Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 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 tables present 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 June 30, ($ 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)	$	—	$	142	$	—	$	—	$	—	$	142
Remarketing fee income	15		—		—		—		—		15
Brokerage commissions and other revenue	—		—		—		—		14		14
Brokered/agent commissions	—		4		—		—		—		4
Deposit account and other banking fees	—		—		—		—		1		1
Other	3		—		—		—		—		3
Total revenue from contracts with customers	18		146		—		—		15		179
All other revenue	22		292		19		6		37		376
Total other revenue (d)	$	40	$	438	$	19	$	6	$	52	$	555
2019
Revenue from contracts with customers
Noninsurance contracts (a) (b) (c)	$	—	$	134	$	—	$	—	$	—	$	134
Remarketing fee income	19		—		—		—		—		19
Brokerage commissions and other revenue	—		—		—		—		17		17
Brokered/agent commissions	—		4		—		—		—		4
Deposit account and other banking fees	—		—		—		—		4		4
Other	5		—		—		—		—		5
Total revenue from contracts with customers	24		138		—		—		21		183
All other revenue	37		148		4		10		13		212
Total other revenue (d)	$	61	$	286	$	4	$	10	$	34	$	395

(a)

We had opening balances of $2.9 billion and $2.7 billion in unearned revenue associated with outstanding contracts at April 1, 2020, and April 1, 2019, respectively, and $211 million and $202 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 June 30, 2020, and June 30, 2019.


(b)	At June 30, 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 $406 million during the remainder of 2020, $747 million in 2021, $649 million in 2022, $520 million in 2023, and $596 million thereafter. At June 30, 2019, we had unearned revenue of $2.8 billion associated with outstanding contracts.


(c)	We had deferred insurance assets of $1.7 billion and $1.8 billion at April 1, 2020, and June 30, 2020, respectively, and recognized $121 million of expense during the three months ended June 30, 2020. We had deferred insurance assets of $1.6 billion at both April 1, 2019, and June 30, 2019, and recognized $114 million of expense during the three months ended June 30, 2019.


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



Six months ended June 30, ($ 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)	$	—	$	285	$	—	$	—	$	—	$	285
Remarketing fee income	32		—		—		—		—		32
Brokerage commissions and other revenue	—		—		—		—		27		27
Brokered/agent commissions	—		8		—		—		—		8
Deposit account and other banking fees	—		—		—		—		5		5
Other	8		—		—		—		—		8
Total revenue from contracts with customers	40		293		—		—		32		365
All other revenue	47		282		29		19		79		456
Total other revenue (c)	$	87	$	575	$	29	$	19	$	111	$	821
2019
Revenue from contracts with customers
Noninsurance contracts (a) (b)	$	—	$	265	$	—	$	—	$	—	$	265
Remarketing fee income	37		—		—		—		—		37
Brokerage commissions and other revenue	—		—		—		—		34		34
Brokered/agent commissions	—		7		—		—		—		7
Deposit account and other banking fees	—		—		—		—		9		9
Other	10		—		—		—		—		10
Total revenue from contracts with customers	47		272		—		—		43		362
All other revenue	82		374		6		21		16		499
Total other revenue (c)	$	129	$	646	$	6	$	21	$	59	$	861

(a)

We had opening balances of $2.9 billion and $2.6 billion in unearned revenue associated with outstanding contracts at January 1, 2020, and January 1, 2019, respectively, and $425 million and $401 million of these balances were recognized as insurance premiums and service revenue earned in our Condensed Consolidated Statement of Comprehensive Income during the six months ended June 30, 2020, and June 30, 2019.


(b)	We had deferred insurance assets of $1.7 billion and $1.8 billion January 1, 2020, and June 30, 2020, respectively, and recognized $246 million of expense during the six months ended June 30, 2020. We had deferred insurance assets of $1.5 billion and $1.6 billion at January 1, 2019, and June 30, 2019, respectively, and recognized $225 million of expense during the six months ended June 30, 2019.


(c)	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 losses of $11 million and $9 million for the three months and six months ended June 30, 2020, respectively, and net remarketing gains of $23 million and $38 million for the three months and six months ended June 30, 2019, on the sale of off-lease vehicles. These losses and gains are included in depreciation expense on operating lease assets in our Condensed Consolidated Statement of Comprehensive Income.