Discover Financial Services to Take Investment-Related Write Down of up to $19 Million after Tax
29 Maggio 2008 - 10:26PM
Business Wire
Discover Financial Services (NYSE: DFS) announced today that in the
quarter ending May 31, 2008, it expects to partially write down a
previously disclosed investment in the asset-backed commercial
paper notes of Golden Key U.S. LLC, which had invested in U.S.
mortgage-backed securities. The estimated charge will range from
$18 million to $31 million pretax, or $11 million to $19 million
after tax. Discover currently has no other investments of this
type. The company�s original investment in the notes was $120.1
million and it recorded an $11.4 million write down of the
investment in the quarter ended Nov. 30, 2007. The company expects
that the investment will be restructured by the issuer in the third
or fourth quarter of 2008. A restructuring or further deterioration
in market conditions could result in further impairment. The
original investment of $120.1 million represented approximately 1
percent of the company�s cash and cash equivalents and investment
securities, which totaled $9.2 billion as of Feb. 29, 2008. About
Discover Financial Services Discover Financial Services (NYSE: DFS)
is a leading credit card issuer and electronic payment services
company with one of the most recognized brands in U.S. financial
services. The company operates the Discover Card, America's cash
rewards pioneer. Since its inception in 1986, the company has
become one of the largest card issuers in the United States. Its
payments businesses consist of the Discover Network, with millions
of merchant and cash access locations, and PULSE, one of the
nation's leading ATM/debit networks. For more information, visit
www.discoverfinancial.com. This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are based
upon the current beliefs and expectations of the Company�s
management and are subject to significant risks and uncertainties.
Actual results may differ materially from those set forth in the
forward-looking statements. These forward-looking statements speak
only as of the date of this press release, and there is no
undertaking to update or revise them as more information becomes
available. The following factors, among others, could cause actual
results to differ materially from those set forth in the
forward-looking statements: the actions and initiatives of current
and potential competitors; our ability to manage credit risks and
securitize our receivables at acceptable rates; changes in economic
variables, such as the number and size of personal bankruptcy
filings, the rate of unemployment and the levels of consumer
confidence and consumer debt; the level and volatility of equity
prices, commodity prices and interest rates, currency values,
investments, other market fluctuations and other market indices;
the availability and cost of funding and capital; access to U.S.
debt and deposit markets; losses in our investment portfolio; the
ability to increase or sustain Discover Card usage or attract new
cardmembers and introduce new products and services; our ability to
attract new merchants and maintain relationships with current
merchants; material security breaches of key systems; unforeseen
and catastrophic events; our reputation; the potential effects of
technological changes; the effect of political, economic and market
conditions and geopolitical events; unanticipated developments
relating to lawsuits, investigations or similar matters; the impact
of current, pending and future legislation, regulation and
regulatory and legal actions; our ability to attract and retain
employees; the ability to protect our intellectual property; the
impact of our separation from Morgan Stanley; the impact of any
potential future acquisitions; investor sentiment; and the
restrictions on our operations resulting from indebtedness incurred
during our separation from Morgan Stanley. Additional factors that
could cause the Company�s results to differ materially from those
described in the forward-looking statements can be found in the
Company�s annual report on Form 10-K, filed with the SEC and
available at the SEC�s internet site (http://www.sec.gov).
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