Segment earnings before interest expense and income taxes (EBIT) were $963 million in the third quarter of 2012, an increase of 3.4 percent from $931 million in 2011. Third quarter EBITDA and EBIT margin rates were 8.9 percent and 5.8 percent, respectively, compared with 9.1 percent and 5.8 percent in 2011. Third quarter gross margin rate declined to 30.3 percent in 2012 from 30.5 percent in 2011, reflecting the impact of the company’s integrated growth strategies partially offset by underlying rate improvements within categories. Third quarter selling, general and administrative (SG&A) expense rate was 21.4 percent in 2012, unchanged from 2011.U.S. Credit Card Segment Results 2 Third quarter average receivables decreased 4.7 percent to $5.9 billion in 2012 from $6.2 billion in 2011. Third quarter 2012 portfolio spread to LIBOR was $138 million, or 9.3 percent, compared with $158 million, or 10.2 percent, in 2011. Performance in third quarter 2012 reflected a $20 million reduction in the allowance for doubtful accounts, compared with a $49 million reduction in third quarter 2011.
|2The Company intends to continue reporting a U.S. Credit Card segment until the credit card receivables transaction with TD Bank closes in 2013. The segment results will continue to be reported on the same basis as historical results.|