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Accounts Receivable and Loans

9 Months Ended

Sep. 30, 2015

Loans Notes Trade And Other Receivables Disclosure [Abstract]

Accounts Receivable and Loans

3. Accounts Receivable and Loans

The Company’s charge and lending payment card products result in the generation of Card Member receivables and Card Member loans, respectively.

Accounts receivable by segment as of September 30, 2015 and December 31, 2014, consisted of:

(Millions)		2015			2014
U.S. Card Services(a)		$	21,965		$	22,468
International Card Services			6,511			7,653
Global Commercial Services(b)			15,748			14,583
Global Network & Merchant Services(c)			107			147
Card Member receivables(d)			44,331			44,851
Less: Reserve for losses			441			465
Card Member receivables, net		$	43,890		$	44,386
Other receivables, net(e)		$	2,517		$	2,614

• Includes $6.0 billion and $7.0 billion of gross Card Member receivables available to settle obligations of a consolidated variable interest entity (VIE) as of September 30, 2015 and December 31, 2014, respectively.
• Includes $327 million and $636 million due from airlines, of which Delta Air Lines comprises $265 million and $606 million as of September 30, 2015 and December 31, 2014, respectively.
• Includes receivables primarily related to the Company’s International Currency Card portfolios.
• Includes approximately $12.3 billion and $13.3 billion of Card Member receivables outside the U.S. as of September 30, 2015 and December 31, 2014, respectively.
• Other receivables primarily represent amounts related to (i) certain merchants for billed discount revenue and (ii) Global Network Services (GNS) partner banks for items such as royalty and franchise fees. Other receivables are presented net of reserves for losses of $61 million as of both September 30, 2015 and December 31, 2014.

Loans by segment as of September 30, 2015 and December 31, 2014, consisted of:

(Millions)			2015			2014
U.S. Card Services(a)		$	62,133		$	62,592
International Card Services			6,710			7,744
Global Commercial Services			52			49
Card Member loans			68,895			70,385
Less: Reserve for losses			1,164			1,201
Card Member loans, net		$	67,731		$	69,184
Other loans, net(b)		$	1,054		$	920

• Includes approximately $27.3 billion and $30.1 billion of gross Card Member loans available to settle obligations of a consolidated VIE as of September 30, 2015 and December 31, 2014, respectively.
• Other loans primarily represent loans to merchants. Other loans are presented net of reserves for losses of $18 million and $12 million as of September 30, 2015 and December 31, 2014, 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 September 30, 2015 and December 31, 2014:

						30-59			60-89			90+
						Days			Days			Days
						Past			Past			Past
2015 (Millions)			Current			Due			Due			Due			Total
Card Member Loans:
U.S. Card Services		$	61,530		$	191		$	131		$	281		$	62,133
International Card Services			6,604			35			22			49			6,710
Card Member Receivables:
U.S. Card Services		$	21,612		$	133		$	73		$	147		$	21,965
International Card Services			6,412			29			22			48			6,511
Global Commercial Services(a)			(b)			(b)			(b)			112			15,748
						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		$	61,995		$	179		$	128		$	290		$	62,592
International Card Services			7,621			39			27			57			7,744
Card Member Receivables:
U.S. Card Services		$	22,096		$	129		$	72		$	171		$	22,468
International Card Services			7,557			29			20			47			7,653
Global Commercial Services(a)			(b)			(b)			(b)			120			14,583

• For Card Member 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 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 Card Member Loans and Receivables

The following tables present the key credit quality indicators as of or for the nine months ended September 30:

		2015						2014
		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		1.4	%	1.6	%	1.0	%	1.6	%	1.8	%	1.0	%
International Card Services		2.0	%	2.4	%	1.6	%	2.0	%	2.4	%	1.6	%
Card Member Receivables:
U.S. Card Services		1.8	%	2.0	%	1.6	%	1.7	%	1.9	%	1.6	%
International Card Services		2.1	%	2.2	%	1.5	%	2.0	%	2.1	%	1.4	%
						2015				2014
						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:
Global Commercial Services						0.09	%	0.7	%	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. The nine months ended September 30, 2015, reflects the impact of a change in the timing of charge-offs for Card Member loans and receivables in certain modification programs from 180 days past due to 120 days past due, which was fully recognized during the three months ended March 31, 2015.

Impaired Card Member Loans and Receivables

Impaired loans and receivables are individual larger balance or homogeneous pools of smaller balance loans and receivables for which it is probable that the Company 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 the Company’s various modification programs. Beginning January 1, 2015, on a prospective basis the Company continues to classify Card Member accounts that have exited a modification program as a Troubled Debt Restructuring (TDR), with such accounts identified as “Out of Program TDRs.”

The following table provides additional information with respect to the Company’s impaired Card Member loans (which are not significant for GCS) and impaired Card Member receivables (which are not significant for International Card Services (ICS) and GCS) as of September 30, 2015 and December 31, 2014:

		As of September 30, 2015
		Over 90 days						Accounts Classified as a TDR (c)
		Past Due &														Total			Unpaid
		Accruing			Non-							Out of				Impaired			Principal			Allowance
(Millions)		Interest		(a)	Accruals		(b)	In Program		(d)		Program		(e)		Balance			Balance			for TDRs
Card Member Loans:
U.S. Card Services		$	192		$	175		$	224			$	109			$	700		$	649		$	66
International Card Services			49			―			―				―				49			49			―
Card Member Receivables:
U.S. Card Services			―			―			26				4				30			30			18
Total		$	241		$	175		$	250			$	113			$	779		$	728		$	84
		As of December 31, 2014
		Over 90 days
		Past Due &										Total				Unpaid
		Accruing			Non-			In Program				Impaired				Principal			Allowance
(Millions)		Interest		(a)	Accruals		(b)	TDRs		(c)(d)		Balance				Balance			for TDRs
Card Member Loans:
U.S. Card Services		$	161		$	241		$	286			$	688			$	646		$	67
International Card Services			57			―			―				57				56			―
Card Member Receivables:
U.S. Card Services			―			―			48				48				48			35
Total		$	218		$	241		$	334			$	793			$	750		$	102

• The Company’s policy is generally to accrue interest through the date of write-off (generally 180 days past due). The Company establishes reserves for interest that it believes will not be collected. Amounts presented exclude loans classified as a 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.
• Accounts classified as a TDR include $19 million and $26 million that are over 90 days past due and accruing interest and $25 million and $34 million that are non-accrual as of September 30, 2015 and December 31, 2014, respectively.
• In Program TDRs include Card Member accounts that are currently enrolled in a modification program.
• Out of Program TDRs include $82 million of Card Member accounts that have successfully completed a modification program and $31 million of Card Member accounts that were not in compliance with the terms of the modification programs.

The following table provides information with respect to the Company’s average balances of, and interest income recognized from, impaired Card Member loans (which are not significant for GCS) and the average balances of impaired Card Member receivables (which are not significant for ICS and GCS) for the three and nine months ended September 30:

		Three Months Ended						Nine Months Ended
		September 30, 2015						September 30, 2015
		Average			Interest Income			Average			Interest Income
2015 (Millions)		Balance			Recognized			Balance			Recognized
Card Member Loans:
U.S. Card Services		$	693		$	16		$	685		$	43
International Card Services			53			3			55			10
Card Member Receivables:
U.S. Card Services			28			―			35			―
Total		$	774		$	19		$	775		$	53
		Three Months Ended						Nine Months Ended
		September 30, 2014						September 30, 2014
		Average			Interest Income			Average			Interest Income
2014 (Millions)		Balance			Recognized			Balance			Recognized
Card Member Loans:
U.S. Card Services		$	675		$	12		$	734		$	37
International Card Services			63			4			63			12
Card Member Receivables:
U.S. Card Services			44			―			47			―
Total		$	782		$	16		$	844		$	49

Card Member Loans and Receivables Modified as TDRs

The following table provides additional information with respect to the USCS Card Member loans and receivables modified as TDRs for the three and nine months ended September 30, 2015 and 2014. The ICS Card Member loans and receivables modifications were not significant and the Company does not offer modification programs for its GCS Card Member receivables; therefore, these segments are not included in the following TDR disclosures.

Three Months Ended

Nine Months Ended

September 30, 2015

September 30, 2015

Average

Average

Average

Payment

Average

Payment

Number of

Outstanding

Interest Rate

Term

Number of

Outstanding

Interest Rate

Term

Accounts

Balances (a)

Reduction

Extension

Accounts

Balances (a)

Reduction

Extension

(thousands)

(millions)

(% Points)

(Months)

(thousands)

(millions)

(% Points)

(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

Three Months Ended

Nine Months Ended

September 30, 2014

September 30, 2014

Average

Average

Average

Payment

Average

Payment

Number of

Outstanding

Interest Rate

Term

Number of

Outstanding

Interest Rate

Term

Accounts

Balances (a)

Reduction

Extension

Accounts

Balances (a)

Reduction

Extension

(thousands)

(millions)

(% Points)

(Months)

(thousands)

(millions)

(% Points)

(Months)

Troubled Debt Restructurings:

Card Member Loans

11

$

83

9

(b)

35

$

261

11

(b)

Card Member Receivables

4

41

(c)

12

11

129

(c)

12

Total

15

$

124

46

$

390

• 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.

The following table provides information for the three and nine months ended September 30, 2015 and 2014, 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 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, 2015						September 30, 2015
					Outstanding						Outstanding
			Number of			Balances			Number of			Balances
			Accounts		Upon Default				Accounts		Upon Default
			(thousands)		(millions)(a)				(thousands)		(millions) (a)
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
		Three Months Ended						Nine Months Ended
		September 30, 2014						September 30, 2014
					Outstanding						Outstanding
			Number of			Balances			Number of			Balances
			Accounts		Upon Default				Accounts		Upon Default
			(thousands)		(millions)(a)(b)				(thousands)		(millions)(a)(b)
Troubled Debt Restructurings That Subsequently Defaulted:
Card Member Loans			2		$	12			6		$	40
Card Member Receivables			1			2			2			9
Total			3		$	14			8		$	49

• The outstanding balances upon default include principal, fees and accrued interest on Card Member loans and principal and fees on Card Member receivables.
• The outstanding balances upon default have been revised to reflect the exclusion of written off accounts, which are not material.

X

- Definition

Loans notes trade and other receivables disclosure abstract.

+ References

No definition available.

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X

- Definition

The entire disclosure for financing receivables. Examples of financing receivables include, but are not limited to, loans, trade accounts receivables, notes receivable, credit cards, and receivables relating to a lessor's right(s) to payment(s) from a lease other than an operating lease that is recognized as assets.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef



-Publisher FASB



-Name Accounting Standards Codification



-Topic 310



-SubTopic 10



-Section 55



-Paragraph 14



-URI http://asc.fasb.org/extlink&oid=32702940&loc=SL6953791-111525



Reference 2: http://www.xbrl.org/2003/role/presentationRef



-Publisher FASB



-Name Accounting Standards Codification



-Topic 310



-SubTopic 10



-Section 50



-Paragraph 1



-URI http://asc.fasb.org/extlink&oid=35738203&loc=d3e4975-111524

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