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Accounts Receivable and Loans (Tables) | 9 Months Ended
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Sep. 30, 2011
Accounts Receivable and Loans (Tables) [Abstract] |
Cardmember receivables segment detail | Accounts receivable as of September 30, 2011 and December 31, 2010 were as follows:
(Millions) |  | 2011 |  | 2010
| U.S. Card Services(a) |  | $ | 18,957 |  | $ | 19,155
| International Card Services |  |  | 6,746 |  |  | 6,673
| Global Commercial Services(b) |  |  | 13,866 |  |  | 11,259
| Global Network & Merchant Services(c) |  |  | 190 |  |  | 179
Cardmember receivables, gross(d) |  |  | 39,759 |  |  | 37,266
Less: Cardmember receivables reserve for losses |  |  | 388 |  |  | 386
Cardmember receivables, net |  | $ | 39,371 |  | $ | 36,880
Other receivables, net(e) |  | $ | 3,517 |  | $ | 3,554
(a) Includes $6.6 billion and $7.7 billion of gross cardmember receivables available to settle obligations of a consolidated VIE as of September 30, 2011 and December 31, 2010, respectively. (b) Includes $0.5 billion of gross cardmember receivables available to settle obligations of a consolidated VIE as of both September 30, 2011 and December 31, 2010. (c) Includes receivables primarily related to the Company's International Currency Card portfolios. (d) Includes approximately $12.6 billion and $11.7 billion of cardmember receivables outside the United States as of September 30, 2011 and December 31, 2010, respectively. (e) Other receivables primarily represent amounts for tax-related receivables, amounts due from the Company's travel customers and suppliers, purchased joint venture receivables, amounts due from third-party issuing partners, amounts due from certain merchants for billed discount revenue, accrued interest on investments and other receivables due to the Company in the ordinary course of business.
Cardmember loans segment detail | Loans as of September 30, 2011 and December 31, 2010 consisted of:
(Millions) |  |  | 2011 |  |  | 2010
| U.S. Card Services(a) |  | $ | 49,886 |  | $ | 51,565
| International Card Services |  |  | 8,293 |  |  | 9,255
| Global Commercial Services |  |  | 28 |  |  | 30
Cardmember loans, gross(b) |  |  | 58,207 |  |  | 60,850
Less: Cardmember loans reserve for losses |  |  | 2,139 |  |  | 3,646
Cardmember loans, net |  | $ | 56,068 |  | $ | 57,204
Other loans, net(c) |  | $ | 359 |  | $ | 412
(a) I ncludes approximately $31.6 billion and $34.7 billion of gross cardmember loans available to settle obligations of a consolidated VIE a s of September 30, 2011 and December 31, 2010, respectively. (b) Cardmember loan balance includes u namortized net card fees of $138 million and $134 million as of September 30, 2011 and December 31, 2010, respectively. (c) Other loans primarily represent s mall business installment loans and a store card portfolio whose billed b usiness is not processed on the Company's network.
Aging of cardmember loans and receivables | T he following table represents the aging of cardmember loans and receivables as of September 30, 2011 and December 31, 2010:
|  |  |  |  |  | 30-59 |  |  | 60-89 |  |  | 90+ |  |  |
|  |  |  |  |  | Days |  |  | Days |  |  | Days |  |  |
|  |  |  |  |  | Past |  |  | Past |  |  | Past |  |  |
2011(Millions) |  |  | Current |  |  | Due |  |  | Due |  |  | Due |  |  | Total
Cardmember Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services |  | $ | 49,146 |  | $ | 230 |  | $ | 161 |  | $ | 349 |  | $ | 49,886
International Card Services |  |  | 8,134 |  |  | 51 |  |  | 35 |  |  | 73 |  |  | 8,293
Cardmember Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services |  | $ | 18,575 |  | $ | 147 |  | $ | 75 |  | $ | 160 |  | $ | 18,957
International Card Services(a) |  |  | (b) |  |  | (b) |  |  | (b) |  |  | 63 |  |  | 6,746
Global Commercial Services(a) |  |  | (b) |  |  | (b) |  |  | (b) |  |  | 98 |  |  | 13,866
2010(Millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cardmember Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services |  | $ | 50,508 |  | $ | 282 |  | $ | 226 |  | $ | 549 |  | $ | 51,565
International Card Services |  |  | 9,044 |  |  | 66 |  |  | 48 |  |  | 97 |  |  | 9,255
Cardmember Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services |  | $ | 18,864 |  | $ | 104 |  | $ | 55 |  | $ | 132 |  | $ | 19,155
International Card Services(a) |  |  | (b) |  |  | (b) |  |  | (b) |  |  | 64 |  |  | 6,673
Global Commercial Services(a) |  |  | (b) |  |  | (b) |  |  | (b) |  |  | 96 |  |  | 11,259
For c ardmember receivables in International Card Services (ICS) and Global Commercial Services (GCS), delinquency data is tracked based on days past billing status rather than days past due. A cardmember account is considered 90 days past billing if payment has not been received within 90 days of the cardmember'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 cardmember receivable balance is considered as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes. Historically, data for periods prior to 90 days past billing are not available due to system constraints. Therefore, it 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 T otal and the 90+ Days Past Due balances.
Credit quality indicators for loans and receivables | The following table s prese nt the key credit quality indicators as of or for the nine months ended September 30:
|  | 2011 |  | 2010 |
|  | 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 |
U.S. Card Services ― |  |  |  |  |  |  |  |  |  |  |  |  |
Cardmember Loans |  | 3.2 | % | 3.5 | % | 1.5 | % | 6.2 | % | 6.8 | % | 2.5 | %
International Card Services ― |  |  |  |  |  |  |  |  |  |  |  |  |
Cardmember Loans |  | 2.9 | % | 3.5 | % | 1.9 | % | 4.9 | % | 5.8 | % | 2.8 | %
U.S. Card Services ― |  |  |  |  |  |  |  |  |  |  |  |  |
Cardmember Receivables |  | 1.7 | % | 1.8 | % | 2.0 | % | 1.7 | % | 1.8 | % | 1.7 | %
|  |  |  |  |  | 2011 |  | 2010 |
|  |  |  |  |  | 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 | (b) | Receivables |
International Card Services ― Cardmember Receivables |  | 0.15 | % | 0.9 | % | 0.27 | % | 1.0 | %
Global Commercial Services ― Cardmember Receivables | 0.06 | % | 0.7 | % | 0.13 | % | 0.8 | %
(a) 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's practice is to include uncollectible interest and/or fees as part of its total provision for losses, a net write-off rate includi ng principal, interest and/or fees is also presented. (b) In the first quarter of 2010, the Company modified its reporting in the ICS and GCS segments to write-off past due cardmember receivables when 180 days past due or earlier, versus its prior methodology of writing them off when 360 days past billing or earlier. This change is consistent with bank regulatory guidance and the write-off methodology adopted for the cardmember receivables portfo lio in the U.S. Card Services (USCS) segment in the fourth quarter of 2008. This change r esulted in approximately $60 million and $48 million of net write-offs for ICS and GCS, respe ctively, being included in the first quarter of 2010, which increased the net loss ratios and decreased the 90 days past billing metrics for these segments, but did not have a substantial impact on provisions for losses.
Impaired cardmember loans and receivables | The following tables provide additional information with respect to the Company's impaired cardmember loans and receivables as of September 30, 2011 and December 31, 2010:
|  |  | Loans over |  |  |  |  |  |  |  |  |  |  |  |
|  |  | 90 Days |  |  |  |  |  | Loans & |  |  | Total |  |  |
|  |  | Past Due |  |  | Non- |  |  | Receivables |  |  | Impaired |  |  | Unpaid |  |  |  |  |
(Millions) |  | & Accruing |  |  | Accrual |  |  | Modified |  |  | Loans & |  |  | Principal |  |  |  | Allowance |
2011 |  |  | Interest | (a) |  | Loans | (b) |  | as a TDR | (c)(d) |  | Receivables |  |  | Balance | (e) |  |  | for TDRs | (f)
U.S. Card Services ― Cardmember Loans |  | $ | 65 |  | $ | 420 |  | $ | 869 |  | $ | 1,354 |  | $ | 1,303 |  |  | $ | 199 |
International Card Services ― Cardmember Loans |  |  | 71 |  |  | 6 |  |  | 9 |  |  | 86 |  |  | 84 |  |  |  | 4 |
U.S. Card Services ― Cardmember Receivables |  |  | ― |  |  | ― |  |  | 159 |  |  | 159 |  |  | 158 |  |  |  | 94 |
Total(g) |  | $ | 136 |  | $ | 426 |  | $ | 1,037 |  | $ | 1,599 |  | $ | 1,545 |  |  | $ | 297 |
|  |  | Loans over |  |  |  |  |  |  |  |  |  |  |  |
|  |  | 90 Days |  |  |  |  |  | Loans & |  |  | Total |  |  |
|  |  | Past Due |  |  | Non- |  |  | Receivables |  |  | Impaired |  |  | Unpaid |  |  |  |  |
(Millions) |  | & Accruing |  |  | Accrual |  |  | Modified |  |  | Loans & |  |  | Principal |  |  |  | Allowance |
2010 |  |  | Interest | (a) |  | Loans | (b) |  | as a TDR | (c) |  | Receivables |  |  | Balance | (e) |  | for TDRs | (f)
U.S. Card Services ― Cardmember Loans |  | $ | 90 |  | $ | 628 |  | $ | 1,076 |  | $ | 1,794 |  | $ | 1,704 |  |  | $ | 274 |
International Card Services ― Cardmember Loans |  |  | 95 |  |  | 8 |  |  | 11 |  |  | 114 |  |  | 112 |  |  |  | 5 |
U.S. Card Services ― Cardmember Receivables |  |  | ― |  |  | ― |  |  | 114 |  |  | 114 |  |  | 109 |  |  |  | 63 |
Total(g) |  | $ | 185 |  | $ | 636 |  | $ | 1,201 |  | $ | 2,022 |  | $ | 1,925 |  |  | $ | 342 |
(a) The Company's policy is generally to accrue inte rest through the date of charge-off (at 180 days past due). The Company establishes reserves for interest that the Company believes will not be collected. (b) Non-accrual loans not in modification programs include certain cardmember loans placed with outside collection agencies for which the Company has ceased accruing interest. The Company's policy is not to resume the accrual of interest on these loans. Payments received are applied against the recorded loan balance. Interest income is recognized on a cash basis for any payments received after the loan balance has been paid in full. (c) The total loans and receivable s modified as a TDR include $517 million and $655 mil lion that are non-accrual and $5 million and $7 million that are past due 90 days and still accruing interest as of September 30, 2011 and December 31, 2010, respectively. These amounts are excluded from the previous two columns. (d) The Company reassessed all cardmember loans and receivables modifications that occurred on or after January 1, 2011, to determine whether any such modifications met the definition of a TDR under new GAAP effective July 1, 2011. As a result, beginning the third quarter of 2011 the Company now includes its short-term settlement programs in TDRs. The Company's settlement programs hav e terms of three months or less and are contingent upon the cardmember fulfilling the program's payment terms, which if satisfied re sults in the write-off of the cardmember's remaining outstanding balance. The cardmember loans and receivables modified through these settlement programs continue to be evaluated individually for impairment when measuring reserves for losses. As of September 30, 2011, the outstanding balance of cardmember loans and receivables modified through settlement program s wa s $5.8 million and the assoc iated reserves for losses wa s $3.7 million. (e) Unpaid principal balance consists of cardmember charges billed and excludes other amounts charged directly by the Company such as interest and fees. (f) Represents the reserve for losses for TDRs, which are evaluated separately fo r impairment. The Company record s a reserve for losses for all impaired loans. Refer to Cardmember Loans Evaluated Separately and Collectively for Impairment in Note 5 for further discussion of the reserve for losses on loans over 90 days past due and accruing interest and non-accrual loans, which are evaluated collectively for impairment. (g) These di sclosures are not significant for cardmember receivables in ICS and GCS.
Troubled debt restructurings | The following table provides additional information with respect to the cardmember loans and receivables modified as TDRs during the following periods:
|  | Three Months Ended |  | Nine Months Ended
|  | September 30, 2011 |  | September 30, 2011
|  |  |  |  | Aggregated |  |  | Aggregated |  |  |  |  | Aggregated |  |  | Aggregated
|  |  |  |  | Pre- |  |  | Post- |  |  |  |  | Pre- |  |  | Post-
|  |  |  | Modification |  | Modification |  |  |  | Modification |  | Modification
|  | Number of |  | Outstanding |  | Outstanding |  | Number of |  | Outstanding |  | Outstanding
(Accounts in thousands, Dollars in millions) |  | Accounts |  |  | Balances(a)(b) |  |  | Balances(a)(b) |  | Accounts |  |  | Balances(a)(b) |  |  | Balances(a)(b)
Troubled Debt Restructurings: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services ― Cardmember Loans |  | 35 |  | $ | 269 |  | $ | 259 |  | 116 |  | $ | 875 |  | $ | 839
U.S. Card Services ― Cardmember Receivables |  | 14 |  |  | 108 |  |  | 105 |  | 36 |  |  | 292 |  |  | 281
Total(c) |  | 49 |  | $ | 377 |  | $ | 364 |  | 152 |  | $ | 1,167 |  | $ | 1,120
The outstanding balance includes principal and accrued interest. The difference between the pre- and post-modification outstanding balance s is solely attributable to amounts charged off for cardmember loans and receivables being resolved through the Company's short-term settlement programs. These disclosures are not significant for cardmember loans modifications in ICS.
Troubled debt restructurings that subsequently defaulted | The following table provides information with respect to the cardmember loans and receivables modif ied as TDRs on which there was a default w ithin 12 months of modification during the periods presented. A cardmember will default from a modific ation program after between one and up to three consecutive missed payments, depending on the terms of the modification program.
|  | Three Months Ended |  | Nine Months Ended
|  | September 30, 2011 |  | September 30, 2011
|  |  |  |  |  | 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: |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services ― Cardmember Loans |  |  | 9 |  | $ | 65 |  |  | 36 |  | $ | 271
U.S. Card Services ― Cardmember Receivables |  |  | 1 |  |  | 7 |  |  | 5 |  |  | 32
Total(b) |  |  | 10 |  | $ | 72 |  |  | 41 |  | $ | 303
(a) The outstanding balance include s principal and accrued interest. (b) During the period s presented, the ICS cardmember l oan modifications on which there was a default from the modification program within 12 months of modification were not significant.

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