5%
----------- -----------
Income before income taxes 628.9 486.5 29%
Income tax expense 253.0 192.8 31%
----------- -----------
Net income $ 375.9 $ 293.7 28%
=========== ===========
Oper exp as a % of net oper revenues 74.8% 78.6%
Profit margin (1) 15.0% 12.9%
Effective tax rate 40.2% 39.6%
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
9/30/96 6/30/96 3/31/96
----------- ----------- -----------
Merchant and cardmember fees $ 379.5 $ 345.6 $ 320.5
Commissions 264.3 303.8 300.7
Asset management and admin. fees 289.8 285.8 274.9
Servicing fees 222.7 191.5 200.3
Principal transactions 107.0 114.5 118.9
Investment banking 45.7 57.6 64.7
Other 20.7 33.5 24.8
----------- ----------- -----------
Total non-interest revenues 1,329.7 1,332.3 1,304.8
----------- ----------- -----------
Interest revenue 893.7 863.3 861.4
Interest expense 390.4 379.7 390.7
----------- ----------- -----------
Net interest income 503.3 483.6 470.7
Provision for losses on receivables 307.0 274.2 228.0
----------- ----------- -----------
Net credit income 196.3 209.4 242.7
----------- ----------- -----------
Net operating revenues 1,526.0 1,541.7 1,547.5
----------- ----------- -----------
Employee compensation and benefits 525.8 552.9 570.3
Marketing and business development 209.9 201.4 191.9
Info. processing and communications 190.2 185.9 182.1
Facilities and equipment 63.8 63.7 61.2
Other 143.3 149.7 141.6
----------- ----------- -----------
Total non-interest expenses 1,133.0 1,153.6 1,147.1
----------- ----------- -----------
Income before income taxes 393.0 388.1 400.4
Income tax expense 154.0 149.3 154.6
----------- ----------- -----------
Net income $ 239.0 $ 238.8 $ 245.8
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
12/31/95 9/30/95 6/30/95
----------- ----------- -----------
Merchant and cardmember fees $ 343.6 $ 285.8 $ 265.6
Commissions 273.8 266.2 247.9
Asset management and admin. fees 258.6 251.7 251.0
Servicing fees 162.6 187.8 174.2
Principal transactions 111.1 121.6 120.8
Investment banking 48.8 45.1 48.7
Other 24.2 16.2 26.1
----------- ----------- -----------
Total non-interest revenues 1,222.7 1,174.4 1,134.3
----------- ----------- -----------
Interest revenue 905.0 844.2 812.6
Interest expense 402.8 374.7 384.4
----------- ----------- -----------
Net interest income 502.2 469.5 428.2
Provision for losses on receivables 292.7 192.7 137.6
----------- ----------- -----------
Net credit income 209.5 276.8 290.6
----------- ----------- -----------
Net operating revenues 1,432.2 1,451.2 1,424.9
----------- ----------- -----------
Employee compensation and benefits 496.9 511.5 489.5
Marketing and business development 224.0 204.4 159.0
Info. processing and communications 191.5 169.9 171.7
Facilities and equipment 61.9 60.8 58.4
Other 165.3 148.9 161.0
----------- ----------- -----------
Total non-interest expenses 1,139.6 1,095.5 1,039.6
----------- ----------- -----------
Income before income taxes 292.6 355.7 385.3
Income tax expense 114.5 137.0 147.8
----------- ----------- -----------
Net income $ 178.1 $ 218.7 $ 237.5
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
3/31/95 12/31/94 9/30/94
----------- ----------- -----------
Merchant and cardmember fees $ 240.3 $ 268.9 $ 238.6
Commissions 234.6 211.6 208.2
Asset management and admin. fees 245.5 245.3 243.9
Servicing fees 172.3 162.3 145.9
Principal transactions 125.4 121.6 105.8
Investment banking 38.9 41.1 32.5
Other 27.0 30.7 12.7
----------- ----------- -----------
Total non-interest revenues 1,084.0 1,081.5 987.6
----------- ----------- -----------
Interest revenue 757.2 706.3 653.8
Interest expense 352.9 319.8 263.6
----------- ----------- -----------
Net interest income 404.3 386.5 390.2
Provision for losses on receivables 120.7 209.8 137.1
----------- ----------- -----------
Net credit income 283.6 176.7 253.1
----------- ----------- -----------
Net operating revenues 1,367.6 1,258.2 1,240.7
----------- ----------- -----------
Employee compensation and benefits 483.7 428.1 432.7
Marketing and business development 147.7 201.7 167.5
Info. processing and communications 154.4 164.4 146.2
Facilities and equipment 54.4 57.7 58.1
Other 165.1 173.8 136.0
----------- ----------- -----------
Total non-interest expenses 1,005.3 1,025.7 940.5
----------- ----------- -----------
Income before income taxes 362.3 232.5 300.2
Income tax expense 140.2 92.5 115.7
----------- ----------- -----------
Net income $ 222.1 $ 140.0 $ 184.5
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
9/30/96 6/30/96 3/31/96
----------- ----------- -----------
Merchant and cardmember fees $ 379.5 $ 345.6 $ 320.5
Servicing fees 222.7 191.5 200.3
Other 1.1 1.2 5.1
----------- ----------- -----------
Total non-interest revenues 603.3 538.3 525.9
----------- ----------- -----------
Interest revenue 702.9 673.4 675.2
Interest expense 270.2 257.6 275.1
----------- ----------- -----------
Net interest income 432.7 415.8 400.1
Provision for loan losses 304.2 271.3 225.0
----------- ----------- -----------
Net credit income 128.5 144.5 175.1
----------- ----------- -----------
Net operating revenues 731.8 682.8 701.0
----------- ----------- -----------
Employee compensation and benefits 129.8 119.3 124.2
Marketing and business development 187.5 174.0 164.4
Info. processing and communications 123.6 116.9 114.4
Facilities and equipment 15.6 15.4 14.8
Other 83.2 94.1 85.8
----------- ----------- -----------
Total non-interest expenses 539.7 519.7 503.6
----------- ----------- -----------
Income before income taxes 192.1 163.1 197.4
Income tax expense 72.1 59.7 73.1
----------- ----------- -----------
Net income $ 120.0 $ 103.4 $ 124.3
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
12/31/95 9/30/95 6/30/95
----------- ----------- -----------
Merchant and cardmember fees $ 343.6 $ 285.8 $ 265.6
Servicing fees 162.6 187.8 174.2
Other 1.1 0.8 0.4
----------- ----------- -----------
Total non-interest revenues 507.3 474.4 440.2
----------- ----------- -----------
Interest revenue 698.6 639.9 596.9
Interest expense 275.9 247.5 236.4
----------- ----------- -----------
Net interest income 422.7 392.4 360.5
Provision for loan losses 287.1 190.2 135.7
----------- ----------- -----------
Net credit income 135.6 202.2 224.8
----------- ----------- -----------
Net operating revenues 642.9 676.6 665.0
----------- ----------- -----------
Employee compensation and benefits 119.2 112.3 104.8
Marketing and business development 201.2 187.6 132.0
Info. processing and communications 115.5 107.2 105.4
Facilities and equipment 13.7 13.5 12.1
Other 89.2 77.1 85.4
----------- ----------- -----------
Total non-interest expenses 538.8 497.7 439.7
----------- ----------- -----------
Income before income taxes 104.1 178.9 225.3
Income tax expense 41.8 66.9 84.7
----------- ----------- -----------
Net income $ 62.3 $ 112.0 $ 140.6
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
3/31/95 12/31/94 9/30/94
----------- ----------- -----------
Merchant and cardmember fees $ 240.3 $ 268.9 $ 238.6
Servicing fees 172.3 162.3 145.9
Other 0.3 0.2 0.4
----------- ----------- -----------
Total non-interest revenues 412.9 431.4 384.9
----------- ----------- -----------
Interest revenue 563.5 522.6 515.3
Interest expense 225.7 197.8 178.8
----------- ----------- -----------
Net interest income 337.8 324.8 336.5
Provision for loan losses 117.5 206.5 134.9
----------- ----------- -----------
Net credit income 220.3 118.3 201.6
----------- ----------- -----------
Net operating revenues 633.2 549.7 586.5
----------- ----------- -----------
Employee compensation and benefits 102.3 97.2 95.4
Marketing and business development 124.5 177.7 146.8
Info. processing and communications 90.9 95.7 85.4
Facilities and equipment 11.8 11.5 11.3
Other 91.1 83.3 71.6
----------- ----------- -----------
Total non-interest expenses 420.6 465.4 410.5
----------- ----------- -----------
Income before income taxes 212.6 84.3 176.0
Income tax expense 80.6 32.4 66.4
----------- ----------- -----------
Net income $ 132.0 $ 51.9 $ 109.6
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
9/30/96 6/30/96 3/31/96
----------- ----------- -----------
Commissions $ 264.3 $ 303.8 $ 300.7
Asset management and admin. fees 289.8 285.8 274.9
Principal transactions 107.0 114.5 118.9
Investment banking 45.7 57.6 64.7
Other 19.6 32.3 19.7
----------- ----------- -----------
Total non-interest revenues 726.4 794.0 778.9
----------- ----------- -----------
Interest revenue 190.8 189.9 186.2
Interest expense 120.2 122.1 115.6
----------- ----------- -----------
Net interest income 70.6 67.8 70.6
Provision for losses on receivables 2.8 2.9 3.0
----------- ----------- -----------
Net credit income 67.8 64.9 67.6
----------- ----------- -----------
Net operating revenues 794.2 858.9 846.5
----------- ----------- -----------
Employee compensation and benefits 396.0 433.6 446.1
Marketing and business development 22.4 27.4 27.5
Info. processing and communications 66.6 69.0 67.7
Facilities and equipment 48.2 48.3 46.4
Other 60.1 55.6 55.8
----------- ----------- -----------
Total non-interest expenses 593.3 633.9 643.5
----------- ----------- -----------
Income before income taxes 200.9 225.0 203.0
Income tax expense 81.9 89.6 81.5
----------- ----------- -----------
Net income $ 119.0 $ 135.4 $ 121.5
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
12/31/95 9/30/95 6/30/95
----------- ----------- -----------
Commissions $ 273.8 $ 266.2 $ 247.9
Asset management and admin. fees 258.6 251.7 251.0
Principal transactions 111.1 121.6 120.8
Investment banking 48.8 45.1 48.7
Other 23.1 15.4 25.7
----------- ----------- -----------
Total non-interest revenues 715.4 700.0 694.1
----------- ----------- -----------
Interest revenue 206.4 204.3 215.7
Interest expense 126.9 127.2 148.0
----------- ----------- -----------
Net interest income 79.5 77.1 67.7
Provision for losses on receivables 5.6 2.5 1.9
----------- ----------- -----------
Net credit income 73.9 74.6 65.8
----------- ----------- -----------
Net operating revenues 789.3 774.6 759.9
----------- ----------- -----------
Employee compensation and benefits 377.7 399.2 384.7
Marketing and business development 22.8 16.8 27.0
Info. processing and communications 76.0 62.7 66.3
Facilities and equipment 48.2 47.3 46.3
Other 76.1 71.8 75.6
----------- ----------- -----------
Total non-interest expenses 600.8 597.8 599.9
----------- ----------- -----------
Income before income taxes 188.5 176.8 160.0
Income tax expense 72.7 70.1 63.1
----------- ----------- -----------
Net income $ 115.8 $ 106.7 $ 96.9
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
3/31/95 12/31/94 9/30/94
----------- ----------- -----------
Commissions $ 234.6 $ 211.6 $ 208.2
Asset management and admin. fees 245.5 245.3 243.9
Principal transactions 125.4 121.6 105.8
Investment banking 38.9 41.1 32.5
Other 26.7 30.5 12.3
----------- ----------- -----------
Total non-interest revenues 671.1 650.1 602.7
----------- ----------- -----------
Interest revenue 193.7 183.7 138.5
Interest expense 127.2 122.0 84.8
----------- ----------- -----------
Net interest income 66.5 61.7 53.7
Provision for losses on receivables 3.2 3.3 2.2
----------- ----------- -----------
Net credit income 63.3 58.4 51.5
----------- ----------- -----------
Net operating revenues 734.4 708.5 654.2
----------- ----------- -----------
Employee compensation and benefits 381.4 330.9 337.3
Marketing and business development 23.2 24.0 20.7
Info. processing and communications 63.5 68.7 60.8
Facilities and equipment 42.6 46.2 46.8
Other 74.0 90.5 64.4
----------- ----------- -----------
Total non-interest expenses 584.7 560.3 530.0
----------- ----------- -----------
Income before income taxes 149.7 148.2 124.2
Income tax expense 59.6 60.1 49.3
----------- ----------- -----------
Net income $ 90.1 $ 88.1 $ 74.9
=========== =========== ===========
<PAGE>
DEAN WITTER, DISCOVER & CO.
STATISTICAL SUMMARY
Third Quarter
Sept 30, 1996 Sept 30, 1995
------------- -------------
Consolidated
Equity at end of period (millions) $ 4,978.2 $ 4,724.1
Credit Services ($millions)
Managed loans
Average $ 33,163.8 $ 27,606.0
End of period $ 33,793.8 $ 28,161.3
Interest yield 14.6% 15.3%
Interest spread 8.4% 8.6%
Net charge-off rate 5.4% 3.8%
Average total earning assets $ 34,560.3 $ 28,469.5
Average total earning assets
net int margin 8.7% 9.0%
General purpose credit card mgd loans
Average $ 29,552.8 $ 24,128.8
End of period $ 30,152.9 $ 24,590.7
Net charge-off rate 5.4% 3.8%
Owned loans--EOP $ 20,282.7 $ 17,474.6
<PAGE>
DEAN WITTER, DISCOVER & CO.
STATISTICAL SUMMARY
Year-to-date
Sept 30, 1996 Sept 30, 1995
------------- -------------
Consolidated
Equity at end of period (millions) $ 4,978.2 $ 4,724.1
Return on average equity (1) 18.6% 18.7%
Pro forma book value per share - EOP $ 30.87 $ 29.29
Invstmt in SPSTSI-EOP mkt val (mil) $ 317.5 $ 577.5
Credit Services ($millions)
Managed loans
Average $ 32,145.9 $ 26,562.7
End of period $ 33,793.8 $ 28,161.3
Interest yield 14.6% 15.2%
Interest spread 8.4% 8.4%
Net charge-off rate 5.2% 3.5%
Average total earning assets $ 33,535.4 $ 27,350.5
Avg tot earning assets net int margin 8.7% 8.9%
General purpose credit card mgd loans
Average $ 28,399.5 $ 23,354.2
End of period $ 30,152.9 $ 24,590.7
Net charge-off rate 5.2% 3.6%
Owned loans - EOP $ 20,282.7 $ 17,474.6
General purpose credit card accts (mil) 38.4 34.6
NOVUS Network incr in merch loc. (thou) 320 243
Securities ($billions)
Account executives 8,900 8,233
Total client assets $ 239.7 $ 213.2
Assets under management and administration:
Equity funds $ 35.8 $ 27.9
Fixed income funds 24.0 25.1
Money market funds 23.8 21.0
Investment management services 2.9 2.4
Total $ 86.5 $ 76.4
ICS Assets $ 9.8 $ 7.8
(1) Twelve month trailing return on average equity.
