Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Our primary revenue sources, which include financing revenue and other interest income, are addressed by other GAAP and are not in the scope of ASC Topic 606, Revenue from Contracts with Customers. As part of our Insurance operations, we recognize revenue from insurance contracts, which are addressed by other GAAP and are not included in the scope of this standard. Certain noninsurance contracts within our Insurance operations, including VSCs, GAP contracts, and VMCs, are included in the scope of this standard. All revenue associated with noninsurance contracts is recognized over the contract term on a basis proportionate to the anticipated cost emergence. Further, commissions and sales expense incurred to obtain these contracts are amortized over the terms of the related policies and service contracts on the same basis as premiums and service revenue are earned, and all advertising costs are recognized as expense when incurred.

The following table presents a disaggregated view of our revenue from contracts with customers included in other revenue that falls within the scope of the revenue recognition principles of ASC Topic 606, Revenue from Contracts with Customers. For further information regarding our revenue recognition policies and details about the nature of our respective revenue streams, refer to Note 1 and Note 3 to the Consolidated Financial Statements in our 2019 Annual Report on Form 10-K.



Three months ended March 31, ($ in millions)	Automotive Finance operations		Insurance operations			Mortgage Finance operations		Corporate Finance operations		Corporate and Other		Consolidated
2020
Revenue from contracts with customers
Noninsurance contracts (a) (b) (c)	$	—	$	143		$	—	$	—	$	—	$	143
Remarketing fee income	17		—			—		—		—		17
Brokerage commissions and other revenue	—		—			—		—		13		13
Deposit account and other banking fees	—		—			—		—		4		4
Brokered/agent commissions	—		4			—		—		—		4
Other	5		—			—		—		—		5
Total revenue from contracts with customers	22		147			—		—		17		186
All other revenue (d)	25		(10		)	10		13		42		80
Total other revenue (e)	$	47	$	137		$	10	$	13	$	59	$	266
2019
Revenue from contracts with customers
Noninsurance contracts (a) (b) (c)	$	—	$	131		$	—	$	—	$	—	$	131
Remarketing fee income	18		—			—		—		—		18
Brokerage commissions and other revenue	—		—			—		—		17		17
Deposit account and other banking fees	—		—			—		—		5		5
Brokered/agent commissions	—		3			—		—		—		3
Other	5		—			—		—		—		5
Total revenue from contracts with customers	23		134			—		—		22		179
All other revenue	45		226			2		11		3		287
Total other revenue (e)	$	68	$	360		$	2	$	11	$	25	$	466

(a)

We had opening balances of $2.9 billion and $2.6 billion in unearned revenue associated with outstanding contracts at December 31, 2019, and December 31, 2018, respectively, and $214 million and $199 million of these balances were recognized as insurance premiums and service revenue earned in our Condensed Consolidated Statement of Comprehensive Income during the three months ended March 31, 2020, and March 31, 2019.


(b)	At March 31, 2020, we had unearned revenue of $2.9 billion associated with outstanding contracts, and with respect to this balance we expect to recognize revenue of $591 million in 2020, $714 million in 2021, $609 million in 2022, $476 million in 2023, and $498 million thereafter. At March 31, 2019, we had unearned revenue of $2.7 billion associated with outstanding contracts.

(c)

We had deferred insurance assets of $1.7 billion at both December 31, 2019, and March 31, 2020, respectively, and recognized $125 million of expense during the three months ended March 31, 2020. We had deferred insurance assets of $1.5 billion and $1.6 billion at December 31, 2018, and March 31, 2019, respectively, and recognized $111 million of expense during the three months ended March 31, 2019.


(d)	Insurance operations includes $132 million of insurance premiums and service revenue earned and $142 million of net losses on investment securities.


(e)	Represents a component of total net revenue. Refer to Note 22 for further information on our reportable operating segments.

In addition to the components of other revenue presented above, as part of our Automotive Finance operations, we recognized net remarketing gains of $2 million for the three months ended March 31, 2020, and $15 million for the three months ended March 31, 2019, on the sale of off-lease vehicles. These gains are included in depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive Income.