Loans and Accounts Receivable

3 Months Ended

Mar. 31, 2018

Loans Notes Trade And Other Receivables Disclosure [Abstract]

Loans and Accounts Receivable

3. Loans and Accounts Receivable

Our lending and charge payment card products result in the generation of Card Member loans and Card Member receivables, respectively.

Card Member loans by segment and Other loans as of March 31, 2018 and December 31, 2017consisted of:

(Millions)		2018		2017
U.S. Consumer Services(a)	$	52,655	$	53,668
International Consumer and Network Services		8,667		8,651
Global Commercial Services		11,498		11,080
Card Member loans		72,820		73,399
Less: Reserve for losses		1,786		1,706
Card Member loans, net	$	71,034	$	71,693
Other loans, net(b)	$	2,872	$	2,607

• Includes approximately $24.1 billion and $25.7 billion of gross Card Member loans available to settle obligations of a consolidated variable interest entity (VIE) as of March 31, 2018 and December 31, 2017, respectively. The balance as of March 31, 2018 also includes the acquired Hilton portfolio (refer to Note 2).
• Other loans primarily represent personal and commercial financing products. Other loans are presented net of reserves for losses of $91 million and $80 million as of March 31, 2018 and December 31, 2017, respectively.

Card Member accounts receivable by segment and Other receivables as of March 31, 2018 and December 31, 2017 consisted of:

(Millions)	2018		2017
U.S. Consumer Services (a)	$	11,659	$	13,143
International Consumer and Network Services		7,071		7,803
Global Commercial Services		35,511		33,101
Card Member receivables		54,241		54,047
Less: Reserve for losses		565		521
Card Member receivables, net	$	53,676	$	53,526
Other receivables, net (b)	$	3,194	$	3,209

• Includes $7.8 billion and $8.9 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of March 31, 2018 and December 31, 2017, respectively.
• Other receivables primarily represent amounts related to (i)GNS partners 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 $31 million and $31 million as of March 31, 2018 and December 31, 2017, respectively.

Card Member Loans and Card Member Receivables Aging

Generally, a Card Member account is considered past due if payment is not received within 30 days after the billing statement date. The following table presents the aging of Card Member loans and receivables as of March 31, 2018 and December 31, 2017:

2018 (Millions)		Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Card Member Loans:
U.S. Consumer Services	$	51,922	$	201	$	156	$	376	$	52,655
International Consumer and Network Services		8,524		46		31		66		8,667
Global Commercial Services
Global Small Business Services		11,278		45		33		71		11,427
Global Corporate Payments(a)		(b)		(b)		(b)		1		71
Card Member Receivables:
U.S. Consumer Services		11,510		48		35		66		11,659
International Consumer and Network Services		6,967		33		22		49		7,071
Global Commercial Services
Global Small Business Services	$	15,931	$	93	$	68	$	126	$	16,218
Global Corporate Payments(a)		(b)		(b)		(b)	$	163	$	19,293
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	$	52,961	$	201	$	162	$	344	$	53,668
International Consumer and Network Services		8,530		37		28		56		8,651
Global Commercial Services
Global Small Business Services		10,892		43		31		59		11,025
Global Corporate Payments(a)		(b)		(b)		(b)		―		55
Card Member Receivables:
U.S. Consumer Services		12,993		53		33		64		13,143
International Consumer and Network Services		7,703		29		21		50		7,803
Global Commercial Services
Global Small Business Services	$	15,868	$	91	$	54	$	106	$	16,119
Global Corporate Payments(a)		(b)		(b)		(b)	$	148	$	16,982

• 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 we initiate 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 Card Member Loans and Receivables

The following tables present the key credit quality indicators as of or for the three months endedMarch 31:

		2018						2017
		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	2.0	%	2.4	%	1.4	%	1.7	%	2.0	%	1.2	%
	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	%	1.3	%	1.6	%	1.8	%	1.2	%
Card Member Receivables:
	U.S. Consumer Services	1.3	%	1.5	%	1.3	%	1.5	%	1.7	%	1.3	%
	International Consumer and Network Services	2.0	%	2.2	%	1.5	%	2.1	%	2.3	%	1.5	%
	Global Small Business Services	1.7	%	1.9	%	1.8	%	1.8	%	2.0	%	1.6	%
						2018				2017
						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	%	0.11	%	0.7	%

We present 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 we consider 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

Impaired Card Member loans and receivables are individual larger balance or homogeneous pools of smaller balance loans and receivables for which it is probable that we will be unable to collect all amounts due according to the original contractual terms of the Card Member agreement. In certain cases, these Card Member loans and receivables are included in one of our various Troubled Debt Restructuring (TDR)modification programs.

The following tables provide additional information with respect to our impaired Card Member loans and receivables. Impaired Card Member receivables are not significant for International Consumer and Network Services (ICNS) as of March 31, 2018 and December 31, 2017; therefore, this segment’s receivables are not included in the following tables.

		As of March 31, 2018
					Accounts Classified as a TDR(c)
2018 (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	$	254	$	182	$	209	$	125	$	770	$	691	$	52
International Consumer and Network Services		66		―		―		―		66		65		―
Global Commercial Services		46		35		38		25		144		134		8
Card Member Receivables:
U.S. Consumer Services		―		―		19		10		29		29		1
Global Commercial Services		―		―		48		21		69		69		3
Total	$	366	$	217	$	314	$	181	$	1,078	$	988	$	64

		As of December 31, 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	$	233	$	168	$	178	$	131	$	710	$	639	$	49
International Consumer and Network Services		56		―		―		―		56		55		―
Global Commercial Services		38		31		31		27		127		118		8
Card Member Receivables:
U.S. Consumer Services		―		―		15		9		24		24		1
Global Commercial Services		―		―		37		19		56		56		2
Total	$	327	$	199	$	261	$	186	$	973	$	892	$	60

• Our policy is generally to accrue interest through the date of write-off (typically 180 days past due). We establish reserves for interest that we believe 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 we have ceased accruing interest. Amounts presented exclude Card Member loans classified as a TDR.
• Accounts classified as a TDR include $15 million and $15 million that are over 90 days past due and accruing interest and $4 million and $5 million that are non-accruals as of March 31, 2018 and December 31, 2017, respectively.
• In Program TDRs include Card Member accounts that are currently enrolled in a modification program.
• Out of Program TDRs include $137 million and $141 million of Card Member accounts that have successfully completed a modification program and $44 million and $45 million of Card Member accounts that were not in compliance with the terms of the modification programs as of March 31, 2018 and December 31, 2017, respectively.

The following table provides information with respect to our average balances and interest income recognized from impaired Card Member loans and the average balances of impaired Card Member receivables for thethree months endedMarch 31:

	2018				2017
			Interest				Interest
	Average		Income		Average		Income
(Millions)		Balance	Recognized			Balance	Recognized
Card Member Loans:
U.S. Consumer Services	$	740	$	21	$	616	$	16
International Consumer and Network Services		61		5		53		4
Global Commercial Services		136		5		116		4
Card Member Receivables:
U.S. Consumer Services		27		―		18		―
Global Commercial Services		63		―		40		―
Total	$	1,027	$	31	$	843	$	24

Card Member Loans and Receivables Modified as TDRs

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 thethree months endedMarch 31, 2018 and 2017. 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 March 31, 2018
		Number of		Outstanding		Average Interest		Average Payment
		Accounts		Balances(a)		Rate Reduction		Term Extensions
		(in thousands)		($ in millions)		(% Points)		(# of Months)
Troubled Debt Restructurings:
	Card Member Loans		11	$	81		11		(b)
	Card Member Receivables		1		29		(c)		28
Total			12	$	110
		Three Months Ended March 31, 2017
		Number of		Outstanding		Average Interest		Average Payment
		Accounts		Balances(a)		Rate Reduction		Term Extensions
		(in thousands)		($ in millions)		(% Points)		(# of Months)
Troubled Debt Restructurings:
	Card Member Loans		8	$	57		13		(b)
	Card Member Receivables		2		28		(c)		22
Total			10	$	85

• 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. Modifications did not reduce the principal balance.
• For Card Member loans, there have been no payment term extensions.
• We do not offer interest rate reduction programs for Card Member receivables as the receivables are non-interest bearing.

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 thethree months endedMarch 31, 2018 and 2017. 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.

		2018			2017
		Number ofAccounts		Aggregated OutstandingBalancesUpon Default(a)	Number ofAccounts		Aggregated OutstandingBalancesUpon Default(a)
		(thousands)	(millions)		(thousands)	(millions)
Troubled Debt Restructurings That
	Subsequently Defaulted:
	Card Member Loans	2	$	9	2	$	11
	Card Member Receivables	1		2	1		1
Total		3	$	11	3	$	12

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