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Loans and Accounts Receivable (Tables)

6 Months Ended

Jun. 30, 2018

Loans and Accounts Receivable (Tables) [Abstract]

Card Member loans by segment and Other loans as of June 30, 2018 and December 31, 2017 consisted of:

(Millions)		2018		2017
Global Consumer Services Group^(a)	$	63,560	$	62,319
Global Commercial Services		11,859		11,080
Card Member loans		75,419		73,399
Less: Reserve for losses		1,840		1,706
Card Member loans, net	$	73,579	$	71,693
Other loans, net^(b)	$	3,108	$	2,607

Includes approximately $24.1 billion and $25.7 billion of gross Card Member loans available to settle obligations of a consolidated variable interest entity (VIE) as of June 30, 2018 and December 31, 2017, respectively. The balance as of June 30, 2018 also includes loans related to the acquired Hilton portfolio (refer to Note 2).
Other loans primarily represent consumer and commercial non-card financing products. Other loans are presented net of reserves for losses of $101 million and $80 million as of June 30, 2018 and December 31, 2017, respectively.

Card Member receivables segment detail

Card Member accounts receivable by segment and Other receivables as of June 30, 2018 and December 31, 2017 consisted of:

(Millions)	2018		2017
Global Consumer Services Group^(a)	$	19,044	$	20,946
Global Commercial Services		35,938		33,101
Card Member receivables		54,982		54,047
Less: Reserve for losses		558		521
Card Member receivables, net	$	54,424	$	53,526
Other receivables, net^(b)	$	3,241	$	3,209

Includes $7.9 billion and $8.9 billion of gross Card Member receivables available to settle obligations of a consolidated VIE as of June 30, 2018 and December 31, 2017, respectively.
Other receivables primarily represent amounts related to (i) GNS partners for items such as royalty and franchise fees, (ii) tax-related receivables, (iii) certain merchants for billed discount revenue, and (iv) loyalty coalition partners for points issued, as well as program participation and servicing fees. Other receivables are presented net of reserves for losses of $30 million and $31 million as of June 30, 2018 and December 31, 2017, respectively.

Aging of Card Member loans and receivables

The following table presents the aging of Card Member loans and receivables as of June 30, 2018 and December 31, 2017:

2018 (Millions)		Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Card Member Loans:
Global Consumer Services Group	$	62,718	$	230	$	178	$	434	$	63,560
Global Commercial Services
Global Small Business Services		11,675		39		28		69		11,811
Global Corporate Payments^(a)		(b)		(b)		(b)		―		48
Card Member Receivables:
Global Consumer Services Group		18,814		71		45		114		19,044
Global Commercial Services
Global Small Business Services	$	16,432	$	76	$	45	$	116	$	16,669
Global Corporate Payments^(a)		(b)		(b)		(b)	$	149	$	19,269

2017 (Millions)		Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total
Card Member Loans:
Global Consumer Services Group	$	61,491	$	238	$	190	$	400	$	62,319
Global Commercial Services
Global Small Business Services		10,892		43		31		59		11,025
Global Corporate Payments^(a)		(b)		(b)		(b)		―		55
Card Member Receivables:
Global Consumer Services Group		20,696		82		54		114		20,946
Global Commercial Services
Global Small Business Services	$	15,868	$	91	$	54	$	106	$	16,119
Global Corporate Payments^(a)		(b)		(b)		(b)	$	148	$	16,982

For Global Corporate Payments (GCP) Card Member loans and 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 we initiate collection procedures on an account prior to the account becoming 90 days past billing, the associated Card Member loan and receivable balance is classified as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes. See also (b).
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 loans and receivables

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

		2018						2017
		Net Write-Off Rate						Net Write-Off Rate
		Principal Only^(a)		Principal, Interest & Fees^(a)		30+ Days Past Due as a % of Total		Principal Only^(a)		Principal, Interest & Fees^(a)		30+ Days Past Due as a % of Total
Card Member Loans:
	Global Consumer Services Group	2.1	%	2.5	%	1.3	%	1.8	%	2.1	%	1.2	%
	Global Small Business Services	1.7	%	2.0	%	1.2	%	1.5	%	1.8	%	1.1	%
Card Member Receivables:
	Global Consumer Services Group	1.6	%	1.8	%	1.2	%	1.6	%	1.8	%	1.2	%
	Global Small Business Services	1.9	%	2.1	%	1.4	%	1.7	%	1.9	%	1.4	%

						2018				2017
						Net Loss Ratio as a % of Charge Volume		90+ Days Past Billing as a % of Receivables		Net Loss Ratio as a % of Charge Volume		90+ Days Past Billing as a % of Receivables
Card Member Receivables:
	Global Corporate Payments					0.11	%	0.8	%	0.10	%	0.8	%

We present 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 we consider uncollectible interest and/or fees in estimating our reserves for credit losses, a net write-off rate including principal, interest and/or fees is also presented.

Impaired Card Member loans and receivables

The following tables provide additional information with respect to our impaired Card Member loans and receivables as of June 30, 2018 and December 31, 2017:

		As of June 30, 2018

					Accounts Classified as a TDR^(c)
2018 (Millions)	Over 90 days Past Due & Accruing Interest^(a)		Non-Accruals^(b)		In Program^(d)		Out of Program^(e)		Total Impaired Balance		Unpaid Principal Balance		Allowance for TDRs
Card Member Loans:
Global Consumer Services Group^(f)	$	308	$	184	$	245	$	118	$	855	$	774	$	60
Global Commercial Services		44		36		48		25		153		141		10
Card Member Receivables:
Global Consumer Services Group		―		―		23		10		33		32		2
Global Commercial Services		―		―		53		22		75		75		3
Total	$	352	$	220	$	369	$	175	$	1,116	$	1,022	$	75

		As of December 31, 2017

					Accounts Classified as a TDR^(c)
2017 (Millions)	Over 90 days Past Due & Accruing Interest^(a)		Non-Accruals^(b)		In Program^(d)		Out of Program^(e)		Total Impaired Balance		Unpaid Principal Balance		Allowance for TDRs
Card Member Loans:
Global Consumer Services Group^(f)	$	289	$	168	$	178	$	131	$	766	$	694	$	49
Global Commercial Services		38		31		31		27		127		118		8
Card Member Receivables:
Global Consumer Services Group		―		―		15		9		24		24		1
Global Commercial Services		―		―		37		19		56		56		2
Total	$	327	$	199	$	261	$	186	$	973	$	892	$	60

Our policy is generally to accrue interest through the date of write-off (typically 180 days past due). We establish reserves for interest that we believe will not be collected. Amounts presented exclude Card Member 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 we have ceased accruing interest. Amounts presented exclude Card Member loans classified as a TDR.
Accounts classified as a TDR include $15 million and $15 million that are over 90 days past due and accruing interest and $4 million and $5 million that are non-accruals as of June 30, 2018 and December 31, 2017, respectively.
In Program TDRs include Card Member accounts that are currently enrolled in a modification program.
Out of Program TDRs include $132 million and $141 million of Card Member accounts that have successfully completed a modification program and $43 million and $45 million of Card Member accounts that were not in compliance with the terms of the modification programs as of June 30, 2018 and December 31, 2017, respectively.
GCSG includes balances outside the U.S. of $65 million and $56 million that are over 90 days and accruing interest and $64 million and $55 million in unpaid principal as of June 30, 2018 and December 31, 2017, respectively.

Interest income recognized and average balance of impaired Card Member loans and receivables

The following table provides information with respect to our average balances and interest income recognized from impaired Card Member loans and the average balances of impaired Card Member receivables:

	Three Months Ended June 30, 2018				Six Months Ended June 30, 2018
(Millions)		Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
Card Member Loans:
Global Consumer Services Group	$	846	$	26	$	819	$	52
Global Commercial Services		149		6		141		11
Card Member Receivables:
Global Consumer Services Group		31		―		29		―
Global Commercial Services		72		―		67		―
Total	$	1,098	$	32	$	1,056	$	63

	Three Months Ended June 30, 2017				Six Months Ended June 30, 2017
(Millions)		Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
Card Member Loans:
Global Consumer Services Group	$	674	$	20	$	671	$	40
Global Commercial Services		120		4		117		8
Card Member Receivables:
Global Consumer Services Group		18		―		18		―
Global Commercial Services		41		―		40		―
Total	$	853	$	24	$	846	$	48

Troubled debt restructurings

The following table provides additional information with respect to Card Member loans and receivables modified as TDRs for the three and six months ended June 30, 2018 and 2017.

	Three Months Ended					Six Months Ended
	June 30, 2018					June 30, 2018
	Number of Accounts (in thousands)	Outstanding Balances ($ in millions)^(a)		Average Interest Rate Reduction (% Points)	Average Payment Term Extension (# of Months)	Number of Accounts (in thousands)	Outstanding Balances($ in millions)^(a)		Average Interest Rate Reduction (% Points)	Average Payment Term Extension (# of Months)
Troubled Debt Restructurings:
Card Member Loans	12	$	88	12	(b)	23	$	169	12	(b)
Card Member Receivables	1		25	(c)	28	2		54	(c)	28
Total	13	$	113			25	$	223

	Three Months Ended					Six Months Ended
	June 30, 2017					June 30, 2017
	Number of Accounts (in thousands)	Outstanding Balances ($ in millions)^(a)		Average Interest Rate Reduction (% Points)	Average Payment Term Extension (# of Months)	Number of Accounts (in thousands)	Outstanding Balances($ in millions)^(a)		Average Interest Rate Reduction (% Points)	Average Payment Term Extension (# of Months)
Troubled Debt Restructurings:
Card Member Loans	7	$	46	10	(b)	15	$	103	11	(b)
Card Member Receivables	1		18	(c)	32	3		46	(c)	26
Total	8	$	64			18	$	149

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.
We do not offer interest rate reduction programs for Card Member receivables as the receivables are non-interest bearing.

Troubled debt restructurings that subsequently defaulted

The following table provides information with respect to 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 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				Six Months Ended
	June 30, 2018				June 30, 2018
		Number of Accounts(in thousands)	Aggregated Outstanding Balances Upon Default ($ in millions)^(a)			Number of Accounts (in thousands)	Aggregated Outstanding Balances Upon Default($ in millions)^(a)
Troubled Debt Restructurings That Subsequently Defaulted:
Card Member Loans		2	$	9		4	$	18
Card Member Receivables		1		3		2		5
Total		3	$	12		6	$	23


	Three Months Ended				Six Months Ended
	June 30, 2017				June 30, 2017
		Number of Accounts(in thousands)	Aggregated Outstanding Balances Upon Default ($ in millions)^(a)			Number of Accounts (in thousands)	Aggregated Outstanding Balances Upon Default($ in millions)^(a)
Troubled Debt Restructurings That Subsequently Defaulted:
Card Member Loans		2	$	10		4	$	21
Card Member Receivables		1		2		2		3
Total		3	$	12		6	$	24

The outstanding balances upon default include principal, fees and accrued interest on Card Member loans, and principal and fees on Card Member receivables.