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Accounts Receivable and Loans (Tables)
 6 Months Ended
Jun. 30, 2014
Accounts Receivable and Loans (Tables) [Abstract]  
Card Member receivables segment detail

Accounts receivable by segment as of June 30, 2014 and December 31, 2013 consisted of:

(Millions) 2014 2013
U.S. Card Services(a) $21,238 $21,842
International Card Services  7,457  7,771
Global Commercial Services(b)  16,460  14,391
Global Network & Merchant Services(c)  151  159
Card Member receivables(d)  45,306  44,163
Less: Reserve for losses  413  386
Card Member receivables, net $44,893 $43,777
Other receivables, net(e) $3,753 $3,408

  • Includes $6.5 billion and $7.3 billion of gross Card Member receivables available to settle obligations of a consolidated variable interest entity (VIE) as of June 30, 2014 and December 31, 2013, respectively.
  • Includes $669 million and $836 million due from airlines, of which Delta Air Lines (Delta) comprises $637 million and $628 million as of June 30, 2014 and December 31, 2013, respectively.
  • Includes receivables primarily related to the Company's International Currency Card portfolios.
  • Includes approximately $14.0 billion and $13.8 billion of Card Member receivables outside the U.S. as of June 30, 2014 and December 31, 2013, respectively.
  • Other receivables primarily represent amounts related to (i) purchased Global Network Services (GNS) joint venture receivables, (ii) tax receivables, (iii) GNS partner banks for items such as royalty and franchise fees, and (iv) certain merchants for billed discount revenue. Other receivables are presented net of reserves for losses of $59 million and $71 million as of June 30, 2014 and December 31, 2013, respectively.

 
Card Member loans segment detail

Loans as of June 30, 2014 and December 31, 2013 consisted of:

(Millions)  2014  2013
U.S. Card Services(a) $57,727 $58,395
International Card Services  8,555  8,790
Global Commercial Services  56  53
Card Member loans  66,338  67,238
Less: Reserve for losses  1,170  1,261
Card Member loans, net $65,168 $65,977
Other loans, net(b) $703 $608

  • Includes approximately $28.9 billion and $31.2 billion of gross Card Member loans available to settle obligations of a consolidated VIE as of June 30, 2014 and December 31, 2013, respectively.
  • Other loans primarily represent loans to merchants and a store card loan portfolio. Other loans are presented net of reserves for losses of $10 million and $13 million as of June 30, 2014 and December 31, 2013, respectively.

 
Aging of Card Member loans and receivables

The following table presents the aging of Card Member loans and receivables as of June 30, 2014 and December 31, 2013:

       30-59  60-89  90+   
       Days  Days  Days   
       Past  Past  Past   
2014 (Millions)  Current  Due  Due  Due  Total
Card Member Loans:                
U.S. Card Services  $57,181 $155 $116 $275 $57,727
International Card Services   8,415  45  30  65  8,555
Card Member Receivables:                
U.S. Card Services  $20,915 $111 $59 $153 $21,238
International Card Services(a)   7,356  32  19  50  7,457
Global Commercial Services   (b)  (b)  (b)  119  16,460
                
      30-59  60-89  90+   
      Days  Days  Days   
      Past  Past  Past   
2013 (Millions)  Current  Due  Due  Due  Total
Card Member Loans:                
U.S. Card Services  $57,772 $183 $134 $306 $58,395
International Card Services   8,664  43  28  55  8,790
Card Member Receivables:                
U.S. Card Services  $21,488 $125 $69 $160 $21,842
International Card Services   (b)  (b)  (b)  83  7,771
Global Commercial Services   (b)  (b)  (b)  132  14,391

  • Beginning in first quarter 2014, as a result of system enhancements, delinquency data is now available and presented on a prospective basis for the indicated aging categories. Comparable data for prior periods is not available. For risk management purposes, the Company has historically utilized 90 days past billing for the International Card Services (ICS) segment, as described below in (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. For Card Member receivables in GCS as of June 30, 2014 and ICS and GCS as of December 31, 2013, 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 receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes.

 
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:

  2014 2013 
  Net Write-Off Rate   Net Write-Off Rate   
      30 Days     30 Days 
    Principal, Past Due   Principal, Past Due 
  Principal Interest, & as a % of Principal Interest, &  as a % of 
  Only (a)Fees (a)Total Only (a)Fees (a)Total 
Card Member Loans:             
U.S. Card Services 1.6%1.9%0.9%2.0%2.2%1.1%
International Card Services(b) 2.0%2.4%1.6%1.9%2.3%1.6%
Card Member Receivables:             
U.S. Card Services 1.8%2.0%1.5%2.0%2.1%1.6%
International Card Services(b) 2.0%2.2%1.3%(c) (c) (c) 
              
      2014 2013 
      Net Loss   Net Loss   
      Ratio as 90 Days Ratio as 90 Days 
      a % of Past Billing a % of Past Billing 
      Charge as a % of Charge as a % of 
      Volume Receivables Volume Receivables 
Card Member Receivables:         
International Card Services(c) (c) 0.19%1.1%
Global Commercial Services0.09%0.7%0.08%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.
  • Beginning in 2014, write-offs for certain installment loan products have been reclassified from Card Member receivables to Card Member loans. Prior period write-offs have not been reclassified.
  • Historically, net loss ratio as a % of charge volume and 90 days past billings as a % of receivables were presented. Beginning in first quarter 2014, as a result of system enhancements, 30 days past due as a % of total, Net write-off rate (principal only) and Net write-off rate (principal and fees) have been presented.

 
Impaired Card Member loans and receivables

The following table provides additional information with respect to the Company's impaired Card Member loans, which are not significant for GCS, and Card Member receivables, which are not significant for ICS and GCS, as of June 30, 2014 and December 31, 2013:

   Loans over            
    90 Days     Loans &  Total   
    Past Due  Non- Receivables  Impaired  Unpaid    
   & Accruing  Accrual  Modified  Loans & Principal  Allowance 
2014 (Millions)  Interest (a) Loans (b) as a TDR (c)Receivables  Balance (d) for TDRs (e)
Card Member Loans:                    
U.S. Card Services  $ 171 $ 198 $ 323 $ 692 $ 631 $ 74 
International Card Services    65   ―   ―   65   64   ― 
Card Member Receivables:                    
U.S. Card Services    ―   ―   44   44   43   32 
Total  $ 236 $ 198 $ 367 $ 801 $ 738 $ 106 
                     
   Loans over            
    90 Days     Loans &  Total   
    Past Due  Non- Receivables  Impaired  Unpaid    
   & Accruing  Accrual  Modified  Loans & Principal  Allowance 
2013 (Millions)  Interest (a) Loans (b) as a TDR (c)Receivables  Balance (d)for TDRs (e)
Card Member Loans:                    
U.S. Card Services  $ 170 $ 244 $ 373 $ 787 $ 731 $ 84 
International Card Services    54   4   5   63   62   ― 
Card Member Receivables:                    
U.S. Card Services    ―   ―   50   50   49   38 
Total  $ 224 $ 248 $ 428 $ 900 $ 842 $ 122 

  • The Company's policy is generally to accrue interest through the date of write-off (i.e., at 180 days past due). The Company establishes reserves for interest that the Company believes will not be collected. Amounts presented exclude loans modified as a troubled debt restructuring (TDR).
  • Non-accrual loans not in modification programs include certain Card Member loans placed with outside collection agencies for which the Company has ceased accruing interest.
  • Total loans and receivables modified as a TDR includes $94 million and $92 million that are non-accrual and $23 million and $26 million that are past due 90 days and still accruing interest as of June 30, 2014 and December 31, 2013, respectively.
  • Unpaid principal balance consists of Card Member charges billed and excludes other amounts charged directly by the Company such as interest and fees.
  • Represents the reserve for losses for TDRs, which are evaluated individually for impairment. The Company records a reserve for losses for all impaired loans. Refer to Card Member Loans Evaluated Individually and Collectively for Impairment in Note 4 for further information regarding the reserve for losses on loans over 90 days past due and accruing interest and non-accrual loans, which are evaluated collectively for impairment.

 
Interest income recognized and average balance of impaired Card Member loans and receivables
   Three Months Ended Six Months Ended
   June 30, 2014 June 30, 2014
   Interest Income Average Interest Income Average
2014 (Millions) Recognized Balance Recognized Balance
Card Member Loans:             
U.S. Card Services  $ 9 $ 715 $ 25 $ 760
International Card Services    4   65   8   64
Card Member Receivables:             
U.S. Card Services    ―   47   ―   47
Total  $ 13 $ 827 $ 33 $ 871
              
   Three Months Ended Six Months Ended
   June 30, 2013 June 30, 2013
   Interest Income Average Interest Income Average
2013 (Millions) Recognized Balance Recognized Balance
Card Member Loans:             
U.S. Card Services  $ 10 $ 999 $ 22 $ 1,041
International Card Services    4   69   8   69
Card Member Receivables:             
U.S. Card Services    ―   91   ―   100
Total  $ 14 $ 1,159 $ 30 $ 1,210

The following table provides information with respect to the Company's interest income recognized and average balances of impaired Card Member loans, which are not significant for GCS, and Card Member receivables, which are not significant for ICS and GCS, for the three and six months ended June 30:
Troubled debt restructurings

The following table provides additional information with respect to the U.S. Card Services (USCS) Card Member loans and receivables modified as TDRs for the three and six months ended June 30. The ICS and GCS Card Member loans and receivables modifications were not significant. For information on TDRs and the related accounting policies, refer to Note 4 on pages 74 – 76 of the Annual Report.

  Three Months Ended Six Months Ended
  June 30, 2014 June 30, 2014
         Average        Average
       Average  Payment      Average Payment
  Number of Outstanding Interest Rate Term Number of Outstanding Interest Rate Term
  Accounts Balances(a)(b) Reduction Extension Accounts Balances(a)(b) Reduction Extension
  (in thousands) ($ in millions) (% Points) (# of Months) (in thousands) ($ in millions) (% Points) (# of Months)
Troubled Debt Restructurings:                  
Card Member Loans 12 $82 11 (c) 24 $178 12 (c)
Card Member Receivables 3  41 (c) 12 7  88 (c) 12
Total 15 $123     31 $266    
                   
  Three Months Ended Six Months Ended
  June 30, 2013 June 30, 2013
         Average        Average
       Average Payment      Average Payment
  Number of Outstanding Interest Rate Term Number of Outstanding Interest Rate Term
  Accounts Balances(a)(b) Reduction Extension Accounts Balances(a)(b) Reduction Extension
  (in thousands) ($ in millions) (% Points) (# of Months) (in thousands) ($ in millions) (% Points) (# of Months)
Troubled Debt Restructurings:                  
Card Member Loans 12 $94 11 (c) 35 $267 12 (c)
Card Member Receivables 4  51 (c) 12 12  154 (c) 12
Total 16 $145     47 $421    

  • Represents the outstanding balance immediately prior to modification. Modifications did not reduce the aggregate principal balances except for the six months ended June 30, 2013, where aggregate principal balances were reduced by $4 million.
  • 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 for the three and six months ended June 30, 2014 and 2013, with respect to the USCS Card Member loans and receivables modified as TDRs that subsequently defaulted within 12 months of modification. A Card Member is considered to have been in default from a modification program after one and up to two consecutive 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. The defaulted ICS Card Member loan and receivable modifications were not significant.

  Three Months Ended Six Months Ended
  June 30, 2014 June 30, 2014
      Aggregated     Aggregated
     Outstanding     Outstanding
   Number of  Balances  Number of  Balances
(Accounts in thousands, Dollars in millions)  Accounts Upon Default(a)  Accounts Upon Default(a)
Troubled Debt Restructurings That Subsequently Defaulted:            
Card Member Loans  2 $20  4 $40
Card Member Receivables   1  11  2  18
Total  3 $31  6 $58
             
               
  Three Months Ended Six Months Ended
  June 30, 2013 June 30, 2013
      Aggregated     Aggregated
     Outstanding     Outstanding
   Number of  Balances  Number of  Balances
(Accounts in thousands, Dollars in millions)  Accounts Upon Default(a)  Accounts Upon Default(a)
Troubled Debt Restructurings That Subsequently Defaulted:            
Card Member Loans  6 $53  11 $101
Card Member Receivables  1  13  2  25
Total  7 $66  13 $126

  • The outstanding balance includes principal, fees and accrued interest on Card Member loans and principal and fees on Card Member receivables.