Receivables, net

Receivables consisted of the following:



	December 31, 2015			December 31, 2014
	(in millions)
Real estate secured:
First lien	$	7,302		$	20,153
Second lien	1,854			2,517
Total real estate secured receivables	9,156			22,670
Accrued interest income and other	142			789
Credit loss reserve for receivables	(311		)	(2,217		)
Total receivables, net	$	8,987		$	21,242

Deferred origination fees, net of costs, totaled $71 million and $159 million at December 31, 2015 and December 31, 2014, respectively, and are included in the receivables balance. Net unamortized premium on our receivables totaled $35 million and $76 million at December 31, 2015 and December 31, 2014, respectively, and are also included in the receivables balance.

In June 2015, we expanded our receivable sales program which resulted in the transfer of receivables with a carrying value of $11,399 million, including accrued interest, to held for sale during the second quarter of 2015. See Note 7, "Receivables Held for Sale," for additional information including the total of all real estate secured receivables transferred to held for sale during 2015 under the expanded receivable sales program.

Collateralized funding transactions Secured financings previously issued under public trusts with a balance of $879 million at December 31, 2015 are secured by $1,654 million of closed-end real estate secured receivables. Secured financings previously issued under public trusts with a balance of $1,489 million at December 31, 2014 were secured by $2,999 million of closed-end real estate secured receivables.

Aging Analysis of Past Due Receivables The following tables summarize the past due status of our receivables (excluding receivables held for sale) at December 31, 2015 and December 31, 2014. The aging of past due amounts is determined based on the contractual delinquency status of payments made under the terms of the receivable. An account is generally considered to be contractually delinquent when payments have not been made in accordance with the loan terms. Delinquency status is affected by customer account management policies and practices such as re-aging. As previously discussed, in June 2015 we expanded our receivable sales program and transferred receivables with a carrying value of $11,399 million, including accrued interest, to held for sale during the second quarter of 2015 which should be considered when comparing the aging analysis of past due receivables between periods.



	Past Due				Total Past Due				Total Receivables⁽²⁾
December 31, 2015	30 – 89 days		90+ days		Total Past Due		Current⁽¹⁾		Total Receivables⁽²⁾
	(in millions)
Real estate secured:
First lien	$	179	$	219	$	398	$	6,904	$	7,302
Second lien	98		62		160		1,694		1,854
Total real estate secured receivables	$	277	$	281	$	558	$	8,598	$	9,156



	Past Due				Total Past Due				Total Receivables⁽²⁾
December 31, 2014	30 – 89 days		90+ days		Total Past Due		Current⁽¹⁾		Total Receivables⁽²⁾
	(in millions)
Real estate secured:
First lien	$	1,572	$	902	$	2,474	$	17,679	$	20,153
Second lien	165		100		265		2,252		2,517
Total real estate secured receivables	$	1,737	$	1,002	$	2,739	$	19,931	$	22,670


⁽¹⁾	Receivables less than 30 days past due are presented as current.

⁽²⁾

The receivable balances included in this table reflect the principal amount outstanding on the loan net of any charge-off recorded in accordance with our existing charge-off policies and include certain basis adjustments to the loan such as unearned income, unamortized deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans. However, these basis adjustments on the loans are excluded in other presentations of dollars of two-months-and-over contractual delinquency, nonaccrual receivable and nonperforming receivable account balances.

Contractual maturities Contractual maturities of our receivables (based upon final contractual maturities) are as follows:



	2016		2017		2018		2019		2020		Thereafter		Total
	(in millions)
Real estate secured:
First lien	$	15	$	16	$	25	$	37	$	56	$	7,153	$	7,302
Second lien	15		12		14		44		252		1,517		1,854
Total real estate secured receivables	$	30	$	28	$	39	$	81	$	308	$	8,670	$	9,156

As a substantial portion of consumer receivables, based on our experience, will be repaid prior to contractual maturity, the above maturity schedule should not be regarded as a forecast of future cash collections.

The following table summarizes contractual maturities of receivables due after one year by repricing characteristic (based upon final contractual maturities):



At December 31, 2015	Over 1 But Within 5 Years		Over 5 Years
	(in millions)
Receivables at predetermined interest rates	$	395	$	7,866
Receivables at floating or adjustable rates	61		804
Total	$	456	$	8,670

Nonaccrual receivables Nonaccrual receivables and nonaccrual receivables held for sale are all receivables which are 90 or more days contractually delinquent as well as second lien loans (regardless of delinquency status) where the first lien loan that we own or service is 90 or more days contractually delinquent. Nonaccrual receivables do not include receivables which have made qualifying payments and have been re-aged such that the contractual delinquency status has been reset to current. If a re-aged loan subsequently experiences payment default and becomes 90 or more days contractually delinquent, it will be reported as nonaccrual.

Nonaccrual receivables and nonaccrual receivables held for sale consisted of the following:



	December 31, 2015		December 31, 2014
	(in millions)
Nonaccrual receivable portfolios⁽¹⁾:
Real estate secured⁽²⁾	$	283	$	1,024
Receivables held for sale⁽³⁾	386		509
Total nonaccrual receivables⁽⁴⁾	$	669	$	1,533

⁽¹⁾

The receivable balances included in this table reflect the principal amount outstanding on the loan net of any charge-off recorded in accordance with our existing charge-off policies but exclude any basis adjustments to the loan such as unearned income, unamortized deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans. Additionally, the balances in this table related to receivables which have been classified as held for sale have been reduced by the lower of amortized cost or fair value adjustment recorded as well as the credit loss reserves associated with these receivables prior to the transfer.


⁽²⁾	At December 31, 2015 and December 31, 2014, nonaccrual real estate secured receivables held for investment include $187 million and $417 million, respectively, of receivables that are carried at the lower of amortized cost or fair value of the collateral less cost to sell.


⁽³⁾	For a discussion of the movements between the components of nonaccrual receivables, see Note 7, "Receivables Held for Sale," which includes discussion of the expansion of our receivable sales program in the second quarter of 2015.


⁽⁴⁾	Nonaccrual receivables do not include receivables totaling $501 million and $627 million at December 31, 2015 and December 31, 2014, respectively, which are less than 90 days contractually delinquent and not accruing interest.

The following table provides additional information on our total nonaccrual receivables:



Year Ended December 31,	2015		2014		2013
	(in millions)
Interest income that would have been recorded if the nonaccrual receivable had been current in accordance with contractual terms during the period	$	163	$	354	$	819
Interest income that was recorded on nonaccrual receivables included in interest income on nonaccrual loans during the period	59		114		216

Troubled Debt Restructurings We report as trouble debt restructurings ("TDR Loans") substantially all receivables modified as a result of a financial difficulty, regardless of whether the modification was permanent or temporary, including all modifications with trial periods. Additionally, we report as TDR Loans all re-ages, except first time early stage delinquency re-ages where the customer has not been granted a prior re-age or modification. TDR Loans also include receivables discharged under Chapter 7 bankruptcy and not re-affirmed. TDR Loans are considered to be impaired loans. The TDR Loan balances in the tables below reflect the principal amount outstanding on the loan net of any charge-off recorded in accordance with our existing charge-off policies and includes all basis adjustments on the loan, such as unearned income, unamortized deferred fees and costs on originated loans and premiums or discounts on purchased loans. Additionally, the carrying amount of TDR Loans classified as held for sale has been reduced by both the lower of amortized cost or fair value adjustment as well as the credit loss reserves associated with these receivables prior to the transfer. TDR Loans are considered to be impaired loans regardless of their accrual status.

Modifications for real estate secured receivables may include changes to one or more terms of the loan, including, but not limited to, a change in interest rate, an extension of the amortization period, a reduction in payment amount, partial forgiveness or deferment of principal or other loan covenants. A substantial amount of our modifications involve interest rate reductions which lower the amount of interest income we are contractually entitled to receive for a period of time in future periods. By lowering the interest rate and making other changes to the loan terms, we believe we are able to increase the amount of cash flow that will ultimately be collected from the loan, given the borrower's financial condition. Re-aging is an account management action that results in the resetting of the contractual delinquency status of an account to current which generally requires the receipt of two qualifying payments. TDR Loans are reserved for based on the present value of expected future cash flows discounted at the loans' original effective interest rate which generally results in a higher reserve requirement for these loans. The portion of the credit loss reserves on TDR Loans that is associated with the discounting of cash flows is released from credit loss reserves over the life of the TDR Loan. There are no credit loss reserves associated with TDR Loans classified as held for sale as they are carried at the lower of amortized cost or fair value.

The following table presents information about receivables held for investment and receivables held for sale which as a result of any account management action taken during the years ended December 31, 2015, 2014 and 2013 became classified as TDR Loans as well as a summary of the type of account management action taken.



Year Ended December 31,	2015		2014		2013
	(in millions)
Receivables classified as TDR Loans during the period:
Real estate secured:
First lien held for investment	$	177	$	659	$	1,358
Second lien held for investment	53		86		166
Real estate secured receivables held for sale	221		70		298
Total real estate secured	451		815		1,822
Personal non-credit card receivables held for sale⁽¹⁾	—		—		28
Total	$	451	$	815	$	1,850

Types of account management actions taken during the period:
Modifications, primarily interest rate modifications	$	174	$	276	$	692
Re-age of past due account	277		539		1,158
Total⁽²⁾	$	451	$	815	$	1,850


⁽¹⁾	As discussed more fully in Note 7, "Receivables Held for Sale," we sold our personal non-credit card receivable portfolio on April 1, 2013.


⁽²⁾	During 2015, it was determined that loan balances totaling $160 million previously reported as modifications in the table above during 2014 should have been reported as a re-age. Accordingly, the modification and re-age information presented in the table above for 2014 has been adjusted. The total amount reported remains unchanged.

The tables below present information about our TDR Loans and TDR Loans held for sale, including the related allowance for credit losses. The TDR Loan carrying value trend in the table below reflects the impact of the transfer of additional receivables to held for sale as a result of the expansion of the receivable sales program in 2015 as the majority of the receivables transferred to held for sale were previously classified as TDR Loans.



	December 31, 2015				December 31, 2014
	Carrying Value		Unpaid Principal Balance		Carrying Value		Unpaid Principal Balance
	(in millions)
TDR Loans:⁽¹⁾
Real estate secured:
First lien⁽²⁾	$	870	$	1,003	$	9,630	$	9,931
Second lien⁽²⁾	652		732		915		1,050
Real estate secured receivables held for sale⁽³⁾	6,044		7,317		650		1,004
Total real estate secured TDR Loans	$	7,566	$	9,052	$	11,195	$	11,985

Credit loss reserves for TDR Loans:⁽⁴⁾
Real estate secured:
First lien	$	95			$	1,738
Second lien	135				244
Total credit loss reserves for real estate secured TDR Loans⁽³⁾	$	230			$	1,982


⁽¹⁾	At December 31, 2015 and December 31, 2014, the unpaid principal balance reflected above includes $740 million and $549 million, respectively, which have received a reduction in the unpaid principal balance as part of an account management action.


⁽²⁾	At December 31, 2015 and December 31, 2014, the carrying value of TDR Loans held for investment totaling $250 million and $517 million, respectively, are recorded at the lower of amortized cost or fair value of the collateral less cost to sell.


⁽³⁾	There are no credit loss reserves associated with receivables classified as held for sale as they are carried at the lower of amortized cost or fair value.


⁽⁴⁾	Included in credit loss reserves.

The following table provides additional information about the average balance and interest income recognized on TDR Loans and TDR Loans held for sale.



Year Ended December 31,	2015		2014		2013
	(in millions)
Average balance of TDR Loans:
Real estate secured:
First lien	$	8,927	$	11,342	$	14,430
Second lien	836		975		1,136
Total real estate secured	9,763		12,317		15,566
Personal non-credit card	—		—		144
Total average balance of TDR Loans	$	9,763	$	12,317	$	15,710
Interest income recognized on TDR Loans:
Real estate secured:
First lien	$	665	$	782	$	927
Second lien	85		95		108
Total real estate secured	750		877		1,035
Personal non-credit card	—		—		40
Total interest income recognized on TDR Loans	$	750	$	877	$	1,075

The following table discloses receivables and receivables held for sale which were classified as TDR Loans during the previous 12 months which subsequently became sixty days or greater contractually delinquent during the year ended December 31, 2015, 2014 and 2013.



Year Ended December 31,	2015		2014		2013
	(in millions)
Real estate secured:
First lien	$	72	$	367	$	765
Second lien	24		53		116
Real estate secured receivables held for sale	90		33		342
Total real estate secured	186		453		1,223
Personal non-credit card receivables held for sale	—		—		21
Total	$	186	$	453	$	1,244

Consumer Receivable Credit Quality Indicators Credit quality indicators used for consumer receivables include a loan’s delinquency status, whether the loan is performing and whether the loan is a TDR Loan.

Delinquency The following table summarizes dollars of two-months-and-over contractual delinquency and as a percent of total receivables and receivables held for sale (“delinquency ratio”) for our loan portfolio. As previously discussed, in June 2015 we expanded our receivable sales program and transferred receivables with a carrying value of $11,399 million, including accrued interest, to held for sale during the second quarter of 2015 which should be considered when comparing dollars of contractual delinquency and the delinquency ratio between periods.



	December 31, 2015				December 31, 2014
	Dollars of Delinquency		Delinquency Ratio		Dollars of Delinquency		Delinquency Ratio
	(dollars are in millions)
Real estate secured receivables⁽¹⁾:
First lien	$	272	3.73	%	$	1,388	6.89	%
Second lien	94		5.07		154		6.12
Real estate secured receivables held for sale	569		6.88		530		61.63
Total real estate secured receivables⁽²⁾	$	935	5.37	%	$	2,072	8.81	%

⁽¹⁾

The receivable balances included in this table reflect the principal amount outstanding on the loan net of any charge-off recorded in accordance with our existing charge-off policies but exclude any basis adjustments to the loan such as unearned income, unamortized deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans. Additionally, the balances in this table related to receivables which have been classified as held for sale have been reduced by the lower of amortized cost or fair value adjustment recorded as well as the credit loss reserves associated with these receivables prior to the transfer.


⁽²⁾	At December 31, 2015 and December 31, 2014, total real estate secured receivables include $363 million and $745 million, respectively, that are in the process of foreclosure.

Nonperforming The following table summarizes the status of receivables and receivables held for sale.



	Accruing Loans		Nonaccrual Loans⁽⁴⁾		Total
	(in millions)
At December 31, 2015⁽¹⁾
Real estate secured⁽²⁾⁽³⁾	$	8,873	$	283	$	9,156
Real estate secured receivables held for sale	7,879		386		8,265
Total	$	16,752	$	669	$	17,421
At December 31, 2014⁽¹⁾
Real estate secured⁽²⁾⁽³⁾	$	21,646	$	1,024	$	22,670
Real estate secured receivables held for sale	351		509		860
Total	$	21,997	$	1,533	$	23,530

⁽¹⁾

The balances included in this table reflect the principal amount outstanding on the loan net of any charge-off recorded in accordance with our existing charge-off policies but exclude any basis adjustments to the loan such as unearned income, unamortized deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans. Additionally, the balances in this table related to receivables which have been classified as held for sale have been reduced by the lower of amortized cost or fair value adjustment recorded as well as the credit loss reserves associated with these receivables prior to the transfer.


⁽²⁾	At December 31, 2015 and December 31, 2014, nonperforming real estate secured receivables held for investment include $187 million and $417 million, respectively, of receivables that are carried at the lower of amortized cost or fair value of the collateral less cost to sell.


⁽³⁾	At December 31, 2015 and December 31, 2014, nonperforming real estate secured receivables held for investment include $178 million and $739 million, respectively, of TDR Loans, some of which may also be carried at fair value of the collateral less cost to sell.


⁽⁴⁾	Nonperforming receivables do not include receivables totaling $501 million and $627 million at December 31, 2015 and December 31, 2014, respectively, which are less than 90 days contractually delinquent and not accruing interest.

Troubled debt restructurings See discussion of TDR Loans above for further details on this credit quality indicator.