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Loans and Accounts Receivable (Tables)

9 Months Ended

Sep. 30, 2016

Loans and Accounts Receivable (Tables) [Abstract]

Card Member accounts receivable by segment and Other receivables as of September 30, 2016 and December 31, 2015 consisted of:

(Millions)	2016		2015
U.S. Consumer Services^(a)	$	10,101	$	11,807
International Consumer and Network Services		5,551		5,599
Global Commercial Services		29,606		26,727
Card Member receivables^(b)		45,258		44,133
Less: Reserve for losses		437		462
Card Member receivables, net	$	44,821	$	43,671
Other receivables, net^(c)	$	2,510	$	3,024

Includes $5.5 billion and $6.6 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of September 30, 2016 and December 31, 2015, respectively.
Includes approximately $12.9 billion and $11.9 billion of Card Member receivables outside the United States as of September 30, 2016 and December 31, 2015, respectively.
Other receivables primarily represent amounts related to (i) certain merchants for billed discount revenue, (ii) GNS partner banks for items such as royalty and franchise fees, 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 $48 million and $43 million as of September 30, 2016 and December 31, 2015, respectively.

Card Member loans segment detail

Card Member loans by segment and Other loans as of September 30, 2016 and December 31, 2015, consisted of:

(Millions)		2016		2015
U.S. Consumer Services^(a)	$	44,857	$	43,495
International Consumer and Network Services		6,700		7,072
Global Commercial Services		9,061		8,006
Card Member loans		60,618		58,573
Less: Reserve for losses		1,114		1,028
Card Member loans, net	$	59,504	$	57,545
Other loans, net^(b)	$	1,157	$	1,254

Includes approximately $24.8 billion and $23.6 billion of gross Card Member loans available to settle obligations of a consolidated variable interest entity (VIE) as of September 30, 2016 and December 31, 2015, respectively.
Other loans primarily represent merchant financing loans. Other loans are presented net of reserves for losses of $30 million and $20 million as of September 30, 2016 and December 31, 2015, respectively.

Aging of Card Member loans and receivables

The following table presents the aging of Card Member loans and receivables as of September 30, 2016 and December 31, 2015:

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	$	44,367	$	149	$	105	$	236	$	44,857
International Consumer and Network Services		6,589		34		25		52		6,700
Global Commercial Services
Global Small Business Services		8,918		29		20		46		9,013
Global Corporate Payments^(a)		(b)		(b)		(b)		1		48
Card Member Receivables:
U.S. Consumer Services	$	9,963	$	51	$	28	$	59	$	10,101
International Consumer and Network Services		5,470		25		17		39		5,551
Global Commercial Services
Global Small Business Services		13,605		77		44		83		13,809
Global Corporate Payments^(a)		(b)		(b)		(b)		124		15,797

2015 (Millions)		Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Card Member Loans:
U.S. Consumer Services	$	43,063	$	128	$	94	$	210	$	43,495
International Consumer and Network Services		6,961		34		25		52		7,072
Global Commercial Services
Global Small Business Services		7,867		26		18		40		7,951
Global Corporate Payments^(a)		(b)		(b)		(b)		1		55
Card Member Receivables:
U.S. Consumer Services	$	11,646	$	54	$	32	$	75	$	11,807
International Consumer and Network Services		5,515		24		18		42		5,599
Global Commercial Services
Global Small Business Services		12,734		69		45		102		12,950
Global Corporate Payments^(a)		(b)		(b)		(b)		124		13,777

For GCP Card Member loans and receivables in 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.
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:

		2016						2015
		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	1.5	%	1.8	%	1.1	%	1.4	%	1.6	%	1.0	%
	International Consumer and Network Services	2.0	%	2.5	%	1.7	%	2.0	%	2.4	%	1.6	%
	Global Small Business Services	1.4	%	1.7	%	1.1	%	1.3	%	1.5	%	1.0	%
Card Member Receivables:
	U.S. Consumer Services	1.4	%	1.6	%	1.4	%	1.6	%	1.8	%	1.6	%
	International Consumer and Network Services	2.1	%	2.3	%	1.5	%	2.1	%	2.3	%	1.6	%
	Global Small Business Services	1.6	%	1.8	%	1.5	%	1.9	%	2.2	%	1.6	%

						2016				2015
						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					0.09	%	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.

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 ICNS as of September 30, 2016 and December 31, 2015; therefore, the segment’s receivables are not included in the following tables.

		As of September 30, 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	$	156	$	133		168	$	124	$	581	$	532	$	50
International Consumer and Network Services		52		―		―		―		52		51		―
Global Commercial Services		27		29		27		25		108		100		10
Card Member Receivables:
U.S. Consumer Services		―		―		9		5		14		14		6
Global Commercial Services		―		―		24		8		32		32		18
Total	$	235	$	162		228	$	162	$	787	$	729	$	84

		As of December 31, 2015

					Accounts Classified as a TDR^(c)
2015 (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	$	140	$	124		149	$	89	$	502	$	463	$	44
International Consumer and Network Services		52		―		―		―		52		51		―
Global Commercial Services		24		26		23		18		91		85		9
Card Member Receivables:
U.S. Consumer Services		―		―		11		3		14		14		8
Global Commercial Services		―		―		16		3		19		19		12
Total	$	216	$	150		199	$	113	$	678	$	632	$	73

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.
Accounts classified as a TDR include $19 million and $20 million that are over 90 days past due and accruing interest and $14 million and $18 million that are non-accruals as of September 30, 2016 and December 31, 2015, respectively.
In Program TDRs include Card Member accounts that are currently enrolled in a modification program.
Out of Program TDRs include $123 million and $84 million of Card Member accounts that have successfully completed a modification program and $39 million and $29 million of Card Member accounts that were not in compliance with the terms of the modification programs as of September 30, 2016 and December 31, 2015, 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, 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

	Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
(Millions)		Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
Card Member Loans:
U.S. Consumer Services	$	585	$	13	$	580	$	34
International Consumer and Network Services		53		3		55		10
Global Commercial Services		108		3		105		9
Card Member Receivables:
U.S. Consumer Services		11		―		14		―
Global Commercial Services		17		―		21		―
Total	$	774	$	19	$	775	$	53

Troubled debt restructurings

The following table provides additional information with respect to the USCS and GCS Card Member loans and receivables modified as TDRs for the three and nine months ended September 30, 2016 and 2015. 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, 2016					September 30, 2016
	Number of Accounts	Outstanding Balances ^(a)		Average Interest Rate Reduction	Average Payment Term Extension	Number of Accounts	Outstanding Balances ^(a)		Average Interest Rate Reduction	Average Payment Term Extension
	(in thousands)	($ in millions)		(% Points)	(# of Months)	(in thousands)	($ in millions)		(% Points)	(# 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

	Three Months Ended					Nine Months Ended
	September 30, 2015					September 30, 2015
	Number of Accounts	Outstanding Balances ^(a)		Average Interest Rate Reduction	Average Payment Term Extension	Number of Accounts	Outstanding Balances ^(a)		Average Interest Rate Reduction	Average Payment Term Extension
	(in thousands)	($ in millions)		(% Points)	(# of Months)	(in thousands)	($ in millions)		(% Points)	(# of Months)
Troubled Debt Restructurings:
Card Member Loans	10	$	69	9	(b)	31	$	218	10	(b)
Card Member Receivables	3		37	(c)	12	9		111	(c)	12
Total	13	$	106			40	$	329

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.
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, in the three and nine months ended September 30, 2016 and 2015. A Card Member is considered in default of 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.

	Three Months Ended				Nine Months Ended
	September 30, 2016				September 30, 2016
		Number of Accounts	Aggregated Outstanding Balances Upon Default^(a)			Number of Accounts	Aggregated Outstanding Balances Upon Default^(a)
		(in thousands)	($ in millions)			(in thousands)	($ in millions)
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


	Three Months Ended				Nine Months Ended
	September 30, 2015				September 30, 2015
		Number of Accounts	Aggregated Outstanding Balances Upon Default^(a)			Number of Accounts	Aggregated Outstanding Balances Upon Default^(a)
		(in thousands)	($ in millions)			(in thousands)	($ in millions)
Troubled Debt Restructurings That Subsequently Defaulted:
Card Member Loans		1	$	14		6	$	39
Card Member Receivables		1		1		3		3
Total		2	$	15		9	$	42

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