Table 3 summarizes the Company’s managed consumer loan portfolio. Table 3: Managed Consumer Loan Portfolio Year Ended December 31 (In Thousands) 2002 2001 2000 1999 1998 Year-End Balances: Reported consumer loans: Domestic $ 25,044,101 $ 18,546,426 $ 12,591,561 $ 7,783,535 $ 4,569,664 International 2,809,551 2,374,588 2,521,151 2,130,014 1,587,447 Total 27,853,652 20,921,014 15,112,712 9,913,549 6,157,111 Off-balance sheet consumer loans: Domestic 29,371,895 22,747,293 13,961,714 10,013,424 10,933,984 International 2,520,990 1,595,656 449,600 309,615 304,031 Total 31,892,885 24,342,949 14,411,314 10,323,039 11,238,015 Managed consumer loan portfolio: Domestic 54,415,996 41,293,719 26,553,275 17,796,959 15,503,648 International 5,330,541 3,970,244 2,970,751 2,439,629 1,891,478 Total $ 59,746,537 $ 45,263,963 $ 29,524,026 $ 20,236,588 $ 17,395,126 Average Balances: Reported consumer loans: Domestic $ 22,711,141 $ 14,648,298 $ 9,320,165 $ 5,784,662 $ 4,336,757 International 2,828,855 2,636,008 2,167,611 1,882,693 1,011,802 Total 25,539,996 17,284,306 11,487,776 7,667,355 5,348,559 Off-balance sheet consumer loans: Domestic 25,348,865 17,718,683 10,804,845 10,062,771 9,773,284 International 1,910,705 609,328 342,241 316,787 87,694 Total 27,259,570 18,328,011 11,147,086 10,379,558 9,860,978 Managed consumer loan portfolio: Domestic 48,060,006 32,366,981 20,125,010 15,847,433 14,110,041 International 4,739,560 3,245,336 2,509,852 2,199,480 1,099,496 Total $ 52,799,566 $ 35,612,317 $ 22,634,862 $ 18,046,913 $ 15,209,537 The Company actively engages in off-balance sheet consumer loan securitization transactions. Securitizations involve the transfer of a pool of loan receivables by the Company to an entity created for securitizations, generally a trust or other special purpose entity (“the trusts”). The credit quality of the receivables is supported by credit enhancements, which may be in various forms including interest-only strips, subordinated interests in the pool of receivables, cash collateral accounts, and accrued interest and fees on the investor’s share of the pool of receivables. Securities ($31.9 billion outstanding as of December 31, 2002) representing undivided interests in the pool of consumer loan receivables are sold to the public through an underwritten offering or to private investors in private placement transactions. The Company receives the proceeds of the sale as payment for the receivables transferred. In certain securitizations, the Company retains an interest in the entity to which it transferred receivables (“seller’s interest”) equal to the amount of the outstanding receivables transferred to the trust in excess of the principal balance of the securities outstanding. For securitizations backed by a revolving pool of assets, the Company’s seller’s interest varies as the amount of the excess receivables in the trusts fluctuates as the accountholders make principal payments and incur new charges on the selected accounts. A securitization backed by non-revolving amortizing assets, such as auto loans, generally does not include a seller’s interest, as obligor principal payments are generally paid to investors on a monthly basis. A securitization accounted for as a sale in accordance with SFAS 140 results in the removal of the receivables, other than any applicable seller’s interest, from the Company’s balance sheet for financial and regulatory accounting purposes and recording of any additional retained interests. 27