Loans and Accounts Receivable (Tables)
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6 Months Ended |
Jun. 30, 2017 |
Loans and Accounts Receivable (Tables) [Abstract] |
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Card Member loans segment detail |
Card Member loans by segment and Other loans as of June 30, 2017 and December 31, 2016 consisted of: (Millions) | | | 2017 | | | 2016 | U.S. Consumer Services(a) | | $ | 48,348 | | $ | 48,758 | International Consumer and Network Services | | | 7,245 | | | 6,971 | Global Commercial Services | | | 10,378 | | | 9,536 | Card Member loans | | | 65,971 | | | 65,265 | Less: Reserve for losses | | | 1,320 | | | 1,223 | Card Member loans, net | | $ | 64,651 | | $ | 64,042 | Other loans, net(b) | | $ | 1,855 | | $ | 1,419 |
- Includes approximately $24.5 billion and $26.1 billion of gross Card Member loans available to settle obligations of a consolidated variable interest entity (VIE) as of June 30, 2017 and December 31, 2016, respectively.
- Other loans primarily represent personal and commercial financing products. Other loans are presented net of reserves for losses of $54 million and $42 million as of June 30, 2017 and December 31, 2016, respectively.
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Card Member receivables segment detail |
Card Member accounts receivable by segment and Other receivables as of June 30, 2017 and December 31, 2016 consisted of: (Millions) | | 2017 | | 2016 | U.S. Consumer Services (a) | | $ | 11,344 | | $ | 12,302 | International Consumer and Network Services | | | 5,988 | | | 5,966 | Global Commercial Services | | | 32,073 | | | 29,040 | Card Member receivables | | | 49,405 | | | 47,308 | Less: Reserve for losses | | | 475 | | | 467 | Card Member receivables, net | | $ | 48,930 | | $ | 46,841 | Other receivables, net (b) | | $ | 2,832 | | $ | 3,232 |
- Includes $7.9 billion and $8.9 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of June 30, 2017 and December 31, 2016, respectively.
- Other receivables primarily represent amounts related to (i) Global Network Services (GNS) partner banks for items such as royalty and franchise fees, (ii) certain merchants for billed discount revenue, and (iii) loyalty coalition partners for points issued, as well as program participation and servicing fees. Other receivables are presented net of reserves for losses of $32 million and $45 million as of June 30, 2017 and December 31, 2016, respectively.
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Aging of Card Member loans and receivables |
The following table presents the aging of Card Member loans and receivables as of June 30, 2017 and December 31, 2016: 2017 (Millions) | | | Current | | | 30-59 Days Past Due | | | 60-89 Days Past Due | | | 90+ Days Past Due | | | Total | Card Member Loans: | | | | | | | | | | | | | | | | U.S. Consumer Services | | $ | 47,797 | | $ | 155 | | $ | 119 | | $ | 277 | | $ | 48,348 | International Consumer and Network Services | | | 7,124 | | | 38 | | | 25 | | | 58 | | | 7,245 | Global Commercial Services | | | | | | | | | | | | | | | | Global Small Business Services | | $ | 10,207 | | $ | 35 | | $ | 25 | | $ | 57 | | $ | 10,324 | Global Corporate Payments(a) | | | (b) | | | (b) | | | (b) | | $ | ― | | $ | 54 | Card Member Receivables: | | | | | | | | | | | | | | | | U.S. Consumer Services | | $ | 11,220 | | $ | 42 | | $ | 24 | | $ | 58 | | $ | 11,344 | International Consumer and Network Services | | | 5,903 | | | 25 | | | 16 | | | 44 | | | 5,988 | Global Commercial Services | | | | | | | | | | | | | | | | Global Small Business Services | | $ | 14,967 | | $ | 75 | | $ | 41 | | $ | 102 | | $ | 15,185 | Global Corporate Payments(a) | | | (b) | | | (b) | | | (b) | | $ | 136 | | $ | 16,888 | | | | | | | | | | | | | | | | | 2016 (Millions) | | | Current | | | 30-59 Days Past Due | | | 60-89 Days Past Due | | | 90+ Days Past Due | | | Total | Card Member Loans: | | | | | | | | | | | | | | | | U.S. Consumer Services | | $ | 48,216 | | $ | 156 | | $ | 119 | | $ | 267 | | $ | 48,758 | International Consumer and Network Services | | | 6,863 | | | 32 | | | 24 | | | 52 | | | 6,971 | Global Commercial Services | | | | | | | | | | | | | | | | Global Small Business Services | | $ | 9,378 | | $ | 34 | | $ | 23 | | $ | 49 | | $ | 9,484 | Global Corporate Payments(a) | | | (b) | | | (b) | | | (b) | | $ | ― | | $ | 52 | Card Member Receivables: | | | | | | | | | | | | | | | | U.S. Consumer Services | | $ | 12,158 | | $ | 45 | | $ | 30 | | $ | 69 | | $ | 12,302 | International Consumer and Network Services | | | 5,888 | | | 22 | | | 15 | | | 41 | | | 5,966 | Global Commercial Services | | | | | | | | | | | | | | | | Global Small Business Services | | $ | 14,047 | | $ | 77 | | $ | 47 | | $ | 102 | | $ | 14,273 | Global Corporate Payments(a) | | | (b) | | | (b) | | | (b) | | $ | 135 | | $ | 14,767 |
- For Global Corporate Payments (GCP) Card Member loans and receivables in Global Commercial Services (GCS), delinquency data is tracked based on days past billing status rather than days past due. A Card Member account is considered 90 days past billing if payment has not been received within 90 days of the Card Member’s billing statement date. In addition, if the Company initiates collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member loan and receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes. See also (b).
- Delinquency data for periods other than 90 days past billing is not available due to system constraints. Therefore, such data has not been utilized for risk management purposes. The balances that are current to 89 days past due can be derived as the difference between the Total and the 90+ Days Past Due balances.
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Credit quality indicators for loans and receivables |
The following tables present the key credit quality indicators as of or for the six months ended June 30: | | | 2017 | | 2016 | | | | | Net Write-Off Rate | | | | Net Write-Off Rate | | | | | | | Principal Only(a) | | Principal, Interest & Fees(a) | | 30+ Days Past Due as a % of Total | | Principal Only(a) | | Principal, Interest & Fees(a) | | 30+ Days Past Due as a % of Total | | Card Member Loans: | | | | | | | | | | | | | | | U.S. Consumer Services | | 1.7 | % | 2.0 | % | 1.1 | % | 1.5 | % | 1.7 | % | 1.1 | % | | International Consumer and Network Services | | 2.0 | % | 2.5 | % | 1.7 | % | 2.0 | % | 2.4 | % | 1.7 | % | | Global Small Business Services | | 1.5 | % | 1.8 | % | 1.1 | % | 1.3 | % | 1.6 | % | 1.1 | % | Card Member Receivables: | | | | | | | | | | | | | | | U.S. Consumer Services | | 1.4 | % | 1.5 | % | 1.1 | % | 1.5 | % | 1.8 | % | 1.2 | % | | International Consumer and Network Services | | 2.0 | % | 2.2 | % | 1.4 | % | 2.2 | % | 2.4 | % | 1.4 | % | | Global Small Business Services | | 1.7 | % | 1.9 | % | 1.4 | % | 1.7 | % | 2.0 | % | 1.4 | % | | | | | | | | | | | | | | | | | | | | | | | 2017 | | 2016 | | | | | | | | | Net Loss Ratio as a % of Charge Volume | | 90+ Days Past Billing as a % of Receivables | | Net Loss Ratio as a % of Charge Volume | | 90+ Days Past Billing as a % of Receivables | | Card Member Receivables: | | | | | | | | | | | Global Corporate Payments | 0.10 | % | 0.8 | % | 0.09 | % | 0.7 | % |
The Company presents a net write-off rate based on principal losses only (i.e., excluding interest and/or fees) to be consistent with industry convention. In addition, because the Company considers uncollectible interest and/or fees in estimating its reserves for credit losses, a net write-off rate including principal, interest and/or fees is also presented.
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Impaired Card Member loans and receivables |
The following tables provide additional information with respect to the Company’s impaired Card Member loans and receivables. Impaired Card Member receivables are not significant for International Consumer and Network Services (ICNS) as of June 30, 2017 and December 31, 2016; therefore, this segment’s receivables are not included in the following tables. | | | As of June 30, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accounts Classified as a TDR(c) | | | | | | | | 2017 (Millions) | | Over 90 days Past Due & Accruing Interest(a) | | Non-Accruals(b) | | In Program(d) | | Out of Program(e) | | Total Impaired Balance | | Unpaid Principal Balance | | Allowance for TDRs | Card Member Loans: | | | | | | | | | | | | | | | | | | | | | | U.S. Consumer Services | | $ | 175 | | $ | 156 | | $ | 153 | | $ | 132 | | $ | 616 | | $ | 560 | | $ | 47 | International Consumer and Network Services | | | 58 | | | ― | | | ― | | | ― | | | 58 | | | 57 | | | ― | Global Commercial Services | | | 33 | | | 34 | | | 26 | | | 27 | | | 120 | | | 110 | | | 9 | Card Member Receivables: | | | | | | | | | | | | | | | | | | | | | | U.S. Consumer Services | | | ― | | | ― | | | 10 | | | 8 | | | 18 | | | 18 | | | 4 | Global Commercial Services | | | ― | | | ― | | | 25 | | | 15 | | | 40 | | | 40 | | | 9 | Total | | $ | 266 | | $ | 190 | | $ | 214 | | $ | 182 | | $ | 852 | | $ | 785 | | $ | 69 |
| | | As of December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accounts Classified as a TDR(c) | | | | | | | | 2016 (Millions) | | Over 90 days Past Due & Accruing Interest(a) | | Non-Accruals(b) | | In Program(d) | | Out of Program(e) | | Total Impaired Balance | | Unpaid Principal Balance | | Allowance for TDRs | Card Member Loans: | | | | | | | | | | | | | | | | | | | | | | U.S. Consumer Services | | $ | 178 | | | 139 | | | 165 | | | 129 | | | 611 | | | 558 | | | 51 | International Consumer and Network Services | | | 52 | | | ― | | | ― | | | ― | | | 52 | | | 51 | | | ― | Global Commercial Services | | | 30 | | | 30 | | | 26 | | | 26 | | | 112 | | | 103 | | | 9 | Card Member Receivables: | | | | | | | | | | | | | | | | | | | | | | U.S. Consumer Services | | | ― | | | ― | | | 11 | | | 6 | | | 17 | | | 17 | | | 7 | Global Commercial Services | | | ― | | | ― | | | 28 | | | 10 | | | 38 | | | 38 | | | 21 | Total | | $ | 260 | | $ | 169 | | $ | 230 | | $ | 171 | | $ | 830 | | $ | 767 | | $ | 88 |
- The Company’s policy is generally to accrue interest through the date of write-off (typically 180 days past due). The Company establishes reserves for interest that it believes will not be collected. Amounts presented exclude Card Member loans classified as a TDR.
- Non-accrual loans not in modification programs primarily include certain Card Member loans placed with outside collection agencies for which the Company has ceased accruing interest. Amounts presented exclude Card Member loans classified as a TDR.
- Accounts classified as a TDR include $18 million and $20 million that are over 90 days past due and accruing interest and $7 million and $11 million that are non-accruals as of June 30, 2017 and December 31, 2016, respectively.
- In Program TDRs include Card Member accounts that are currently enrolled in a modification program.
- Out of Program TDRs include $139 million and $132 million of Card Member accounts that have successfully completed a modification program and $43 million and $39 million of Card Member accounts that were not in compliance with the terms of the modification programs as of June 30, 2017 and December 31, 2016, respectively.
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Interest income recognized and average balance of impaired Card Member loans and receivables |
The following table provides information with respect to the Company’s average balances of, and interest income recognized from, impaired Card Member loans and the average balances of impaired Card Member receivables for the three and six months ended June 30: | | Three Months Ended June 30, 2017 | | Six Months Ended June 30, 2017 | (Millions) | | | Average Balance | | | Interest Income Recognized | | | Average Balance | | | Interest Income Recognized | Card Member Loans: | | | | | | | | | | | | | U.S. Consumer Services | | $ | 618 | | $ | 16 | | $ | 616 | | $ | 32 | International Consumer and Network Services | | | 56 | | | 4 | | | 55 | | | 8 | Global Commercial Services | | | 120 | | | 4 | | | 117 | | | 8 | Card Member Receivables: | | | | | | | | | | | | | U.S. Consumer Services | | | 18 | | | ― | | | 18 | | | ― | Global Commercial Services | | | 41 | | | ― | | | 40 | | | ― | Total | | $ | 853 | | $ | 24 | | $ | 846 | | $ | 48 | | | | | | | | | | | | | | | | Three Months Ended June 30, 2016 | | Six Months Ended June 30, 2016 | (Millions) | | | Average Balance | | | Interest Income Recognized | | | Average Balance | | | Interest Income Recognized | Card Member Loans: | | | | | | | | | | | | | U.S. Consumer Services | | $ | 551 | | $ | 12 | | $ | 555 | | $ | 24 | International Consumer and Network Services | | | 54 | | | 4 | | | 53 | | | 8 | Global Commercial Services | | | 102 | | | 3 | | | 103 | | | 6 | Card Member Receivables: | | | | | | | | | | | | | U.S. Consumer Services | | | 13 | | | ― | | | 12 | | | ― | Global Commercial Services | | | 25 | | | ― | | | 20 | | | ― | Total | | $ | 745 | | $ | 19 | | $ | 743 | | $ | 38 |
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Troubled debt restructurings |
The following table provides additional information with respect to the U.S. Consumer Services (USCS) and GCS Card Member loans and receivables modified as TDRs for the three and six months ended June 30, 2017 and 2016. The ICNS Card Member loans and receivables modifications were not significant; therefore, this segment is not included in the following TDR disclosures. | | Three Months Ended | | Six Months Ended | | | June 30, 2017 | | June 30, 2017 | | | Number of Accounts (in thousands) | | Outstanding Balances ($ in millions)(a) | | Average Interest Rate Reduction (% Points) | | Average Payment Term Extension (# of Months) | | Number of Accounts (in thousands) | | Outstanding Balances($ in millions)(a) | | Average Interest Rate Reduction (% Points) | | Average Payment Term Extension (# of Months) | Troubled Debt Restructurings: | | | | | | | | | | | | | | | | | | | Card Member Loans | | 7 | | $ | 46 | | 10 | | (b) | | 15 | | $ | 103 | | 11 | | (b) | Card Member Receivables | | 1 | | | 18 | | (c) | | 32 | | 3 | | | 46 | | (c) | | 26 | Total | | 8 | | $ | 64 | | | | | | 18 | | $ | 149 | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, 2016 | | June 30, 2016 | | | Number of Accounts (in thousands) | | Outstanding Balances ($ in millions)(a) | | Average Interest Rate Reduction (% Points) | | Average Payment Term Extension (# of Months) | | Number of Accounts (in thousands) | | Outstanding Balances($ in millions)(a) | | Average Interest Rate Reduction (% Points) | | Average Payment Term Extension (# of Months) | Troubled Debt Restructurings: | | | | | | | | | | | | | | | | | | | Card Member Loans | | 7 | | $ | 50 | | 10 | | (b) | | 15 | | $ | 107 | | 11 | | (b) | Card Member Receivables | | 2 | | | 27 | | (c) | | 17 | | 5 | | | 65 | | (c) | | 17 | Total | | 9 | | $ | 77 | | | | | | 20 | | $ | 172 | | | | |
- Represents the outstanding balance immediately prior to modification. The outstanding balance includes principal, fees and accrued interest on Card Member loans and principal and fees on Card Member receivables.
- For Card Member loans, there have been no payment term extensions.
- The Company does not offer interest rate reduction programs for Card Member receivables as the receivables are non-interest bearing.
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Troubled debt restructurings that subsequently defaulted |
The following table provides information with respect to the USCS and GCS Card Member loans and receivables modified as TDRs that subsequently defaulted within 12 months of modification, for the three and six months ended June 30, 2017 and 2016. A Card Member is considered in default of a modification program after one and up to two missed payments, depending on the terms of the modification program. For all Card Members that defaulted from a modification program, the probability of default is factored into the reserves for Card Member loans and receivables. | | Three Months Ended | | Six Months Ended | | | June 30, 2017 | | June 30, 2017 | | | | Number of Accounts(in thousands) | | Aggregated Outstanding Balances Upon Default ($ in millions)(a) | | | Number of Accounts (in thousands) | | Aggregated Outstanding Balances Upon Default($ in millions)(a) | Troubled Debt Restructurings That Subsequently Defaulted: | | | | | | | | | | | | | Card Member Loans | | | 2 | | $ | 10 | | | 4 | | $ | 21 | Card Member Receivables | | | 1 | | | 2 | | | 2 | | | 3 | Total | | | 3 | | $ | 12 | | | 6 | | $ | 24 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | | June 30, 2016 | | June 30, 2016 | | | | Number of Accounts(in thousands) | | Aggregated Outstanding Balances Upon Default ($ in millions)(a) | | | Number of Accounts (in thousands) | | Aggregated Outstanding Balances Upon Default($ in millions)(a) | Troubled Debt Restructurings That Subsequently Defaulted: | | | | | | | | | | | | | Card Member Loans | | | 1 | | $ | 9 | | | 2 | | $ | 18 | Card Member Receivables | | | 1 | | | 1 | | | 2 | | | 2 | Total | | | 2 | | $ | 10 | | | 4 | | $ | 20 |
The outstanding balances upon default include principal, fees and accrued interest on Card Member loans, and principal and fees on Card Member receivables.
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