XML 28 R27.htm IDEA: XBRL DOCUMENT v2.3.0.15
Accounts Receivable and Loans (Tables)
9 Months Ended
Sep. 30, 2011
Accounts Receivable and Loans (Tables) [Abstract] 
Cardmember receivables segment detail

Accounts receivable as of September 30, 2011 and December 31, 2010 were as follows:

(Millions) 2011 2010
 U.S. Card Services(a) $18,957 $19,155
 International Card Services  6,746  6,673
 Global Commercial Services(b)  13,866  11,259
 Global Network & Merchant Services(c)  190  179
Cardmember receivables, gross(d)  39,759  37,266
Less: Cardmember receivables reserve for losses  388  386
Cardmember receivables, net $39,371 $36,880
Other receivables, net(e) $3,517 $3,554
          

(a)       Includes $6.6 billion and $7.7 billion of gross cardmember receivables available to settle obligations of a consolidated VIE as of September 30, 2011 and December 31, 2010, respectively.

(b)       Includes $0.5 billion of gross cardmember receivables available to settle obligations of a consolidated VIE as of both September 30, 2011 and December 31, 2010.

(c)       Includes receivables primarily related to the Company's International Currency Card portfolios.

(d)       Includes approximately $12.6 billion and $11.7 billion of cardmember receivables outside the United States as of September 30, 2011 and December 31, 2010, respectively.

(e)       Other receivables primarily represent amounts for tax-related receivables, amounts due from the Company's travel customers and suppliers, purchased joint venture receivables, amounts due from third-party issuing partners, amounts due from certain merchants for billed discount revenue, accrued interest on investments and other receivables due to the Company in the ordinary course of business.

 

Cardmember loans segment detail

Loans as of September 30, 2011 and December 31, 2010 consisted of:

(Millions)  2011  2010
 U.S. Card Services(a) $49,886 $51,565
 International Card Services  8,293  9,255
 Global Commercial Services  28  30
Cardmember loans, gross(b)  58,207  60,850
Less: Cardmember loans reserve for losses  2,139  3,646
Cardmember loans, net $56,068 $57,204
Other loans, net(c) $359 $412

(a)       Includes approximately $31.6 billion and $34.7 billion of gross cardmember loans available to settle obligations of a consolidated VIE as of September 30, 2011 and December 31, 2010, respectively.

(b)       Cardmember loan balance includes unamortized net card fees of $138 million and $134 million as of September 30, 2011 and December 31, 2010, respectively.

(c)       Other loans primarily represent small business installment loans and a store card portfolio whose billed business is not processed on the Company's network.

Aging of cardmember loans and receivables

The following table represents the aging of cardmember loans and receivables as of September 30, 2011 and December 31, 2010:

      30-59  60-89  90+   
      Days  Days  Days   
      Past  Past  Past   
2011(Millions)  Current  Due  Due  Due  Total
Cardmember Loans:               
U.S. Card Services $ 49,146 $ 230 $ 161 $ 349 $ 49,886
International Card Services   8,134   51   35   73   8,293
Cardmember Receivables:               
U.S. Card Services $ 18,575 $ 147 $ 75 $ 160 $ 18,957
International Card Services(a)  (b)  (b)  (b)   63   6,746
Global Commercial Services(a)  (b)  (b)  (b)   98   13,866
                
2010(Millions)               
Cardmember Loans:               
U.S. Card Services $ 50,508 $282 $226 $549 $ 51,565
International Card Services   9,044  66  48  97   9,255
Cardmember Receivables:               
U.S. Card Services $ 18,864 $ 104 $ 55 $ 132 $ 19,155
International Card Services(a)  (b)  (b)  (b)   64   6,673
Global Commercial Services(a)  (b)  (b)  (b)   96   11,259

  • For cardmember receivables in International Card Services (ICS) and Global Commercial Services (GCS), delinquency data is tracked based on days past billing status rather than days past due. A cardmember account is considered 90 days past billing if payment has not been received within 90 days of the cardmember'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 cardmember receivable balance is considered as 90 days past billing. These amounts are shown above as 90+ Days Past Due for presentation purposes.
  • Historically, data for periods prior to 90 days past billing are not available due to system constraints. Therefore, it 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 nine months ended September 30:

  2011 2010 
  Net Write-Off Rate   Net Write-Off Rate   
      30 Days     30 Days 
    Principal, Past Due   Principal, Past Due 
  Principal Interest, & as a % of Principal Interest, &  as a % of 
  Only (a)Fees (a)Total Only (a)Fees (a)Total 
U.S. Card Services ―              
Cardmember Loans 3.2%3.5%1.5%6.2%6.8%2.5%
International Card Services ―             
Cardmember Loans 2.9%3.5%1.9%4.9%5.8%2.8%
U.S. Card Services ―              
Cardmember Receivables 1.7%1.8%2.0%1.7%1.8%1.7%
              
      2011 2010 
      Net Loss   Net Loss   
      Ratio as 90 Days Ratio as 90 Days 
      a % of Past Billing a % of Past Billing 
      Charge as a % of Charge as a % of 
      Volume Receivables Volume (b)Receivables 
International Card Services ― Cardmember Receivables 0.15%0.9%0.27%1.0%
Global Commercial Services ― Cardmember Receivables0.06%0.7%0.13%0.8%

(a) 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, because the Company's practice is to include uncollectible interest and/or fees as part of its total provision for losses, a net write-off rate including principal, interest and/or fees is also presented.

(b) In the first quarter of 2010, the Company modified its reporting in the ICS and GCS segments to write-off past due cardmember receivables when 180 days past due or earlier, versus its prior methodology of writing them off when 360 days past billing or earlier. This change is consistent with bank regulatory guidance and the write-off methodology adopted for the cardmember receivables portfolio in the U.S. Card Services (USCS) segment in the fourth quarter of 2008. This change resulted in approximately $60 million and $48 million of net write-offs for ICS and GCS, respectively, being included in the first quarter of 2010, which increased the net loss ratios and decreased the 90 days past billing metrics for these segments, but did not have a substantial impact on provisions for losses.

 

Impaired cardmember loans and receivables

The following tables provide additional information with respect to the Company's impaired cardmember loans and receivables as of September 30, 2011 and December 31, 2010:

   Loans over            
   90 Days     Loans &  Total   
   Past Due  Non-  Receivables  Impaired  Unpaid     
(Millions) & Accruing  Accrual  Modified  Loans &  Principal   Allowance 
2011  Interest (a) Loans (b) as a TDR (c)(d) Receivables  Balance (e)  for TDRs (f)
U.S. Card Services ― Cardmember Loans $ 65 $ 420 $ 869 $ 1,354 $ 1,303  $ 199 
International Card Services ― Cardmember Loans   71   6   9   86   84    4 
U.S. Card Services ― Cardmember Receivables   ―   ―   159   159   158    94 
Total(g) $ 136 $ 426 $ 1,037 $ 1,599 $ 1,545  $ 297 
                     
   Loans over            
   90 Days     Loans &  Total   
   Past Due  Non-  Receivables  Impaired  Unpaid     
(Millions) & Accruing  Accrual  Modified  Loans &  Principal   Allowance 
2010  Interest (a) Loans (b) as a TDR (c) Receivables  Balance (e) for TDRs (f)
U.S. Card Services ― Cardmember Loans $ 90 $ 628 $ 1,076 $ 1,794 $ 1,704  $ 274 
International Card Services ― Cardmember Loans   95   8   11   114   112    5 
U.S. Card Services ― Cardmember Receivables   ―   ―   114   114   109    63 
Total(g) $ 185 $ 636 $ 1,201 $ 2,022 $ 1,925  $ 342 

(a)       The Company's policy is generally to accrue interest through the date of charge-off (at 180 days past due). The Company establishes reserves for interest that the Company believes will not be collected.

(b)       Non-accrual loans not in modification programs include certain cardmember loans placed with outside collection agencies for which the Company has ceased accruing interest. The Company's policy is not to resume the accrual of interest on these loans. Payments received are applied against the recorded loan balance. Interest income is recognized on a cash basis for any payments received after the loan balance has been paid in full.

(c)       The total loans and receivables modified as a TDR include $517 million and $655 million that are non-accrual and $5 million and $7 million that are past due 90 days and still accruing interest as of September 30, 2011 and December 31, 2010, respectively. These amounts are excluded from the previous two columns.

(d)       The Company reassessed all cardmember loans and receivables modifications that occurred on or after January 1, 2011, to determine whether any such modifications met the definition of a TDR under new GAAP effective July 1, 2011. As a result, beginning the third quarter of 2011 the Company now includes its short-term settlement programs in TDRs. The Company's settlement programs have terms of three months or less and are contingent upon the cardmember fulfilling the program's payment terms, which if satisfied results in the write-off of the cardmember's remaining outstanding balance. The cardmember loans and receivables modified through these settlement programs continue to be evaluated individually for impairment when measuring reserves for losses. As of September 30, 2011, the outstanding balance of cardmember loans and receivables modified through settlement programs was $5.8 million and the associated reserves for losses was $3.7 million.

(e) Unpaid principal balance consists of cardmember charges billed and excludes other amounts charged directly by the Company such as interest and fees.

(f)       Represents the reserve for losses for TDRs, which are evaluated separately for impairment. The Company records a reserve for losses for all impaired loans. Refer to Cardmember Loans Evaluated Separately and Collectively for Impairment in Note 5 for further discussion of the reserve for losses on loans over 90 days past due and accruing interest and non-accrual loans, which are evaluated collectively for impairment.

(g)       These disclosures are not significant for cardmember receivables in ICS and GCS.

 

Troubled debt restructurings

The following table provides additional information with respect to the cardmember loans and receivables modified as TDRs during the following periods:

  Three Months Ended Nine Months Ended
  September 30, 2011 September 30, 2011
     Aggregated  Aggregated    Aggregated  Aggregated
     Pre-  Post-    Pre-  Post-
    Modification Modification   Modification Modification
  Number of Outstanding Outstanding Number of Outstanding Outstanding
(Accounts in thousands, Dollars in millions) Accounts  Balances(a)(b)  Balances(a)(b) Accounts  Balances(a)(b)  Balances(a)(b)
Troubled Debt Restructurings:                
U.S. Card Services ― Cardmember Loans 35 $269 $259 116 $875 $839
U.S. Card Services ― Cardmember Receivables 14  108  105 36  292  281
Total(c) 49 $377 $364 152 $1,167 $1,120

  • The outstanding balance includes principal and accrued interest.
  • The difference between the pre- and post-modification outstanding balances is solely attributable to amounts charged off for cardmember loans and receivables being resolved through the Company's short-term settlement programs.
  • These disclosures are not significant for cardmember loans modifications in ICS.
Troubled debt restructurings that subsequently defaulted

The following table provides information with respect to the cardmember loans and receivables modified as TDRs on which there was a default within 12 months of modification during the periods presented. A cardmember will default from a modification program after between one and up to three consecutive missed payments, depending on the terms of the modification program.

  Three Months Ended Nine Months Ended
  September 30, 2011 September 30, 2011
      Aggregated     Aggregated
     Outstanding     Outstanding
   Number of  Balances  Number of  Balances
(Accounts in thousands, Dollars in millions)  Accounts Upon Default(a)  Accounts Upon Default(a)
Troubled Debt Restructurings That Subsequently Defaulted:            
U.S. Card Services ― Cardmember Loans  9 $65  36 $271
U.S. Card Services ― Cardmember Receivables  1  7  5  32
Total(b)  10 $72  41 $303

(a) The outstanding balance includes principal and accrued interest.

(b) During the periods presented, the ICS cardmember loan modifications on which there was a default from the modification program within 12 months of modification were not significant.