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Loans and Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2017

Loans and Accounts Receivable (Tables) [Abstract]

Card Member loans by segment and Other loans as of September 30, 2017 and December 31, 2016 consisted of:

(Millions)		2017		2016
U.S. Consumer Services^(a)	$	49,326	$	48,758
International Consumer and Network Services		7,823		6,971
Global Commercial Services		10,729		9,536
Card Member loans		67,878		65,265
Less: Reserve for losses		1,502		1,223
Card Member loans, net	$	66,376	$	64,042
Other loans, net^(b)	$	2,268	$	1,419

Includes approximately $24.2 billion and $26.1 billion of gross Card Member loans available to settle obligations of a consolidated variable interest entity (VIE) as of September 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 $64 million and $42 million as of September 30, 2017 and December 31, 2016, respectively.

Card Member receivables segment detail

Card Member accounts receivable by segment and Other receivables as of September 30, 2017 and December 31, 2016 consisted of:

(Millions)	2017		2016
U.S. Consumer Services^(a)	$	11,192	$	12,302
International Consumer and Network Services		6,512		5,966
Global Commercial Services		33,810		29,040
Card Member receivables		51,514		47,308
Less: Reserve for losses		512		467
Card Member receivables, net	$	51,002	$	46,841
Other receivables, net^(b)	$	2,701	$	3,232

Includes $7.8 billion and $8.9 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of September 30, 2017 and December 31, 2016, respectively.
Other receivables primarily represent amounts related to (i) Global Network Services partner banks for items such as royalty and franchise fees, (ii) tax-related receivables, (iii) certain merchants for billed discount revenue, and (iv) 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 September 30, 2017 and December 31, 2016, respectively.

Aging of Card Member loans and receivables

The following table presents the aging of Card Member loans and receivables as of September 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	$	48,707	$	183	$	128	$	308	$	49,326
International Consumer and Network Services		7,698		39		27		59		7,823
Global Commercial Services
Global Small Business Services		10,556		36		24		59		10,675
Global Corporate Payments^(a)		(b)		(b)		(b)		―		54
Card Member Receivables:
U.S. Consumer Services		11,055		51		26		60		11,192
International Consumer and Network Services		6,424		28		18		42		6,512
Global Commercial Services
Global Small Business Services	$	15,651	$	75	$	50	$	102	$	15,878
Global Corporate Payments^(a)		(b)		(b)		(b)	$	153	$	17,932

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.

Credit quality indicators for loans and receivables

The following tables present the key credit quality indicators as of or for the nine months ended September 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	%	1.3	%	1.5	%	1.8	%	1.1	%
	International Consumer and Network Services	2.1	%	2.6	%	1.6	%	2.0	%	2.5	%	1.7	%
	Global Small Business Services	1.6	%	1.9	%	1.1	%	1.4	%	1.7	%	1.1	%
Card Member Receivables:
	U.S. Consumer Services	1.3	%	1.5	%	1.2	%	1.4	%	1.6	%	1.4	%
	International Consumer and Network Services	2.1	%	2.2	%	1.4	%	2.1	%	2.3	%	1.5	%
	Global Small Business Services	1.6	%	1.8	%	1.4	%	1.6	%	1.8	%	1.5	%

						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	%	0.9	%	0.09	%	0.8	%

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.

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 September 30, 2017 and December 31, 2016; therefore, this segment’s receivables are not included in the following tables.

		As of September 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	$	206	$	158	$	162	$	131	$	657	$	593	$	48
International Consumer and Network Services		59		―		―		―		59		58		―
Global Commercial Services		37		32		28		26		123		113		9
Card Member Receivables:
U.S. Consumer Services		―		―		12		9		21		21		4
Global Commercial Services		―		―		31		16		47		47		8
Total	$	302	$	190	$	233	$	182	$	907	$	832	$	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 $15 million and $20 million that are over 90 days past due and accruing interest and $6 million and $11 million that are non-accruals as of September 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 September 30, 2017 and December 31, 2016, respectively.

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 nine months ended September 30:

	Three Months Ended September 30, 2017				Nine Months Ended September 30, 2017
(Millions)		Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
Card Member Loans:
U.S. Consumer Services	$	636	$	17	$	626	$	49
International Consumer and Network Services		59		4		56		12
Global Commercial Services		122		5		119		13
Card Member Receivables:
U.S. Consumer Services		20		―		19		―
Global Commercial Services		44		―		42		―
Total	$	881	$	26	$	862	$	74

	Three Months Ended September 30, 2016				Nine Months Ended September 30, 2016
(Millions)		Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
Card Member Loans:
U.S. Consumer Services	$	587	$	14	$	555	$	38
International Consumer and Network Services		53		4		52		12
Global Commercial Services		111		4		102		10
Card Member Receivables:
U.S. Consumer Services		13		―		13		―
Global Commercial Services		29		―		24		―
Total	$	793	$	22	$	746	$	60

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 nine months ended September 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					Nine Months Ended
	September 30, 2017					September 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	8	$	57	9	(b)	23	$	160	10	(b)
Card Member Receivables	1		18	(c)	31	4		64	(c)	27
Total	9	$	75			27	$	224

	Three Months Ended					Nine Months Ended
	September 30, 2016					September 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	8	$	56	9	(b)	23	$	163	10	(b)
Card Member Receivables	2		29	(c)	19	7		94	(c)	17
Total	10	$	85			30	$	257

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.

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 nine months ended September 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				Nine Months Ended
	September 30, 2017				September 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	$	9		5	$	30
Card Member Receivables		1		2		3		4
Total		3	$	11		8	$	34


	Three Months Ended				Nine Months Ended
	September 30, 2016				September 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		3	$	12		5	$	30
Card Member Receivables		1		1		3		3
Total		4	$	13		8	$	33

The outstanding balances upon default include principal, fees and accrued interest on Card Member loans, and principal and fees on Card Member receivables.