<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): January 22, 1997
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 January 22, 1997, Dean Witter, Discover & Co. (the "Registrant")
released financial information with respect to the quarter and twelve months
ended December 31, 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 January 22, 1997
containing financial information for the quarter and
twelve months ended December 31, 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: January 22, 1997
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DEAN WITTER, DISCOVER & CO.
EXHIBITS
TO CURRENT REPORT ON
FORM 8-K DATED JANUARY 22, 1997
Commission File Number 1-11758
<PAGE>
Exhibit Index
-------------
Exhibit No. Description Page
- ------------- ----------- ----
99.1 Press release of the Registrant dated
January 22, 1997 containing financial
information for the quarter and twelve
months ended December 31, 1996.
<PAGE>
EXHIBIT 99.1
Release Date: January 22, 1997 Contact: Timothy Lee
Corporate Communications
212-392-8709
Amy Pappas
Investor Relations
212-392-6171
DEAN WITTER DISCOVER REPORTS
EARNINGS PER SHARE UP 33% IN FOURTH QUARTER;
RECORD EARNINGS OF $951 MILLION FOR 1996
NEW YORK, January 22 -- Dean Witter, Discover & Co. today reported fourth
quarter earnings per share of $0.68 on a fully diluted basis, up 33 percent from
last year's $0.51. Earnings per share reflect the Company's recent 2 for 1 stock
split. Net income rose to $227.8 million for the fourth quarter, a 28 percent
increase over the 1995 fourth quarter of $178.1 million. Net operating revenues
for the quarter were a record $1.6 billion, 13 percent above the $1.4 billion in
last year's fourth quarter.
Securities earnings of $126.0 million were 9 percent over last year's fourth
quarter $115.8 million and 6 percent over this year's third quarter $119.0
million. Credit Services earnings climbed 63 percent to $101.8 million from
$62.3 million in the fourth quarter a year ago.
For the full year, the Company reported fully-diluted earnings per share of
$2.77, up 14 percent from $2.44 in 1995. Net income was a record $951.4 million,
an 11 percent increase over last year's $856.4 million. Net operating revenues
were $6.2 billion, a 10 percent advance over $5.7 billion in 1995. Return on
equity was 19.0 percent.
"We are very pleased with our fourth quarter and full-year results," said Philip
J. Purcell, Chairman and Chief Executive Officer. "Securities earnings continued
to grow strongly even from the high levels we've already achieved. We continued
to achieve rapid growth in assets under management and in our account executive
sales force. In Credit Services, our fourth quarter results were exceptionally
strong given the industry-wide trend of higher credit card write-offs. The
pricing actions that we've taken during the year helped to partially offset the
costs from higher write-offs. We expect the impact from the pricing actions to
continue into 1997."
FULL YEAR RESULTS
<PAGE>
Securities return on equity for 1996 was 42.1 percent. Earnings were a record
$501.9 million in 1996, 23 percent above 1995. Net operating revenues of $3.4
billion were 10 percent above the previous year, and the profit margin grew to a
record 14.9 percent.
Assets under management and administration were up $10.5 billion for the year to
$90.0 billion. For the fourth consecutive year, the number of account executives
increased by 500 or more and totaled 9,080 at year end. Securities opened
616,000 new client accounts, a record high and 13 percent above the number of
accounts opened last year. Total client assets rose by $29.9 billion to close
the year at $251.2 billion.
Credit Services earnings were $449.5 million, slightly ahead of 1995's record
$446.9 million. Managed loans rose by $4.8 billion, or 15 percent, to $36.6
billion. Net operating revenues increased 9 percent to an all-time high of $2.9
billion.
Credit card transaction volume of $53.6 billion was 13 percent higher than 1995.
General-purpose credit card accounts reached 38.9 million at year end, an
increase of 2.8 million from a year ago. The NOVUS Network enrolled 425,000 new
merchant locations during 1996, adding such well-known merchants as Eddie Bauer,
Blockbuster Video, Spiegel's and Tiffany's.
FOURTH QUARTER
The Company's Securities business continued to post strong results in the 1996
fourth quarter.
Asset management and administration fees increased 16 percent from last year's
fourth quarter to $299.3 million. Assets under management and administration
were up 13 percent versus the end of the fourth quarter of 1995.
Commission revenues were up 7 percent to $294.3 million over last year's fourth
quarter, fueled by higher sales of equities and insurance products.
Investment banking revenues increased 60 percent to $78.1 million from the
fourth quarter of 1995, due primarily to higher corporate underwriting revenues
and increased advisory fees.
Account executives increased by 180 during the quarter, the seventh consecutive
quarterly increase.
<PAGE>
Securities net operating revenues of $879.0 million were a quarterly record and
up 11 percent from a year ago. Operating expenses of $677.2 million increased by
13 percent and the quarter's profit margin declined slightly to 14.3 percent.
Credit Services reported strong earnings for the fourth quarter.
Merchant and cardmember fees, on a managed loan basis, rose to a record $563.8
million, up 48 percent from last year's fourth quarter. The increase was due to
several pricing actions taken during the year and to higher transaction volume.
Net interest income increased 19 percent over the fourth quarter of last year
due largely to loan growth.
Net operating revenues rose 14 percent to a record $735.9 million from the
fourth quarter of 1995, despite a 53 percent increase in the provision for loan
losses. The increase in the provision was primarily due to higher write-offs. In
the fourth quarter, the Company substantially increased its reserves for on-
balance sheet loans. The effect of this increase was partially offset by lower
provisions for loans intended to be securitized.
Operating expenses increased 7 percent to $574.1 million from the fourth quarter
of last year. The profit margin increased to 13.8 percent from 9.7 percent a
year ago.
In December, the Company reported the acquisition of Lombard Securities Inc., a
leading provider of on-line securities services. The Company also became a part
owner of Mondex USA, which will provide smart cards and advanced electronic
payment systems.
"We are building a strong presence on the new frontier in electronic commerce, "
Purcell said. "We enter 1997 in excellent position."
<PAGE>
DEAN WITTER, DISCOVER & CO.
Financial Summary
(in millions, except share data)
(unaudited)
Three Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Total revenues
Credit Services $ 1,442.8 $ 1,205.9 20%
Securities 1,000.6 921.8 9%
----------- -----------
Total Dean Witter, Discover & Co. $ 2,443.4 $ 2,127.7 15%
=========== ===========
Net operating revenues (1)
Credit Services $ 735.9 $ 642.9 14%
Securities 879.0 789.3 11%
----------- -----------
Total Dean Witter, Discover & Co. $ 1,614.9 $ 1,432.2 13%
=========== ===========
Net income
Credit Services $ 101.8 $ 62.3 63%
Securities 126.0 115.8 9%
----------- -----------
Total Dean Witter, Discover & Co. $ 227.8 $ 178.1 28%
=========== ===========
Earnings per share (2):
Primary net income per share $ 0.68 $ 0.51 33%
Primary avg common shares o/s (3) 334,280,968 351,746,068
Fully diluted net income per share $ 0.68 $ 0.51 33%
Fully diluted avg common shares
o/s (3) 334,931,196 351,746,068
Common shares o/s at period end 319,667,550 337,674,684
===================================
(1) Net operating revenues is total revenues minus interest expense and the
provision for losses on receivables.
(2) All share and per share data have been restated for the two-for-one common
stock split.
(3) 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.
DEAN WITTER, DISCOVER & CO.
Financial Summary
(in millions, except share data)
(unaudited)
Twelve Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Total revenues
Credit Services $ 5,161.8 $ 4,333.7 19%
Securities 3,866.8 3,600.7 7%
----------- -----------
Total Dean Witter, Discover & Co. $ 9,028.6 $ 7,934.4 14%
=========== ===========
Net operating revenues (1)
Credit Services $ 2,851.5 $ 2,617.7 9%
Securities 3,378.6 3,058.2 10%
----------- -----------
Total Dean Witter, Discover & Co. $ 6,230.1 $ 5,675.9 10%
=========== ===========
Net income
Credit Services $ 449.5 $ 446.9 1%
Securities 501.9 409.5 23%
----------- -----------
Total Dean Witter, Discover & Co. $ 951.4 $ 856.4 11%
=========== ===========
Earnings per share (2):
Primary net income per share $ 2.79 $ 2.44 14%
Primary avg common shares o/s (3) 341,179,638 350,725,970
Fully diluted net income per share $ 2.77 $ 2.44 14%
Fully diluted avg common shares
o/s (3) 343,308,062 350,903,050
Common shares o/s at period end 319,667,550 337,674,684
===============================
(1) Net operating revenues is total revenues minus interest expense and the
provision for losses on receivables.
(2) All share and per share data have been restated for the two-for-one common
stock split.
(3) 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.
SUPPLEMENTAL FINANCIAL INFORMATION INDEX
DECEMBER 1996
CONSOLIDATED INCOME DATA (Managed loan basis) F-1
CREDIT SERVICES INCOME DATA (Managed loan basis) F-2
SECURITIES INCOME DATA (GAAP and Managed loan basis) F-3
CONSOLIDATED QUARTERLY INCOME DATA (Managed loan basis) F-4
CREDIT SERVICES QUARTERLY INCOME DATA (Managed loan basis) F-5
SECURITIES QUARTERLY INCOME DATA (GAAP and Managed loan basis) F-6
CONSOLIDATED INCOME DATA (GAAP basis) F-7
CREDIT SERVICES INCOME DATA (GAAP basis) F-8
SECURITIES INCOME DATA (GAAP and Managed loan basis) F-9
CONSOLIDATED QUARTERLY INCOME DATA (GAAP basis) F-10
CREDIT SERVICES QUARTERLY INCOME DATA (GAAP basis) F-11
SECURITIES QUARTERLY INCOME DATA (GAAP and Managed loan basis) F-12
STATISTICAL SUMMARY F-13
CONTINUING REVENUES AND RATIO OF CONTINUING REVENUES F-14
<PAGE>
DEAN WITTER, DISCOVER & CO.
Consolidated Income Data
(in millions, except share data)
(unaudited, Managed loan basis)
Three Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- ----------
Merchant and cardmember fees $ 563.8 $ 379.7 48%
Commissions 294.3 273.8 7%
Asset management and admin. fees 299.3 258.6 16%
Servicing fees 0.0 0.0 --
Principal transactions 108.9 111.1 (2%)
Investment banking 78.1 48.8 60%
Other 28.8 24.1 20%
----------- -----------
Total non-interest revenues 1,373.2 1,096.1 25%
----------- -----------
Interest revenue 1,494.1 1,337.9 12%
Interest expense 613.4 580.5 6%
----------- -----------
Net interest income 880.7 757.4 16%
Provision for losses on receivables 639.0 421.3 52%
----------- -----------
Net credit income 241.7 336.1 (28%)
----------- -----------
Net operating revenues 1,614.9 1,432.2 13%
----------- -----------
Employee compensation and benefits 559.2 496.9 13%
Marketing and business development 253.6 224.0 13%
Info. processing and communications 209.5 191.5 9%
Facilities and equipment 67.4 61.9 9%
Other 161.6 165.3 (2%)
----------- -----------
Total non-interest expenses 1,251.3 1,139.6 10%
----------- -----------
Income before income taxes 363.6 292.6 24%
Income tax expense 135.8 114.5 19%
----------- -----------
Net income $ 227.8 $ 178.1 28%
=========== ===========
Primary net income per share (1) $ 0.68 $ 0.51 33%
Primary avg common shares o/s (1) 334,280,968 351,746,068
Fully diluted net income per share (1) $ 0.68 $ 0.51 33%
Fully diluted avg common shares o/s (1) 334,931,196 351,746,068
Oper exp as a % of net oper revenues 77.5% 79.6%
Effective tax rate 37.3% 39.1%
(1) All share and per share data have been restated for the two-for-one
common stock split.
DEAN WITTER, DISCOVER & CO.
Consolidated Income Data
(in millions, except share data)
(unaudited, Managed loan basis)
Twelve Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 1,813.6 $ 1,272.6 43%
Commissions 1,163.1 1,022.5 14%
Asset management and admin. fees 1,149.8 1,006.8 14%
Servicing fees 0.0 0.0 --
Principal transactions 449.3 478.9 (6%)
Investment banking 246.1 181.5 36%
Other 107.8 93.5 15%
----------- -----------
Total non-interest revenues 4,929.7 4,055.8 22%
----------- -----------
Interest revenue 5,642.1 5,014.2 13%
Interest expense 2,375.3 2,223.4 7%
----------- -----------
Net interest income 3,266.8 2,790.8 17%
Provision for losses on receivables 1,966.4 1,170.7 68%
----------- -----------
Net credit income 1,300.4 1,620.1 (20%)
----------- -----------
Net operating revenues 6,230.1 5,675.9 10%
----------- -----------
Employee compensation and benefits 2,208.2 1,981.6 11%
Marketing and business development 856.8 735.1 17%
Info. processing and communications 767.7 687.5 12%
Facilities and equipment 256.1 235.5 9%
Other 596.2 640.3 (7%)
----------- -----------
Total non-interest expenses 4,685.0 4,280.0 9%
----------- -----------
Income before income taxes 1,545.1 1,395.9 11%
Income tax expense 593.7 539.5 10%
----------- -----------
Net income $ 951.4 $ 856.4 11%
=========== ===========
Primary net income per share (1) $ 2.79 $ 2.44 14%
Primary avg common shares o/s (1) 341,179,638 350,725,970
Fully diluted net income per share (1) $ 2.77 $ 2.44 14%
Fully diluted avg common shares o/s (1) 343,308,062 350,903,050
Oper exp as a % of net oper revenues 75.2% 75.4%
Effective tax rate 38.4% 38.6%
(1) All share and per share data have been restated for the two-for-one common
stock split.
F-1
<PAGE>
DEAN WITTER, DISCOVER & CO.
Credit Services Summarized Income Data
(in millions)
(unaudited, Managed loan basis)
Three Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 563.8 $ 379.7 48%
Servicing fees 0.0 0.0 --
Other 1.4 1.0 --
----------- -----------
Total non-interest revenues 565.2 380.7 48%
----------- -----------
Interest revenue 1,301.5 1,131.5 15%
Interest expense 494.8 453.7 9%
----------- -----------
Net interest income 806.7 677.8 19%
Provision for loan losses 636.0 415.6 53%
----------- -----------
Net credit income 170.7 262.2 (35%)
----------- -----------
Net operating revenues 735.9 642.9 14%
----------- -----------
Employee compensation and benefits 132.1 119.2 11%
Marketing and business development 210.6 201.2 5%
Info. processing and communications 132.3 115.5 15%
Facilities and equipment 18.1 13.7 32%
Other 81.0 89.2 (9%)
----------- -----------
Total non-interest expenses 574.1 538.8 7%
----------- -----------
Income before income taxes 161.8 104.1 55%
Income tax expense 60.0 41.8 44%
----------- -----------
Net income $ 101.8 $ 62.3 63%
=========== ===========
Oper exp as a % of net oper revenues 78.0% 83.8%
Profit margin (1) 13.8% 9.7%
Effective tax rate 37.1% 40.2%
=====================================
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
DEAN WITTER, DISCOVER & CO.
Credit Services Summarized Income Data
(in millions)
(unaudited, Managed loan basis)
Twelve Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 1,813.6 $ 1,272.6 43%
Servicing fees 0.0 0.0 --
Other 8.8 2.6 --
----------- -----------
Total non-interest revenues 1,822.4 1,275.2 43%
----------- -----------
Interest revenue 4,882.6 4,194.1 16%
Interest expense 1,898.8 1,694.1 12%
----------- -----------
Net interest income 2,983.8 2,500.0 19%
Provision for loan losses 1,954.7 1,157.5 69%
----------- -----------
Net credit income 1,029.1 1,342.5 (23%)
----------- -----------
Net operating revenues 2,851.5 2,617.7 9%
----------- -----------
Employee compensation and benefits 505.4 438.6 15%
Marketing and business development 736.5 645.3 14%
Info. processing and communications 487.2 419.0 16%
Facilities and equipment 63.9 51.1 25%
Other 344.1 342.8 --
----------- -----------
Total non-interest expenses 2,137.1 1,896.8 13%
----------- -----------
Income before income taxes 714.4 720.9 (1%)
Income tax expense 264.9 274.0 (3%)
----------- -----------
Net income $ 449.5 $ 446.9 1%
=========== ===========
Oper exp as a % of net oper revenues 74.9% 72.5%
Profit margin (1) 15.8% 17.1%
Effective tax rate 37.1% 38.0%
====================================
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
F-2
<PAGE>
DEAN WITTER, DISCOVER & CO.
Securities Summarized Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
Three Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Commissions $ 294.3 $ 273.8 7%
Asset management and admin. fees 299.3 258.6 16%
Principal transactions 108.9 111.1 (2%)
Investment banking 78.1 48.8 60%
Other 27.4 23.1 19%
----------- -----------
Total non-interest revenues 808.0 715.4 13%
----------- -----------
Interest revenue 192.6 206.4 (7%)
Interest expense 118.6 126.9 (7%)
----------- -----------
Net interest income 74.0 79.5 (7%)
Provision for losses on receivables 3.0 5.6 (46%)
----------- -----------
Net credit income 71.0 73.9 (4%)
----------- -----------
Net operating revenues 879.0 789.3 11%
----------- -----------
Employee compensation and benefits 427.1 377.7 13%
Marketing and business development 43.0 22.8 89%
Info. processing and communications 77.2 76.0 2%
Facilities and equipment 49.3 48.2 2%
Other 80.6 76.1 6%
----------- -----------
Total non-interest expenses 677.2 600.8 13%
----------- -----------
Income before income taxes 201.8 188.5 7%
Income tax expense 75.8 72.7 4%
----------- -----------
Net income $ 126.0 $ 115.8 9%
=========== ===========
Oper exp as a % of net oper revenues 77.0% 76.1%
Profit margin (1) 14.3% 14.7%
Effective tax rate 37.6% 38.6%
====================================
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
DEAN WITTER, DISCOVER & CO.
Securities Summarized Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
Twelve Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Commissions $ 1,163.1 $ 1,022.5 14%
Asset management and admin. fees 1,149.8 1,006.8 14%
Principal transactions 449.3 478.9 (6%)
Investment banking 246.1 181.5 36%
Other 99.0 90.9 9%
----------- -----------
Total non-interest revenues 3,107.3 2,780.6 12%
----------- -----------
Interest revenue 759.5 820.1 (7%)
Interest expense 476.5 529.3 (10%)
----------- -----------
Net interest income 283.0 290.8 (3%)
Provision for losses on receivables 11.7 13.2 (11%)
----------- -----------
Net credit income 271.3 277.6 (2%)
----------- -----------
Net operating revenues 3,378.6 3,058.2 10%
----------- -----------
Employee compensation and benefits 1,702.8 1,543.0 10%
Marketing and business development 120.3 89.8 34%
Info. processing and communications 280.5 268.5 4%
Facilities and equipment 192.2 184.4 4%
Other 252.1 297.5 (15%)
----------- -----------
Total non-interest expenses 2,547.9 2,383.2 7%
----------- -----------
Income before income taxes 830.7 675.0 23%
Income tax expense 328.8 265.5 24%
----------- -----------
Net income $ 501.9 $ 409.5 23%
=========== ===========
Oper exp as a % of net oper revenues 75.4% 77.9%
Profit margin (1) 14.9% 13.4%
Effective tax rate 39.6% 39.3%
====================================
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
F-3
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
12/31/96 9/30/96 6/30/96
----------- ----------- -----------
Merchant and cardmember fees $ 563.8 $ 462.8 $ 419.5
Commissions 294.3 264.3 303.8
Asset management and admin. fees 299.3 289.8 285.8
Servicing fees 0.0 0.0 0.0
Principal transactions 108.9 107.0 114.5
Investment banking 78.1 45.7 57.6
Other 28.8 20.7 33.5
----------- ----------- -----------
Total non-interest revenues 1,373.2 1,190.3 1,214.7
----------- ----------- -----------
Interest revenue 1,494.1 1,426.7 1,366.7
Interest expense 613.4 599.5 582.8
----------- ----------- -----------
Net interest income 880.7 827.2 783.9
Provision for losses on receivables 639.0 491.5 456.9
----------- ----------- -----------
Net credit income 241.7 335.7 327.0
----------- ----------- -----------
Net operating revenues 1,614.9 1,526.0 1,541.7
----------- ----------- -----------
Employee compensation and benefits 559.2 525.8 552.9
Marketing and business development 253.6 209.9 201.4
Info. processing and communications 209.5 190.2 185.9
Facilities and equipment 67.4 63.8 63.7
Other 161.6 143.3 149.7
----------- ----------- -----------
Total non-interest expenses 1,251.3 1,133.0 1,153.6
----------- ----------- -----------
Income before income taxes 363.6 393.0 388.1
Income tax expense 135.8 154.0 149.3
----------- ----------- -----------
Net income $ 227.8 $ 239.0 $ 238.8
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
3/31/96 12/31/95 9/30/95
----------- ----------- -----------
Merchant and cardmember fees $ 367.5 $ 379.7 $ 322.5
Commissions 300.7 273.8 266.2
Asset management and admin. fees 274.9 258.6 251.7
Servicing fees 0.0 0.0 0.0
Principal transactions 118.9 111.1 121.6
Investment banking 64.7 48.8 45.1
Other 24.8 24.1 16.3
----------- ----------- -----------
Total non-interest revenues 1,151.5 1,096.1 1,023.4
----------- ----------- -----------
Interest revenue 1,354.6 1,337.9 1,280.1
Interest expense 579.6 580.5 554.1
----------- ----------- -----------
Net interest income 775.0 757.4 726.0
Provision for losses on receivables 379.0 421.3 298.2
----------- ----------- -----------
Net credit income 396.0 336.1 427.8
----------- ----------- -----------
Net operating revenues 1,547.5 1,432.2 1,451.2
----------- ----------- -----------
Employee compensation and benefits 570.3 496.9 511.5
Marketing and business development 191.9 224.0 204.4
Info. processing and communications 182.1 191.5 169.9
Facilities and equipment 61.2 61.9 60.8
Other 141.6 165.3 148.9
----------- ----------- -----------
Total non-interest expenses 1,147.1 1,139.6 1,095.5
----------- ----------- -----------
Income before income taxes 400.4 292.6 355.7
Income tax expense 154.6 114.5 137.0
----------- ----------- -----------
Net income $ 245.8 $ 178.1 $ 218.7
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
6/30/95 3/31/95 12/31/94
----------- ----------- -----------
Merchant and cardmember fees $ 298.8 $ 271.6 $ 300.3
Commissions 247.9 234.6 211.6
Asset management and admin. fees 251.0 245.5 245.3
Servicing fees 0.0 0.0 0.0
Principal transactions 120.8 125.4 121.6
Investment banking 48.7 38.9 41.1
Other 26.1 27.0 30.8
----------- ----------- -----------
Total non-interest revenues 993.3 943.0 950.7
----------- ----------- -----------
Interest revenue 1,240.9 1,155.3 1,095.7
Interest expense 566.9 521.9 484.2
----------- ----------- -----------
Net interest income 674.0 633.4 611.5
Provision for losses on receivables 242.4 208.8 304.0
----------- ----------- -----------
Net credit income 431.6 424.6 307.5
----------- ----------- -----------
Net operating revenues 1,424.9 1,367.6 1,258.2
----------- ----------- -----------
Employee compensation and benefits 489.5 483.7 428.1
Marketing and business development 159.0 147.7 201.7
Info. processing and communications 171.7 154.4 164.4
Facilities and equipment 58.4 54.4 57.7
Other 161.0 165.1 173.8
----------- ----------- -----------
Total non-interest expenses 1,039.6 1,005.3 1,025.7
----------- ----------- -----------
Income before income taxes 385.3 362.3 232.5
Income tax expense 147.8 140.2 92.5
----------- ----------- -----------
Net income $ 237.5 $ 222.1 $ 140.0
=========== =========== ===========
F-4
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
12/31/96 9/30/96 6/30/96
----------- ----------- -----------
Merchant and cardmember fees $ 563.8 $ 462.8 $ 419.5
Servicing fees 0.0 0.0 0.0
Other 1.4 1.1 1.2
----------- ----------- -----------
Total non-interest revenues 565.2 463.9 420.7
----------- ----------- -----------
Interest revenue 1,301.5 1,235.9 1,176.8
Interest expense 494.8 479.3 460.7
----------- ----------- -----------
Net interest income 806.7 756.6 716.1
Provision for loan losses 636.0 488.7 454.0
----------- ----------- -----------
Net credit income 170.7 267.9 262.1
----------- ----------- -----------
Net operating revenues 735.9 731.8 682.8
----------- ----------- -----------
Employee compensation and benefits 132.1 129.8 119.3
Marketing and business development 210.6 187.5 174.0
Info. processing and communications 132.3 123.6 116.9
Facilities and equipment 18.1 15.6 15.4
Other 81.0 83.2 94.1
----------- ----------- -----------
Total non-interest expenses 574.1 539.7 519.7
----------- ----------- -----------
Income before income taxes 161.8 192.1 163.1
Income tax expense 60.0 72.1 59.7
----------- ----------- -----------
Net income $ 101.8 $ 120.0 $ 103.4
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
3/31/96 12/31/95 9/30/95
----------- ----------- -----------
Merchant and cardmember fees $ 367.5 $ 379.7 $ 322.5
Servicing fees 0.0 0.0 0.0
Other 5.1 1.0 0.9
----------- ----------- -----------
Total non-interest revenues 372.6 380.7 323.4
----------- ----------- -----------
Interest revenue 1,168.4 1,131.5 1,075.8
Interest expense 464.0 453.7 426.8
----------- ----------- -----------
Net interest income 704.4 677.8 649.0
Provision for loan losses 376.0 415.6 295.8
----------- ----------- -----------
Net credit income 328.4 262.2 353.2
----------- ----------- -----------
Net operating revenues 701.0 642.9 676.6
----------- ----------- -----------
Employee compensation and benefits 124.2 119.2 112.3
Marketing and business development 164.4 201.2 187.6
Info. processing and communications 114.4 115.5 107.2
Facilities and equipment 14.8 13.7 13.5
Other 85.8 89.2 77.1
----------- ----------- -----------
Total non-interest expenses 503.6 538.8 497.7
----------- ----------- -----------
Income before income taxes 197.4 104.1 178.9
Income tax expense 73.1 41.8 66.9
----------- ----------- -----------
Net income $ 124.3 $ 62.3 $ 112.0
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, Managed loan basis)
FOR THE QUARTER ENDED
6/30/95 3/31/95 12/31/94
----------- ----------- -----------
Merchant and cardmember fees $ 298.8 $ 271.6 $ 300.3
Servicing fees 0.0 0.0 0.0
Other 0.4 0.3 0.3
----------- ----------- -----------
Total non-interest revenues 299.2 271.9 300.6
----------- ----------- -----------
Interest revenue 1,025.2 961.6 912.0
Interest expense 418.9 394.7 362.2
----------- ----------- -----------
Net interest income 606.3 566.9 549.8
Provision for loan losses 240.5 205.6 300.7
----------- ----------- -----------
Net credit income 365.8 361.3 249.1
----------- ----------- -----------
Net operating revenues 665.0 633.2 549.7
----------- ----------- -----------
Employee compensation and benefits 104.8 102.3 97.2
Marketing and business development 132.0 124.5 177.7
Info. processing and communications 105.4 90.9 95.7
Facilities and equipment 12.1 11.8 11.5
Other 85.4 91.1 83.3
----------- ----------- -----------
Total non-interest expenses 439.7 420.6 465.4
----------- ----------- -----------
Income before income taxes 225.3 212.6 84.3
Income tax expense 84.7 80.6 32.4
----------- ----------- -----------
Net income $ 140.6 $ 132.0 $ 51.9
=========== =========== ===========
F-5
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
12/31/96 9/30/96 6/30/96
----------- ----------- -----------
Commissions $ 294.3 $ 264.3 $ 303.8
Asset management and admin. fees 299.3 289.8 285.8
Principal transactions 108.9 107.0 114.5
Investment banking 78.1 45.7 57.6
Other 27.4 19.6 32.3
----------- ----------- -----------
Total non-interest revenues 808.0 726.4 794.0
----------- ----------- -----------
Interest revenue 192.6 190.8 189.9
Interest expense 118.6 120.2 122.1
----------- ----------- -----------
Net interest income 74.0 70.6 67.8
Provision for losses on receivables 3.0 2.8 2.9
----------- ----------- -----------
Net credit income 71.0 67.8 64.9
----------- ----------- -----------
Net operating revenues 879.0 794.2 858.9
----------- ----------- -----------
Employee compensation and benefits 427.1 396.0 433.6
Marketing and business development 43.0 22.4 27.4
Info. processing and communications 77.2 66.6 69.0
Facilities and equipment 49.3 48.2 48.3
Other 80.6 60.1 55.6
----------- ----------- -----------
Total non-interest expenses 677.2 593.3 633.9
----------- ----------- -----------
Income before income taxes 201.8 200.9 225.0
Income tax expense 75.8 81.9 89.6
----------- ----------- -----------
Net income $ 126.0 $ 119.0 $ 135.4
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
3/31/96 12/31/95 9/30/95
----------- ----------- -----------
Commissions $ 300.7 $ 273.8 $ 266.2
Asset management and admin. fees 274.9 258.6 251.7
Principal transactions 118.9 111.1 121.6
Investment banking 64.7 48.8 45.1
Other 19.7 23.1 15.4
----------- ----------- -----------
Total non-interest revenues 778.9 715.4 700.0
----------- ----------- -----------
Interest revenue 186.2 206.4 204.3
Interest expense 115.6 126.9 127.2
----------- ----------- -----------
Net interest income 70.6 79.5 77.1
Provision for losses on receivables 3.0 5.6 2.5
----------- ----------- -----------
Net credit income 67.6 73.9 74.6
----------- ----------- -----------
Net operating revenues 846.5 789.3 774.6
----------- ----------- -----------
Employee compensation and benefits 446.1 377.7 399.2
Marketing and business development 27.5 22.8 16.8
Info. processing and communications 67.7 76.0 62.7
Facilities and equipment 46.4 48.2 47.3
Other 55.8 76.1 71.8
----------- ----------- -----------
Total non-interest expenses 643.5 600.8 597.8
----------- ----------- -----------
Income before income taxes 203.0 188.5 176.8
Income tax expense 81.5 72.7 70.1
----------- ----------- -----------
Net income $ 121.5 $ 115.8 $ 106.7
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
6/30/95 3/31/95 12/31/94
----------- ----------- -----------
Commissions $ 247.9 $ 234.6 $ 211.6
Asset management and admin. fees 251.0 245.5 245.3
Principal transactions 120.8 125.4 121.6
Investment banking 48.7 38.9 41.1
Other 25.7 26.7 30.5
----------- ----------- -----------
Total non-interest revenues 694.1 671.1 650.1
----------- ----------- -----------
Interest revenue 215.7 193.7 183.7
Interest expense 148.0 127.2 122.0
----------- ----------- -----------
Net interest income 67.7 66.5 61.7
Provision for losses on receivables 1.9 3.2 3.3
----------- ----------- -----------
Net credit income 65.8 63.3 58.4
----------- ----------- -----------
Net operating revenues 759.9 734.4 708.5
----------- ----------- -----------
Employee compensation and benefits 384.7 381.4 330.9
Marketing and business development 27.0 23.2 24.0
Info. processing and communications 66.3 63.5 68.7
Facilities and equipment 46.3 42.6 46.2
Other 75.6 74.0 90.5
----------- ----------- -----------
Total non-interest expenses 599.9 584.7 560.3
----------- ----------- -----------
Income before income taxes 160.0 149.7 148.2
Income tax expense 63.1 59.6 60.1
----------- ----------- -----------
Net income $ 96.9 $ 90.1 $ 88.1
=========== =========== ===========
F-6
<PAGE>
DEAN WITTER, DISCOVER & CO.
Consolidated Income Data
(in millions, except share data)
(unaudited, GAAP basis)
Three Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 460.6 $ 343.6 34%
Commissions 294.3 273.8 7%
Asset management and admin. fees 299.3 258.6 16%
Servicing fees 204.5 162.6 26%
Principal transactions 108.9 111.1 (2%)
Investment banking 78.1 48.8 60%
Other 28.8 24.2 19%
----------- -----------
Total non-interest revenues 1,474.5 1,222.7 21%
----------- -----------
Interest revenue 968.9 905.0 7%
Interest expense 405.4 402.8 1%
----------- -----------
Net interest income 563.5 502.2 12%
Provision for losses on receivables 423.1 292.7 45%
----------- -----------
Net credit income 140.4 209.5 (33%)
----------- -----------
Net operating revenues 1,614.9 1,432.2 13%
----------- -----------
Employee compensation and benefits 559.2 496.9 13%
Marketing and business development 253.6 224.0 13%
Info. processing and communications 209.5 191.5 9%
Facilities and equipment 67.4 61.9 9%
Other 161.6 165.3 (2%)
----------- -----------
Total non-interest expenses 1,251.3 1,139.6 10%
----------- -----------
Income before income taxes 363.6 292.6 24%
Income tax expense 135.8 114.5 19%
----------- -----------
Net income $ 227.8 $ 178.1 28%
=========== ===========
Primary net income per share (1) $ 0.68 $ 0.51 33%
Primary avg common shares o/s (1) 334,280,968 351,746,068
Fully diluted net income per share (1) $ 0.68 $ 0.51 33%
Fully diluted avg common shares o/s (1) 334,931,196 351,746,068
Oper exp as a % of net oper revenues 77.5% 79.6%
Effective tax rate 37.3% 39.1%
(1) All share and per share data have been restated for the two-for-one common
stock split.
DEAN WITTER, DISCOVER & CO.
Consolidated Income Data
(in millions, except share data)
(unaudited, GAAP basis)
Twelve Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees $ 1,506.2 $ 1,135.3 33%
Commissions 1,163.1 1,022.5 14%
Asset management and admin. fees 1,149.8 1,006.8 14%
Servicing fees 819.0 696.9 18%
Principal transactions 449.3 478.9 (6%)
Investment banking 246.1 181.5 36%
Other 107.8 93.5 15%
----------- -----------
Total non-interest revenues 5,441.3 4,615.4 18%
----------- -----------
Interest revenue 3,587.3 3,319.0 8%
Interest expense 1,566.2 1,514.8 3%
----------- -----------
Net interest income 2,021.1 1,804.2 12%
Provision for losses on receivables 1,232.3 743.7 66%
----------- -----------
Net credit income 788.8 1,060.5 (26%)
----------- -----------
Net operating revenues 6,230.1 5,675.9 10%
----------- -----------
Employee compensation and benefits 2,208.2 1,981.6 11%
Marketing and business development 856.8 735.1 17%
Info. processing and communications 767.7 687.5 12%
Facilities and equipment 256.1 235.5 9%
Other 596.2 640.3 (7%)
----------- -----------
Total non-interest expenses 4,685.0 4,280.0 9%
----------- -----------
Income before income taxes 1,545.1 1,395.9 11%
Income tax expense 593.7 539.5 10%
----------- -----------
Net income $ 951.4 $ 856.4 11%
=========== ===========
Primary net income per share (1) $ 2.79 $ 2.44 14%
Primary avg common shares o/s (1) 341,179,638 350,725,970
Fully diluted net income per share (1) $ 2.77 $ 2.44 14%
Fully diluted avg common shares o/s (1) 343,308,062 350,903,050
Oper exp as a % of net oper revenues 75.2% 75.4%
Effective tax rate 38.4% 38.6%
(1) All share and per share data have been restated for the two-for-one common
stock split.
F-7
<PAGE>
DEAN WITTER, DISCOVER & CO.
Credit Services Summarized Income Data
(in millions)
(unaudited, GAAP basis)
Three Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees (1) $ 460.6 $ 343.6 34%
Servicing fees (1) 204.5 162.6 26%
Other 1.4 1.1 --
----------- -----------
Total non-interest revenues 666.5 507.3 31%
----------- -----------
Interest revenue (1) 776.3 698.6 11%
Interest expense (1) 286.8 275.9 4%
----------- -----------
Net interest income 489.5 422.7 16%
Provision for loan losses (1) 420.1 287.1 46%
----------- -----------
Net credit income 69.4 135.6 (49%)
----------- -----------
Net operating revenues 735.9 642.9 14%
----------- -----------
Employee compensation and benefits 132.1 119.2 11%
Marketing and business development 210.6 201.2 5%
Info. processing and communications 132.3 115.5 15%
Facilities and equipment 18.1 13.7 32%
Other 81.0 89.2 (9%)
----------- -----------
Total non-interest expenses 574.1 538.8 7%
----------- -----------
Income before income taxes 161.8 104.1 55%
Income tax expense 60.0 41.8 44%
----------- -----------
Net income $ 101.8 $ 62.3 63%
=========== ===========
Oper exp as a % of net oper revenues 78.0% 83.8%
Profit margin (2) 13.8% 9.7%
Effective tax rate 37.1% 40.2%
====================================
(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.
DEAN WITTER, DISCOVER & CO.
Credit Services Summarized Income Data
(in millions)
(unaudited, GAAP basis)
Twelve Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Merchant and cardmember fees (1) $ 1,506.2 $ 1,135.3 33%
Servicing fees (1) 819.0 696.9 18%
Other 8.8 2.6 --
----------- -----------
Total non-interest revenues 2,334.0 1,834.8 27%
----------- -----------
Interest revenue (1) 2,827.8 2,498.9 13%
Interest expense (1) 1,089.7 985.5 11%
----------- -----------
Net interest income 1,738.1 1,513.4 15%
Provision for loan losses (1) 1,220.6 730.5 67%
----------- -----------
Net credit income 517.5 782.9 (34%)
----------- -----------
Net operating revenues 2,851.5 2,617.7 9%
----------- -----------
Employee compensation and benefits 505.4 438.6 15%
Marketing and business development 736.5 645.3 14%
Info. processing and communications 487.2 419.0 16%
Facilities and equipment 63.9 51.1 25%
Other 344.1 342.8 --
----------- -----------
Total non-interest expenses 2,137.1 1,896.8 13%
----------- -----------
Income before income taxes 714.4 720.9 (1%)
Income tax expense 264.9 274.0 (3%)
----------- -----------
Net income $ 449.5 $ 446.9 1%
=========== ===========
Oper exp as a % of net oper revenues 74.9% 72.5%
Profit margin (2) 15.8% 17.1%
Effective tax rate 37.1% 38.0%
====================================
(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.
F-8
<PAGE>
DEAN WITTER, DISCOVER & CO.
Securities Summarized Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
Three Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Commissions $ 294.3 $ 273.8 7%
Asset management and admin. fees 299.3 258.6 16%
Principal transactions 108.9 111.1 (2%)
Investment banking 78.1 48.8 60%
Other 27.4 23.1 19%
----------- -----------
Total non-interest revenues 808.0 715.4 13%
----------- -----------
Interest revenue 192.6 206.4 (7%)
Interest expense 118.6 126.9 (7%)
----------- -----------
Net interest income 74.0 79.5 (7%)
Provision for losses on receivables 3.0 5.6 (46%)
----------- -----------
Net credit income 71.0 73.9 (4%)
----------- -----------
Net operating revenues 879.0 789.3 11%
----------- -----------
Employee compensation and benefits 427.1 377.7 13%
Marketing and business development 43.0 22.8 89%
Info. processing and communications 77.2 76.0 2%
Facilities and equipment 49.3 48.2 2%
Other 80.6 76.1 6%
----------- -----------
Total non-interest expenses 677.2 600.8 13%
----------- -----------
Income before income taxes 201.8 188.5 7%
Income tax expense 75.8 72.7 4%
----------- -----------
Net income $ 126.0 $ 115.8 9%
=========== ===========
Oper exp as a % of net oper revenues 77.0% 76.1%
Profit margin (1) 14.3% 14.7%
Effective tax rate 37.6% 38.6%
====================================
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
DEAN WITTER, DISCOVER & CO.
Securities Summarized Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
Twelve Months %
Ended December 31, Increase
1996 1995 (Decrease)
----------- ----------- -----------
Commissions $ 1,163.1 $ 1,022.5 14%
Asset management and admin. fees 1,149.8 1,006.8 14%
Principal transactions 449.3 478.9 (6%)
Investment banking 246.1 181.5 36%
Other 99.0 90.9 9%
----------- -----------
Total non-interest revenues 3,107.3 2,780.6 12%
----------- -----------
Interest revenue 759.5 820.1 (7%)
Interest expense 476.5 529.3 (10%)
----------- -----------
Net interest income 283.0 290.8 (3%)
Provision for losses on receivables 11.7 13.2 (11%)
----------- -----------
Net credit income 271.3 277.6 (2%)
----------- -----------
Net operating revenues 3,378.6 3,058.2 10%
----------- -----------
Employee compensation and benefits 1,702.8 1,543.0 10%
Marketing and business development 120.3 89.8 34%
Info. processing and communications 280.5 268.5 4%
Facilities and equipment 192.2 184.4 4%
Other 252.1 297.5 (15%)
----------- -----------
Total non-interest expenses 2,547.9 2,383.2 7%
----------- -----------
Income before income taxes 830.7 675.0 23%
Income tax expense 328.8 265.5 24%
----------- -----------
Net income $ 501.9 $ 409.5 23%
=========== ===========
Oper exp as a % of net oper revenues 75.4% 77.9%
Profit margin (1) 14.9% 13.4%
Effective tax rate 39.6% 39.3%
====================================
(1) Profit margin is defined as net income as a percentage
of net operating revenues.
F-9
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
12/31/96 9/30/96 6/30/96
----------- ----------- -----------
Merchant and cardmember fees $ 460.6 $ 379.5 $ 345.6
Commissions 294.3 264.3 303.8
Asset management and admin. fees 299.3 289.8 285.8
Servicing fees 204.5 222.7 191.5
Principal transactions 108.9 107.0 114.5
Investment banking 78.1 45.7 57.6
Other 28.8 20.7 33.5
----------- ----------- -----------
Total non-interest revenues 1,474.5 1,329.7 1,332.3
----------- ----------- -----------
Interest revenue 968.9 893.7 863.3
Interest expense 405.4 390.4 379.7
----------- ----------- -----------
Net interest income 563.5 503.3 483.6
Provision for losses on receivables 423.1 307.0 274.2
----------- ----------- -----------
Net credit income 140.4 196.3 209.4
----------- ----------- -----------
Net operating revenues 1,614.9 1,526.0 1,541.7
----------- ----------- -----------
Employee compensation and benefits 559.2 525.8 552.9
Marketing and business development 253.6 209.9 201.4
Info. processing and communications 209.5 190.2 185.9
Facilities and equipment 67.4 63.8 63.7
Other 161.6 143.3 149.7
----------- ----------- -----------
Total non-interest expenses 1,251.3 1,133.0 1,153.6
----------- ----------- -----------
Income before income taxes 363.6 393.0 388.1
Income tax expense 135.8 154.0 149.3
----------- ----------- -----------
Net income $ 227.8 $ 239.0 $ 238.8
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
3/31/96 12/31/95 9/30/95
----------- ----------- -----------
Merchant and cardmember fees $ 320.5 $ 343.6 $ 285.8
Commissions 300.7 273.8 266.2
Asset management and admin. fees 274.9 258.6 251.7
Servicing fees 200.3 162.6 187.8
Principal transactions 118.9 111.1 121.6
Investment banking 64.7 48.8 45.1
Other 24.8 24.2 16.2
----------- ----------- -----------
Total non-interest revenues 1,304.8 1,222.7 1,174.4
----------- ----------- -----------
Interest revenue 861.4 905.0 844.2
Interest expense 390.7 402.8 374.7
----------- ----------- -----------
Net interest income 470.7 502.2 469.5
Provision for losses on receivables 228.0 292.7 192.7
----------- ----------- -----------
Net credit income 242.7 209.5 276.8
----------- ----------- -----------
Net operating revenues 1,547.5 1,432.2 1,451.2
----------- ----------- -----------
Employee compensation and benefits 570.3 496.9 511.5
Marketing and business development 191.9 224.0 204.4
Info. processing and communications 182.1 191.5 169.9
Facilities and equipment 61.2 61.9 60.8
Other 141.6 165.3 148.9
----------- ----------- -----------
Total non-interest expenses 1,147.1 1,139.6 1,095.5
----------- ----------- -----------
Income before income taxes 400.4 292.6 355.7
Income tax expense 154.6 114.5 137.0
----------- ----------- -----------
Net income $ 245.8 $ 178.1 $ 218.7
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Consolidated Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
6/30/95 3/31/95 12/31/94
----------- ----------- -----------
Merchant and cardmember fees $ 265.6 $ 240.3 $ 268.9
Commissions 247.9 234.6 211.6
Asset management and admin. fees 251.0 245.5 245.3
Servicing fees 174.2 172.3 162.3
Principal transactions 120.8 125.4 121.6
Investment banking 48.7 38.9 41.1
Other 26.1 27.0 30.7
----------- ----------- -----------
Total non-interest revenues 1,134.3 1,084.0 1,081.5
----------- ----------- -----------
Interest revenue 812.6 757.2 706.3
Interest expense 384.4 352.9 319.8
----------- ----------- -----------
Net interest income 428.2 404.3 386.5
Provision for losses on receivables 137.6 120.7 209.8
----------- ----------- -----------
Net credit income 290.6 283.6 176.7
----------- ----------- -----------
Net operating revenues 1,424.9 1,367.6 1,258.2
----------- ----------- -----------
Employee compensation and benefits 489.5 483.7 428.1
Marketing and business development 159.0 147.7 201.7
Info. processing and communications 171.7 154.4 164.4
Facilities and equipment 58.4 54.4 57.7
Other 161.0 165.1 173.8
----------- ----------- -----------
Total non-interest expenses 1,039.6 1,005.3 1,025.7
----------- ----------- -----------
Income before income taxes 385.3 362.3 232.5
Income tax expense 147.8 140.2 92.5
----------- ----------- -----------
Net income $ 237.5 $ 222.1 $ 140.0
=========== =========== ===========
F-10
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
12/31/96 9/30/96 6/30/96
----------- ----------- -----------
Merchant and cardmember fees $ 460.6 $ 379.5 $ 345.6
Servicing fees 204.5 222.7 191.5
Other 1.4 1.1 1.2
----------- ----------- -----------
Total non-interest revenues 666.5 603.3 538.3
----------- ----------- -----------
Interest revenue 776.3 702.9 673.4
Interest expense 286.8 270.2 257.6
----------- ----------- -----------
Net interest income 489.5 432.7 415.8
Provision for loan losses 420.1 304.2 271.3
----------- ----------- -----------
Net credit income 69.4 128.5 144.5
----------- ----------- -----------
Net operating revenues 735.9 731.8 682.8
----------- ----------- -----------
Employee compensation and benefits 132.1 129.8 119.3
Marketing and business development 210.6 187.5 174.0
Info. processing and communications 132.3 123.6 116.9
Facilities and equipment 18.1 15.6 15.4
Other 81.0 83.2 94.1
----------- ----------- -----------
Total non-interest expenses 574.1 539.7 519.7
----------- ----------- -----------
Income before income taxes 161.8 192.1 163.1
Income tax expense 60.0 72.1 59.7
----------- ----------- -----------
Net income $ 101.8 $ 120.0 $ 103.4
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
3/31/96 12/31/95 9/30/95
----------- ----------- -----------
Merchant and cardmember fees $ 320.5 $ 343.6 $ 285.8
Servicing fees 200.3 162.6 187.8
Other 5.1 1.1 0.8
----------- ----------- -----------
Total non-interest revenues 525.9 507.3 474.4
----------- ----------- -----------
Interest revenue 675.2 698.6 639.9
Interest expense 275.1 275.9 247.5
----------- ----------- -----------
Net interest income 400.1 422.7 392.4
Provision for loan losses 225.0 287.1 190.2
----------- ----------- -----------
Net credit income 175.1 135.6 202.2
----------- ----------- -----------
Net operating revenues 701.0 642.9 676.6
----------- ----------- -----------
Employee compensation and benefits 124.2 119.2 112.3
Marketing and business development 164.4 201.2 187.6
Info. processing and communications 114.4 115.5 107.2
Facilities and equipment 14.8 13.7 13.5
Other 85.8 89.2 77.1
----------- ----------- -----------
Total non-interest expenses 503.6 538.8 497.7
----------- ----------- -----------
Income before income taxes 197.4 104.1 178.9
Income tax expense 73.1 41.8 66.9
----------- ----------- -----------
Net income $ 124.3 $ 62.3 $ 112.0
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Credit Services Income Data
(in millions)
(unaudited, GAAP basis)
FOR THE QUARTER ENDED
6/30/95 3/31/95 12/31/94
----------- ----------- -----------
Merchant and cardmember fees $ 265.6 $ 240.3 $ 268.9
Servicing fees 174.2 172.3 162.3
Other 0.4 0.3 0.2
----------- ----------- -----------
Total non-interest revenues 440.2 412.9 431.4
----------- ----------- -----------
Interest revenue 596.9 563.5 522.6
Interest expense 236.4 225.7 197.8
----------- ----------- -----------
Net interest income 360.5 337.8 324.8
Provision for loan losses 135.7 117.5 206.5
----------- ----------- -----------
Net credit income 224.8 220.3 118.3
----------- ----------- -----------
Net operating revenues 665.0 633.2 549.7
----------- ----------- -----------
Employee compensation and benefits 104.8 102.3 97.2
Marketing and business development 132.0 124.5 177.7
Info. processing and communications 105.4 90.9 95.7
Facilities and equipment 12.1 11.8 11.5
Other 85.4 91.1 83.3
----------- ----------- -----------
Total non-interest expenses 439.7 420.6 465.4
----------- ----------- -----------
Income before income taxes 225.3 212.6 84.3
Income tax expense 84.7 80.6 32.4
----------- ----------- -----------
Net income $ 140.6 $ 132.0 $ 51.9
=========== =========== ===========
F-11
<PAGE>
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
12/31/96 9/30/96 6/30/96
----------- ----------- -----------
Commissions $ 294.3 $ 264.3 $ 303.8
Asset management and admin. fees 299.3 289.8 285.8
Principal transactions 108.9 107.0 114.5
Investment banking 78.1 45.7 57.6
Other 27.4 19.6 32.3
----------- ----------- -----------
Total non-interest revenues 808.0 726.4 794.0
----------- ----------- -----------
Interest revenue 192.6 190.8 189.9
Interest expense 118.6 120.2 122.1
----------- ----------- -----------
Net interest income 74.0 70.6 67.8
Provision for losses on receivables 3.0 2.8 2.9
----------- ----------- -----------
Net credit income 71.0 67.8 64.9
----------- ----------- -----------
Net operating revenues 879.0 794.2 858.9
----------- ----------- -----------
Employee compensation and benefits 427.1 396.0 433.6
Marketing and business development 43.0 22.4 27.4
Info. processing and communications 77.2 66.6 69.0
Facilities and equipment 49.3 48.2 48.3
Other 80.6 60.1 55.6
----------- ----------- -----------
Total non-interest expenses 677.2 593.3 633.9
----------- ----------- -----------
Income before income taxes 201.8 200.9 225.0
Income tax expense 75.8 81.9 89.6
----------- ----------- -----------
Net income $ 126.0 $ 119.0 $ 135.4
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
3/31/96 12/31/95 9/30/95
----------- ----------- -----------
Commissions $ 300.7 $ 273.8 $ 266.2
Asset management and admin. fees 274.9 258.6 251.7
Principal transactions 118.9 111.1 121.6
Investment banking 64.7 48.8 45.1
Other 19.7 23.1 15.4
----------- ----------- -----------
Total non-interest revenues 778.9 715.4 700.0
----------- ----------- -----------
Interest revenue 186.2 206.4 204.3
Interest expense 115.6 126.9 127.2
----------- ----------- -----------
Net interest income 70.6 79.5 77.1
Provision for losses on receivables 3.0 5.6 2.5
----------- ----------- -----------
Net credit income 67.6 73.9 74.6
----------- ----------- -----------
Net operating revenues 846.5 789.3 774.6
----------- ----------- -----------
Employee compensation and benefits 446.1 377.7 399.2
Marketing and business development 27.5 22.8 16.8
Info. processing and communications 67.7 76.0 62.7
Facilities and equipment 46.4 48.2 47.3
Other 55.8 76.1 71.8
----------- ----------- -----------
Total non-interest expenses 643.5 600.8 597.8
----------- ----------- -----------
Income before income taxes 203.0 188.5 176.8
Income tax expense 81.5 72.7 70.1
----------- ----------- -----------
Net income $ 121.5 $ 115.8 $ 106.7
=========== =========== ===========
DEAN WITTER, DISCOVER & CO.
Quarterly Securities Income Data
(in millions)
(unaudited, GAAP and Managed loan basis)
FOR THE QUARTER ENDED
6/30/95 3/31/95 12/31/94
----------- ----------- -----------
Commissions $ 247.9 $ 234.6 $ 211.6
Asset management and admin. fees 251.0 245.5 245.3
Principal transactions 120.8 125.4 121.6
Investment banking 48.7 38.9 41.1
Other 25.7 26.7 30.5
----------- ----------- -----------
Total non-interest revenues 694.1 671.1 650.1
----------- ----------- -----------
Interest revenue 215.7 193.7 183.7
Interest expense 148.0 127.2 122.0
----------- ----------- -----------
Net interest income 67.7 66.5 61.7
Provision for losses on receivables 1.9 3.2 3.3
----------- ----------- -----------
Net credit income 65.8 63.3 58.4
----------- ----------- -----------
Net operating revenues 759.9 734.4 708.5
----------- ----------- -----------
Employee compensation and benefits 384.7 381.4 330.9
Marketing and business development 27.0 23.2 24.0
Info. processing and communications 66.3 63.5 68.7
Facilities and equipment 46.3 42.6 46.2
Other 75.6 74.0 90.5
----------- ----------- -----------
Total non-interest expenses 599.9 584.7 560.3
----------- ----------- -----------
Income before income taxes 160.0 149.7 148.2
Income tax expense 63.1 59.6 60.1
----------- ----------- -----------
Net income $ 96.9 $ 90.1 $ 88.1
=========== =========== ===========
F-12
<PAGE>
DEAN WITTER, DISCOVER & CO.
STATISTICAL SUMMARY
Fourth Quarter
Dec 31, 1996 Dec 31, 1995
------------- -------------
Consolidated
Equity at end of period (millions) $ 5,164.4 $ 4,833.7
Credit Services ($millions)
Managed loans
Average $ 34,652.5 $ 29,518.3
End of period $ 36,572.8 $ 31,775.9
Interest yield 14.7% 15.0%
Interest spread 8.6% 8.4%
Net charge-off rate 6.0% 4.4%
Average total earning assets $ 36,016.6 $ 30,602.2
Avg tot earning assets net int margin 8.9% 8.8%
GPCC managed loans
Average $ 30,870.7 $ 25,796.0
End of period $ 32,600.2 $ 27,818.3
Net charge-off rate 6.1% 4.5%
Owned loans-EOP $ 23,188.2 $ 21,556.4
DEAN WITTER, DISCOVER & CO.
STATISTICAL SUMMARY
Year-to-date
Dec 31, 1996 Dec 31, 1995
------------- -------------
Consolidated
Equity at end of period (millions) $ 5,164.4 $ 4,833.7
Return on average equity 19.0% 19.2%
Pro forma book value per share - EOP (1) $ 16.16 $ 15.12
Invstmt in SPSTSI-EOP mkt val (mil) $ 305.0 $ 592.5
Credit Services ($millions)
Managed loans
Average $ 32,777.2 $ 27,304.9
End of period $ 36,572.8 $ 31,775.9
Interest yield 14.7% 15.2%
Interest spread 8.4% 8.4%
Net charge-off rate 5.4% 3.8%
Average total earning assets $ 34,160.2 $ 28,167.1
Avg tot earning assets net int margin 8.7% 8.9%
GPCC managed loans
Average $ 29,020.6 $ 23,969.7
End of period $ 32,600.2 $ 27,818.3
Net charge-off rate 5.4% 3.8%
Owned loans - EOP $ 23,188.2 $ 21,556.4
GPCC transaction volume $ 53.6 $ 47.5
GPCC accounts (mil) 38.9 36.1
GPCC active accounts (mil) 23.8 23.0
GPCC avg recv per avg active acct ($) $ 1,252 $ 1,117
NOVUS Network incr in merch loc. (thou) 425 333
Securities ($billions)
Account executives 9,080 8,575
Total client assets $ 251.2 $ 221.3
Assets under management and administration
Equity funds $ 38.1 $ 29.9
Fixed income funds 24.1 25.4
Money market funds 24.7 21.6
Investment management services 3.1 2.6
Total $ 90.0 $ 79.5
ICS Assets $ 10.4 $ 8.9
(1) Per share data has been restated for the two-for-one common stock split.
Note: "GPCC" represents General Purpose Credit Card.
F-13
<PAGE>
DEAN WITTER, DISCOVER & CO.
SECURITIES
CONTINUING REVENUES AND RATIO OF CONTINUING REVENUES
TO FIXED EXPENSES
Year-to-Date
-------------------------------
Dec. 31, 1996 Dec. 31, 1995
---------------- -------------
Continuing Revenues (1) (millions) $ 1,405.0 $ 1,254.9
Ratio of continuing revenues to
fixed expenses (2) 87.3% 82.0%
(1) Continuing revenues consist of, among other things, asset management and
administration fees and 12b-1 fees related to certain open-end DWR Funds,
IRA-2000 fees, AAA-Account fees, Investment Consulting Services fees, residual
income, net interest income, as well as various other fee based revenues.
(2) Fixed expenses include, among other things, non-variable personnel,
business promotion, occupancy, communications and data processing, and
stationery and supplies expenses.
Note: Certain reclassifications have been made to prior period amounts to
conform to the current presentation.
F-14
