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Accounts Receivable and Loans | 12 Months Ended
--- | ---
Dec. 31, 2015
Disclosure Text Block Abstract |
Accounts Receivable and Loans | NOTE 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. This Note is presented excluding amounts associated with the Card Member loans and receivables HFS as of December 31, 2015. Card Member and Other Receivables Card Member receivables, represent ing amounts due on charge card products, are recorded at the time a Card Member enters into a point-of-sa le transaction with a merchant. Each cha rge card transaction is authorized based on its likely economics, a Card Member’s most recent credit information and spend patterns. Additionally, global spend limits are establish ed to limit the maximum exposure for the Company. Charge Card Members generally must pay the full amount billed each month. Card Member receivable balances are presented on the Consolidated Balance Sheets net of reserves for losse s (refer to Note 4), and include principal and any related accrued fees. Accounts receivable by segment as of December 31, 2015 and 2014 consisted of:
(Millions) |  | 2015 |  | 2014
U.S. Card Services (a) |  | $ | 23,255 |  | $ | 22,468
International Card Services |  |  | 6,975 |  |  | 7,653
Global Commercial Services (b) |  |  | 13,777 |  |  | 14,583
Global Network & Merchant Services (c) |  |  | 126 |  |  | 147
Card Member receivables (d) |  |  | 44,133 |  |  | 44,851
Less: Reserve for losses |  |  | 462 |  |  | 465
Card Member receivables, net |  | $ | 43,671 |  | $ | 44,386
Other receivables, net (e) |  | $ | 3,024 |  | $ | 2,614
Includes $6.6 billion and $7.0 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of December 31, 2015 and 2014, respectively. Includes $319 million and $636 million due from airlines, of which Delta Air Lines (Delta) comprises $257 million and $606 million as of December 31, 2015 and 2014, respectively. Includes receivables primarily related to the Company’s International Currency Card portf olios. Includes approximately $11.9 billion and $13.3 billion of Card Member receivables outside the United States as of December 31, 2015 and 2014, respectively. Other receivables primarily represent amounts related to (i) certain merchants for billed discount revenue and (ii) GNS partner banks for items such as royalty and franchise fees. Other receivables are presented net of reserves for losses of $43 million and $61 million as of December 31, 2015 and 2014, respectively. Ca rd Member and Other Loans Card Member loans, represent ing revolving amounts due on lending card products, are recorded at the time a Card Member enters into a point-of-sale transaction w ith a merchant, as well as amounts due from charge Card Members who utilize the lending-on-charge feature on their account and elect to revolve a portion of the outstanding balance by enter ing into a revolving payment arrangement with the Company. These lo ans have a range of terms such as credit limits, interest rates, fees and payment structures, which can be revised over time based on new information about Card Members and in accordance with applicable regulations and the respective product’s terms and co nditions. Card Members holding revolving loans are typically required to make monthly payments based on pre-established amounts. The amounts that Card Members choose to revolve are subject to finance charges. Card Member loans are presented on the Consolid ated Balance Sheets net of reserves for losses (refer to Note 4), and include principal, accrued interest and fees receivable. The Company’s policy generally is to cease accruing interest on a Card Member loan at the time the account is written off, and es tablish reserves for interest that the Company believes will not be collected. Loans by segment as of December 31, 2015 and 2014 consisted of:
(Millions) |  |  | 2015 |  |  | 2014
U.S. Card Services(a) |  | $ | 51,446 |  | $ | 62,592
International Card Services |  |  | 7,072 |  |  | 7,744
Global Commercial Services |  |  | 55 |  |  | 49
Card Member loans |  |  | 58,573 |  |  | 70,385
Less: Reserve for losses |  |  | 1,028 |  |  | 1,201
Card Member loans, net |  | $ | 57,545 |  | $ | 69,184
Other loans, net(b) |  | $ | 1,254 |  | $ | 920
Includes approximately $23.6 billion and $30.1 billion of gross Card Member loans available to settle obligations of a consolidated VIE as of December 31, 2015 and 2014, respectively. Other loans primarily represent loans to merchants. Other loans are presented net of reserves for losses of $20 million and $12 million as of December 31, 2015 and 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 af ter the billing statement date. The following table presents the aging of Card Member loans and receivables as of December 31, 2015 and 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 |  | $ | 50,929 |  | $ | 154 |  | $ | 112 |  | $ | 251 |  | $ | 51,446
International Card Services |  |  | 6,961 |  |  | 34 |  |  | 25 |  |  | 52 |  |  | 7,072
Card Member Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services |  | $ | 22,896 |  | $ | 118 |  | $ | 73 |  | $ | 168 |  | $ | 23,255
International Card Services |  |  | 6,875 |  |  | 28 |  |  | 21 |  |  | 51 |  |  | 6,975
Global Commercial Services (a) |  |  | (b) |  |  | (b) |  |  | (b) |  |  | 124 |  |  | 13,777
|  |  |  |  |  |  | 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 table s present the key credit quality indicators as of or for the years ended December 31:
|  | 2015 |  | 2014 |
|  | Net Write-Off Rate |  |  |  | Net Write-Off Rate |  |  |
|  |  |  |  |  | 30+ |  |  |  |  |  | 30+ |
|  |  |  | Principal, |  | Days Past Due |  |  |  | Principal, |  | Days 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 | % | 1.5 | % | 1.7 | % | 1.0 | %
International Card Services |  | 1.9 | % | 2.4 | % | 1.6 | % | 2.0 | % | 2.4 | % | 1.6 | %
Card Member Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services |  | 1.7 | % | 1.9 | % | 1.5 | % | 1.6 | % | 1.8 | % | 1.7 | %
International Card Services |  | 2.0 | % | 2.2 | % | 1.4 | % | 1.9 | % | 2.1 | % | 1.3 | %
|  |  |  |  |  | 2015 |  | 2014 |
|  |  |  |  |  | Net Loss |  |  |  | Net Loss |  |  |
|  |  |  |  |  | Ratio as |  | 90+ |  | Ratio as |  | 90+ |
|  |  |  |  |  | a % of |  | Days Past Billing |  | a % of |  | Days Past Billing |
|  |  |  |  |  | Charge |  | as a % of |  | Charge |  | as a % of |
|  |  |  |  |  | Volume |  | Receivables |  | Volume |  | Receivables |
Card Member Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |
Global Commercial Services |  |  |  |  |  | 0.09 | % | 0.9 | % | 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, b ecause 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 year ended December 31, 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. Refer to Note 4 for additional indicators, including external environmental qualitative factors, management considers in its monthly e valuation process for reserves for losses. 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 term s of the Card Member agreement. The Company considers impaired loans and receivables to include: (i) loans over 90 days past due still accruing interest, (ii) nonaccrual loans and (iii) loans and receivables modifi ed as troubled debt restructurings (TDRs). The Company may modify, through various programs, Card Member loans and receivables in instances where the Card Member is experiencing financial difficulty in order to minimize losses and improve collectability, while providing Card Members with temporary or permanent financial relief. The Company has classified Card Member loans and receivables in these modification programs as TDRs. Beginning January 1, 2015, on a prospective basis the Company continues to class ify Card Member accounts that have exited a modification program as a TDR, with such accounts iden tified as “Out of Program TDRs.” Such modifications to the loans and receivables primarily include (i) temporary interest rate reductions (possibly as low as zero percent, in which case t he loan is characterized as non-accrual in the Company’s TDR disclosures), (ii) placing the Card Member on a fixed payment plan not to exceed 60 months and (iii) suspending delinquency fees until the Card Member exits the modifi cation program. Upon entering the modification program, the Card Member’s ability to make future purchases is either cancelled, or in certain cases suspended until the Card Member successfully exits the modification program. In accordance with the modific ation agreement with the Card Member, loans may revert back to the original contractual terms (including the contractual interest rate) when the Card Member exits the modification program, which is (i) when all payments have been made in accordance with th e modification agreement or, (ii) when the Card Member defaults out of the modification program. The Company establishes a reserve for Card Member interest charges and fees considered to be uncollectible. Reserves for Card Member loans and receivables mod ified as TDRs are determined as the difference between the cash flows expected to be received from the Card Member (taking into consideration the probability of subsequent defaults), discounted at the original effective interest rates, and the carrying val ue of the related Card Member loan or receivable balance. The Company determines the original effective interest rate as the interest rate in effect prior to the imposition of any penalty interest rate. All changes in the impairment measurement are include d in the P rovision s for losses in the Consolidated Statements of Income. The following table s provide additional information with respect to the Company’s impaired Card Member loans and receivables. Impaired Card Member loans are not significant for GCS and impaired Card Member receivables are not significant for International Card Services (ICS) and GCS; therefore, these segments are not included in the following tables.
|  | As of December 31, 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 |  | $ | 164 |  | $ | 150 |  | $ | 172 |  |  | $ | 107 |  |  | $ | 593 |  | $ | 548 |  | $ | 53
International Card Services |  |  | 52 |  |  | ― |  |  | ― |  |  |  | ― |  |  |  | 52 |  |  | 51 |  |  | ―
Card Member Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services |  |  | ― |  |  | ― |  |  | 27 |  |  |  | 6 |  |  |  | 33 |  |  | 33 |  |  | 20
Total |  | $ | 216 |  | $ | 150 |  | $ | 199 |  |  | $ | 113 |  |  | $ | 678 |  | $ | 632 |  | $ | 73
|  | 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 |  |  |
|  | As of December 31, 2013 |  |  |
|  | 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 |  | $ | 167 |  | $ | 294 |  | $ | 351 |  |  | $ | 812 |  |  | $ | 775 |  | $ | 78 |  |  |
International Card Services |  |  | 54 |  |  | 4 |  |  | 5 |  |  |  | 63 |  |  |  | 62 |  |  | ― |  |  |
Card Member Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Card Services |  |  | ― |  |  | ― |  |  | 50 |  |  |  | 50 |  |  |  | 49 |  |  | 38 |  |  |
Total |  | $ | 221 |  | $ | 298 |  | $ | 406 |  |  | $ | 925 |  |  | $ | 886 |  | $ | 116 |  |  |
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 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. Accou nts classified as a TDR include $20 million, $26 million and $29 mi l l ion that are over 90 days past due and accruing interest and $18 million, $34 millio n and $43 million that are non-accrual as of December 31, 2015, 2014 and 2013, respectively. In Program TDRs include Card Member accounts that are currentl y enrolled in a modification program. Out of Pro gram TDRs include $84 million of Card Member accounts that have successfully complete d a modification program and $29 million of Card Member accounts that were not in compliance with the terms of the modification program s. 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 years ended December 31:
|  |  | Average |  | Interest Income
2015 (Millions) |  |  | Balance |  | Recognized
Card Member Loans: |  |  |  |  |  |
U.S. Card Services |  | $ | 673 |  | $ | 59
International Card Services |  |  | 54 |  |  | 14
Card Member Receivables: |  |  |  |  |  |
U.S. Card Services |  |  | 33 |  |  | ―
Total |  | $ | 760 |  | $ | 73
|  |  | Average |  | Interest Income
2014 (Millions) |  |  | Balance |  | Recognized
Card Member Loans: |  |  |  |  |  |
U.S. Card Services |  | $ | 750 |  | $ | 49
International Card Services |  |  | 62 |  |  | 16
Card Member Receivables: |  |  |  |  |  |
U.S. Card Services |  |  | 47 |  |  | ―
Total |  | $ | 859 |  | $ | 65
|  |  | Average |  | Interest Income
2013 (Millions) |  |  | Balance |  | Recognized
Card Member Loans: |  |  |  |  |  |
U.S. Card Services |  | $ | 948 |  | $ | 46
International Card Services |  |  | 67 |  |  | 16
Card Member Receivables: |  |  |  |  |  |
U.S. Card Services |  |  | 81 |  |  | ―
Total |  | $ | 1,096 |  | $ | 62
Card Member Loans and Receivables Modified as TDRs 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 year s ended December 31, 2015, 2014 and 2013. 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.
|  |  | Number of |  | Outstanding |  | Average Interest |  | Average Payment
|  |  | Accounts |  |  | Balances(a) |  | Rate Reduction |  | Term Extensions
2015 |  | (in thousands) |  |  | ($ in millions) |  | (% points) |  | (# of months)
Troubled Debt Restructurings: |  |  |  |  |  |  |  |  |
| Card Member Loans |  | 40 |  | $ | 285 |  | 9 |  | (b)
| Card Member Receivables |  | 12 |  |  | 147 |  | (c) |  | 12
Total |  | 52 |  | $ | 432 |  |  |  |
|  |  | Number of |  | Outstanding |  | Average Interest |  | Average Payment
|  | Accounts |  |  | Balances(a) |  | Rate Reduction |  | Term Extensions
2014 |  | (in thousands) |  |  | ($ in millions) |  | (% points) |  | (# of months)
Troubled Debt Restructurings: |  |  |  |  |  |  |  |  |
| Card Member Loans |  | 46 |  | $ | 342 |  | 10 |  | (b)
| Card Member Receivables |  | 15 |  |  | 176 |  | (c) |  | 12
Total |  | 61 |  | $ | 518 |  |  |  |
|  |  | Number of |  | Outstanding |  | Average Interest |  | Average Payment
|  | Accounts |  |  | Balances(a) |  | Rate Reduction |  | Term Extensions
2013 |  | (in thousands) |  |  | ($ in millions) |  | (% points) |  | (# of months)
Troubled Debt Restructurings: |  |  |  |  |  |  |  |  |
| Card Member Loans |  | 60 |  | $ | 448 |  | 10 |  | (b)
| Card Member Receivables |  | 20 |  |  | 247 |  | (c) |  | 12
Total |  | 80 |  | $ | 695 |  |  |  |
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. For the year ended December 31, 2013, i n certain modifications, the principal balance was reduced in the aggregate by $4 million. For the years ended December 31, 2015 and 2014, m odifications 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 years ended December 31, 2015, 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 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.
|  |  |  |  | Outstanding
|  |  | Number of |  | Balances
|  |  |  | Accounts |  | Upon Default
2015 |  |  | (thousands) |  | (millions)(a)
Troubled Debt Restructurings That Subsequently Defaulted: |  |  |  |  |  |
| Card Member Loans |  |  | 8 |  | $ | 52
| Card Member Receivables |  |  | 3 |  |  | 5
Total |  |  | 11 |  | $ | 57
|  |  |  |  | Outstanding
|  |  | Number of |  | Balances
|  |  | Accounts |  | Upon Default
2014 |  |  | (thousands)(b) |  | (millions)(a)
Troubled Debt Restructurings That Subsequently Defaulted: |  |  |  |  |  |
| Card Member Loans |  |  | 8 |  | $ | 52
| Card Member Receivables |  |  | 3 |  |  | 12
Total |  |  | 11 |  | $ | 64
|  |  |  |  | Outstanding
|  |  | Number of |  | Balances
|  |  | Accounts |  | Upon Default
2013 |  |  | (thousands) |  | (millions)(a)(b)
Troubled Debt Restructurings That Subsequently Defaulted: |  |  |  |  |  |
| Card Member Loans |  |  | 18 |  | $ | 141
| Card Member Receivables |  |  | 3 |  |  | 25
Total |  |  | 21 |  | $ | 166
The outstanding balances upon default include principal, fees and accrued interest on Card Member loans, and principal and fees on Card Member receivables. The number of accounts and outstanding balances upon default have been revised to reflect the exclusion of written off accounts, which are not material.

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- 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=49124121&loc=d3e4975-111524 + Details
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