Document_and_Entity_Informatio
Document and Entity Information Document (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 17, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Synchrony Financial | ||
Entity Central Index Key | 1601712 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 833,764,589 | ||
Entity Public Float | $0 |
Consolidated_and_Combined_Stat
Consolidated and Combined Statements of Earnings (USD $) | 12 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest income: | |||
Interest and fees on loans (Note 5) | $12,216 | $11,295 | $10,300 |
Interest on investment securities | 26 | 18 | 9 |
Total interest income | 12,242 | 11,313 | 10,309 |
Interest expense: | |||
Interest on deposits | 470 | 374 | 362 |
Interest on third-party debt | 124 | 0 | 0 |
Interest on related party debt (Note 16) | 113 | 157 | 155 |
Total interest expense | 922 | 742 | 745 |
Net interest income | 11,320 | 10,571 | 9,564 |
Retailer share arrangements | -2,575 | -2,373 | -1,984 |
Net interest income, after retailer share arrangements | 8,745 | 8,198 | 7,580 |
Provision for loan losses | 2,917 | 3,072 | 2,565 |
Net interest income, after retailer share arrangements and provision for loan losses | 5,828 | 5,126 | 5,015 |
Other income: | |||
Interchange revenue | 389 | 324 | 287 |
Debt cancellation fees | 275 | 324 | 309 |
Loyalty programs | -281 | -213 | -199 |
Other | 102 | 65 | 87 |
Total other income | 485 | 500 | 484 |
Other expense: | |||
Employee costs | 866 | 698 | 620 |
Professional fees | 607 | 486 | 451 |
Marketing and business development | 460 | 269 | 208 |
Information processing | 212 | 193 | 165 |
Other | 782 | 838 | 679 |
Total other expense | 2,927 | 2,484 | 2,123 |
Earnings before benefit from income taxes | 3,386 | 3,142 | 3,376 |
Provision for income taxes (Note 15) | 1,277 | 1,163 | 1,257 |
Net earnings | 2,109 | 1,979 | 2,119 |
Earnings per share | |||
Basic (in usd per share) | $2.78 | $2.81 | $3 |
Diluted (in usd per share) | $2.78 | $2.81 | $3 |
Variable Interest Entity, Primary Beneficiary | |||
Interest expense: | |||
Interest on borrowings of consolidated securitization entities | $215 | $211 | $228 |
Consolidated_and_Combined_Stat1
Consolidated and Combined Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $2,109 | $1,979 | $2,119 |
Other comprehensive income (loss) | |||
Investment securities | 9 | -10 | 2 |
Currency translation adjustments | -5 | -4 | 2 |
Other | -1 | -1 | 0 |
Other comprehensive income (loss) | 3 | -15 | 4 |
Comprehensive income | $2,112 | $1,964 | $2,123 |
Consolidated_and_Combined_Stat2
Consolidated and Combined Statements of Financial Position (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Assets | ||||
Cash and equivalents | $11,828 | $2,319 | ||
Investment securities (Note 4) | 1,598 | 236 | ||
Loan receivables: (Notes 5 and 6) | 61,286 | [1],[2] | 57,254 | [1],[2] |
Less: Allowance for loan losses | -3,236 | -2,892 | ||
Loan receivables, net | 58,050 | 54,362 | ||
Loan receivables held for sale (Note 5) | 332 | 0 | ||
Goodwill (Note 7) | 949 | 949 | ||
Intangible assets, net (Note 7) | 519 | 300 | ||
Other assets | 2,431 | [3] | 919 | [3] |
Total assets | 75,707 | 59,085 | ||
Deposits: (Note 8) | ||||
Interest-bearing deposit accounts | 34,847 | 25,360 | ||
Non-interest-bearing deposit accounts | 108 | 359 | ||
Total deposits | 34,955 | 25,719 | ||
Borrowings: (Notes 6 and 9) | ||||
Related party debt (Note 16) | 655 | [4] | 8,959 | [4] |
Total borrowings | 27,460 | [4] | 24,321 | [4] |
Accrued expenses and other liabilities | 2,814 | 3,085 | ||
Total liabilities | 65,229 | 53,125 | ||
Equity: | ||||
Common Stock, par share value $0.001 per share; 4,000,000,000 shares authorized, 833,764,589 shares issued and outstanding at December 31, 2014 | 1 | 0 | ||
Additional paid-in capital | 9,408 | 0 | ||
Retained earnings | 1,079 | 0 | ||
Parent’s net investment | 0 | 5,973 | ||
Accumulated other comprehensive income (loss): | ||||
Investment securities | 0 | -9 | ||
Currency translation adjustments | -8 | -3 | ||
Other | -2 | -1 | ||
Total equity | 10,478 | 5,960 | ||
Total liabilities and equity | 75,707 | 59,085 | ||
Unsecuritized loans held for investment | ||||
Assets | ||||
Loan receivables: (Notes 5 and 6) | 34,335 | 31,183 | ||
Restricted loans of consolidated securitization entities | ||||
Assets | ||||
Loan receivables: (Notes 5 and 6) | 26,951 | 26,071 | ||
Borrowings: (Notes 6 and 9) | ||||
Borrowings of consolidated securitization entities | 14,967 | [4] | 15,362 | [4] |
New Bank Term Loan Facility | ||||
Borrowings: (Notes 6 and 9) | ||||
Bank term loan | 8,245 | [4] | 0 | [4] |
Senior unsecured notes | ||||
Borrowings: (Notes 6 and 9) | ||||
Bank term loan | $3,593 | [4] | $0 | [4] |
[1] | At December 31, 2014 and 2013, loan receivables included deferred expense, net of deferred income, of $46 million and $8 million, respectively. | |||
[2] | Total loan receivables include $27.0 billion and $26.1 billion of restricted loans of consolidated securitization entities at December 31, 2014 and 2013, respectively. See Note 6. Variable Interest Entities for further information on these restricted loans. | |||
[3] | Other assets include restricted cash and equivalents of $1,104 million and $76 million at December 31, 2014 and 2013, respectively. | |||
[4] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. |
Consolidated_and_Combined_Stat3
Consolidated and Combined Statements of Financial Position Statement (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Restricted cash and cash equivalents | $1,104 | $76 |
Common stock par value (in usd per share) | $0.00 | |
Common stock shares authorized | 4,000,000,000 | |
Common stock shares issued | 833,764,589 | |
Common stock shares outstanding | 833,764,589 |
Consolidated_and_Combined_Stat4
Consolidated and Combined Statements of Changes in Equity (USD $) | Total | Common Stock | Additional Paid-in Capital | Parent's Net Investment | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
In Millions, except Share data, unless otherwise specified | ||||||
Beginning balance at Dec. 31, 2011 | $4,328 | $4,330 | ($2) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 2,119 | 2,119 | ||||
Other comprehensive income | 4 | 4 | ||||
Changes in Parent's net investment | -1,869 | -1,869 | ||||
Ending balance at Dec. 31, 2012 | 4,582 | 4,580 | 2 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 1,979 | 1,979 | ||||
Other comprehensive income | -15 | -15 | ||||
Changes in Parent's net investment | -586 | -586 | ||||
Ending balance at Dec. 31, 2013 | 5,960 | 5,973 | -13 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 2,109 | 1,030 | 1,079 | |||
Other comprehensive income | 3 | 3 | ||||
Changes in Parent's net investment | -603 | -603 | ||||
Conversion of parent's net investment into common stock (in shares) | 705,271,000 | |||||
Conversion of parent's net investment into common stock | 1 | 6,399 | -6,400 | |||
Issuance of common stock (in shares) | 128,494,000 | |||||
Issuance of common stock | 2,842 | 2,842 | ||||
Stock-based compensation | 12 | 12 | ||||
Other | 155 | 155 | ||||
Ending balance at Dec. 31, 2014 | $10,478 | $1 | $9,408 | $1,079 | ($10) | |
Balance (in shares) at Dec. 31, 2014 | 833,764,589 | 833,765,000 |
Consolidated_and_Combined_Stat5
Consolidated and Combined Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows - operating activities | |||
Net earnings | $2,109 | $1,979 | $2,119 |
Adjustments to reconcile net earnings to cash provided from operating activities | |||
Provision for loan losses | 2,917 | 3,072 | 2,565 |
Deferred income taxes | -203 | -237 | -18 |
Depreciation and amortization | 131 | 104 | 83 |
(Increase) decrease in interest and fees receivable | 68 | -152 | -541 |
(Increase) decrease in other assets | 196 | 40 | 1,180 |
Increase (decrease) in accrued expenses and other liabilities | -172 | 810 | 189 |
All other operating activities | 294 | 63 | 60 |
Cash from operating activities | 5,340 | 5,679 | 5,637 |
Cash flows - investing activities | |||
Maturity and redemption of investment securities | 27 | 40 | 40 |
Purchases of investment securities | -1,376 | -100 | -31 |
Acquisition of loan receivables | 0 | -206 | -815 |
Net cash from principal business purchased (Note 3) | 0 | 6,393 | 0 |
Net (increase) decrease in restricted cash and equivalents | -1,028 | -20 | -17 |
Net (increase) decrease in loan receivables | -8,755 | -7,355 | -5,902 |
Proceeds from sale of loan receivables | 1,510 | 289 | 379 |
All other investing activities | -446 | -107 | -106 |
Cash (used for) from investing activities | -10,068 | -1,066 | -6,452 |
Borrowings of consolidated securitization entities | |||
Proceeds from issuance of securitized debt | 5,176 | 866 | 7,799 |
Maturities and repayment of securitized debt | -5,569 | -2,708 | -4,775 |
Third-party debt | |||
Proceeds from issuance of third-party debt | 12,343 | 0 | 0 |
Maturities and repayment of third-party debt | -505 | 0 | 0 |
Related party debt | |||
Proceeds from borrowings of related party debt | 1,615 | 0 | 0 |
Maturities and repayment of related party debt | -10,015 | -1,649 | -1,099 |
Net increase (decrease) in deposits | 9,088 | 481 | 972 |
Proceeds from initial public offering | 2,842 | 0 | 0 |
Net transfers (to) from Parent | -603 | -586 | -1,869 |
All other financing activities | -135 | -32 | -66 |
Cash (used for) from financing activities | 14,237 | -3,628 | 962 |
Increase in cash and equivalents | 9,509 | 985 | 147 |
Cash and equivalents at beginning of year | 2,319 | 1,334 | 1,187 |
Cash and equivalents at end of year | 11,828 | 2,319 | 1,334 |
Supplemental disclosure of cash flow information | |||
Cash paid during the year for interest | -839 | -729 | -736 |
Cash paid during the year for income taxes | ($1,787) | ($1,183) | ($228) |
Business_Description
Business Description | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description | BUSINESS DESCRIPTION |
Synchrony Financial (the “Company”) provides a range of credit products through programs it has established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers. The Company is a holding company for the legal entities that historically conducted General Electric Company’s (“GE”) North American retail finance business, including GE Capital Retail Bank. Substantially all of the assets and operations of that business were transferred to the Company in 2013, and the remaining assets were transferred to the Company by June 30, 2014, and prior to the completion of the Company’s initial public offering of its common stock (the “IPO”), which closed on August 5, 2014. Prior to the IPO, the Company was indirectly wholly-owned by General Electric Capital Corporation (“GECC” or “Parent”). | |
The Company changed its name in March 2014 to Synchrony Financial and, in June 2014, changed the name of GE Capital Retail Bank to Synchrony Bank (the “Bank”). References to the “Company”, “we”, “us” and “our” are to Synchrony Financial and its consolidated subsidiaries unless the context otherwise requires. | |
In the third quarter of 2014, we entered into a series of transactions (the “Transactions”) to affect the first steps in GE’s staged exit from our business. The Transactions, among other things, included the IPO of 125 million shares of our common stock, and the issuance of 3.5 million additional shares of our common stock pursuant to an option granted to the underwriters in the IPO (the “Underwriters' Option”). Following the closing of the IPO and the Underwriters' Option, GE currently owns approximately 84.6% of our common stock. See Note 14. Equity and Other Stock Related Information and Note 16. Related Party Transactions for additional information on the Transactions. |
Basis_of_Presentation_and_Summ
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Basis of Presentation | |
The accompanying consolidated and combined financial statements were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). | |
Preparing financial statements in conformity with U.S. GAAP requires us to make estimates based on assumptions about current, and for some estimates future, economic and market conditions (for example, unemployment, housing, interest rates and market liquidity) which affect reported amounts and related disclosures in our consolidated and combined financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially affect our results of operations and financial position. Among other effects, such changes could result in incremental losses on loan receivables, future impairments of investment securities, goodwill and intangible assets, increases in reserves for contingencies, establishment of valuation allowances on deferred tax assets and increases in our tax liabilities. | |
We conduct our operations within the United States and Canada. Substantially all of our revenues are from U.S. customers. The operating activities conducted by our non-U.S. affiliates use the local currency as their functional currency. The effects of translating the financial statements of these non-U.S. affiliates to U.S. dollars are included in equity. Asset and liability accounts are translated at year-end exchange rates, while revenues and expenses are translated at average rates for the respective periods. | |
Consolidated Basis of Presentation | |
The transfer of all of the assets of our business from GECC and its subsidiaries to the Company was completed in the second quarter of 2014. As a result, the Company’s financial statements have been prepared on a consolidated basis beginning June 30, 2014. Under this basis of presentation, our financial statements consolidate all of our subsidiaries – i.e., entities in which we have a controlling financial interest, most often because we hold a majority voting interest. All periods subsequent to June 30, 2014 are also presented on a consolidated basis. | |
To determine if we hold a controlling financial interest in an entity, we first evaluate if we are required to apply the variable interest entity (“VIE”) model to the entity, otherwise the entity is evaluated under the voting interest model. Where we hold current or potential rights that give us the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (“power”) combined with a variable interest that gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses (“significant economics”), we have a controlling financial interest in that VIE. Rights held by others to remove the party with power over the VIE are not considered unless one party can exercise those rights unilaterally. We consolidate certain securitization entities under the VIE model because we have both power and significant economics. See Note 6. Variable Interest Entities. | |
Combined Basis of Presentation | |
For all periods prior to June 30, 2014, the Company's financial statements were prepared on a combined basis. The combined financial statements combine all of our subsidiaries and certain accounts of GECC and its subsidiaries that were historically managed as part of our business. | |
For all periods prior to the IPO, the Consolidated and Combined Statements of Earnings reflect intercompany expense allocations made to us by GE and GECC for certain corporate functions and for shared services provided by GE and GECC. Where possible, these allocations were made on a specific identification basis, and in other cases, these expenses were allocated by GE and GECC based on relative percentages of net operating costs or some other basis depending on the nature of the allocated cost. See Note 16. Related Party Transactions for further information on expenses allocated by GE and GECC. | |
The historical financial results in the consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had we operated as a separate, standalone entity during those periods. We believe that the consolidated and combined financial statements include all adjustments necessary for a fair presentation of the Company. | |
Segment Reporting | |
We conduct our operations through a single business segment. Substantially all of our interest and fees on loans and long-lived assets relate to our operations within the United States. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance. The chief operating decision maker uses a variety of measures to assess the performance of the business as a whole, depending on the nature of the activity. Revenue activities are managed through three sales platforms (Retail Card, Payment Solutions and CareCredit). Those platforms are organized by the types of partners we work with to reach our customers, with success principally measured based on revenues, new accounts and other cardholder sales metrics. Detailed profitability information of the nature that could be used to allocate resources and assess the performance and operations for each sales platform individually, however, is not used by our chief operating decision maker. Expense activities, including funding costs, loan losses and operating expenses, are not measured for each platform but instead are managed for the Company as a whole. | |
Cash and Equivalents | |
Debt securities, money market instruments and bank deposits with original maturities of three months or less are included in cash equivalents unless designated as available-for-sale and classified as investment securities. | |
Restricted Cash and Equivalents | |
Restricted cash and equivalents represent cash and equivalents that are not available to us due to restrictions related to its use. The Bank is required to maintain reserves against its deposit liabilities in the form of vault cash and/or balances with the Federal Reserve Bank. In addition, our securitization entities are required to fund segregated accounts that may only be used for certain purposes, including payment of interest and servicing fees and repayment of maturing debt. We include our restricted cash and equivalents in other assets in our Consolidated and Combined Statements of Financial Position. | |
Investment Securities | |
We report investments in debt and marketable equity securities at fair value. See Note 10. Fair Value Measurements for further information on fair value. Unrealized gains and losses on these investment securities, which are classified as available-for-sale, are included in equity, net of applicable taxes. We regularly review investment securities for impairment using both quantitative and qualitative criteria. | |
For debt securities, if we do not intend to sell the security or it is not more likely than not that we will be required to sell the security before recovery of our amortized cost, we evaluate other qualitative criteria to determine whether we do not expect to recover the amortized cost basis of the security, such as the financial health of and specific prospects for the issuer, including whether the issuer is in compliance with the terms and covenants of the security. We also evaluate quantitative criteria including determining whether there has been an adverse change in expected future cash flows. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to be other-than-temporarily impaired, and we record the difference between the security’s amortized cost basis and its recoverable amount in earnings and the difference between the security’s recoverable amount and fair value in other comprehensive income. If we intend to sell the security or it is more likely than not we will be required to sell the security before recovery of its amortized cost basis, the security is also considered other-than-temporarily impaired and we recognize the entire difference between the security’s amortized cost basis and its fair value in earnings. For equity securities, we consider the length of time and magnitude of the amount that each security is in an unrealized loss position. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to be other-than-temporarily impaired, and we record the difference between the security’s amortized cost basis and its fair value in earnings. | |
Realized gains and losses are accounted for on the specific identification method. | |
Loan Receivables | |
Loan receivables primarily consist of open-end consumer revolving credit card accounts, closed-end consumer installment loans, and open-end commercial revolving credit card accounts. Loan receivables are reported at the amounts due from customers, including unpaid interest and fees. | |
Loan Receivables Held for Sale | |
Loans purchased or originated with the intent to sell or as to which we do not have the ability and intent to hold for the foreseeable future are classified as loan receivables held for sale and recorded at the lower of amortized cost or fair value. We continue to recognize interest and fees on these loans on the accrual basis. The fair value of loan receivables held for sale is determined on an aggregate homogeneous portfolio basis. | |
If a loan is transferred from held for investment to held for sale, declines in fair value related to credit are recorded as a charge-off which establishes a new cost basis for the loan. Further declines in fair value and recoveries up to the amortized cost and realized gains or losses are recorded as a component of other income in our Consolidated and Combined Statements of Earnings. | |
Allowance for Loan Losses | |
Losses on loan receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. The method for calculating the best estimate of probable losses takes into account our historical experience adjusted for current conditions with each product and customer type and our judgment concerning the probable effects of relevant observable data, trends and market factors. | |
We evaluate each portfolio for impairment quarterly. For credit card receivables, our estimation process includes analysis of historical data, and there is a significant amount of judgment applied in selecting inputs and analyzing the results produced by the models to determine the allowance. We use a migration analysis to estimate the likelihood that a loan will progress through the various stages of delinquency. The migration analysis considers uncollectible principal, interest and fees reflected in the loan receivables. We use other analyses to estimate losses incurred on non-delinquent accounts. The considerations in these analyses include past performance, risk management techniques applied to various accounts, historical behavior of different account vintages, current economic conditions, recent trends in delinquencies, bankruptcy filings, account collection management, policy changes, account seasoning, loan volume and amounts, payment rates, forecasting uncertainties, and a qualitative assessment of the adequacy of the allowance for losses, which compares this allowance for losses to projected net charge-offs over the next twelve months, in a manner consistent with regulatory guidance. We regularly review our collection experience (including delinquencies and net charge-offs) in determining our allowance for loan losses. We also consider our historical loss experience to date based on actual defaulted loans and overall portfolio indicators including delinquent and non-accrual loans, trends in loan volume and lending terms, credit policies and other observable environmental factors such as unemployment and home price indices. | |
The underlying assumptions, estimates and assessments we use to provide for losses are updated periodically to reflect our view of current conditions and are subject to the regulatory examination process, which can result in changes to our assumptions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible that we will experience credit losses that are different from our current estimates. Charge-offs are deducted from the allowance for losses when we judge the principal to be uncollectible and subsequent recoveries are added to the allowance at the time cash is received on a charged-off account. | |
Delinquent receivables are those that are 30 days or more past due based on their contractual payments. “Non-accrual” loan receivables are those on which we have stopped accruing interest. We continue to accrue interest until the earlier of the time at which collection of an account becomes doubtful or the account becomes 180 days past due, with the exception of non-credit card accounts, for which we stop accruing interest in the period that the account becomes 90 days past due. | |
Beginning in the fourth quarter of 2013, we revised our methods of classifying loan receivables as non-accrual to more closely align with regulatory guidance. As a result we continue to accrue interest on credit card balances until they reach 180 days past due. Previously, we stopped accruing interest on credit cards when the accounts became 90 days past due. As a result of this revision, credit card receivables of $949 million that were previously classified as non-accrual were returned to accrual status in the fourth quarter of 2013. This revision did not have a material effect on earnings for the year ended December 31, 2013. | |
“Impaired” loans represent loans for which it is probable that we will be unable to collect all amounts due according to the original contractual terms of the loan agreement and loans meeting the definition of a troubled debt restructuring (“TDR”). TDRs are those loans for which we have granted a concession to a borrower experiencing financial difficulties where we do not receive adequate compensation. | |
The same loan receivable may meet more than one of the definitions above. Accordingly, these categories are not mutually exclusive and it is possible for a particular loan to meet the definitions of a TDR, impaired loan and non-accrual loan and be included in each of these categories. The categorization of a particular loan also may not be indicative of the potential for loss. | |
Loan Modifications and Restructurings | |
Our loss mitigation strategy is intended to minimize economic loss and, at times, can result in rate reductions, principal forgiveness, extensions or other actions, which may cause the related loan to be classified as a TDR and also as impaired. We utilize short-term (3 to 12 months) or long-term (12 to 60 months) modification programs to borrowers experiencing financial difficulty as a loss mitigation strategy to improve long-term collectability of the loans that are classified as TDRs. For our credit card customers, the short-term program primarily consists of a reduced minimum payment and an interest rate reduction, both lasting for a period no longer than 12 months. The long-term program involves changing the structure of the loan to a fixed payment loan with a maturity no longer than 60 months and reducing the interest rate on the loan. The long-term program does not normally provide for the forgiveness of unpaid principal, but may allow for the reversal of certain unpaid interest or fee assessments. We also make loan modifications for customers who request financial assistance through external sources, such as a consumer credit counseling agency program. The loans that are modified typically receive a reduced interest rate but continue to be subject to the original minimum payment terms and do not normally include waiver of unpaid principal, interest or fees. The determination of whether these changes to the terms and conditions meet the TDR criteria includes our consideration of all relevant facts and circumstances. See Note 5. Loan Receivables and Allowance for Loan Losses for additional information on our loan modifications and restructurings. | |
Our allowance for loan losses on TDRs is generally measured based on the difference between the recorded loan receivable and the present value of the expected future cash flows, discounted at the original effective interest rate of the loan. If the loan is collateral dependent, we measure impairment based upon the fair value of the underlying collateral less estimated selling costs. | |
Data related to redefault experience is also considered in our overall reserve adequacy review. Once the loan has been modified, it returns to current status (re-aged) only after three consecutive minimum monthly payments are received post modification date, subject to a re-aging limitation of once a year, or twice in a five-year period in accordance with the Federal Financial Institutions Examination Council (“FFIEC”) guidelines on Uniform Retail Credit Classification and Account Management policy issued in June 2000. We believe that the allowance for loan losses would not be materially different had we not re-aged these accounts. | |
Charge-Offs | |
Net charge-offs consist of the unpaid principal balance of loans held for investment that we determine are uncollectible, net of recovered amounts. We exclude accrued and unpaid finance charges, fees and third-party fraud losses from charge-offs. Charged-off and recovered accrued and unpaid finance charges and fees are included in interest and fees on loans while fraud losses are included in other expense. Charge-offs are recorded as a reduction to the allowance for loan losses and subsequent recoveries of previously charged-off amounts are credited to the allowance for loan losses. Costs incurred to recover charged-off loans are recorded as collection expense and are included in other expense in our Consolidated and Combined Statements of Earnings. | |
We charge-off unsecured closed-end consumer installment loans and loans secured by collateral when they are 120 days contractually past due and unsecured open-ended revolving loans when they are 180 days contractually past due. Unsecured consumer loans in bankruptcy are charged-off within 60 days of notification of filing by the bankruptcy court or within contractual charge-off periods, whichever occurs earlier. Credit card loans of deceased account holders are charged-off within 60 days of receipt of notification. | |
Goodwill and Intangible Assets | |
We do not amortize goodwill, but test it at least annually for impairment at the reporting unit level pursuant to ASC 350, Intangibles—Goodwill and Other. A reporting unit is defined under GAAP as the operating segment, or one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. Our single operating segment comprises a single reporting unit, based on the level at which segment management regularly reviews and measures the business operating results. | |
Goodwill impairment risk is first assessed by performing a qualitative review of entity-specific, industry, market and general economic factors for our reporting unit. If potential goodwill impairment risk exists that indicates that it is more likely than not that the carrying value of our reporting unit exceeds its fair value, we apply a two-step quantitative test. The first step compares the reporting unit’s estimated fair value with its carrying value. If the carrying value of our reporting unit’s net assets exceeds its fair value, the second step is applied to measure the difference between the carrying value and implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the goodwill is considered impaired and reduced to its implied fair value. The qualitative assessment for each period presented in the consolidated and combined financial statements was performed without hindsight, assuming only factors and market conditions existing as of those dates, and resulted in no potential goodwill impairment risk for our reporting unit. Consequently, goodwill was not deemed to be impaired for any of the periods presented. | |
Definite-lived intangible assets principally consist of customer-related assets including contract acquisition costs and purchased credit card relationships. These assets are amortized over their estimated useful lives and evaluated for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The evaluation compares the cash inflows expected to be generated from each intangible asset to its carrying value. If cash flows attributable to the intangible asset are less than the carrying value, the asset is considered impaired and written down to its estimated fair value. No impairments of definite-lived intangible assets have been recognized in the periods presented in the consolidated and combined financial statements. | |
Revenue Recognition | |
Interest and Fees on Loans | |
We use the effective interest method to recognize income on loans. Interest on loans is comprised largely of interest and late fees on credit card and other loans. Interest income is recognized based upon the amount of loans outstanding and their contractual interest rate. Late fees are recognized when billable to the customer. We continue to accrue interest and fees on credit cards until the accounts are charged-off in the period the account becomes 180 days past due. For non-credit card loans, we stop accruing interest and fees when the account becomes 90 days past due. Previously recognized interest income that was accrued but not collected from the customer is reversed. Although we stop accruing interest in advance of payments, we recognize interest income as cash is collected when appropriate, provided the amount does not exceed that which would have been earned at the historical effective interest rate; otherwise, payments received are applied to reduce the principal balance of the loan. | |
We resume accruing interest on non-credit card loans when the customer’s account is less than 90 days past due and collection of such amounts is probable. Interest accruals on modified loans that are not considered to be TDRs may return to current status (re-aged) only after receipt of at least three consecutive minimum monthly payments subject to a re-aging limitation of once a year, or twice in a five-year period. | |
Direct loan origination costs on credit card loans are deferred and amortized on a straight-line basis over a one-year period, or the life of the loan for other loan receivables, and are included in interest and fees on loans in our Consolidated and Combined Statements of Earnings. See Note 5. Loan Receivables and Allowance for Loan Losses for further detail. | |
Other loan fees including returned check, cash advance and other miscellaneous fees are recognized net of waivers and charge-offs when the related transaction or service is provided, and are included in other income in our Consolidated and Combined Statements of Earnings. | |
Promotional Financing | |
Loans originated with promotional financing may include deferred interest financing (interest accrues during a promotional period and becomes payable if the full purchase amount is not paid off during the promotional period), no interest financing (no interest accrues during a promotional period but begins to accrue thereafter on any outstanding amounts at the end of the promotional period) and reduced interest financing (interest accrues monthly at a promotional interest rate during the promotional period). For deferred interest financing, we bill interest to the borrower, retroactive to the inception of the loan, if the loan is not repaid prior to the specified date. Income is recognized on such loans when it is billable. In almost all cases, our retail partner will pay an upfront fee or reimburse us to compensate us for all or part of the costs associated with providing the promotional financing. Upfront fees are deferred and accreted to income over the promotional period. Reimbursements are estimated and accrued as income over the promotional period. | |
Purchased Loans | |
Loans acquired by purchase are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the acquired loans. As a result, the allowance for losses is not carried over at acquisition. For loans acquired with evidence of credit deterioration, the excess of cash flows expected at acquisition over the initial acquisition cost is recognized into interest income over their remaining lives using the effective interest method. Subsequent decreases to the expected cash flows for these loans require us to evaluate the need for an allowance for credit losses. Subsequent improvements in expected cash flows are recognized into interest income prospectively. For other acquired loans, the excess of contractually required cash flows over the initial acquisition cost is recognized into interest income over the remaining lives using the effective interest method. Subsequent increases in incurred losses for these loans require us to evaluate the need for an allowance for credit losses. Our evaluation of the amount of future cash flows expected to be collected is performed in a similar manner as that used to determine our allowance for loan losses. | |
Retailer Share Arrangements | |
Most of our Retail Card program agreements and certain other program agreements contain retailer share arrangements that provide for payments to our partners if the economic performance of the program exceeds a contractually defined threshold. Although the share arrangements vary by partner, these arrangements are generally structured to measure the economic performance of the program, based typically on agreed upon program revenues (including interest income and certain other income) less agreed upon program expenses (including interest expense, provision for credit losses, retailer payments and operating expenses), and share portions of this amount above a negotiated threshold. These thresholds and the economic performance of a program are based on, among other things, agreed upon measures of program expenses. On a quarterly basis, we make a judgment as to whether it is probable that the performance threshold will be met under a particular retail partner’s retailer share arrangement. The current period’s estimated contribution to that ultimate expected payment is recorded as a liability. To the extent facts and circumstances change and the cumulative probable payment for prior months has changed, a cumulative adjustment is made to align the retailer share arrangement liability balance with the amount considered probable of being paid relating to past periods. | |
Loyalty Programs | |
Our loyalty programs are designed to generate increased purchase volume per customer while reinforcing the value of our credit cards and strengthening cardholder loyalty. These programs typically provide cardholders with rewards in the form of merchandise discounts that are earned by achieving a pre-set spending level on their private label or Dual Card. Other programs provide cash back or reward points, which are redeemable for a variety of products or awards. These programs are primarily in our Retail Card platform. We establish a rewards liability based on points and merchandise discounts earned that are ultimately expected to be redeemed and the average cost per point at redemption. The rewards liability is included in accrued expenses and other liabilities in our Consolidated and Combined Statements of Financial Position. Cash rebates are earned based on a tiered percentage of purchase volume. As points and discounts are redeemed or cash rebates are issued, the rewards liability is relieved. The estimated cost of loyalty programs is classified as a reduction to other income in our Consolidated and Combined Statements of Earnings. | |
Fraud Losses | |
We experience third-party fraud losses from the unauthorized use of credit cards and when loans are obtained through fraudulent means. Fraud losses are included as a charge within other expense in our Consolidated and Combined Statements of Earnings, net of recoveries, when such losses are probable. Loans are charged off, as applicable, after the investigation period has completed. | |
Income Taxes | |
We are included in the consolidated U.S. federal and state income tax returns of GE, where applicable, but also file certain separate state and foreign income tax returns. The tax provision and current and deferred tax balances have been presented on a separate company basis as if we were a separate filer. The effects of tax adjustments and settlements from taxing authorities are presented in our consolidated and combined financial statements in the period to which they relate as if we were a separate filer. Our current obligations for taxes are settled with our parent on an estimated basis and adjusted in later periods as appropriate and are reflected in our consolidated and combined financial statements in the periods in which those settlements occur. We recognize the current and deferred tax consequences of all transactions that have been recognized in the financial statements using the provisions of the enacted tax laws. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax laws and rates that will be in effect when the differences are expected to reverse. We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. See Note 15. Income Taxes for additional detail. | |
Fair Value Measurements | |
For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. | |
Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: | |
Level 1— Quoted prices for identical instruments in active markets. | |
Level 2— Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. | |
Level 3— Significant inputs to the valuation model are unobservable. | |
We maintain policies and procedures to value instruments using the best and most relevant data available. In addition, we have risk management teams that review valuation, including independent price validation for certain instruments. We use non-binding broker quotes and other third-party pricing services as our primary basis for valuation when there is limited or no relevant market activity for a specific instrument or for other instruments that share similar characteristics. We have not adjusted prices we have obtained. | |
As is the case with our primary pricing vendor, third-party brokers and other third-party pricing services do not provide us access to their proprietary valuation models, inputs and assumptions. Accordingly, our risk management personnel conduct reviews of these brokers and services, as applicable, similar to the reviews performed of our primary pricing vendor. In addition, we conduct internal reviews of pricing for all investment securities on a quarterly basis to ensure reasonableness of valuations used in the consolidated and combined financial statements. These reviews are designed to identify prices that appear stale, those that have changed significantly from prior valuations, and other anomalies that may indicate that a price may not be accurate. Based on the information available, we believe that the fair values provided by the primary pricing vendor, third-party brokers and other third-party pricing services are representative of prices that would be received to sell the assets at the measurement date (exit prices) and are classified appropriately in the hierarchy. | |
Recurring Fair Value Measurements | |
Our investments in debt and equity securities are measured at fair value every reporting period on a recurring basis. | |
Non-Recurring Fair Value Measurements | |
Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. | |
Repossessed assets and cost method investments are currently the only significant categories of assets which we account for at fair value on a non-recurring basis. | |
Financial Assets and Financial Liabilities Carried at Other than Fair Value | |
The following is a description of the valuation techniques used to estimate the fair values of the financial assets and liabilities carried at other than fair value. | |
Loan receivables, net | |
In estimating the fair value for our loan receivables, we use a discounted future cash flow model. We use various unobservable inputs including estimated interest and fee income, payment rates, loss rates and discount rates (which consider current market interest rate data adjusted for credit risk and other factors) to estimate the fair values of loans. When collateral dependent, loan receivables may be valued using collateral values. | |
Deposits | |
For demand deposits with no defined maturity, carrying value approximates fair value due to the potentially liquid nature of these deposits. For fixed-maturity certificates of deposit, fair values are estimated by discounting expected future cash flows using market rates currently offered for deposits with similar remaining maturities. | |
Borrowings | |
The fair values of borrowings of consolidated securitization entities, as well as related party debt issued by one of our securitization entities which was held by a GECC affiliate at December 31, 2013, are based on valuation methodologies that utilize current market interest rate data which are comparable to market quotes adjusted for our non-performance risk. Borrowings that are publicly traded securities are classified as level 2. Borrowings that are not publicly traded are classified as level 3. | |
The fair values of the senior unsecured notes are based on secondary market trades and other observable inputs and are classified as level 2. The fair value of the Bank Term Loan is based on non-binding broker quotes and are classified as level 3. | |
The fair value of the related party debt at December 31, 2014 is based on an internal valuation methodology that utilizes significant unobservable inputs. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2014 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS |
Effective January 11, 2013, we acquired the deposit business of MetLife Bank, N.A. in a transaction that was accounted for using the acquisition method of accounting. In exchange for assuming $6.4 billion of deposit liabilities we received assets that included $6.4 billion of cash, $19 million of core deposit intangibles, $8 million of other intangibles and $8 million of deferred tax assets. The $13 million excess of the fair value of the consideration conveyed to the seller over the fair value of the net assets acquired was recognized as goodwill. |
Investment_Securities
Investment Securities | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||
Investment Securities | INVESTMENT SECURITIES | |||||||||||||||||||||||||||||||
All of our investment securities are classified as available-for-sale and are held to meet our liquidity objectives and to comply with the Community Reinvestment Act. Our investment securities consist of the following: | ||||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||||||||
Gross | Gross | Gross | Gross | |||||||||||||||||||||||||||||
Amortized | unrealized | unrealized | Estimated | Amortized | unrealized | unrealized | Estimated | |||||||||||||||||||||||||
($ in millions) | cost | gains | losses | fair value | cost | gains | losses | fair value | ||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||
U.S. government and federal agency | $ | 1,252 | $ | — | $ | — | $ | 1,252 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
State and municipal | 57 | 1 | (1 | ) | 57 | 53 | — | (7 | ) | 46 | ||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||
mortgage-backed(a) | 271 | 3 | (3 | ) | 271 | 183 | 1 | (9 | ) | 175 | ||||||||||||||||||||||
U.S. corporate debt | 3 | — | — | 3 | — | — | — | — | ||||||||||||||||||||||||
Equity | 15 | — | — | 15 | 15 | — | — | 15 | ||||||||||||||||||||||||
Total | $ | 1,598 | $ | 4 | $ | (4 | ) | $ | 1,598 | $ | 251 | $ | 1 | $ | (16 | ) | $ | 236 | ||||||||||||||
_______________________ | ||||||||||||||||||||||||||||||||
(a) | At December 31, 2014 and 2013 all of our residential mortgage-backed securities related to securities issued by government-sponsored entities and are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. All residential mortgage-backed securities are collateralized by U.S. mortgages. | |||||||||||||||||||||||||||||||
The following table presents the estimated fair values and gross unrealized losses of our available-for-sale investment securities: | ||||||||||||||||||||||||||||||||
In loss position for | ||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or more | |||||||||||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||||||||||
Estimated | unrealized | Estimated | unrealized | |||||||||||||||||||||||||||||
($ in millions) | fair value | losses | fair value | losses | ||||||||||||||||||||||||||||
At December 31, 2014 | ||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||
State and municipal | $ | — | $ | — | $ | 34 | $ | (1 | ) | |||||||||||||||||||||||
Residential mortgage-backed | 30 | — | 85 | (3 | ) | |||||||||||||||||||||||||||
U.S. government and federal agency | 700 | — | — | — | ||||||||||||||||||||||||||||
Total | $ | 730 | $ | — | $ | 119 | $ | (4 | ) | |||||||||||||||||||||||
At December 31, 2013 | ||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||
State and municipal | $ | 23 | $ | (2 | ) | $ | 20 | $ | (5 | ) | ||||||||||||||||||||||
Residential mortgage-backed | 127 | (7 | ) | 20 | (2 | ) | ||||||||||||||||||||||||||
Equity | 14 | — | — | — | ||||||||||||||||||||||||||||
Total | $ | 164 | $ | (9 | ) | $ | 40 | $ | (7 | ) | ||||||||||||||||||||||
At December 31, 2014, none of our equity securities and U.S. corporate debt securities were in a gross unrealized loss position. We regularly review investment securities for impairment using both qualitative and quantitative criteria. We presently do not intend to sell our debt securities that are in an unrealized loss position and believe that it is not more likely than not that we will be required to sell these securities before recovery of our amortized cost. | ||||||||||||||||||||||||||||||||
There were no other-than-temporary impairments recognized for the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||||||||||||||||||
Contractual Maturities of Investments in Available-for-Sale Debt Securities (excluding residential mortgage-backed securities) | ||||||||||||||||||||||||||||||||
Amortized | Estimated | |||||||||||||||||||||||||||||||
At December 31, 2014 ($ in millions) | cost | fair value | ||||||||||||||||||||||||||||||
Due | ||||||||||||||||||||||||||||||||
Within one year | $ | 1,005 | $ | 1,005 | ||||||||||||||||||||||||||||
After one year through five years | $ | 250 | $ | 250 | ||||||||||||||||||||||||||||
After five years through ten years | $ | 1 | $ | 1 | ||||||||||||||||||||||||||||
After ten years | $ | 56 | $ | 56 | ||||||||||||||||||||||||||||
We expect actual maturities to differ from contractual maturities because borrowers have the right to prepay certain obligations. | ||||||||||||||||||||||||||||||||
There were no significant realized gains or losses recognized for the years ended December 31, 2014, 2013 and 2012. | ||||||||||||||||||||||||||||||||
Although we generally do not have the intent to sell any specific securities held at December 31, 2014, in the ordinary course of managing our investment securities portfolio, we may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield, liquidity requirements and funding obligations. |
Loan_Receivables_and_Allowance
Loan Receivables and Allowance for Loan Losses | 12 Months Ended | |||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||
Loan Receivables and Allowance for Loan Losses | LOAN RECEIVABLES AND ALLOWANCE FOR LOAN LOSSES | |||||||||||||||||||||||||||||
At December 31 ($ in millions) | 2014 | 2013 | ||||||||||||||||||||||||||||
Credit cards | $ | 58,880 | $ | 54,958 | ||||||||||||||||||||||||||
Consumer installment loans | 1,063 | 965 | ||||||||||||||||||||||||||||
Commercial credit products | 1,320 | 1,317 | ||||||||||||||||||||||||||||
Other | 23 | 14 | ||||||||||||||||||||||||||||
Total loan receivables, before allowance for losses(a)(b) | $ | 61,286 | $ | 57,254 | ||||||||||||||||||||||||||
_______________________ | ||||||||||||||||||||||||||||||
(a) | Total loan receivables include $27.0 billion and $26.1 billion of restricted loans of consolidated securitization entities at December 31, 2014 and 2013, respectively. See Note 6. Variable Interest Entities for further information on these restricted loans. | |||||||||||||||||||||||||||||
(b) | At December 31, 2014 and 2013, loan receivables included deferred expense, net of deferred income, of $46 million and $8 million, respectively. | |||||||||||||||||||||||||||||
Disposition of Loan Receivables | ||||||||||||||||||||||||||||||
During the fourth quarter of 2014, we closed the sale of certain credit card portfolios associated with two retail partners whose program agreements with us were not extended beyond their contractual expiration dates in 2014. We recognized a pre-tax gain of $46 million related to the portfolio sales in other income in our Consolidated and Combined Statement of Earnings for the year ended December 31, 2014. | ||||||||||||||||||||||||||||||
In addition, we entered into an agreement to sell a credit card portfolio associated with one additional retail partner whose program agreement with us was not extended beyond its contractual expiration date in 2015. As a result, at December 31, 2014, $332 million of loan receivables are classified as loan receivables held for sale on our Consolidated and Combined Statement of Financial Position. The sale of this portfolio, which is subject to customary closing conditions, is expected to be completed in the second quarter of 2015. | ||||||||||||||||||||||||||||||
Allowance for Loan Losses | ||||||||||||||||||||||||||||||
($ in millions) | Balance at January 1, 2014 | Provision charged to operations | Gross charge-offs | Recoveries | Balance at December 31, 2014 | |||||||||||||||||||||||||
Credit cards | $ | 2,827 | $ | 2,858 | (a) | $ | (3,111 | ) | $ | 595 | $ | 3,169 | ||||||||||||||||||
Consumer installment loans | 19 | 20 | (30 | ) | 13 | 22 | ||||||||||||||||||||||||
Commercial credit products | 46 | 39 | (48 | ) | 8 | 45 | ||||||||||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 2,892 | $ | 2,917 | $ | (3,189 | ) | $ | 616 | $ | 3,236 | |||||||||||||||||||
($ in millions) | Balance at January 1, 2013 | Provision charged to operations | Gross charge-offs | Recoveries | Balance at December 31, 2013 | |||||||||||||||||||||||||
Credit cards | $ | 2,174 | $ | 2,970 | $ | (2,847 | ) | $ | 530 | $ | 2,827 | |||||||||||||||||||
Consumer installment loans | 62 | 49 | (111 | ) | 19 | 19 | ||||||||||||||||||||||||
Commercial credit products | 38 | 53 | (53 | ) | 8 | 46 | ||||||||||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 2,274 | $ | 3,072 | $ | (3,011 | ) | $ | 557 | $ | 2,892 | |||||||||||||||||||
($ in millions) | Balance at January 1, 2012 | Provision charged to operations | Gross charge-offs | Recoveries | Balance at December 31, 2012 | |||||||||||||||||||||||||
Credit cards | $ | 1,902 | $ | 2,438 | $ | (2,680 | ) | $ | 514 | $ | 2,174 | |||||||||||||||||||
Consumer installment loans | 113 | 54 | (130 | ) | 25 | 62 | ||||||||||||||||||||||||
Commercial credit products | 37 | 69 | (76 | ) | 8 | 38 | ||||||||||||||||||||||||
Other | — | 4 | (4 | ) | — | — | ||||||||||||||||||||||||
Total | $ | 2,052 | $ | 2,565 | $ | (2,890 | ) | $ | 547 | $ | 2,274 | |||||||||||||||||||
_____________________ | ||||||||||||||||||||||||||||||
(a) | Includes a $61 million reduction in provision for loan losses associated with the classification of certain loan receivables as held for sale. | |||||||||||||||||||||||||||||
Delinquent and Non-accrual Loans | ||||||||||||||||||||||||||||||
At December 31, 2014 ($ in millions) | 30-89 days delinquent | 90 or more days delinquent | Total Past Due | 90 or more days delinquent and accruing | Total non-accruing (a) | |||||||||||||||||||||||||
Credit cards | $ | 1,331 | $ | 1,147 | $ | 2,478 | $ | 1,147 | $ | — | ||||||||||||||||||||
Consumer installment loans | 15 | 2 | 17 | — | 2 | |||||||||||||||||||||||||
Commercial credit products | 28 | 13 | 41 | 13 | — | |||||||||||||||||||||||||
Total delinquent loans | $ | 1,374 | $ | 1,162 | $ | 2,536 | $ | 1,160 | $ | 2 | ||||||||||||||||||||
Percentage of total loan receivables(a) | 2.2 | % | 1.9 | % | 4.1 | % | 1.9 | % | — | % | ||||||||||||||||||||
At December 31, 2013 ($ in millions) | 30-89 days delinquent | 90 or more days delinquent | Total Past Due | 90 or more days delinquent and accruing | Total non-accruing (a) | |||||||||||||||||||||||||
Credit cards | $ | 1,327 | $ | 1,105 | $ | 2,432 | $ | 1,105 | $ | — | ||||||||||||||||||||
Consumer installment loans | 12 | 2 | 14 | — | 2 | |||||||||||||||||||||||||
Commercial credit products | 28 | 14 | 42 | 14 | — | |||||||||||||||||||||||||
Total delinquent loans | $ | 1,367 | $ | 1,121 | $ | 2,488 | $ | 1,119 | $ | 2 | ||||||||||||||||||||
Percentage of total loan receivables(a) | 2.4 | % | 2 | % | 4.3 | % | 2 | % | — | % | ||||||||||||||||||||
______________________ | ||||||||||||||||||||||||||||||
(a) | Percentages are calculated based on period-end balances. | |||||||||||||||||||||||||||||
Impaired Loans and Troubled Debt Restructurings | ||||||||||||||||||||||||||||||
Most of our non-accrual loan receivables are smaller balance loans evaluated collectively, by portfolio, for impairment and therefore are outside the scope of the disclosure requirements for impaired loans. Accordingly, impaired loans represent restructured smaller balance homogeneous loans meeting the definition of a TDR. We use certain loan modification programs for borrowers experiencing financial difficulties. These loan modification programs include interest rate reductions and payment deferrals in excess of three months, which were not part of the terms of the original contract. | ||||||||||||||||||||||||||||||
We have both internal and external loan modification programs. The internal loan modification programs include both temporary and permanent programs. For our credit card customers, the temporary hardship program primarily consists of a reduced minimum payment and an interest rate reduction, both lasting for a period no longer than 12 months. The permanent workout program involves changing the structure of the loan to a fixed payment loan with a maturity no longer than 60 months and reducing the interest rate on the loan. The permanent program does not normally provide for the forgiveness of unpaid principal, but may allow for the reversal of certain unpaid interest or fee assessments. We also make loan modifications for customers who request financial assistance through external sources, such as consumer credit counseling agency programs. These loans typically receive a reduced interest rate but continue to be subject to the original minimum payment terms and do not normally include waiver of unpaid principal, interest or fees. The following table provides information on loans that entered a loan modification program during the periods presented: | ||||||||||||||||||||||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | ||||||||||||||||||||||||||||
Credit cards | $ | 423 | $ | 506 | ||||||||||||||||||||||||||
Consumer installment loans | — | 26 | ||||||||||||||||||||||||||||
Commercial credit products | 5 | 7 | ||||||||||||||||||||||||||||
Total | $ | 428 | $ | 539 | ||||||||||||||||||||||||||
Loans classified as TDRs are recorded at their present value with impairment measured as the difference between the loan balance and the discounted present value of cash flows expected to be collected, discounted at the original effective interest rate of the loan. Our allowance for loan losses on TDRs is generally measured based on the difference between the recorded loan receivable and the present value of the expected future cash flows. Interest income from loans accounted for as TDRs is accounted for in the same manner as other accruing loans. | ||||||||||||||||||||||||||||||
The following table provides information about loans classified as TDRs and specific reserves. We do not evaluate credit card loans for impairment on an individual basis, but instead estimate an allowance for loan losses on a collective basis. As a result, there are no impaired loans for which there is no allowance. | ||||||||||||||||||||||||||||||
At December 31, 2014 ($ in millions) | Total recorded | Related allowance | Net recorded investment | Unpaid principal balance | ||||||||||||||||||||||||||
investment | ||||||||||||||||||||||||||||||
Credit cards | $ | 716 | $ | (217 | ) | $ | 499 | $ | 613 | |||||||||||||||||||||
Consumer installment loans | — | — | — | — | ||||||||||||||||||||||||||
Commercial credit products | 8 | (3 | ) | 5 | 8 | |||||||||||||||||||||||||
Total | $ | 724 | $ | (220 | ) | $ | 504 | $ | 621 | |||||||||||||||||||||
At December 31, 2013 ($ in millions) | Total recorded | Related allowance | Net recorded investment | Unpaid principal balance | ||||||||||||||||||||||||||
investment | ||||||||||||||||||||||||||||||
Credit cards | $ | 799 | $ | (246 | ) | $ | 553 | $ | 692 | |||||||||||||||||||||
Consumer installment loans | — | — | — | — | ||||||||||||||||||||||||||
Commercial credit products | 12 | (5 | ) | 7 | 12 | |||||||||||||||||||||||||
Total | $ | 811 | $ | (251 | ) | $ | 560 | $ | 704 | |||||||||||||||||||||
Financial Effects of TDRs | ||||||||||||||||||||||||||||||
As part of our loan modifications for borrowers experiencing financial difficulty, we may provide multiple concessions to minimize our economic loss and improve long-term loan performance and collectability. The following table presents the types and financial effects of loans modified and accounted for as TDRs during the periods presented: | ||||||||||||||||||||||||||||||
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||
($ in millions) | Interest income recognized during period when loans were impaired | Interest income that would have been recorded with original terms | Average recorded investment | Interest income recognized during period when loans were impaired | Interest income that would have been recorded with original terms | Average recorded investment | Interest income recognized during period when loans were impaired | Interest income that would have been recorded with original terms | Average recorded investment | |||||||||||||||||||||
Credit cards | $ | 56 | $ | 140 | $ | 745 | $ | 79 | $ | 175 | $ | 890 | $ | 75 | $ | 173 | $ | 908 | ||||||||||||
Consumer installment loans | — | — | — | 1 | 3 | — | 1 | 4 | 80 | |||||||||||||||||||||
Commercial credit products | — | 2 | 10 | 1 | 2 | 12 | 1 | 3 | 5 | |||||||||||||||||||||
Total | $ | 56 | $ | 142 | $ | 755 | $ | 81 | $ | 180 | $ | 902 | $ | 77 | $ | 180 | $ | 993 | ||||||||||||
Payment Defaults | ||||||||||||||||||||||||||||||
The following table presents the type, number and amount of loans accounted for as TDRs that enrolled in a modification plan within the previous 12 months and experienced a payment default during the periods presented. A customer defaults from a modification program after two consecutive missed payments. | ||||||||||||||||||||||||||||||
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||
($ in millions) | Accounts defaulted | Loans defaulted | Accounts defaulted | Loans defaulted | Accounts defaulted | Loans defaulted | ||||||||||||||||||||||||
Credit cards | 29,313 | $ | 60 | 30,640 | $ | 56 | 43,609 | $ | 82 | |||||||||||||||||||||
Consumer installment loans | — | — | 98 | 3 | 129 | 4 | ||||||||||||||||||||||||
Commercial credit products | 159 | 1 | 42 | — | 95 | — | ||||||||||||||||||||||||
Total | 29,472 | $ | 61 | 30,780 | $ | 59 | 43,833 | $ | 86 | |||||||||||||||||||||
Credit Quality Indicators | ||||||||||||||||||||||||||||||
Our loan receivables portfolio includes both secured and unsecured loans. Secured loan receivables are largely comprised of consumer installment loans secured by equipment. Unsecured loan receivables are largely comprised of our open-ended revolving credit card and commercial loans. As part of our credit risk management activities, on an ongoing basis, we assess overall credit quality by reviewing information related to the performance of a customer’s account with us, as well as information from credit bureaus, such as a Fair Isaac Corporation (“FICO”) or other credit scores, relating to the customer’s broader credit performance. FICO scores are generally obtained at origination of the account and are refreshed, at a minimum quarterly, but could be as often as weekly, to assist in predicting customer behavior. Beginning in 2014, we refined the categories of FICO scores we use to better align to the categories used across our industry. We now categorize these credit scores into the following three credit score categories: (i) 661 or higher, which are considered the strongest credits; (ii) 601 to 660, considered moderate credit risk; and (iii) 600 or less, which are considered weaker credits. There are certain customer accounts for which a FICO score is not available where we use alternative sources to assess their credit and predict behavior. The following table provides the most recent FICO scores available for our customers at December 31, 2014 and 2013, respectively, as a percentage of each class of loan receivable. We have reclassified the categories at December 31, 2013 to conform to the current period classification. The table below excludes 0.8% and 1.1% of our total loan receivables balance at December 31, 2014 and 2013, respectively, which represents those customer accounts for which a FICO score is not available. | ||||||||||||||||||||||||||||||
At December 31 | 2014 | 2013 | ||||||||||||||||||||||||||||
661 or | 601 to | 600 or | 661 or | 601 to | 600 or | |||||||||||||||||||||||||
higher | 660 | less | higher | 660 | less | |||||||||||||||||||||||||
Credit cards | 72.5 | % | 19.9 | % | 7.6 | % | 71.7 | % | 20 | % | 8.3 | % | ||||||||||||||||||
Consumer installment loans | 78.9 | % | 15.7 | % | 5.4 | % | 78.2 | % | 15.5 | % | 6.3 | % | ||||||||||||||||||
Commercial credit products | 86.5 | % | 8.6 | % | 4.8 | % | 85.3 | % | 9.4 | % | 5.3 | % | ||||||||||||||||||
Unfunded Lending Commitments | ||||||||||||||||||||||||||||||
We manage the potential risk in credit commitments by limiting the total amount of credit, both by individual customer and in total, by monitoring the size and maturity of our portfolios and by applying the same credit standards for all of our credit products. Unused credit card lines available to our customers totaled approximately $297 billion and $277 billion at December 31, 2014 and 2013, respectively. While these amounts represented the total available unused credit card lines, we have not experienced and do not anticipate that all of our customers will access their entire available line at any given point in time. | ||||||||||||||||||||||||||||||
Interest Income by Product | ||||||||||||||||||||||||||||||
The following table provides additional information about our interest and fees on loans from our loan receivables, including held for sale: | ||||||||||||||||||||||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||
Credit cards | $ | 11,967 | $ | 11,015 | $ | 9,967 | ||||||||||||||||||||||||
Consumer installment loans | 99 | 129 | 176 | |||||||||||||||||||||||||||
Commercial credit products | 149 | 150 | 156 | |||||||||||||||||||||||||||
Other | 1 | 1 | 1 | |||||||||||||||||||||||||||
Total | $ | 12,216 | $ | 11,295 | $ | 10,300 | ||||||||||||||||||||||||
Variable_Interest_Entities
Variable Interest Entities | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Variable Interest Entities [Abstract] | ||||||||
Variable Interest Entities | VARIABLE INTEREST ENTITIES | |||||||
We use VIEs to securitize loans and arrange asset-backed financing in the ordinary course of business. Investors in these entities only have recourse to the assets owned by the entity and not to our general credit. We do not have implicit support arrangements with any VIE and we did not provide non-contractual support for previously transferred loan receivables to any VIE in the years ended December 31, 2014 and 2013. Our VIEs are able to accept new loan receivables and arrange new asset-backed financings, consistent with the requirements and limitations on such activities placed on the VIE by existing investors. Once an account has been designated to a VIE, the contractual arrangements we have require all existing and future loans originated under such account to be transferred to the VIE. The amount of loan receivables held by our VIEs in excess of the minimum amount required under the asset-backed financing arrangements with investors may be removed by us under random removal of accounts provisions. All loan receivables held by a VIE are subject to claims of third-party investors. | ||||||||
In evaluating whether we have the power to direct the activities of a VIE that most significantly impact its economic performance, we consider the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and our decision-making role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important. | ||||||||
In determining whether we have the right to receive benefits or the obligation to absorb losses that could potentially be significant to a VIE, we evaluate all of our economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity’s design, including: the entity’s capital structure, contractual rights to earnings or losses, subordination of our interests relative to those of other investors, as well as any other contractual arrangements that might exist that could have the potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic interests is a matter that requires the exercise of professional judgment. | ||||||||
We consolidate our VIEs because we have the power to direct the activities that significantly affect the VIEs' economic performance, typically because of our role as either servicer or administrator for the VIEs. The power to direct exists because of our role in the design and conduct of the servicing of the VIEs’ assets as well as directing certain affairs of the VIEs, including determining whether and on what terms debt of the VIEs will be issued. | ||||||||
The loan receivables in these entities have risks and characteristics similar to our other financing receivables and were underwritten to the same standard. Accordingly, the performance of these assets has been similar to our other comparable loan receivables; however, the blended performance of the pools of receivables in these entities reflects the eligibility criteria that we apply to determine which receivables are selected for transfer. Contractually, the cash flows from these financing receivables must first be used to pay third-party debt holders, as well as other expenses of the entity. Excess cash flows, if any, are available to us. The creditors of these entities have no claim on our other assets. | ||||||||
The table below summarizes the assets and liabilities of our consolidated securitization VIEs described above. | ||||||||
At December 31 ($ in millions) | 2014 | 2013 | ||||||
Assets | ||||||||
Loan receivables, net(a) | $ | 25,645 | $ | 24,766 | ||||
Other assets | 1,134 | 20 | ||||||
Total | $ | 26,779 | $ | 24,786 | ||||
Liabilities | ||||||||
Borrowings | $ | 14,967 | $ | 15,362 | ||||
Other liabilities | 368 | 228 | ||||||
Total | $ | 15,335 | $ | 15,590 | ||||
_______________________ | ||||||||
(a) | Includes $1.3 billion of related allowance for loan losses for both periods presented, resulting in gross restricted loans of $27.0 billion and $26.1 billion at December 31, 2014 and 2013, respectively. | |||||||
The balances presented above are net of intercompany balances and transactions that are eliminated in our consolidated and combined financial statements. | ||||||||
We provide, and, for one of our securitization entities GECC provides, servicing to these VIEs. Historically, the applicable servicer of each of these VIEs was contractually permitted to commingle cash collected from customers on loan receivables owned by the VIEs with our own cash prior to payment to a VIE, subject to certain credit rating requirements. As a result of this commingling of cash, at December 31, 2013, we and GECC on a combined basis, owed to these VIEs $4.1 billion and the VIEs owed to us and GECC, $3.3 billion for purchased loan receivables and amounts due to us under the equity and other interests we and GECC held in the VIEs. These amounts have been eliminated in our Consolidated and Combined Statements of Financial Position. | ||||||||
Beginning in 2014, we stopped commingling cash with our VIEs and collections are required to be placed into segregated accounts owned by each VIE in amounts that meet contractually specified minimum levels. These segregated funds are invested in cash and cash equivalents and are restricted as to their use, principally to pay maturing principal and interest on debt and the servicing fees. Collections above these minimum levels are remitted to us on a daily basis. At December 31, 2014, the net amounts we owed to the VIEs we directly service was $9 million, representing VIE collections temporarily held by us, net of servicing fees owed from these VIEs. These amounts have been eliminated in our Consolidated and Combined Statement of Financial Position. At December 31, 2014, the segregated funds held by the VIEs were $1.0 billion and were classified as restricted cash and included as a component of other assets in our Consolidated and Combined Statement of Financial Position. For one of our VIEs, GECC is the servicer and we are the subservicer. At December 31, 2014, in our capacity as a subservicer, we temporarily held $75 million of VIE collections which are reflected in our Consolidated and Combined Statement of Financial Position within other liabilities as amounts payable to GECC. The VIE reflected a corresponding amount as a receivable due from GECC within other assets. In addition, at December 31, 2014, we are entitled to unpaid subservicing fees of $36 million, which is reflected in our Consolidated and Combined Statement of Financial Position within other assets as a receivable due from GECC. The VIE reflected a corresponding amount as a payable to GECC within other liabilities. | ||||||||
Income (principally, interest and fees on loans) earned by our consolidated VIEs was $5.2 billion, $5.3 billion and $4.8 billion for the years ended December 31, 2014, 2013 and 2012, respectively. Related expenses consisted primarily of provision for loan losses of $1.1 billion, $1.2 billion and $1.3 billion for the years ended December 31, 2014, 2013 and 2012, respectively, and interest expense of $215 million, $211 million and $228 million for the years ended December 31, 2014, 2013 and 2012, respectively. These amounts do not include intercompany transactions, principally fees and interest, which are eliminated in our consolidated and combined financial statements. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||
($ in millions) | 2014 | 2013 | ||||||||||||||||||||||
Balance at January 1 | $ | 949 | $ | 936 | ||||||||||||||||||||
Acquisitions | — | 13 | ||||||||||||||||||||||
Balance at December 31 | $ | 949 | $ | 949 | ||||||||||||||||||||
The increase in goodwill during 2013 relates to the acquisition of the MetLife Bank, N.A deposit business. See Note 3. Acquisitions. | ||||||||||||||||||||||||
Intangible Assets Subject to Amortization | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
At December 31 ($ in millions) | Gross carrying amount | Accumulated amortization | Net | Gross carrying amount | Accumulated amortization | Net | ||||||||||||||||||
Customer-related | $ | 849 | $ | (405 | ) | $ | 444 | $ | 586 | $ | (312 | ) | $ | 274 | ||||||||||
Capitalized software | 120 | (45 | ) | 75 | 55 | (29 | ) | 26 | ||||||||||||||||
Total | $ | 969 | $ | (450 | ) | $ | 519 | $ | 641 | $ | (341 | ) | $ | 300 | ||||||||||
During 2014 we recorded additions to intangible assets subject to amortization of $328 million, primarily related to payments made to acquire customer relationships or extend retail partner relationships, as well as capitalized software expenditures related to the build of our standalone information technology infrastructure. | ||||||||||||||||||||||||
Customer-related intangible assets primarily relate to retail partner contract acquisitions and extensions, as well as purchased credit card relationships. During the year ended December 31, 2014, we recorded additions to customer-related intangible assets subject to amortization of $263 million, primarily related to payments made to acquire and extend certain retail partner relationships. These additions had a weighted average amortizable life of 8 years. | ||||||||||||||||||||||||
Amortization expense related to retail partner contracts was $81 million, $60 million and $53 million for the years ended December 31, 2014, 2013 and 2012, respectively, and is included as a component of marketing and business development expense in our Consolidated and Combined Statements of Earnings. All other amortization expense was $28 million, $23 million and $15 million for the years ended December 31, 2014, 2013 and 2012, respectively, and is included as a component of other expense in our Consolidated and Combined Statements of Earnings. We estimate annual amortization expense for existing intangible assets over the next five calendar years to be as follows: | ||||||||||||||||||||||||
($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||||
Amortization expense | $ | 116 | $ | 114 | $ | 92 | $ | 64 | $ | 54 | ||||||||||||||
Deposits
Deposits | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Banking and Thrift [Abstract] | ||||||||||||||||||||||||
Deposits | DEPOSITS | |||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
At December 31 ($ in millions) | Amount | Average rate (a) | Amount | Average rate (a) | ||||||||||||||||||||
Interest-bearing deposits | $ | 34,847 | 1.6 | % | $ | 25,360 | 1.7 | % | ||||||||||||||||
Non-interest-bearing deposits | 108 | — | 359 | — | ||||||||||||||||||||
Total deposits | $ | 34,955 | $ | 25,719 | ||||||||||||||||||||
___________________ | ||||||||||||||||||||||||
(a) | Based on interest expense for the years ended December 31, 2014 and 2013 and average deposits balances. | |||||||||||||||||||||||
At December 31, 2014 and 2013, interest-bearing deposits included $9.4 billion and $5.7 billion, respectively, of direct deposit certificates of $100,000 or more. At December 31, 2014, our interest-bearing time deposits maturing over the next five years and thereafter were as follows: | ||||||||||||||||||||||||
($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||
Deposits | $ | 11,626 | $ | 3,453 | $ | 2,556 | $ | 1,894 | $ | 3,880 | $ | 2,693 | ||||||||||||
The above maturity table excludes $6.1 billion of demand deposits with no defined maturity. In addition, at December 31, 2014, we had $2.6 billion of broker network deposit sweeps procured through a program arranger who channels brokerage account deposits to us. Unless extended, the contracts associated with these broker network deposit sweeps will terminate in 2015 and 2017, representing $2.4 billion and $262 million, respectively. |
Borrowings
Borrowings | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Banking and Thrift [Abstract] | ||||||||||||||||||||||||
Borrowings | BORROWINGS | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
At December 31 ($ in millions) | Maturity date | Amount(a) | Weighted average interest rate | Amount(a) | Weighted average interest rate | |||||||||||||||||||
Borrowings of consolidated securitization entities | 2015 - 2019 | $ | 14,967 | 1.2 | % | $ | 15,362 | 1.2 | % | |||||||||||||||
Bank term loan | 2019 | 8,245 | 2.1 | % | — | — | % | |||||||||||||||||
Senior unsecured notes | 2017 - 2024 | 3,593 | 3.4 | % | — | — | % | |||||||||||||||||
Related party debt | 2019 | 655 | 4.2 | % | 8,959 | 1.7 | % | (b) | ||||||||||||||||
Total borrowings | $ | 27,460 | $ | 24,321 | ||||||||||||||||||||
___________________ | ||||||||||||||||||||||||
(a) | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. | |||||||||||||||||||||||
(b) | Represents average rate based on interest expense for the year ended December 31, 2013 and average borrowing balance. | |||||||||||||||||||||||
Borrowings of Consolidated Securitization Entities | ||||||||||||||||||||||||
We securitize credit card receivables as an additional source of funding. In preparation for the IPO, in the first half of 2014, we amended the terms of certain of these borrowings, primarily to extend maturities and increase the availability of secured borrowing commitments. The maturities of the borrowings of our consolidated securitization entities at December 31, 2014, which reflect the effect of these amendments, were as follows: | ||||||||||||||||||||||||
($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||
Borrowings of consolidated securitization entities | $ | 2,604 | $ | 2,165 | $ | 7,351 | $ | 1,684 | $ | 1,163 | $ | — | ||||||||||||
In addition, at December 31, 2014, we had an aggregate of $6.1 billion of undrawn committed capacity under our securitization programs. | ||||||||||||||||||||||||
During the years ended December 31, 2014 and 2013, we completed new debt issuances through our securitized entities with proceeds of $5.2 billion and $866 million, respectively. | ||||||||||||||||||||||||
Third-Party Debt | ||||||||||||||||||||||||
Bank Term Loan | ||||||||||||||||||||||||
On August 5, 2014, we entered into a new term loan facility (the “Bank Term Loan”) with third-party lenders that initially provided $8.0 billion principal amount of unsecured term loans maturing in 2019. The Bank Term Loan bears interest based upon, at our option, (i) a base rate plus a margin of 0.65% to 1.40% or (ii) a London Interbank Offered Rate (“LIBOR”) rate plus a margin of 1.65% to 2.40%, with the margin, in each case, based on our long-term senior unsecured non-credit-enhanced debt ratings or, if such rating has not been assigned to our debt by the applicable rating agency, a corporate credit rating. At December 31, 2014, the base rate and LIBOR margins were 0.90% and 1.90%, respectively. In August 2014, we prepaid $505 million of the Bank Term Loan, using a portion of the net proceeds from our issuance of senior unsecured notes. In October 2014, we amended the Bank Term Loan to, among other things, increase the amount of indebtedness that the Company may incur thereunder by $750 million, and this amount was borrowed in full. | ||||||||||||||||||||||||
At December 31, 2014, the total indebtedness outstanding under the Bank Term Loan was $8.2 billion and the weighted average interest rate was 2.06%. Subsequent to December 31, 2014, we prepaid an additional $2.5 billion in the aggregate of the Bank Term Loan, which included the use of a portion of the net proceeds from the issuance of senior unsecured notes in February 2015. The total indebtedness outstanding under the Bank Term Loan following these additional prepayments was $5.7 billion. | ||||||||||||||||||||||||
Senior Unsecured Notes | ||||||||||||||||||||||||
On August 11, 2014, we issued a total of $3.6 billion principal amount of senior unsecured notes, comprising $500 million aggregate principal amount of 1.875% senior notes due 2017, $1.1 billion aggregate principal amount of 3.000% senior notes due 2019, $750 million aggregate principal amount of 3.750% senior notes due 2021, and $1.25 billion aggregate principal amount of 4.250% senior notes due 2024. | ||||||||||||||||||||||||
On February 2, 2015, we issued a total of $1.0 billion principal amount of senior unsecured notes, comprising $750 million aggregate principal amount of 2.700% senior notes due 2020, and $250 million aggregate principal amount of floating rate senior notes due 2020. All of the net proceeds from this issuance were used to prepay the Bank Term Loan and GECC Term Loan on a pro rata basis. | ||||||||||||||||||||||||
Related Party Debt | ||||||||||||||||||||||||
In connection with the IPO, all outstanding related party debt at the date of the closing of the IPO, totaling $8.0 billion, was repaid, and we entered into new long-term debt arrangements with third parties and GECC. | ||||||||||||||||||||||||
On August 5, 2014, we entered into a new term loan facility (the “GECC Term Loan”) with GECC, which provided $1.5 billion principal amount of unsecured term loan maturing in 2019. The GECC Term Loan bears interest based upon, at our option, (i) a base rate plus a margin of 3.00% or (ii) a LIBOR rate plus a margin of 4.00%. | ||||||||||||||||||||||||
During 2014, we used the $750 million of additional borrowings under the Bank Term Loan and a portion of the net proceeds from the issuance of senior unsecured notes to make prepayments in the aggregate of $845 million of the GECC Term Loan, and the balance of related party debt outstanding at December 31, 2014 was $655 million. | ||||||||||||||||||||||||
Subsequent to December 31, 2014, we prepaid an aggregate of $206 million of the GECC Term Loan, which included the use of a portion of the net proceeds from the issuance of senior unsecured notes in February 2015. Following these prepayments, the indebtedness outstanding under the GECC Term Loan was $449 million. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS | |||||||||||||||||||
For a description of how we estimate fair value, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies. | ||||||||||||||||||||
The following tables present our assets and liabilities measured at fair value on a recurring basis. Included in the tables are debt and equity securities. | ||||||||||||||||||||
Recurring Fair Value Measurements | ||||||||||||||||||||
The following tables present our assets measured at fair value on a recurring basis. | ||||||||||||||||||||
At December 31, 2014 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Assets | ||||||||||||||||||||
Investment securities | ||||||||||||||||||||
Debt | ||||||||||||||||||||
U.S. Government and Federal Agency | $ | — | $ | 1,252 | $ | — | $ | 1,252 | ||||||||||||
State and municipal | — | — | 57 | 57 | ||||||||||||||||
Residential mortgage-backed | — | 271 | — | 271 | ||||||||||||||||
U.S. Corporate | — | — | 3 | 3 | ||||||||||||||||
Equity | 15 | — | — | 15 | ||||||||||||||||
Total | $ | 15 | $ | 1,523 | $ | 60 | $ | 1,598 | ||||||||||||
At December 31, 2013 ($ in millions) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Investment securities | ||||||||||||||||||||
Debt | ||||||||||||||||||||
State and municipal | $ | — | $ | — | $ | 46 | $ | 46 | ||||||||||||
Residential mortgage-backed | — | 175 | — | 175 | ||||||||||||||||
Equity | 15 | — | — | 15 | ||||||||||||||||
Total | $ | 15 | $ | 175 | $ | 46 | $ | 236 | ||||||||||||
For the years ended December 31, 2014 and 2013 there were no securities transferred between Level 1 and Level 2 or between Level 2 and Level 3. At December 31, 2014 and 2013, we did not have any significant liabilities measured at fair value on a recurring basis. | ||||||||||||||||||||
Our Level 3 recurring fair value measurements primarily relate to state and municipal debt instruments of $57 million and $46 million at December 31, 2014 and 2013, respectively, which are valued using non-binding broker quotes or other third-party sources, as well as corporate debt instruments of $3 million at December 31, 2014. For a description of our process to evaluate third-party pricing servicers, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies. Our state and municipal debt securities are classified as available-for-sale with changes in fair value included in accumulated other comprehensive income. | ||||||||||||||||||||
The following table presents the changes in our Level 3 debt instruments that are measured on a recurring basis for the years ended December 31, 2014 and 2013. | ||||||||||||||||||||
Changes in Level 3 Instruments | ||||||||||||||||||||
Years ended December 31, ($ in millions) | 2014 | 2013 | ||||||||||||||||||
Balance at beginning of period | $ | 46 | $ | 39 | ||||||||||||||||
Net realized/unrealized gains (losses) included in accumulated other comprehensive income | 7 | (4 | ) | |||||||||||||||||
Purchases | 11 | 16 | ||||||||||||||||||
Settlements | (4 | ) | (5 | ) | ||||||||||||||||
Balance at end of period | $ | 60 | $ | 46 | ||||||||||||||||
Net change in unrealized gains (losses) relating to instruments still held at December 31 | $ | 7 | $ | (4 | ) | |||||||||||||||
Non-Recurring Fair Value Measurements | ||||||||||||||||||||
We hold certain assets that have been measured at fair value on a non-recurring basis at December 31, 2014 and 2013. These assets can include repossessed assets and cost method investments that are written down to fair value when they are impaired, as well as loan receivables held for sale. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. The assets held by us that were measured at fair value on a non-recurring basis and the effects of the remeasurement to fair value were not material for all periods presented. The estimated fair value of loan receivables held for sale exceeded their amortized cost and accordingly a remeasurement to fair value was not required during the year ended December 31, 2014. | ||||||||||||||||||||
Financial Assets and Financial Liabilities Carried at Other than Fair Value | ||||||||||||||||||||
Carrying | Corresponding fair value amount | |||||||||||||||||||
At December 31, 2014 ($ in millions) | value | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial Assets | ||||||||||||||||||||
Financial assets for which carrying values equal or approximate fair value: | ||||||||||||||||||||
Cash and equivalents (c) | $ | 11,828 | $ | 11,828 | $ | 8,153 | $ | 3,675 | $ | — | ||||||||||
Other assets(a) | $ | 1,104 | $ | 1,104 | $ | 1,104 | $ | — | $ | — | ||||||||||
Financial assets carried at other than fair value: | ||||||||||||||||||||
Loan receivables, net(d) | $ | 58,050 | $ | 64,113 | $ | — | $ | — | $ | 64,113 | ||||||||||
Loan receivables held for sale(d) | $ | 332 | $ | 351 | $ | — | $ | — | $ | 351 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Financial liabilities carried at other than fair value: | ||||||||||||||||||||
Deposits | $ | 34,955 | $ | 35,442 | $ | — | $ | 35,442 | $ | — | ||||||||||
Borrowings of consolidated securitization entities | $ | 14,967 | $ | 14,985 | $ | — | $ | 7,912 | $ | 7,073 | ||||||||||
Bank term loan | $ | 8,245 | $ | 8,204 | $ | — | $ | — | $ | 8,204 | ||||||||||
Senior unsecured notes | $ | 3,593 | $ | 3,660 | $ | — | $ | 3,660 | $ | — | ||||||||||
Related party debt | $ | 655 | $ | 655 | $ | — | $ | — | $ | 655 | ||||||||||
Carrying | Corresponding fair value amount | |||||||||||||||||||
At December 31, 2013 ($ in millions) | value | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial Assets | ||||||||||||||||||||
Financial assets for which carrying values equal or approximate fair value: | ||||||||||||||||||||
Cash and equivalents | $ | 2,319 | $ | 2,319 | $ | 2,319 | $ | — | $ | — | ||||||||||
Other assets(a) | $ | 76 | $ | 76 | $ | 76 | $ | — | $ | — | ||||||||||
Financial assets carried at other than fair value: | ||||||||||||||||||||
Loan receivables, net | $ | 54,362 | $ | 60,344 | $ | — | $ | — | $ | 60,344 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Financial liabilities carried at other than fair value: | ||||||||||||||||||||
Deposits | $ | 25,719 | $ | 25,994 | $ | — | $ | 25,994 | $ | — | ||||||||||
Borrowings of consolidated securitization entities | $ | 15,362 | $ | 15,308 | $ | — | $ | 8,206 | $ | 7,102 | ||||||||||
Related party debt(b) | $ | 8,959 | $ | 209 | $ | — | $ | 209 | $ | — | ||||||||||
_______________________ | ||||||||||||||||||||
(a) | This balance relates to restricted cash and equivalents which is included in other assets. | |||||||||||||||||||
(b) | The fair value of the related party debt at December 31, 2013 relates to $195 million of debt issued by one of our securitization entities which was held by a GECC affiliate. This related party debt was repurchased by the Company during the year ended December 31, 2014 and is now eliminated in our consolidated and combined financial statements at December 31, 2014. | |||||||||||||||||||
(c) | For cash and cash equivalents carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less. | |||||||||||||||||||
(d) | Under certain retail partner program agreements, the expected sales proceeds related to the sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above. |
Regulatory_and_Capital_Adequac
Regulatory and Capital Adequacy | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||
Regulatory and Capital Adequacy | REGULATORY AND CAPITAL ADEQUACY | ||||||||||||||||||||
As a savings and loan holding company, we are subject to extensive regulation, supervision and examination by the Federal Reserve Board. The Bank is a federally chartered savings association. As such, the Bank is subject to extensive regulation, supervision and examination by the OCC, which is its primary regulator, and by the Consumer Financial Protection Bureau (“CFPB”). In addition, the Bank, as an insured depository institution, is supervised by the Federal Deposit Insurance Corporation. | |||||||||||||||||||||
As a savings and loan holding company, we historically have not been required to maintain any specific amount of minimum capital. Beginning as early as 2015, however, we expect that we will be subject to capital requirements similar to those applicable to the Bank. These capital requirements have recently been substantially revised, including as a result of Basel III and the requirements of the Dodd-Frank Act. Moreover, these requirements are supplemented by outstanding regulatory proposals by the federal banking agencies, based on, and in addition to, changes recently adopted by the Basel Committee to increase the amount and scope of a supplemental leverage capital requirement that will be applicable to larger savings and loan holding companies, like GECC, by increasing the assets included in the denominator of the leverage ratio calculation. | |||||||||||||||||||||
When we become subject to capital requirements, we will also be required to conduct stress tests on an annual basis. Under the Federal Reserve Board’s stress test regulations, we will be required to utilize stress-testing methodologies providing for results under at least three different sets of conditions, including baseline, adverse and severely adverse conditions. In addition, as part of meeting our minimum capital requirements, we may be required to comply with the Federal Reserve Board’s Comprehensive Capital Analysis and Review (“CCAR”) process, or some modified version of the CCAR process, which would measure our minimum capital requirement levels under various stress scenarios. In connection with such a process, we may be required to develop for the Federal Reserve Board’s review and approval a capital plan that will include how we will meet our minimum capital requirements under specified stress scenarios. | |||||||||||||||||||||
Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could limit our business activities and have a material adverse effect on our financial statements. Under capital adequacy guidelines, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. | |||||||||||||||||||||
Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). | |||||||||||||||||||||
At December 31, 2014 and 2013, the Bank met all applicable requirements to be deemed well-capitalized pursuant to OCC regulations and for purposes of the Federal Deposit Insurance Act. To be categorized as well-capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based, and leverage ratios as set forth in the following table. There are no conditions or events subsequent to December 31, 2014 that management believes have changed the Bank’s capital category. | |||||||||||||||||||||
The actual capital amounts and ratios and the required minimums of the Bank are as follows: | |||||||||||||||||||||
At December 31, 2014 ($ in millions) | Actual | Minimum for capital | Minimum to be well-capitalized under prompt corrective action provisions | ||||||||||||||||||
adequacy purposes(b) | |||||||||||||||||||||
Amount | Ratio(a) | Amount | Ratio | Amount | Ratio | ||||||||||||||||
Total risk-based capital | $ | 7,100 | 17.1 | % | $ | 3,322 | 8 | % | $ | 4,152 | 10 | % | |||||||||
Tier 1 risk-based capital | $ | 6,559 | 15.8 | % | $ | 1,661 | 4 | % | $ | 2,491 | 6 | % | |||||||||
Tier 1 leverage | $ | 6,559 | 13.4 | % | $ | 1,959 | 4 | % | $ | 2,449 | 5 | % | |||||||||
At December 31, 2013 ($ in millions) | Actual | Minimum for capital | Minimum to be well-capitalized under prompt corrective action provisions | ||||||||||||||||||
adequacy purposes(b) | |||||||||||||||||||||
Amount | Ratio(a) | Amount | Ratio | Amount | Ratio | ||||||||||||||||
Total risk-based capital | $ | 6,010 | 17.3 | % | $ | 2,784 | 8 | % | $ | 3,480 | 10 | % | |||||||||
Tier 1 risk-based capital | $ | 5,559 | 16 | % | $ | 1,392 | 4 | % | $ | 2,088 | 6 | % | |||||||||
Tier 1 leverage | $ | 5,559 | 14.9 | % | $ | 1,495 | 4 | % | $ | 1,869 | 5 | % | |||||||||
_______________________ | |||||||||||||||||||||
(a) | Represent Basel I capital ratios calculated for the Bank. | ||||||||||||||||||||
(b) | In addition to the Basel I requirements, under the Bank’s Operating Agreement with the OCC entered into on January 11, 2013, the Bank must maintain minimum levels of capital as follows: | ||||||||||||||||||||
At December 31 ($ in millions) | 2014 | 2013 | |||||||||||||||||||
Amount | Ratio | Amount | Ratio | ||||||||||||||||||
Total risk-based capital | $ | 4,568 | 11 | % | $ | 3,828 | 11 | % | |||||||||||||
Tier 1 risk-based capital | $ | 2,907 | 7 | % | $ | 2,436 | 7 | % | |||||||||||||
Tier 1 leverage | $ | 2,938 | 6 | % | $ | 2,243 | 6 | % | |||||||||||||
The Bank may pay dividends on its stock, with consent or non-objection from the OCC and the Federal Reserve Board, among other things, if its regulatory capital would not thereby be reduced below the amount then required by the applicable regulatory capital requirements. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS |
GE Benefit Plans | |
Our U.S. employees continue to be eligible to participate in various employee benefit plans provided by GE. We reimburse GE for the benefits provided, including costs associated with our participation in GE’s retirement plans (pension, retiree health and life insurance, and savings benefit plans) and active health and life insurance benefit plans. | |
Certain of our employees participate in GE’s primary retirement pension plan (the “GE Pension Plan”), a defined benefit pension plan. Our participation in that plan is accounted for as a participant in a multi-employer plan, and therefore, we record expense only to the extent that we are required to fund that plan. We have not been required to fund that plan, beyond the service costs for active participating employees. As such, we have not recorded any liability associated with our participation in this plan in our Consolidated and Combined Statements of Financial Position at December 31, 2014 and 2013. | |
In addition to the GE Pension Plan, certain of our employees are also covered under the GE Supplementary Pension Plan and the GE Retirement Savings Plan. The GE Supplementary Pension Plan is a pension plan providing retirement benefits primarily to higher-level, long service U.S. employees. Our employees are also eligible to participate in the GE Retirement Savings Plan, a defined contribution savings plan that allows an employee to contribute a portion of their pay on a pre-tax basis. GE matches 50% of these contributions up to a maximum of 8% of the employee’s pay. Employees who commence service after January 1, 2011, receive a non-elective contribution into this plan in lieu of participating in the GE Pension Plan. | |
We incurred expenses associated with these plans of $164 million, $124 million and $107 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |
Separation | |
Effective no later than the date on which GE ceases to own at least 50% of our outstanding common stock, our applicable U.S. employees will cease to participate in GE benefit plans and will participate in employee benefit plans established and maintained by us. For at least one year following the date that GE ceases to own at least 50% of our outstanding common stock, we will maintain plans that will provide our U.S. employees with benefits that are comparable in the aggregate to the value of those benefits provided by GE benefit plans immediately prior to the date that GE ceases to own at least 50% of our outstanding common stock, excluding nonqualified defined benefit pension plans, retiree medical benefits, stock options, other equity awards and certain executive fringe benefits. | |
We will also establish new benefit plans for our non-U.S. employees that, together with any benefit plans we assume or continue, will provide such non-U.S. employees with benefits that are comparable in the aggregate to the value of those benefits provided by the benefit plans in effect immediately prior to the date on which GE ceases to own at least 50% of our outstanding common stock, or, in the case of employees in India and the Philippines, a date that is up to one year after such date. We will maintain these existing or new plans for our non-U.S. employees for a period of at least one year following the benefit transition date (or such longer period required by applicable law). | |
We will recognize prior GE service for purposes of eligibility, vesting or calculation of vacation, sick days, severance, layoff and similar benefits under our new plans and programs to the same extent such service is recognized under corresponding GE plans. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Earnings Per Share | EARNINGS PER SHARE | |||||||||||
Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the assumed conversion of all dilutive securities. | ||||||||||||
The following table presents the calculation of basic and diluted earnings per share: | ||||||||||||
Years ended December 31, | ||||||||||||
(in millions, except per share data) | 2014 | 2013 | 2012 | |||||||||
Net earnings | $ | 2,109 | $ | 1,979 | $ | 2,119 | ||||||
Weighted average common shares outstanding, basic | 757.4 | 705.3 | 705.3 | |||||||||
Effect of dilutive securities | 0.2 | — | — | |||||||||
Weighted average common shares outstanding, dilutive | 757.6 | 705.3 | 705.3 | |||||||||
Earnings per basic common share | $ | 2.78 | $ | 2.81 | $ | 3 | ||||||
Earnings per diluted common share | $ | 2.78 | $ | 2.81 | $ | 3 | ||||||
In connection with, and following the IPO, we issued certain stock based awards under the Synchrony Financial 2014 Long-Term Incentive Plan. A total of approximately 6 million shares related to these awards were considered anti-dilutive and therefore were excluded from the computation of diluted earnings per share for the year ended December 31, 2014. |
Equity_and_Other_Stock_Related
Equity and Other Stock Related Information | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Equity and Other Stock Related Information | EQUITY AND OTHER STOCK RELATED INFORMATION |
The IPO | |
In July 2014, in preparation for the IPO, we completed a stock split pursuant to which each share held by the holder of our common stock was reclassified into 5,262.3512 shares. Following this stock split, we had approximately 705 million shares of common stock outstanding. The effects of the stock split have been reflected for all historical periods presented. | |
On August 5, 2014, we closed the IPO of 125 million shares of our common stock at a price to the public of $23.00 per share and on September 3, 2014 we issued an additional 3.5 million shares of our common stock pursuant to the Underwriters' Option. We received net proceeds from the IPO and the Underwriters' Option of approximately $2.8 billion. Following the IPO and the Underwriters' Option, GE owns approximately 84.6% of our common stock. | |
Synchrony Financial Incentive Programs | |
Prior to the IPO, we established the Synchrony Financial 2014 Long-Term Incentive Plan, which we refer to as the “Incentive Plan.” The Incentive Plan permits us to issue stock-based, stock-denominated and other awards to officers, employees, consultants and non-employee directors providing services to the Company and our participating affiliates. Available awards under the Incentive Plan include stock options and stock appreciation rights (“SARs”), restricted stock and restricted stock units (“RSUs”), performance awards and other awards valued in whole or in part by reference to or otherwise based on our common stock (other stock-based awards), and dividend equivalents. | |
In connection with the IPO, we issued a total of 3.3 million RSUs and 4.9 million stock options to certain employees. These RSUs and stock options will generally cliff vest four years from the award date provided that the employee has remained continuously employed by the Company through such vesting date. In addition, during the year ended December 31, 2014, we issued a total of 0.5 million RSUs and 0.7 million stock options in connection with the 2014 annual grant. The RSUs and stock options issued in connection with the 2014 annual grant will generally vest 20% annually, starting with the first anniversary of the award date, provided that the employee has remained continuously employed by the Company through such vesting date. Each RSU is convertible into one share of Synchrony Financial common stock. The total compensation expense recorded for these awards was not material for all periods presented. At December 31, 2014, there was $111 million of total unrecognized compensation cost related to non-vested RSUs and stock options. | |
Other Incentive Programs | |
Prior to the IPO, certain of our employees were granted GE stock options and RSUs under GE’s 2007 Long-Term Incentive Plan. Share requirements for all plans may be met by GE from either unissued or treasury shares of its stock. Stock options expire 10 years from the date they are granted and vest over service periods that range from one to five years. RSUs give the recipients the right to receive shares of GE stock upon the vesting of their related restrictions. Restrictions on RSUs vest in various increments and at various dates, beginning after one year from date of grant through grantee retirement. Each RSU is convertible into one share of GE stock. Although the plan permits GE to issue RSUs settleable in cash, GE has only issued RSUs settleable in shares of GE stock. | |
GE employees have routinely transferred employment between various GE subsidiaries, including to/from the Company. Our consolidated and combined financial statements include compensation expense related to these awards for the portion of an employee’s vesting period that accrued during employment with us. The total compensation expense recorded for these awards was not material for all periods presented. | |
All unvested GE stock options that are held by our employees will vest as of the date GE ceases to own at least 50% of our outstanding common stock. At December 31, 2014, there was $14 million of total unrecognized compensation cost related to non-vested RSUs and stock options. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | INCOME TAXES | |||||||||||
We are included in the consolidated U.S. federal and state income tax returns of GE, where applicable, but also file certain separate state and foreign income tax returns. The tax provision is presented on a separate company basis as if we were a separate filer. The effects of tax adjustments and settlements from taxing authorities are presented in our consolidated and combined financial statements in the period to which they relate as if we were a separate filer. Our current obligations for taxes are settled with our parent on an estimated basis and adjusted in later periods as appropriate and are reflected in our consolidated and combined financial statements in the periods in which those settlements occur. | ||||||||||||
Earnings before Provision for Income Taxes | ||||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||
U.S. | $ | 3,377 | $ | 3,124 | $ | 3,352 | ||||||
Non-U.S. | 9 | 18 | 24 | |||||||||
Earnings before provision for income taxes | $ | 3,386 | $ | 3,142 | $ | 3,376 | ||||||
Provision for Income Taxes | ||||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||
Current provision for income taxes | ||||||||||||
U.S. Federal | $ | (1,320 | ) | $ | (1,280 | ) | $ | (1,152 | ) | |||
Non-U.S. | (7 | ) | (5 | ) | (7 | ) | ||||||
U.S. state and local | (153 | ) | (115 | ) | (116 | ) | ||||||
Total current provision for income taxes | (1,480 | ) | (1,400 | ) | (1,275 | ) | ||||||
Deferred benefit (provision) for income taxes | ||||||||||||
U.S. Federal | 181 | 215 | 16 | |||||||||
Non-U.S. | (1 | ) | 1 | — | ||||||||
U.S. state and local | 23 | 21 | 2 | |||||||||
Deferred benefit (provision) for income taxes from temporary differences | 203 | 237 | 18 | |||||||||
Total provision for income taxes | $ | (1,277 | ) | $ | (1,163 | ) | $ | (1,257 | ) | |||
Consistent with the provisions of ASC 740, Income Taxes, U.S. income taxes have not been provided on temporary differences related to investments in certain non-U.S. subsidiaries. The temporary differences are due to earnings that have been reinvested abroad for an indefinite period of time and other differences between the book basis and tax basis in the equity in the non-U.S. subsidiaries. The cumulative amounts of temporary differences with regard to which we have not provided U.S. income taxes were approximately $23 million and $20 million at December 31, 2014 and 2013 respectively. Any U.S. tax liability associated with these temporary differences would not be material to the consolidated financial statements. | ||||||||||||
Reconciliation of Our Effective Tax Rate to the U.S. Federal Statutory Income Tax Rate | ||||||||||||
For the years ended December 31 | 2014 | 2013 | 2012 | |||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | 35 | % | ||||||
U.S. state and local income taxes, net of federal benefit | 2.5 | % | 1.9 | % | 2.2 | % | ||||||
All other, net | 0.2 | % | 0.1 | % | — | % | ||||||
Effective tax rate | 37.7 | % | 37 | % | 37.2 | % | ||||||
Deferred Taxes | ||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax laws and rates that will be in effect when such differences are expected to reverse. | ||||||||||||
Significant Components of Our Net Deferred Income Taxes | ||||||||||||
At December 31 ($ in millions) | 2014 | 2013 | ||||||||||
Assets | ||||||||||||
Allowance for loan losses | $ | 1,147 | $ | 1,027 | ||||||||
Reward programs | 68 | 34 | ||||||||||
State and local income taxes | 56 | 40 | ||||||||||
State net operating losses | 12 | — | ||||||||||
Other assets | 100 | 55 | ||||||||||
Total deferred income tax assets before valuation allowance | 1,383 | 1,156 | ||||||||||
Valuation allowance | (10 | ) | — | |||||||||
Total deferred income tax assets | 1,373 | 1,156 | ||||||||||
Liabilities | ||||||||||||
Original issue discount | (488 | ) | (508 | ) | ||||||||
Goodwill and identifiable intangibles | (229 | ) | (216 | ) | ||||||||
Other liabilities | (53 | ) | (24 | ) | ||||||||
Total deferred income tax liabilities | (770 | ) | (748 | ) | ||||||||
Net deferred income tax assets | $ | 603 | $ | 408 | ||||||||
At December 31, 2014, the Company has state income tax net operating losses of $520 million with a related deferred tax asset of $19 million ($12 million net of federal benefit). This deferred tax asset is net of unrecognized tax benefits in accordance with ASU 2013-11 and has been reflected in the reconciliation of unrecognized tax benefits. The state net operating losses will expire in 2034 if not utilized prior to that year. The Company believes that it is more likely than not that a portion of the state net operating losses will expire before being utilized. Therefore, we have recorded a valuation allowance of $16 million ($10 million net of federal benefit) to reduce the deferred tax asset to the amount more likely than not to be realized. | ||||||||||||
Tax Sharing and Separation Agreement | ||||||||||||
In connection with the IPO, we entered into a Tax Sharing and Separation Agreement, (“TSSA”), which governs certain separation-related tax matters between the Company and GE following the IPO. The TSSA governs the allocation of the responsibilities for the taxes of the GE group between GE and the Company. The TSSA also allocates rights, obligations and responsibilities in connection with certain administrative matters relating to the preparation of tax returns and control of tax audits and other proceedings relating to taxes. | ||||||||||||
Under the TSSA, we generally are responsible for all taxes attributable to us or our operations for taxable periods following December 31, 2013. To the extent we file tax returns on a consolidated basis with GE, we will be required to make tax sharing payments to GE in amounts equal to our separate company tax liability. Our separate company tax liability will generally be equal to the amount of tax we would have paid had we been filing tax returns separately from GE, subject to certain adjustments, whether or not GE is actually required to pay such amounts to the taxing authorities. For taxable periods prior to January 1, 2014, GE is responsible for all income taxes imposed by the United States, Canada and Puerto Rico. Liabilities related to taxable periods prior to January 1, 2014 were settled with GE during the year ended December 31, 2014. We are responsible for all other taxes attributable to our business. Where required for certain tax items, we have retained the liability and recorded an indemnity receivable in our Consolidated and Combined Statement of Financial Position. | ||||||||||||
Unrecognized Tax Benefits | ||||||||||||
We recognize the financial statement impact of uncertain income tax positions when we conclude that it is more likely than not, based on the technical merits of a position, that the position will be sustained upon examination. In certain situations, we establish a liability that represents the difference between a tax position taken (or expected to be taken) on an income tax return and the amount of taxes recognized in our financial statements. We recognize accrued interest and penalties related to uncertain income tax benefits as interest expense and provision for income taxes, respectively. | ||||||||||||
At December 31, 2014 and 2013, our unrecognized tax benefits, excluding related interest expense and penalties, were $102 million and $202 million respectively, of which $68 million and $131 million, respectively, if recognized, would reduce the annual effective rate. Included in the amount of unrecognized tax benefits are certain items that would not affect the effective tax rate if they were recognized in our Consolidated and Combined Statements of Earnings. These unrecognized items include the portion of gross state and local unrecognized tax benefits that would be offset by the benefit from associated U.S. federal income tax deductions and the portion of gross state and local unrecognized tax benefits that would be offset by a valuation allowance. The amount of unrecognized tax benefits which may be resolved in the next twelve months is not expected to be material to our consolidated financial statements. | ||||||||||||
Reconciliation of Unrecognized Tax Benefits | ||||||||||||
($ in millions) | 2014 | 2013 | ||||||||||
Balance at January 1 | $ | 202 | $ | 167 | ||||||||
Additions: | ||||||||||||
Tax positions of the current year | 75 | 59 | ||||||||||
Tax positions of prior years | 20 | — | ||||||||||
Reductions: | ||||||||||||
Prior year tax positions | (194 | ) | — | |||||||||
Settlements with tax authorities | — | (4 | ) | |||||||||
Expiration of the statute of limitation | (1 | ) | (20 | ) | ||||||||
Balance at December 31 | $ | 102 | $ | 202 | ||||||||
Included in the reduction for prior year tax positions for the year ended December 31, 2014 is a non-cash settlement with GE of $194 million, related to taxable periods prior to January 1, 2014, in accordance with the TSSA. Principally as a result of this settlement, net of the associated U.S. federal income tax deduction, and the related accrued interest, additional paid-in capital increased by $147 million during the year ended December 31, 2014. Additionally, there are unrecognized tax benefits of $21 million for the year ended December 31, 2014 that are included in the tabular reconciliation above but recorded in the Consolidated Statement of Financial Position as a reduction of the related deferred tax asset for net operating losses. Further, the additions related to tax positions of prior years are subject to an indemnification pursuant to the TSSA. As a separate public company, we will continue to compute our unrecognized tax benefits on a separate return basis and we will settle our liabilities, as required, in accordance with the TSSA. | ||||||||||||
For the years ended December 31, 2014, 2013 and 2012, $5 million, $5 million and $3 million of interest expense related to income tax liabilities, respectively, and no penalties were recognized in our Consolidated and Combined Statements of Earnings. At December 31, 2014 and 2013, we had accrued $1 million and $17 million, respectively, for income tax related interest and penalties. | ||||||||||||
The Company is under continuous examination by the Internal Revenue Service (“IRS”) and the tax authorities of various states as part of their audit of GE’s tax returns. The IRS is currently auditing the GE consolidated U.S. income tax returns for 2010 and 2011. In addition, certain issues and refund claims for previous years are still unresolved. During 2013, the IRS completed the audit of GE’s consolidated U.S. income tax returns for 2008 and 2009, except for certain issues that remain under examination. We are under examination in various states going back to 2007 as part of their audit of GE’s tax returns. We believe that there are no issues or claims that are likely to significantly impact our results of operations, financial positions or cash flows. We further believe that we have made adequate provision for all income tax uncertainties that could result from such examinations. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Related Party Transactions [Abstract] | ||||||||||||
Related Party Transactions | RELATED PARTY TRANSACTIONS | |||||||||||
Services Provided by GE | ||||||||||||
GE and its subsidiaries, including GECC, have provided and continue to provide a variety of services to us. | ||||||||||||
In connection with the IPO, we entered into various agreements with GE and its affiliates that now govern our relationship with GE and GECC following the IPO. On July 30, 2014, we entered into a Master Agreement with GECC and, for certain limited purposes only, GE (the “Master Agreement”). The Master Agreement sets forth our agreements with GE and GECC relating to the ownership of certain assets and the allocation of certain liabilities in connection with the separation of our company from GECC. It also sets forth other agreements governing our relationship with GECC and its affiliates after the IPO. In connection with the IPO, we entered into the following agreements with GE and its affiliates: | ||||||||||||
• | Transitional Services Agreement - pursuant to which, among other things, we and GECC provide each other, on a transitional basis, certain administrative and support services and other assistance consistent with the services we and GECC provided to each other before the IPO. | |||||||||||
• | Registration Rights Agreement - pursuant to which, among other things, we provided GECC with registration rights relating to shares of our common stock held by GECC or permitted transferees after the IPO. | |||||||||||
•Tax Sharing and Separation Agreement - see Note 15. Income Taxes for a discussion of this agreement. | ||||||||||||
• | Employee Matters Agreement - which, among other things, governs certain employee, compensation and benefits matters among us, GECC and GE. Under the Employee Matters Agreement, among other things, the Company generally assumes or retains liabilities relating to the employment or services of any person with respect to our business before or after the completion of the IPO. The Employee Matters Agreement also generally provides for continued participation by our employees in GE benefits for so long as GE owns at least 50% of our common stock. | |||||||||||
• | Transitional Trademark License Agreement - pursuant to which, among other things, GE granted us a limited, non-exclusive, royalty-free, non-transferable license (with no right to sublicense) to use (i) certain marks, logos, and the GE monogram in connection with our products and services until such time as GE ceases to beneficially own more than 50% of our outstanding common stock, subject to certain exceptions and (ii) a specified tagline in connection with our products and services and in the general promotion of our business for a period of three years after GE ceases to beneficially own more than 50% of our outstanding common stock. | |||||||||||
• | Intellectual Property Cross License Agreement - pursuant to which, among other things, we and GE grant each other a non-exclusive, irrevocable, royalty-free, fully paid-up, worldwide, perpetual license under certain intellectual property rights that they each own or license. | |||||||||||
• | Subservicing Agreement - pursuant to which we will continue to act as subservicer for one of our securitization entities for which GECC provides servicing relating to loan receivables owned by the securitization entity. In connection with the IPO, we terminated all other servicing and subservicing agreements with GECC and they were replaced by the Transitional Services Agreement to the extent these services will continue to be received from, or provided to, GECC following the IPO. | |||||||||||
Funding Provided by GECC | ||||||||||||
Prior to the IPO, we used related party debt provided by GECC to meet our funding requirements after taking into account deposits held at the Bank, funding from securitized financings and cash generated from our operations. GECC assessed us an interest cost on a portion of the Parent’s total investment and historically we have reflected that portion as related party debt in the Consolidated and Combined Statements of Financial Position. All related party debt owed by the Company to GECC outstanding on the closing date of the IPO was repaid in August 2014, and we entered into the GECC Term Loan, See Note 9. Borrowings for additional information. | ||||||||||||
The following table sets forth the direct costs, indirect costs and interest expenses related to services and funding provided by GE for the periods indicated. | ||||||||||||
($ in millions) | Years ended December 31, | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Direct costs(a) | $ | 294 | $ | 207 | $ | 184 | ||||||
Indirect costs(a) | 134 | 230 | 206 | |||||||||
Interest expense(b) | 113 | 157 | 155 | |||||||||
Total expenses for services and funding provided by GECC | $ | 541 | $ | 594 | $ | 545 | ||||||
_______________________ | ||||||||||||
(a) | Direct and indirect costs are included in the other expense line items in our Consolidated and Combined Statements of Earnings. | |||||||||||
(b) | Included in interest expense in our Consolidated and Combined Statements of Earnings. | |||||||||||
Direct Costs | ||||||||||||
Direct costs are costs associated with either services provided directly to us that are centralized at GE or services provided to us by third parties under contracts entered into by GE. These services included the provision of employee benefits and benefit administration; information technology services; telecommunication services; and other services, including leases for vehicles, equipment and facilities. GE allocated the costs associated with these services to us using established allocation methodologies. Under the Transitional Services Agreement (“TSA”), all of the costs billed to us by GE subsequent to the IPO are included as a component of direct costs and are at GE’s cost in accordance with historic allocation methodologies. | ||||||||||||
Indirect Costs | ||||||||||||
Following the IPO, GE and GECC no longer allocate costs to us related to corporate overhead. For periods prior to the IPO, GE and GECC allocated costs to us related to corporate overhead that directly or indirectly benefited our business. These assessments related to information technology, insurance coverage, tax services provided, executive incentive payments, advertising and branding and other functional support. These allocations were determined primarily using our percentage of GECC’s relevant expenses. In preparation for the IPO, these allocated charges were billed directly to us in July 2014, and are therefore included as a component of “Direct costs”. | ||||||||||||
Interest Expense | ||||||||||||
For periods prior to the IPO, interest expense represents interest cost assessed to us from GECC’s centralized treasury function based on fixed and floating interest rates, plus funding related costs that include charges for liquidity and other treasury costs. For periods subsequent to the IPO, interest expense represents interest accruing on the GECC Term Loan. | ||||||||||||
Other Related Party Transactions | ||||||||||||
GECC is the servicer and we are the subservicer for one of our securitization entities. We perform substantially all of the servicing functions with respect to this entity pursuant to a subservicing agreement with GECC. The net cost recognized in our Consolidated and Combined Statements of Earnings in connection with these arrangements is de minimis. See Note 6. Variable Interest Entities. | ||||||||||||
In addition to the related party activities described above, we have been party to certain cash management and payment processing arrangements with GE and GECC. Historically, most of our cash and equivalents that were not held for purposes of funding the Bank’s liquidity requirements were transferred to GECC on a daily basis and GECC subsequently funded the operating and investing activities of our business as needed. Following the IPO, we no longer transfer cash and equivalents to GECC, other than for purposes of the servicing arrangement discussed above. | ||||||||||||
GE also makes payments for our payroll, corporate credit card bills and freight expenses through a centralized payment system and we reimburse GE in full for the amounts paid. Such expenses are included in other expense across the relevant categories in our Consolidated and Combined Statements of Earnings and are directly attributable to our business and our employees. | ||||||||||||
Parent’s Net Investment | ||||||||||||
At December 31, 2013, the remainder of our Parent’s total investment, in excess of our related party debt is reflected as equity under the caption, Parent’s net investment, in our Consolidated and Combined Statements of Financial Position. At December 31, 2014, GECC's equity ownership is reflected in common stock and additional paid-in capital in our Consolidated and Combined Statements of Financial Position. |
Parent_Company_Financial_Infor
Parent Company Financial Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||
Parent Company Financial Information | PARENT COMPANY FINANCIAL INFORMATION | |||||||||||
The following parent company financial statements for Synchrony Financial are provided in accordance with SEC rules, which requires such disclosure when restricted net assets of consolidated subsidiaries exceed 25% of consolidated net assets. At December 31, 2014, restricted net assets of our subsidiaries were approximately $8.0 billion. | ||||||||||||
Condensed Statements of Earnings | ||||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||
Interest income: | ||||||||||||
Interest income from subsidiaries | $ | 85 | $ | 143 | $ | 154 | ||||||
Interest on investment securities | 1 | — | — | |||||||||
Total interest income | 86 | 143 | 154 | |||||||||
Interest expense: | ||||||||||||
Interest on third-party debt | (124 | ) | — | — | ||||||||
Interest on related party debt | (109 | ) | (143 | ) | (154 | ) | ||||||
Total interest expense | (233 | ) | (143 | ) | (154 | ) | ||||||
Net interest income | (147 | ) | — | — | ||||||||
Dividends from bank subsidiaries | 885 | 1,400 | 745 | |||||||||
Dividends from nonbank subsidiaries | 1,206 | 2,500 | — | |||||||||
Other income | 6 | — | — | |||||||||
Other expense: | ||||||||||||
Employee costs | 23 | — | — | |||||||||
Professional fees | 14 | — | — | |||||||||
Other(a) | 380 | 26 | — | |||||||||
Total other expense | 417 | 26 | — | |||||||||
Earnings before benefit from income taxes | 1,533 | 3,874 | 745 | |||||||||
Benefit from income taxes | 215 | 7 | — | |||||||||
Equity in undistributed net earnings of subsidiaries | 361 | (1,902 | ) | 1,374 | ||||||||
Net earnings | $ | 2,109 | $ | 1,979 | $ | 2,119 | ||||||
Comprehensive income | $ | 2,112 | $ | 1,964 | $ | 2,123 | ||||||
_____________ | ||||||||||||
(a) | Other expense primarily includes various intercompany charges that are eliminated in consolidation. | |||||||||||
Condensed Statements of Financial Position | ||||||||||||
At December 31 ($ in millions) | 2014 | 2013 | ||||||||||
Assets | ||||||||||||
Cash and equivalents | $ | 5,643 | $ | — | ||||||||
Investment securities | 1,255 | — | ||||||||||
Investments in and amounts due from subsidiaries(a)(b)(c) | 16,723 | 14,713 | ||||||||||
Goodwill | 17 | 17 | ||||||||||
Other assets | 148 | 8 | ||||||||||
Total assets | $ | 23,786 | $ | 14,738 | ||||||||
Liabilities and Equity | ||||||||||||
Amounts due to subsidiaries | $ | 296 | $ | — | ||||||||
Bank term loan | 8,245 | — | ||||||||||
Senior unsecured notes | 3,593 | — | ||||||||||
Related party debt(b) | 655 | 8,764 | ||||||||||
Accrued expenses and other liabilities | 519 | 14 | ||||||||||
Total liabilities | 13,308 | 8,778 | ||||||||||
Equity: | ||||||||||||
Total equity | 10,478 | 5,960 | ||||||||||
Total liabilities and equity | $ | 23,786 | $ | 14,738 | ||||||||
_____________ | ||||||||||||
(a) | Includes investments in and amounts due from bank subsidiaries of $8.5 billion at December 31, 2014. | |||||||||||
(b) | Related party debt at December 31, 2013 included $195 million of related party debt issued by a subsidiary of the Company. As described in Note 16. Related Party Transactions, the portion of our parent’s total investment in our combined business on which we were assessed an interest cost is presented as related party debt at December 31, 2013. Except for the subsidiary-issued debt referred to above, we have reflected related party debt at December 31, 2013 as loans to the Company at the parent level. This funding was used by our subsidiaries and is reflected above as interest-bearing loan receivables. | |||||||||||
(c) | At December 31, 2013, $651 million of deposits issued by the Bank were held by GECC and have been reflected as being held by our company. While these amounts have been eliminated in our consolidated and combined financial statements, in accordance with the basis of presentation described in Note 2. Basis of Presentation and Summary of Significant Accounting Policies, we have presented them above as investments in and amounts due from subsidiaries. | |||||||||||
Condensed Statements of Cash Flows | ||||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||
Cash flows - operating activities | ||||||||||||
Net earnings | $ | 2,109 | $ | 1,979 | $ | 2,119 | ||||||
Adjustments to reconcile net earnings to cash provided from operating activities | ||||||||||||
Deferred income taxes | (36 | ) | — | — | ||||||||
(Increase) decrease in other assets | 47 | (8 | ) | — | ||||||||
Increase (decrease) in accrued expenses and other liabilities | 489 | 13 | — | |||||||||
Equity in undistributed net earnings of subsidiaries | (361 | ) | 1,902 | (1,374 | ) | |||||||
All other operating activities | (223 | ) | — | — | ||||||||
Cash from operating activities | 2,025 | 3,886 | 745 | |||||||||
Cash flows - investing activities | ||||||||||||
Net (increase) decrease in investments in and amounts due from subsidiaries | (1,030 | ) | (1,848 | ) | 2,614 | |||||||
Purchases of investment securities | (1,256 | ) | — | — | ||||||||
All other investing activities | (2 | ) | — | — | ||||||||
Cash (used for) from investing activities | (2,288 | ) | (1,848 | ) | 2,614 | |||||||
Cash flows - financing activities | ||||||||||||
Third-party debt | ||||||||||||
Proceeds from issuance of third-party debt | 12,343 | — | — | |||||||||
Maturities and repayment of third-party debt | (505 | ) | — | — | ||||||||
Related party debt | ||||||||||||
Proceeds from issuance of related party debt | 1,615 | — | — | |||||||||
Maturities and repayment of related party debt | (9,820 | ) | (1,452 | ) | (1,490 | ) | ||||||
Proceeds from initial public offering | 2,842 | — | — | |||||||||
Net transfers to Parent | (603 | ) | (586 | ) | (1,869 | ) | ||||||
Increase (decrease) in amounts due to subsidiaries | 98 | — | — | |||||||||
All other financing activities | (64 | ) | — | — | ||||||||
Cash (used for) from financing activities | 5,906 | (2,038 | ) | (3,359 | ) | |||||||
Increase (decrease) in cash and equivalents | 5,643 | — | — | |||||||||
Cash and equivalents at beginning of year | — | — | — | |||||||||
Cash and equivalents at end of year | $ | 5,643 | $ | — | $ | — | ||||||
Legal_Proceedings_and_Regulato
Legal Proceedings and Regulatory Matters | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Regulatory Matters | LEGAL PROCEEDINGS AND REGULATORY MATTERS |
In the normal course of business, from time to time, we have been named as a defendant in various legal proceedings, including arbitrations, class actions and other litigation, arising in connection with our business activities. Certain of the legal actions include claims for substantial compensatory and/or punitive damages, or claims for indeterminate amounts of damages. We are also involved, from time to time, in reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business (collectively, “regulatory matters”), which could subject us to significant fines, penalties, obligations to change our business practices or other requirements resulting in increased expenses, diminished income and damage to our reputation. We contest liability and/or the amount of damages as appropriate in each pending matter. In accordance with applicable accounting guidance, we establish an accrued liability for legal and regulatory matters when those matters present loss contingencies which are both probable and estimable. | |
Legal proceedings and regulatory matters are subject to many uncertain factors that generally cannot be predicted with assurance, and we may be exposed to losses in excess of any amounts accrued. | |
For some matters, we are able to determine that an estimated loss, while not probable, is reasonably possible. For other matters, including those that have not yet progressed through discovery and/or where important factual information and legal issues are unresolved, we are unable to make such an estimate. We currently estimate that the reasonably possible losses for legal proceedings and regulatory matters, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a possible loss, are immaterial. This represents management’s estimate of possible loss with respect to these matters and is based on currently available information. This estimate of possible loss does not represent our maximum loss exposure. The legal proceedings and regulatory matters underlying the estimate will change from time to time and actual results may vary significantly from current estimates. | |
Our estimate of reasonably possible losses involves significant judgment, given the varying stages of the proceedings, the existence of numerous yet to be resolved issues, the breadth of the claims (often spanning multiple years), unspecified damages and/or the novelty of the legal issues presented. Based on our current knowledge, we do not believe that we are a party to any pending legal proceeding or regulatory matters that would have a material adverse effect on our consolidated and combined financial condition or liquidity. However, in light of the uncertainties involved in such matters, the ultimate outcome of a particular matter could be material to our operating results for a particular period depending on, among other factors, the size of the loss or liability imposed and the level of our earnings for that period, and could adversely affect our business and reputation. | |
Below is a description of certain of our legal proceedings and regulatory matters. | |
Regulatory Matters | |
On December 10, 2013, we entered into a Consent Order with the CFPB relating to our CareCredit platform, which requires us to pay up to $34.1 million to qualifying customers; provide additional training and monitoring of our CareCredit partners; include provisions in agreements with our CareCredit partners prohibiting charges for certain services not yet rendered; make changes to certain consumer disclosures, application procedures and procedures for resolution of customer complaints; and terminate CareCredit partners that have chargeback rates in excess of certain thresholds. Some of the business practice changes required by the Consent Order are similar to requirements in an Assurance of Discontinuance that we entered into with the Attorney General for the State of New York on June 3, 2013. | |
Our settlements with the CFPB and the New York State Attorney General do not preclude other regulators or state attorneys general from seeking additional monetary or injunctive relief with respect to CareCredit. In this regard, in 2010 and 2012, respectively, we received formal requests for information from the Attorneys General for the states of Minnesota and New Jersey. We have cooperated fully with these inquiries. | |
On June 19, 2014, we entered into a Consent Order with the CFPB (the “2014 CFPB Consent Order”) related to the CFPB’s review of the Bank’s debt cancellation products and its marketing practices in its telesales channel related to those products. The 2014 CFPB Consent Order requires us to refund $56 million to cardholders who enrolled in a debt cancellation product over the telephone from January 2010 to October 2012 ($11 million of which was refunded prior to the 2014 CFPB Consent Order), pay civil money penalties of $3.5 million, and implement a compliance plan related to the sale of “add-on” products to the extent the Bank restarts telesales of such products (which were discontinued in October 2012).The 2014 CFPB Consent Order also resolved a separate CFPB investigation related to potential violations of the Equal Credit Opportunity Act as a result of the Bank’s omission of certain Spanish-speaking customers and customers residing in Puerto Rico from certain statement credit and settlement offers that were made to certain delinquent customers. The Bank identified this issue through an audit of its collection operations, reported it to the CFPB and initiated a remediation program. The CFPB referred the issue to the Department of Justice (the “DOJ”), which initiated a civil investigation. At the same time we entered into the 2014 CFPB Consent Order, we entered into a consent order with the DOJ (the “2014 DOJ Consent Order,” and together with the 2014 CFPB Consent Order, the “2014 Consent Orders”) to settle a complaint filed by the DOJ on June 19, 2014 in the United States District Court for the District of Utah that made similar allegations to those alleged in the 2014 CFPB Consent Order. The 2014 DOJ Consent Order was approved by the Court on June 26, 2014. The 2014 DOJ Consent Order is similar to the 2014 CFPB Consent Order and does not impose any additional requirements on us. The 2014 Consent Orders require us to complete our remediation program by providing additional payments, balance credits and balance waivers of approximately $37 million and to update our credit bureau reporting relating to the affected accounts. In the fourth quarter of 2014, we determined that our remediation program will require us to provide approximately $38 million in additional remediation, approximately $32 million of which consists of balance credits and waivers to previously charged-off accounts. Of the approximately $207 million in total consumer remediation (including $132 million of voluntary remediations completed prior to the 2014 Consent Orders and approximately $75 million that remains to be completed), approximately $190 million consists of balance credits and waivers to previously charged-off accounts. In addition to the consumer remediation, the 2014 Consent Orders require us to implement a fair lending compliance plan (including fair lending reviews, audits and training), which will, in part, be satisfied by our existing compliance processes. | |
Although we do not believe that the 2014 Consent Orders themselves will have a material adverse effect on our results of operations going forward, we cannot be sure whether the settlements will have an adverse impact on our reputation or whether any similar actions will be brought by state attorneys general or others, all of which could have a material adverse effect on us. | |
Other Matters | |
On September 27, 2013, Secure Axcess LLC, filed a complaint against the Bank as well as other defendants in the U.S. District Court for the Eastern District of Texas, for patent infringement related to the Bank’s alleged use of website authenticity technology referred to as “Safe Keys.” The complaint seeks unspecified damages. On September 9, 2014, the U.S. Patent Office instituted two petitions to review the validity of the Secure Axcess patent at issue in the pending litigation, and on September 29, 2014, the Court stayed the action pending the resolution of the U.S. Patent Office’s review. On October 8, 2014, the Bank (with several other parties) filed a separate petition with the U.S. Patent Office to review the validity of the Secure Axcess patent at issue in the pending litigation, and a motion for joinder of the Bank’s petition with one of the previously-filed petitions that the U.S. Patent Office instituted. | |
The Bank is a defendant in four putative class actions alleging claims under the federal Telephone Consumer Protection Act (“TCPA”), where the plaintiffs assert that they received calls on their cellular telephones relating to accounts not belonging to them. In each case, the complaints allege that the Bank placed calls to consumers by an automated telephone dialing system or using a pre-recorded message or automated voice without their consent and seek up to $1,500 for each violation. The amount of damages sought in the aggregate is unspecified. Abdeljalil et al. v. GE Capital Retail Bank was filed on August 22, 2012 in the U.S. District Court for the Southern District of California, originally naming GECC as the defendant. In August 2013, the Court denied without prejudice GECC’s motion to dismiss the class allegations. GECC subsequently was dismissed and the plaintiffs amended the complaint to name the Bank as the defendant. On April 28, 2014, the plaintiffs filed a motion to certify the alleged class. Cowan v. GE Capital Retail Bank was filed on May 14, 2014 in the U.S. District Court for the District of Connecticut. On August 4, 2014, the Bank filed motions to stay and dismiss the action. Pittman et al. v. GE Capital d/b/a GE Capital Retail Bank was filed on July 29, 2014 in the U.S. District Court for the Northern District of Alabama. On October 28, 2014, the court stayed the action, pursuant to the parties' agreement, until a ruling on the pending motion for class certification in the Abdeljalil action. Hofer et al. v. Synchrony Bank was filed on November 4, 2014 in the U.S. District Court for the Eastern District of Missouri. On January 15, 2014, the Bank filed a motion to stay the action. In addition to the Abdeljalil , Cowan , Pittman, and Hofer actions, the Bank has resolved two other putative class actions that made similar claims under the TCPA, both of which were settled on an individual basis with the class representative. Travaglio et al. v. GE Capital Retail Bank and Allied Interstate LLC was filed on January 17, 2014 in the U.S. District Court for the Middle District of Florida and dismissed on October 9, 2014. Fitzhenry v. Lowe’s Companies Inc. and GE Capital Retail Bank was filed on May 29, 2014 in the U.S. District Court for the District of South Carolina and dismissed on October 20, 2014. | |
On October 30, 2014, the United States Trustee, which is part of the DOJ, filed an application in In re Nyree Belton, a Chapter 7 bankruptcy case pending in the U.S. Bankruptcy Court for the Southern District of New York for orders authorizing discovery of the Bank pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, related to an investigation of the Bank’s credit reporting. The proposed discovery concerns allegations made in Belton et al. v. GE Capital Consumer Lending, a putative class action adversary proceeding pending in the same Bankruptcy Court. In the Belton adversary proceeding, which was filed on April 30, 2014, plaintiff alleges that the Bank violates the discharge injunction under Section 524(a)(2) of the Bankruptcy Code by attempting to collect discharged debts and by failing to update and correct credit information to credit reporting agencies to show that such debts are no longer due and owing because they have been discharged in bankruptcy. Plaintiff seeks declaratory judgment, injunctive relief and an unspecified amount of damages. On December 15, 2014, the Court entered an order staying the adversary proceeding pending the appeal of an order denying the Bank’s motion to compel arbitration. |
Selected_Quarterly_Financial_I
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||
Selected Quarterly Financial Information (Unaudited) | SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) | |||||||||||||||||||||||||||||||
Quarterly Periods Ended | ||||||||||||||||||||||||||||||||
($ in millions) | December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||||||||||||
Interest income | $ | 3,260 | $ | 3,123 | $ | 2,926 | $ | 2,933 | $ | 3,037 | $ | 2,886 | $ | 2,686 | $ | 2,704 | ||||||||||||||||
Interest expense | 282 | 244 | 206 | 190 | 188 | 183 | 178 | 193 | ||||||||||||||||||||||||
Net interest income | 2,978 | 2,879 | 2,720 | 2,743 | 2,849 | 2,703 | 2,508 | 2,511 | ||||||||||||||||||||||||
Earnings before provision for income taxes | 853 | 879 | 764 | 890 | 692 | 1,021 | 856 | 573 | ||||||||||||||||||||||||
Provision for income taxes | 322 | 331 | 292 | 332 | 249 | 380 | 320 | 214 | ||||||||||||||||||||||||
Net earnings | $ | 531 | $ | 548 | $ | 472 | $ | 558 | $ | 443 | $ | 641 | $ | 536 | $ | 359 | ||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||||||||
Basic | $ | 0.64 | $ | 0.7 | $ | 0.67 | $ | 0.79 | $ | 0.63 | $ | 0.91 | $ | 0.76 | $ | 0.51 | ||||||||||||||||
Diluted | $ | 0.64 | $ | 0.7 | $ | 0.67 | $ | 0.79 | $ | 0.63 | $ | 0.91 | $ | 0.76 | $ | 0.51 | ||||||||||||||||
Basis_of_Presentation_and_Summ1
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Consolidated Basis of Presentation | Consolidated Basis of Presentation |
The transfer of all of the assets of our business from GECC and its subsidiaries to the Company was completed in the second quarter of 2014. As a result, the Company’s financial statements have been prepared on a consolidated basis beginning June 30, 2014. Under this basis of presentation, our financial statements consolidate all of our subsidiaries – i.e., entities in which we have a controlling financial interest, most often because we hold a majority voting interest. All periods subsequent to June 30, 2014 are also presented on a consolidated basis. | |
To determine if we hold a controlling financial interest in an entity, we first evaluate if we are required to apply the variable interest entity (“VIE”) model to the entity, otherwise the entity is evaluated under the voting interest model. Where we hold current or potential rights that give us the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (“power”) combined with a variable interest that gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses (“significant economics”), we have a controlling financial interest in that VIE. Rights held by others to remove the party with power over the VIE are not considered unless one party can exercise those rights unilaterally. We consolidate certain securitization entities under the VIE model because we have both power and significant economics. See Note 6. Variable Interest Entities. | |
Combined Basis of Presentation | |
For all periods prior to June 30, 2014, the Company's financial statements were prepared on a combined basis. The combined financial statements combine all of our subsidiaries and certain accounts of GECC and its subsidiaries that were historically managed as part of our business. | |
For all periods prior to the IPO, the Consolidated and Combined Statements of Earnings reflect intercompany expense allocations made to us by GE and GECC for certain corporate functions and for shared services provided by GE and GECC. Where possible, these allocations were made on a specific identification basis, and in other cases, these expenses were allocated by GE and GECC based on relative percentages of net operating costs or some other basis depending on the nature of the allocated cost. See Note 16. Related Party Transactions for further information on expenses allocated by GE and GECC. | |
The historical financial results in the consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had we operated as a separate, standalone entity during those periods. We believe that the consolidated and combined financial statements include all adjustments necessary for a fair presentation of the Company. | |
Segment Reporting | Segment Reporting |
We conduct our operations through a single business segment. Substantially all of our interest and fees on loans and long-lived assets relate to our operations within the United States. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting, operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance. The chief operating decision maker uses a variety of measures to assess the performance of the business as a whole, depending on the nature of the activity. Revenue activities are managed through three sales platforms (Retail Card, Payment Solutions and CareCredit). Those platforms are organized by the types of partners we work with to reach our customers, with success principally measured based on revenues, new accounts and other cardholder sales metrics. Detailed profitability information of the nature that could be used to allocate resources and assess the performance and operations for each sales platform individually, however, is not used by our chief operating decision maker. Expense activities, including funding costs, loan losses and operating expenses, are not measured for each platform but instead are managed for the Company as a whole. | |
Cash and Equivalents | Cash and Equivalents |
Debt securities, money market instruments and bank deposits with original maturities of three months or less are included in cash equivalents unless designated as available-for-sale and classified as investment securities. | |
Restricted Cash and Equivalents | Restricted Cash and Equivalents |
Restricted cash and equivalents represent cash and equivalents that are not available to us due to restrictions related to its use. The Bank is required to maintain reserves against its deposit liabilities in the form of vault cash and/or balances with the Federal Reserve Bank. In addition, our securitization entities are required to fund segregated accounts that may only be used for certain purposes, including payment of interest and servicing fees and repayment of maturing debt. We include our restricted cash and equivalents in other assets in our Consolidated and Combined Statements of Financial Position. | |
Investment Securities | Investment Securities |
We report investments in debt and marketable equity securities at fair value. See Note 10. Fair Value Measurements for further information on fair value. Unrealized gains and losses on these investment securities, which are classified as available-for-sale, are included in equity, net of applicable taxes. We regularly review investment securities for impairment using both quantitative and qualitative criteria. | |
For debt securities, if we do not intend to sell the security or it is not more likely than not that we will be required to sell the security before recovery of our amortized cost, we evaluate other qualitative criteria to determine whether we do not expect to recover the amortized cost basis of the security, such as the financial health of and specific prospects for the issuer, including whether the issuer is in compliance with the terms and covenants of the security. We also evaluate quantitative criteria including determining whether there has been an adverse change in expected future cash flows. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to be other-than-temporarily impaired, and we record the difference between the security’s amortized cost basis and its recoverable amount in earnings and the difference between the security’s recoverable amount and fair value in other comprehensive income. If we intend to sell the security or it is more likely than not we will be required to sell the security before recovery of its amortized cost basis, the security is also considered other-than-temporarily impaired and we recognize the entire difference between the security’s amortized cost basis and its fair value in earnings. For equity securities, we consider the length of time and magnitude of the amount that each security is in an unrealized loss position. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to be other-than-temporarily impaired, and we record the difference between the security’s amortized cost basis and its fair value in earnings. | |
Realized gains and losses are accounted for on the specific identification method. | |
Loan Receivables | Data related to redefault experience is also considered in our overall reserve adequacy review. Once the loan has been modified, it returns to current status (re-aged) only after three consecutive minimum monthly payments are received post modification date, subject to a re-aging limitation of once a year, or twice in a five-year period in accordance with the Federal Financial Institutions Examination Council (“FFIEC”) guidelines on Uniform Retail Credit Classification and Account Management policy issued in June 2000. We believe that the allowance for loan losses would not be materially different had we not re-aged these accounts. |
Loan Receivables | |
Loan receivables primarily consist of open-end consumer revolving credit card accounts, closed-end consumer installment loans, and open-end commercial revolving credit card accounts. Loan receivables are reported at the amounts due from customers, including unpaid interest and fees. | |
Loan Receivables Held for Sale | Loan Receivables Held for Sale |
Loans purchased or originated with the intent to sell or as to which we do not have the ability and intent to hold for the foreseeable future are classified as loan receivables held for sale and recorded at the lower of amortized cost or fair value. We continue to recognize interest and fees on these loans on the accrual basis. The fair value of loan receivables held for sale is determined on an aggregate homogeneous portfolio basis. | |
If a loan is transferred from held for investment to held for sale, declines in fair value related to credit are recorded as a charge-off which establishes a new cost basis for the loan. Further declines in fair value and recoveries up to the amortized cost and realized gains or losses are recorded as a component of other income in our Consolidated and Combined Statements of Earnings. | |
Troubled Debt Restructuring | Our allowance for loan losses on TDRs is generally measured based on the difference between the recorded loan receivable and the present value of the expected future cash flows, discounted at the original effective interest rate of the loan. If the loan is collateral dependent, we measure impairment based upon the fair value of the underlying collateral less estimated selling costs. |
Allowance for Loan Losses | Allowance for Loan Losses |
Losses on loan receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. The method for calculating the best estimate of probable losses takes into account our historical experience adjusted for current conditions with each product and customer type and our judgment concerning the probable effects of relevant observable data, trends and market factors. | |
We evaluate each portfolio for impairment quarterly. For credit card receivables, our estimation process includes analysis of historical data, and there is a significant amount of judgment applied in selecting inputs and analyzing the results produced by the models to determine the allowance. We use a migration analysis to estimate the likelihood that a loan will progress through the various stages of delinquency. The migration analysis considers uncollectible principal, interest and fees reflected in the loan receivables. We use other analyses to estimate losses incurred on non-delinquent accounts. The considerations in these analyses include past performance, risk management techniques applied to various accounts, historical behavior of different account vintages, current economic conditions, recent trends in delinquencies, bankruptcy filings, account collection management, policy changes, account seasoning, loan volume and amounts, payment rates, forecasting uncertainties, and a qualitative assessment of the adequacy of the allowance for losses, which compares this allowance for losses to projected net charge-offs over the next twelve months, in a manner consistent with regulatory guidance. We regularly review our collection experience (including delinquencies and net charge-offs) in determining our allowance for loan losses. We also consider our historical loss experience to date based on actual defaulted loans and overall portfolio indicators including delinquent and non-accrual loans, trends in loan volume and lending terms, credit policies and other observable environmental factors such as unemployment and home price indices. | |
The underlying assumptions, estimates and assessments we use to provide for losses are updated periodically to reflect our view of current conditions and are subject to the regulatory examination process, which can result in changes to our assumptions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible that we will experience credit losses that are different from our current estimates. Charge-offs are deducted from the allowance for losses when we judge the principal to be uncollectible and subsequent recoveries are added to the allowance at the time cash is received on a charged-off account. | |
Delinquent receivables are those that are 30 days or more past due based on their contractual payments. “Non-accrual” loan receivables are those on which we have stopped accruing interest. We continue to accrue interest until the earlier of the time at which collection of an account becomes doubtful or the account becomes 180 days past due, with the exception of non-credit card accounts, for which we stop accruing interest in the period that the account becomes 90 days past due. | |
Beginning in the fourth quarter of 2013, we revised our methods of classifying loan receivables as non-accrual to more closely align with regulatory guidance. As a result we continue to accrue interest on credit card balances until they reach 180 days past due. Previously, we stopped accruing interest on credit cards when the accounts became 90 days past due. As a result of this revision, credit card receivables of $949 million that were previously classified as non-accrual were returned to accrual status in the fourth quarter of 2013. This revision did not have a material effect on earnings for the year ended December 31, 2013. | |
“Impaired” loans represent loans for which it is probable that we will be unable to collect all amounts due according to the original contractual terms of the loan agreement and loans meeting the definition of a troubled debt restructuring (“TDR”). TDRs are those loans for which we have granted a concession to a borrower experiencing financial difficulties where we do not receive adequate compensation. | |
The same loan receivable may meet more than one of the definitions above. Accordingly, these categories are not mutually exclusive and it is possible for a particular loan to meet the definitions of a TDR, impaired loan and non-accrual loan and be included in each of these categories. The categorization of a particular loan also may not be indicative of the potential for loss. | |
Loan Modifications and Restructurings | |
Our loss mitigation strategy is intended to minimize economic loss and, at times, can result in rate reductions, principal forgiveness, extensions or other actions, which may cause the related loan to be classified as a TDR and also as impaired. We utilize short-term (3 to 12 months) or long-term (12 to 60 months) modification programs to borrowers experiencing financial difficulty as a loss mitigation strategy to improve long-term collectability of the loans that are classified as TDRs. For our credit card customers, the short-term program primarily consists of a reduced minimum payment and an interest rate reduction, both lasting for a period no longer than 12 months. The long-term program involves changing the structure of the loan to a fixed payment loan with a maturity no longer than 60 months and reducing the interest rate on the loan. The long-term program does not normally provide for the forgiveness of unpaid principal, but may allow for the reversal of certain unpaid interest or fee assessments. We also make loan modifications for customers who request financial assistance through external sources, such as a consumer credit counseling agency program. The loans that are modified typically receive a reduced interest rate but continue to be subject to the original minimum payment terms and do not normally include waiver of unpaid principal, interest or fees. The determination of whether these changes to the terms and conditions meet the TDR criteria includes our consideration of all relevant facts and circumstances. See Note 5. Loan Receivables and Allowance for Loan Losses for additional information on our loan modifications and restructurings. | |
Charge-Offs | Charge-Offs |
Net charge-offs consist of the unpaid principal balance of loans held for investment that we determine are uncollectible, net of recovered amounts. We exclude accrued and unpaid finance charges, fees and third-party fraud losses from charge-offs. Charged-off and recovered accrued and unpaid finance charges and fees are included in interest and fees on loans while fraud losses are included in other expense. Charge-offs are recorded as a reduction to the allowance for loan losses and subsequent recoveries of previously charged-off amounts are credited to the allowance for loan losses. Costs incurred to recover charged-off loans are recorded as collection expense and are included in other expense in our Consolidated and Combined Statements of Earnings. | |
We charge-off unsecured closed-end consumer installment loans and loans secured by collateral when they are 120 days contractually past due and unsecured open-ended revolving loans when they are 180 days contractually past due. Unsecured consumer loans in bankruptcy are charged-off within 60 days of notification of filing by the bankruptcy court or within contractual charge-off periods, whichever occurs earlier. Credit card loans of deceased account holders are charged-off within 60 days of receipt of notification. | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets |
We do not amortize goodwill, but test it at least annually for impairment at the reporting unit level pursuant to ASC 350, Intangibles—Goodwill and Other. A reporting unit is defined under GAAP as the operating segment, or one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. Our single operating segment comprises a single reporting unit, based on the level at which segment management regularly reviews and measures the business operating results. | |
Goodwill impairment risk is first assessed by performing a qualitative review of entity-specific, industry, market and general economic factors for our reporting unit. If potential goodwill impairment risk exists that indicates that it is more likely than not that the carrying value of our reporting unit exceeds its fair value, we apply a two-step quantitative test. The first step compares the reporting unit’s estimated fair value with its carrying value. If the carrying value of our reporting unit’s net assets exceeds its fair value, the second step is applied to measure the difference between the carrying value and implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the goodwill is considered impaired and reduced to its implied fair value. The qualitative assessment for each period presented in the consolidated and combined financial statements was performed without hindsight, assuming only factors and market conditions existing as of those dates, and resulted in no potential goodwill impairment risk for our reporting unit. Consequently, goodwill was not deemed to be impaired for any of the periods presented. | |
Definite-lived intangible assets principally consist of customer-related assets including contract acquisition costs and purchased credit card relationships. These assets are amortized over their estimated useful lives and evaluated for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The evaluation compares the cash inflows expected to be generated from each intangible asset to its carrying value. If cash flows attributable to the intangible asset are less than the carrying value, the asset is considered impaired and written down to its estimated fair value. No impairments of definite-lived intangible assets have been recognized in the periods presented in the consolidated and combined financial statements. | |
Revenue Recognition, Interest and Fees on Loans | Interest and Fees on Loans |
We use the effective interest method to recognize income on loans. Interest on loans is comprised largely of interest and late fees on credit card and other loans. Interest income is recognized based upon the amount of loans outstanding and their contractual interest rate. Late fees are recognized when billable to the customer. We continue to accrue interest and fees on credit cards until the accounts are charged-off in the period the account becomes 180 days past due. For non-credit card loans, we stop accruing interest and fees when the account becomes 90 days past due. Previously recognized interest income that was accrued but not collected from the customer is reversed. Although we stop accruing interest in advance of payments, we recognize interest income as cash is collected when appropriate, provided the amount does not exceed that which would have been earned at the historical effective interest rate; otherwise, payments received are applied to reduce the principal balance of the loan. | |
We resume accruing interest on non-credit card loans when the customer’s account is less than 90 days past due and collection of such amounts is probable. Interest accruals on modified loans that are not considered to be TDRs may return to current status (re-aged) only after receipt of at least three consecutive minimum monthly payments subject to a re-aging limitation of once a year, or twice in a five-year period. | |
Direct loan origination costs on credit card loans are deferred and amortized on a straight-line basis over a one-year period, or the life of the loan for other loan receivables, and are included in interest and fees on loans in our Consolidated and Combined Statements of Earnings. See Note 5. Loan Receivables and Allowance for Loan Losses for further detail. | |
Other loan fees including returned check, cash advance and other miscellaneous fees are recognized net of waivers and charge-offs when the related transaction or service is provided, and are included in other income in our Consolidated and Combined Statements of Earnings. | |
Revenue Recognition, Promotional Financing | Promotional Financing |
Loans originated with promotional financing may include deferred interest financing (interest accrues during a promotional period and becomes payable if the full purchase amount is not paid off during the promotional period), no interest financing (no interest accrues during a promotional period but begins to accrue thereafter on any outstanding amounts at the end of the promotional period) and reduced interest financing (interest accrues monthly at a promotional interest rate during the promotional period). For deferred interest financing, we bill interest to the borrower, retroactive to the inception of the loan, if the loan is not repaid prior to the specified date. Income is recognized on such loans when it is billable. In almost all cases, our retail partner will pay an upfront fee or reimburse us to compensate us for all or part of the costs associated with providing the promotional financing. Upfront fees are deferred and accreted to income over the promotional period. Reimbursements are estimated and accrued as income over the promotional period. | |
Revenue Recognition, Purchased Loans | Purchased Loans |
Loans acquired by purchase are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the acquired loans. As a result, the allowance for losses is not carried over at acquisition. For loans acquired with evidence of credit deterioration, the excess of cash flows expected at acquisition over the initial acquisition cost is recognized into interest income over their remaining lives using the effective interest method. Subsequent decreases to the expected cash flows for these loans require us to evaluate the need for an allowance for credit losses. Subsequent improvements in expected cash flows are recognized into interest income prospectively. For other acquired loans, the excess of contractually required cash flows over the initial acquisition cost is recognized into interest income over the remaining lives using the effective interest method. Subsequent increases in incurred losses for these loans require us to evaluate the need for an allowance for credit losses. Our evaluation of the amount of future cash flows expected to be collected is performed in a similar manner as that used to determine our allowance for loan losses. | |
Revenue Recognition, Retailer Share Arrangements | Retailer Share Arrangements |
Most of our Retail Card program agreements and certain other program agreements contain retailer share arrangements that provide for payments to our partners if the economic performance of the program exceeds a contractually defined threshold. Although the share arrangements vary by partner, these arrangements are generally structured to measure the economic performance of the program, based typically on agreed upon program revenues (including interest income and certain other income) less agreed upon program expenses (including interest expense, provision for credit losses, retailer payments and operating expenses), and share portions of this amount above a negotiated threshold. These thresholds and the economic performance of a program are based on, among other things, agreed upon measures of program expenses. On a quarterly basis, we make a judgment as to whether it is probable that the performance threshold will be met under a particular retail partner’s retailer share arrangement. The current period’s estimated contribution to that ultimate expected payment is recorded as a liability. To the extent facts and circumstances change and the cumulative probable payment for prior months has changed, a cumulative adjustment is made to align the retailer share arrangement liability balance with the amount considered probable of being paid relating to past periods. | |
Revenue Recognition, Loyalty Programs | Loyalty Programs |
Our loyalty programs are designed to generate increased purchase volume per customer while reinforcing the value of our credit cards and strengthening cardholder loyalty. These programs typically provide cardholders with rewards in the form of merchandise discounts that are earned by achieving a pre-set spending level on their private label or Dual Card. Other programs provide cash back or reward points, which are redeemable for a variety of products or awards. These programs are primarily in our Retail Card platform. We establish a rewards liability based on points and merchandise discounts earned that are ultimately expected to be redeemed and the average cost per point at redemption. The rewards liability is included in accrued expenses and other liabilities in our Consolidated and Combined Statements of Financial Position. Cash rebates are earned based on a tiered percentage of purchase volume. As points and discounts are redeemed or cash rebates are issued, the rewards liability is relieved. The estimated cost of loyalty programs is classified as a reduction to other income in our Consolidated and Combined Statements of Earnings. | |
Revenue Recognition, Fraud Losses | Fraud Losses |
We experience third-party fraud losses from the unauthorized use of credit cards and when loans are obtained through fraudulent means. Fraud losses are included as a charge within other expense in our Consolidated and Combined Statements of Earnings, net of recoveries, when such losses are probable. Loans are charged off, as applicable, after the investigation period has completed. | |
Income Taxes | Income Taxes |
We are included in the consolidated U.S. federal and state income tax returns of GE, where applicable, but also file certain separate state and foreign income tax returns. The tax provision and current and deferred tax balances have been presented on a separate company basis as if we were a separate filer. The effects of tax adjustments and settlements from taxing authorities are presented in our consolidated and combined financial statements in the period to which they relate as if we were a separate filer. Our current obligations for taxes are settled with our parent on an estimated basis and adjusted in later periods as appropriate and are reflected in our consolidated and combined financial statements in the periods in which those settlements occur. We recognize the current and deferred tax consequences of all transactions that have been recognized in the financial statements using the provisions of the enacted tax laws. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax laws and rates that will be in effect when the differences are expected to reverse. We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. See Note 15. Income Taxes for additional detail. | |
Fair Value Measurements | Fair Value Measurements |
For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. | |
Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: | |
Level 1— Quoted prices for identical instruments in active markets. | |
Level 2— Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. | |
Level 3— Significant inputs to the valuation model are unobservable. | |
We maintain policies and procedures to value instruments using the best and most relevant data available. In addition, we have risk management teams that review valuation, including independent price validation for certain instruments. We use non-binding broker quotes and other third-party pricing services as our primary basis for valuation when there is limited or no relevant market activity for a specific instrument or for other instruments that share similar characteristics. We have not adjusted prices we have obtained. | |
As is the case with our primary pricing vendor, third-party brokers and other third-party pricing services do not provide us access to their proprietary valuation models, inputs and assumptions. Accordingly, our risk management personnel conduct reviews of these brokers and services, as applicable, similar to the reviews performed of our primary pricing vendor. In addition, we conduct internal reviews of pricing for all investment securities on a quarterly basis to ensure reasonableness of valuations used in the consolidated and combined financial statements. These reviews are designed to identify prices that appear stale, those that have changed significantly from prior valuations, and other anomalies that may indicate that a price may not be accurate. Based on the information available, we believe that the fair values provided by the primary pricing vendor, third-party brokers and other third-party pricing services are representative of prices that would be received to sell the assets at the measurement date (exit prices) and are classified appropriately in the hierarchy. | |
Recurring Fair Value Measurements | |
Our investments in debt and equity securities are measured at fair value every reporting period on a recurring basis. | |
Non-Recurring Fair Value Measurements | |
Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. | |
Repossessed assets and cost method investments are currently the only significant categories of assets which we account for at fair value on a non-recurring basis. | |
Financial Assets and Financial Liabilities Carried at Other than Fair Value | |
The following is a description of the valuation techniques used to estimate the fair values of the financial assets and liabilities carried at other than fair value. | |
Loan receivables, net | |
In estimating the fair value for our loan receivables, we use a discounted future cash flow model. We use various unobservable inputs including estimated interest and fee income, payment rates, loss rates and discount rates (which consider current market interest rate data adjusted for credit risk and other factors) to estimate the fair values of loans. When collateral dependent, loan receivables may be valued using collateral values. | |
Deposits | |
For demand deposits with no defined maturity, carrying value approximates fair value due to the potentially liquid nature of these deposits. For fixed-maturity certificates of deposit, fair values are estimated by discounting expected future cash flows using market rates currently offered for deposits with similar remaining maturities. | |
Borrowings | |
The fair values of borrowings of consolidated securitization entities, as well as related party debt issued by one of our securitization entities which was held by a GECC affiliate at December 31, 2013, are based on valuation methodologies that utilize current market interest rate data which are comparable to market quotes adjusted for our non-performance risk. Borrowings that are publicly traded securities are classified as level 2. Borrowings that are not publicly traded are classified as level 3. | |
The fair values of the senior unsecured notes are based on secondary market trades and other observable inputs and are classified as level 2. The fair value of the Bank Term Loan is based on non-binding broker quotes and are classified as level 3. | |
The fair value of the related party debt at December 31, 2014 is based on an internal valuation methodology that utilizes significant unobservable inputs. |
Investment_Securities_Tables
Investment Securities (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||
Schedule of Available-for-sale Securities Reconciliation | Our investment securities consist of the following: | |||||||||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||||||||||
Gross | Gross | Gross | Gross | |||||||||||||||||||||||||||||
Amortized | unrealized | unrealized | Estimated | Amortized | unrealized | unrealized | Estimated | |||||||||||||||||||||||||
($ in millions) | cost | gains | losses | fair value | cost | gains | losses | fair value | ||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||
U.S. government and federal agency | $ | 1,252 | $ | — | $ | — | $ | 1,252 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
State and municipal | 57 | 1 | (1 | ) | 57 | 53 | — | (7 | ) | 46 | ||||||||||||||||||||||
Residential | ||||||||||||||||||||||||||||||||
mortgage-backed(a) | 271 | 3 | (3 | ) | 271 | 183 | 1 | (9 | ) | 175 | ||||||||||||||||||||||
U.S. corporate debt | 3 | — | — | 3 | — | — | — | — | ||||||||||||||||||||||||
Equity | 15 | — | — | 15 | 15 | — | — | 15 | ||||||||||||||||||||||||
Total | $ | 1,598 | $ | 4 | $ | (4 | ) | $ | 1,598 | $ | 251 | $ | 1 | $ | (16 | ) | $ | 236 | ||||||||||||||
_______________________ | ||||||||||||||||||||||||||||||||
(a) | At December 31, 2014 and 2013 all of our residential mortgage-backed securities related to securities issued by government-sponsored entities and are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. All residential mortgage-backed securities are collateralized by U.S. mortgages. | |||||||||||||||||||||||||||||||
Available-for-sale Securities, Continuous Loss Position, Fair Value | The following table presents the estimated fair values and gross unrealized losses of our available-for-sale investment securities: | |||||||||||||||||||||||||||||||
In loss position for | ||||||||||||||||||||||||||||||||
Less than 12 months | 12 months or more | |||||||||||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||||||||||
Estimated | unrealized | Estimated | unrealized | |||||||||||||||||||||||||||||
($ in millions) | fair value | losses | fair value | losses | ||||||||||||||||||||||||||||
At December 31, 2014 | ||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||
State and municipal | $ | — | $ | — | $ | 34 | $ | (1 | ) | |||||||||||||||||||||||
Residential mortgage-backed | 30 | — | 85 | (3 | ) | |||||||||||||||||||||||||||
U.S. government and federal agency | 700 | — | — | — | ||||||||||||||||||||||||||||
Total | $ | 730 | $ | — | $ | 119 | $ | (4 | ) | |||||||||||||||||||||||
At December 31, 2013 | ||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||
State and municipal | $ | 23 | $ | (2 | ) | $ | 20 | $ | (5 | ) | ||||||||||||||||||||||
Residential mortgage-backed | 127 | (7 | ) | 20 | (2 | ) | ||||||||||||||||||||||||||
Equity | 14 | — | — | — | ||||||||||||||||||||||||||||
Total | $ | 164 | $ | (9 | ) | $ | 40 | $ | (7 | ) | ||||||||||||||||||||||
Investments Classified by Contractual Maturity Date | Contractual Maturities of Investments in Available-for-Sale Debt Securities (excluding residential mortgage-backed securities) | |||||||||||||||||||||||||||||||
Amortized | Estimated | |||||||||||||||||||||||||||||||
At December 31, 2014 ($ in millions) | cost | fair value | ||||||||||||||||||||||||||||||
Due | ||||||||||||||||||||||||||||||||
Within one year | $ | 1,005 | $ | 1,005 | ||||||||||||||||||||||||||||
After one year through five years | $ | 250 | $ | 250 | ||||||||||||||||||||||||||||
After five years through ten years | $ | 1 | $ | 1 | ||||||||||||||||||||||||||||
After ten years | $ | 56 | $ | 56 | ||||||||||||||||||||||||||||
Loan_Receivables_and_Allowance1
Loan Receivables and Allowance for Loan Losses (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | ||||||||||||||||||||||||||||||
At December 31 ($ in millions) | 2014 | 2013 | ||||||||||||||||||||||||||||
Credit cards | $ | 58,880 | $ | 54,958 | ||||||||||||||||||||||||||
Consumer installment loans | 1,063 | 965 | ||||||||||||||||||||||||||||
Commercial credit products | 1,320 | 1,317 | ||||||||||||||||||||||||||||
Other | 23 | 14 | ||||||||||||||||||||||||||||
Total loan receivables, before allowance for losses(a)(b) | $ | 61,286 | $ | 57,254 | ||||||||||||||||||||||||||
_______________________ | ||||||||||||||||||||||||||||||
(a) | Total loan receivables include $27.0 billion and $26.1 billion of restricted loans of consolidated securitization entities at December 31, 2014 and 2013, respectively. See Note 6. Variable Interest Entities for further information on these restricted loans. | |||||||||||||||||||||||||||||
(b) | At December 31, 2014 and 2013, loan receivables included deferred expense, net of deferred income, of $46 million and $8 million, respectively. | |||||||||||||||||||||||||||||
Allowance for Credit Losses on Financing Receivables | Allowance for Loan Losses | |||||||||||||||||||||||||||||
($ in millions) | Balance at January 1, 2014 | Provision charged to operations | Gross charge-offs | Recoveries | Balance at December 31, 2014 | |||||||||||||||||||||||||
Credit cards | $ | 2,827 | $ | 2,858 | (a) | $ | (3,111 | ) | $ | 595 | $ | 3,169 | ||||||||||||||||||
Consumer installment loans | 19 | 20 | (30 | ) | 13 | 22 | ||||||||||||||||||||||||
Commercial credit products | 46 | 39 | (48 | ) | 8 | 45 | ||||||||||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 2,892 | $ | 2,917 | $ | (3,189 | ) | $ | 616 | $ | 3,236 | |||||||||||||||||||
($ in millions) | Balance at January 1, 2013 | Provision charged to operations | Gross charge-offs | Recoveries | Balance at December 31, 2013 | |||||||||||||||||||||||||
Credit cards | $ | 2,174 | $ | 2,970 | $ | (2,847 | ) | $ | 530 | $ | 2,827 | |||||||||||||||||||
Consumer installment loans | 62 | 49 | (111 | ) | 19 | 19 | ||||||||||||||||||||||||
Commercial credit products | 38 | 53 | (53 | ) | 8 | 46 | ||||||||||||||||||||||||
Other | — | — | — | — | — | |||||||||||||||||||||||||
Total | $ | 2,274 | $ | 3,072 | $ | (3,011 | ) | $ | 557 | $ | 2,892 | |||||||||||||||||||
($ in millions) | Balance at January 1, 2012 | Provision charged to operations | Gross charge-offs | Recoveries | Balance at December 31, 2012 | |||||||||||||||||||||||||
Credit cards | $ | 1,902 | $ | 2,438 | $ | (2,680 | ) | $ | 514 | $ | 2,174 | |||||||||||||||||||
Consumer installment loans | 113 | 54 | (130 | ) | 25 | 62 | ||||||||||||||||||||||||
Commercial credit products | 37 | 69 | (76 | ) | 8 | 38 | ||||||||||||||||||||||||
Other | — | 4 | (4 | ) | — | — | ||||||||||||||||||||||||
Total | $ | 2,052 | $ | 2,565 | $ | (2,890 | ) | $ | 547 | $ | 2,274 | |||||||||||||||||||
_____________________ | ||||||||||||||||||||||||||||||
(a) | Includes a $61 million reduction in provision for loan losses associated with the classification of certain loan receivables as held for sale. | |||||||||||||||||||||||||||||
Past Due Financing Receivables | Delinquent and Non-accrual Loans | |||||||||||||||||||||||||||||
At December 31, 2014 ($ in millions) | 30-89 days delinquent | 90 or more days delinquent | Total Past Due | 90 or more days delinquent and accruing | Total non-accruing (a) | |||||||||||||||||||||||||
Credit cards | $ | 1,331 | $ | 1,147 | $ | 2,478 | $ | 1,147 | $ | — | ||||||||||||||||||||
Consumer installment loans | 15 | 2 | 17 | — | 2 | |||||||||||||||||||||||||
Commercial credit products | 28 | 13 | 41 | 13 | — | |||||||||||||||||||||||||
Total delinquent loans | $ | 1,374 | $ | 1,162 | $ | 2,536 | $ | 1,160 | $ | 2 | ||||||||||||||||||||
Percentage of total loan receivables(a) | 2.2 | % | 1.9 | % | 4.1 | % | 1.9 | % | — | % | ||||||||||||||||||||
At December 31, 2013 ($ in millions) | 30-89 days delinquent | 90 or more days delinquent | Total Past Due | 90 or more days delinquent and accruing | Total non-accruing (a) | |||||||||||||||||||||||||
Credit cards | $ | 1,327 | $ | 1,105 | $ | 2,432 | $ | 1,105 | $ | — | ||||||||||||||||||||
Consumer installment loans | 12 | 2 | 14 | — | 2 | |||||||||||||||||||||||||
Commercial credit products | 28 | 14 | 42 | 14 | — | |||||||||||||||||||||||||
Total delinquent loans | $ | 1,367 | $ | 1,121 | $ | 2,488 | $ | 1,119 | $ | 2 | ||||||||||||||||||||
Percentage of total loan receivables(a) | 2.4 | % | 2 | % | 4.3 | % | 2 | % | — | % | ||||||||||||||||||||
______________________ | ||||||||||||||||||||||||||||||
(a) | Percentages are calculated based on period-end balances | |||||||||||||||||||||||||||||
Troubled Debt Restructurings on Financing Receivables | The following table provides information on loans that entered a loan modification program during the periods presented: | |||||||||||||||||||||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | ||||||||||||||||||||||||||||
Credit cards | $ | 423 | $ | 506 | ||||||||||||||||||||||||||
Consumer installment loans | — | 26 | ||||||||||||||||||||||||||||
Commercial credit products | 5 | 7 | ||||||||||||||||||||||||||||
Total | $ | 428 | $ | 539 | ||||||||||||||||||||||||||
Impaired Financing Receivables | The following table provides information about loans classified as TDRs and specific reserves. We do not evaluate credit card loans for impairment on an individual basis, but instead estimate an allowance for loan losses on a collective basis. As a result, there are no impaired loans for which there is no allowance. | |||||||||||||||||||||||||||||
At December 31, 2014 ($ in millions) | Total recorded | Related allowance | Net recorded investment | Unpaid principal balance | ||||||||||||||||||||||||||
investment | ||||||||||||||||||||||||||||||
Credit cards | $ | 716 | $ | (217 | ) | $ | 499 | $ | 613 | |||||||||||||||||||||
Consumer installment loans | — | — | — | — | ||||||||||||||||||||||||||
Commercial credit products | 8 | (3 | ) | 5 | 8 | |||||||||||||||||||||||||
Total | $ | 724 | $ | (220 | ) | $ | 504 | $ | 621 | |||||||||||||||||||||
At December 31, 2013 ($ in millions) | Total recorded | Related allowance | Net recorded investment | Unpaid principal balance | ||||||||||||||||||||||||||
investment | ||||||||||||||||||||||||||||||
Credit cards | $ | 799 | $ | (246 | ) | $ | 553 | $ | 692 | |||||||||||||||||||||
Consumer installment loans | — | — | — | — | ||||||||||||||||||||||||||
Commercial credit products | 12 | (5 | ) | 7 | 12 | |||||||||||||||||||||||||
Total | $ | 811 | $ | (251 | ) | $ | 560 | $ | 704 | |||||||||||||||||||||
Financial Effect of TDRs | The following table presents the types and financial effects of loans modified and accounted for as TDRs during the periods presented: | |||||||||||||||||||||||||||||
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||
($ in millions) | Interest income recognized during period when loans were impaired | Interest income that would have been recorded with original terms | Average recorded investment | Interest income recognized during period when loans were impaired | Interest income that would have been recorded with original terms | Average recorded investment | Interest income recognized during period when loans were impaired | Interest income that would have been recorded with original terms | Average recorded investment | |||||||||||||||||||||
Credit cards | $ | 56 | $ | 140 | $ | 745 | $ | 79 | $ | 175 | $ | 890 | $ | 75 | $ | 173 | $ | 908 | ||||||||||||
Consumer installment loans | — | — | — | 1 | 3 | — | 1 | 4 | 80 | |||||||||||||||||||||
Commercial credit products | — | 2 | 10 | 1 | 2 | 12 | 1 | 3 | 5 | |||||||||||||||||||||
Total | $ | 56 | $ | 142 | $ | 755 | $ | 81 | $ | 180 | $ | 902 | $ | 77 | $ | 180 | $ | 993 | ||||||||||||
Troubled Debt Restructurings on Financing Receivables, Subsequent Default | The following table presents the type, number and amount of loans accounted for as TDRs that enrolled in a modification plan within the previous 12 months and experienced a payment default during the periods presented. A customer defaults from a modification program after two consecutive missed payments. | |||||||||||||||||||||||||||||
Years ended December 31, | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||
($ in millions) | Accounts defaulted | Loans defaulted | Accounts defaulted | Loans defaulted | Accounts defaulted | Loans defaulted | ||||||||||||||||||||||||
Credit cards | 29,313 | $ | 60 | 30,640 | $ | 56 | 43,609 | $ | 82 | |||||||||||||||||||||
Consumer installment loans | — | — | 98 | 3 | 129 | 4 | ||||||||||||||||||||||||
Commercial credit products | 159 | 1 | 42 | — | 95 | — | ||||||||||||||||||||||||
Total | 29,472 | $ | 61 | 30,780 | $ | 59 | 43,833 | $ | 86 | |||||||||||||||||||||
Financing Receivable Credit Quality Indicators | The following table provides the most recent FICO scores available for our customers at December 31, 2014 and 2013, respectively, as a percentage of each class of loan receivable. We have reclassified the categories at December 31, 2013 to conform to the current period classification. The table below excludes 0.8% and 1.1% of our total loan receivables balance at December 31, 2014 and 2013, respectively, which represents those customer accounts for which a FICO score is not available. | |||||||||||||||||||||||||||||
At December 31 | 2014 | 2013 | ||||||||||||||||||||||||||||
661 or | 601 to | 600 or | 661 or | 601 to | 600 or | |||||||||||||||||||||||||
higher | 660 | less | higher | 660 | less | |||||||||||||||||||||||||
Credit cards | 72.5 | % | 19.9 | % | 7.6 | % | 71.7 | % | 20 | % | 8.3 | % | ||||||||||||||||||
Consumer installment loans | 78.9 | % | 15.7 | % | 5.4 | % | 78.2 | % | 15.5 | % | 6.3 | % | ||||||||||||||||||
Commercial credit products | 86.5 | % | 8.6 | % | 4.8 | % | 85.3 | % | 9.4 | % | 5.3 | % | ||||||||||||||||||
Interest Income and Interest Expense Disclosure | The following table provides additional information about our interest and fees on loans from our loan receivables, including held for sale: | |||||||||||||||||||||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||||||||||||||||||||
Credit cards | $ | 11,967 | $ | 11,015 | $ | 9,967 | ||||||||||||||||||||||||
Consumer installment loans | 99 | 129 | 176 | |||||||||||||||||||||||||||
Commercial credit products | 149 | 150 | 156 | |||||||||||||||||||||||||||
Other | 1 | 1 | 1 | |||||||||||||||||||||||||||
Total | $ | 12,216 | $ | 11,295 | $ | 10,300 | ||||||||||||||||||||||||
Variable_Interest_Entities_Tab
Variable Interest Entities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Variable Interest Entities [Abstract] | ||||||||
Schedule of Variable Interest Entities | The table below summarizes the assets and liabilities of our consolidated securitization VIEs described above. | |||||||
At December 31 ($ in millions) | 2014 | 2013 | ||||||
Assets | ||||||||
Loan receivables, net(a) | $ | 25,645 | $ | 24,766 | ||||
Other assets | 1,134 | 20 | ||||||
Total | $ | 26,779 | $ | 24,786 | ||||
Liabilities | ||||||||
Borrowings | $ | 14,967 | $ | 15,362 | ||||
Other liabilities | 368 | 228 | ||||||
Total | $ | 15,335 | $ | 15,590 | ||||
_______________________ | ||||||||
(a) | Includes $1.3 billion of related allowance for loan losses for both periods presented, resulting in gross restricted loans of $27.0 billion and $26.1 billion at December 31, 2014 and 2013, respectively. |
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Schedule of Goodwill | Goodwill | |||||||||||||||||||||||
($ in millions) | 2014 | 2013 | ||||||||||||||||||||||
Balance at January 1 | $ | 949 | $ | 936 | ||||||||||||||||||||
Acquisitions | — | 13 | ||||||||||||||||||||||
Balance at December 31 | $ | 949 | $ | 949 | ||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | Intangible Assets Subject to Amortization | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
At December 31 ($ in millions) | Gross carrying amount | Accumulated amortization | Net | Gross carrying amount | Accumulated amortization | Net | ||||||||||||||||||
Customer-related | $ | 849 | $ | (405 | ) | $ | 444 | $ | 586 | $ | (312 | ) | $ | 274 | ||||||||||
Capitalized software | 120 | (45 | ) | 75 | 55 | (29 | ) | 26 | ||||||||||||||||
Total | $ | 969 | $ | (450 | ) | $ | 519 | $ | 641 | $ | (341 | ) | $ | 300 | ||||||||||
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | We estimate annual amortization expense for existing intangible assets over the next five calendar years to be as follows: | |||||||||||||||||||||||
($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||||
Amortization expense | $ | 116 | $ | 114 | $ | 92 | $ | 64 | $ | 54 | ||||||||||||||
Deposits_Tables
Deposits (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Banking and Thrift [Abstract] | ||||||||||||||||||||||||
Schedule of Deposit Liabilities | Deposits | |||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
At December 31 ($ in millions) | Amount | Average rate (a) | Amount | Average rate (a) | ||||||||||||||||||||
Interest-bearing deposits | $ | 34,847 | 1.6 | % | $ | 25,360 | 1.7 | % | ||||||||||||||||
Non-interest-bearing deposits | 108 | — | 359 | — | ||||||||||||||||||||
Total deposits | $ | 34,955 | $ | 25,719 | ||||||||||||||||||||
___________________ | ||||||||||||||||||||||||
(a) | Based on interest expense for the years ended December 31, 2014 and 2013 and average deposits balances. | |||||||||||||||||||||||
Schedule of Maturities of Deposit Liabilities | At December 31, 2014, our interest-bearing time deposits maturing over the next five years and thereafter were as follows: | |||||||||||||||||||||||
($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||
Deposits | $ | 11,626 | $ | 3,453 | $ | 2,556 | $ | 1,894 | $ | 3,880 | $ | 2,693 | ||||||||||||
Borrowings_Tables
Borrowings (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Banking and Thrift [Abstract] | ||||||||||||||||||||||||
Schedule of Debt | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
At December 31 ($ in millions) | Maturity date | Amount(a) | Weighted average interest rate | Amount(a) | Weighted average interest rate | |||||||||||||||||||
Borrowings of consolidated securitization entities | 2015 - 2019 | $ | 14,967 | 1.2 | % | $ | 15,362 | 1.2 | % | |||||||||||||||
Bank term loan | 2019 | 8,245 | 2.1 | % | — | — | % | |||||||||||||||||
Senior unsecured notes | 2017 - 2024 | 3,593 | 3.4 | % | — | — | % | |||||||||||||||||
Related party debt | 2019 | 655 | 4.2 | % | 8,959 | 1.7 | % | (b) | ||||||||||||||||
Total borrowings | $ | 27,460 | $ | 24,321 | ||||||||||||||||||||
___________________ | ||||||||||||||||||||||||
(a) | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. | |||||||||||||||||||||||
(b) | Represents average rate based on interest expense for the year ended December 31, 2013 and average borrowing balance. | |||||||||||||||||||||||
Schedule of Maturities of Long-term Debt | The maturities of the borrowings of our consolidated securitization entities at December 31, 2014, which reflect the effect of these amendments, were as follows: | |||||||||||||||||||||||
($ in millions) | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||
Borrowings of consolidated securitization entities | $ | 2,604 | $ | 2,165 | $ | 7,351 | $ | 1,684 | $ | 1,163 | $ | — | ||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||
Fair Value, Assets Measured on Recurring Basis | The following tables present our assets measured at fair value on a recurring basis. | |||||||||||||||||||
At December 31, 2014 ($ in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Assets | ||||||||||||||||||||
Investment securities | ||||||||||||||||||||
Debt | ||||||||||||||||||||
U.S. Government and Federal Agency | $ | — | $ | 1,252 | $ | — | $ | 1,252 | ||||||||||||
State and municipal | — | — | 57 | 57 | ||||||||||||||||
Residential mortgage-backed | — | 271 | — | 271 | ||||||||||||||||
U.S. Corporate | — | — | 3 | 3 | ||||||||||||||||
Equity | 15 | — | — | 15 | ||||||||||||||||
Total | $ | 15 | $ | 1,523 | $ | 60 | $ | 1,598 | ||||||||||||
At December 31, 2013 ($ in millions) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Investment securities | ||||||||||||||||||||
Debt | ||||||||||||||||||||
State and municipal | $ | — | $ | — | $ | 46 | $ | 46 | ||||||||||||
Residential mortgage-backed | — | 175 | — | 175 | ||||||||||||||||
Equity | 15 | — | — | 15 | ||||||||||||||||
Total | $ | 15 | $ | 175 | $ | 46 | $ | 236 | ||||||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents the changes in our Level 3 debt instruments that are measured on a recurring basis for the years ended December 31, 2014 and 2013. | |||||||||||||||||||
Changes in Level 3 Instruments | ||||||||||||||||||||
Years ended December 31, ($ in millions) | 2014 | 2013 | ||||||||||||||||||
Balance at beginning of period | $ | 46 | $ | 39 | ||||||||||||||||
Net realized/unrealized gains (losses) included in accumulated other comprehensive income | 7 | (4 | ) | |||||||||||||||||
Purchases | 11 | 16 | ||||||||||||||||||
Settlements | (4 | ) | (5 | ) | ||||||||||||||||
Balance at end of period | $ | 60 | $ | 46 | ||||||||||||||||
Net change in unrealized gains (losses) relating to instruments still held at December 31 | $ | 7 | $ | (4 | ) | |||||||||||||||
Fair Value, by Balance Sheet Grouping | Financial Assets and Financial Liabilities Carried at Other than Fair Value | |||||||||||||||||||
Carrying | Corresponding fair value amount | |||||||||||||||||||
At December 31, 2014 ($ in millions) | value | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial Assets | ||||||||||||||||||||
Financial assets for which carrying values equal or approximate fair value: | ||||||||||||||||||||
Cash and equivalents (c) | $ | 11,828 | $ | 11,828 | $ | 8,153 | $ | 3,675 | $ | — | ||||||||||
Other assets(a) | $ | 1,104 | $ | 1,104 | $ | 1,104 | $ | — | $ | — | ||||||||||
Financial assets carried at other than fair value: | ||||||||||||||||||||
Loan receivables, net(d) | $ | 58,050 | $ | 64,113 | $ | — | $ | — | $ | 64,113 | ||||||||||
Loan receivables held for sale(d) | $ | 332 | $ | 351 | $ | — | $ | — | $ | 351 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Financial liabilities carried at other than fair value: | ||||||||||||||||||||
Deposits | $ | 34,955 | $ | 35,442 | $ | — | $ | 35,442 | $ | — | ||||||||||
Borrowings of consolidated securitization entities | $ | 14,967 | $ | 14,985 | $ | — | $ | 7,912 | $ | 7,073 | ||||||||||
Bank term loan | $ | 8,245 | $ | 8,204 | $ | — | $ | — | $ | 8,204 | ||||||||||
Senior unsecured notes | $ | 3,593 | $ | 3,660 | $ | — | $ | 3,660 | $ | — | ||||||||||
Related party debt | $ | 655 | $ | 655 | $ | — | $ | — | $ | 655 | ||||||||||
Carrying | Corresponding fair value amount | |||||||||||||||||||
At December 31, 2013 ($ in millions) | value | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||
Financial Assets | ||||||||||||||||||||
Financial assets for which carrying values equal or approximate fair value: | ||||||||||||||||||||
Cash and equivalents | $ | 2,319 | $ | 2,319 | $ | 2,319 | $ | — | $ | — | ||||||||||
Other assets(a) | $ | 76 | $ | 76 | $ | 76 | $ | — | $ | — | ||||||||||
Financial assets carried at other than fair value: | ||||||||||||||||||||
Loan receivables, net | $ | 54,362 | $ | 60,344 | $ | — | $ | — | $ | 60,344 | ||||||||||
Financial Liabilities | ||||||||||||||||||||
Financial liabilities carried at other than fair value: | ||||||||||||||||||||
Deposits | $ | 25,719 | $ | 25,994 | $ | — | $ | 25,994 | $ | — | ||||||||||
Borrowings of consolidated securitization entities | $ | 15,362 | $ | 15,308 | $ | — | $ | 8,206 | $ | 7,102 | ||||||||||
Related party debt(b) | $ | 8,959 | $ | 209 | $ | — | $ | 209 | $ | — | ||||||||||
_______________________ | ||||||||||||||||||||
(a) | This balance relates to restricted cash and equivalents which is included in other assets. | |||||||||||||||||||
(b) | The fair value of the related party debt at December 31, 2013 relates to $195 million of debt issued by one of our securitization entities which was held by a GECC affiliate. This related party debt was repurchased by the Company during the year ended December 31, 2014 and is now eliminated in our consolidated and combined financial statements at December 31, 2014. | |||||||||||||||||||
(c) | For cash and cash equivalents carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less. | |||||||||||||||||||
(d) | Under certain retail partner program agreements, the expected sales proceeds related to the sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above. |
Regulatory_and_Capital_Adequac1
Regulatory and Capital Adequacy (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Banking and Thrift [Abstract] | |||||||||||||||||||||
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The actual capital amounts and ratios and the required minimums of the Bank are as follows: | ||||||||||||||||||||
At December 31, 2014 ($ in millions) | Actual | Minimum for capital | Minimum to be well-capitalized under prompt corrective action provisions | ||||||||||||||||||
adequacy purposes(b) | |||||||||||||||||||||
Amount | Ratio(a) | Amount | Ratio | Amount | Ratio | ||||||||||||||||
Total risk-based capital | $ | 7,100 | 17.1 | % | $ | 3,322 | 8 | % | $ | 4,152 | 10 | % | |||||||||
Tier 1 risk-based capital | $ | 6,559 | 15.8 | % | $ | 1,661 | 4 | % | $ | 2,491 | 6 | % | |||||||||
Tier 1 leverage | $ | 6,559 | 13.4 | % | $ | 1,959 | 4 | % | $ | 2,449 | 5 | % | |||||||||
At December 31, 2013 ($ in millions) | Actual | Minimum for capital | Minimum to be well-capitalized under prompt corrective action provisions | ||||||||||||||||||
adequacy purposes(b) | |||||||||||||||||||||
Amount | Ratio(a) | Amount | Ratio | Amount | Ratio | ||||||||||||||||
Total risk-based capital | $ | 6,010 | 17.3 | % | $ | 2,784 | 8 | % | $ | 3,480 | 10 | % | |||||||||
Tier 1 risk-based capital | $ | 5,559 | 16 | % | $ | 1,392 | 4 | % | $ | 2,088 | 6 | % | |||||||||
Tier 1 leverage | $ | 5,559 | 14.9 | % | $ | 1,495 | 4 | % | $ | 1,869 | 5 | % | |||||||||
_______________________ | |||||||||||||||||||||
(a) | Represent Basel I capital ratios calculated for the Bank. | ||||||||||||||||||||
(b) | In addition to the Basel I requirements, under the Bank’s Operating Agreement with the OCC entered into on January 11, 2013, the Bank must maintain minimum levels of capital as follows: | ||||||||||||||||||||
At December 31 ($ in millions) | 2014 | 2013 | |||||||||||||||||||
Amount | Ratio | Amount | Ratio | ||||||||||||||||||
Total risk-based capital | $ | 4,568 | 11 | % | $ | 3,828 | 11 | % | |||||||||||||
Tier 1 risk-based capital | $ | 2,907 | 7 | % | $ | 2,436 | 7 | % | |||||||||||||
Tier 1 leverage | $ | 2,938 | 6 | % | $ | 2,243 | 6 | % | |||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share [Abstract] | ||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted earnings per share: | |||||||||||
Years ended December 31, | ||||||||||||
(in millions, except per share data) | 2014 | 2013 | 2012 | |||||||||
Net earnings | $ | 2,109 | $ | 1,979 | $ | 2,119 | ||||||
Weighted average common shares outstanding, basic | 757.4 | 705.3 | 705.3 | |||||||||
Effect of dilutive securities | 0.2 | — | — | |||||||||
Weighted average common shares outstanding, dilutive | 757.6 | 705.3 | 705.3 | |||||||||
Earnings per basic common share | $ | 2.78 | $ | 2.81 | $ | 3 | ||||||
Earnings per diluted common share | $ | 2.78 | $ | 2.81 | $ | 3 | ||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | Earnings before Provision for Income Taxes | |||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||
U.S. | $ | 3,377 | $ | 3,124 | $ | 3,352 | ||||||
Non-U.S. | 9 | 18 | 24 | |||||||||
Earnings before provision for income taxes | $ | 3,386 | $ | 3,142 | $ | 3,376 | ||||||
Schedule of Components of Income Tax Expense (Benefit) | Provision for Income Taxes | |||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||
Current provision for income taxes | ||||||||||||
U.S. Federal | $ | (1,320 | ) | $ | (1,280 | ) | $ | (1,152 | ) | |||
Non-U.S. | (7 | ) | (5 | ) | (7 | ) | ||||||
U.S. state and local | (153 | ) | (115 | ) | (116 | ) | ||||||
Total current provision for income taxes | (1,480 | ) | (1,400 | ) | (1,275 | ) | ||||||
Deferred benefit (provision) for income taxes | ||||||||||||
U.S. Federal | 181 | 215 | 16 | |||||||||
Non-U.S. | (1 | ) | 1 | — | ||||||||
U.S. state and local | 23 | 21 | 2 | |||||||||
Deferred benefit (provision) for income taxes from temporary differences | 203 | 237 | 18 | |||||||||
Total provision for income taxes | $ | (1,277 | ) | $ | (1,163 | ) | $ | (1,257 | ) | |||
Schedule of Effective Income Tax Rate Reconciliation | Reconciliation of Our Effective Tax Rate to the U.S. Federal Statutory Income Tax Rate | |||||||||||
For the years ended December 31 | 2014 | 2013 | 2012 | |||||||||
U.S. federal statutory income tax rate | 35 | % | 35 | % | 35 | % | ||||||
U.S. state and local income taxes, net of federal benefit | 2.5 | % | 1.9 | % | 2.2 | % | ||||||
All other, net | 0.2 | % | 0.1 | % | — | % | ||||||
Effective tax rate | 37.7 | % | 37 | % | 37.2 | % | ||||||
Schedule of Deferred Tax Assets and Liabilities | Significant Components of Our Net Deferred Income Taxes | |||||||||||
At December 31 ($ in millions) | 2014 | 2013 | ||||||||||
Assets | ||||||||||||
Allowance for loan losses | $ | 1,147 | $ | 1,027 | ||||||||
Reward programs | 68 | 34 | ||||||||||
State and local income taxes | 56 | 40 | ||||||||||
State net operating losses | 12 | — | ||||||||||
Other assets | 100 | 55 | ||||||||||
Total deferred income tax assets before valuation allowance | 1,383 | 1,156 | ||||||||||
Valuation allowance | (10 | ) | — | |||||||||
Total deferred income tax assets | 1,373 | 1,156 | ||||||||||
Liabilities | ||||||||||||
Original issue discount | (488 | ) | (508 | ) | ||||||||
Goodwill and identifiable intangibles | (229 | ) | (216 | ) | ||||||||
Other liabilities | (53 | ) | (24 | ) | ||||||||
Total deferred income tax liabilities | (770 | ) | (748 | ) | ||||||||
Net deferred income tax assets | $ | 603 | $ | 408 | ||||||||
Summary of Unrecognized Tax Benefits | Reconciliation of Unrecognized Tax Benefits | |||||||||||
($ in millions) | 2014 | 2013 | ||||||||||
Balance at January 1 | $ | 202 | $ | 167 | ||||||||
Additions: | ||||||||||||
Tax positions of the current year | 75 | 59 | ||||||||||
Tax positions of prior years | 20 | — | ||||||||||
Reductions: | ||||||||||||
Prior year tax positions | (194 | ) | — | |||||||||
Settlements with tax authorities | — | (4 | ) | |||||||||
Expiration of the statute of limitation | (1 | ) | (20 | ) | ||||||||
Balance at December 31 | $ | 102 | $ | 202 | ||||||||
Related_Party_Transactions_Tab
Related Party Transactions (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Related Party Transactions [Abstract] | ||||||||||||
Schedule of Related Party Transactions | The following table sets forth the direct costs, indirect costs and interest expenses related to services and funding provided by GE for the periods indicated. | |||||||||||
($ in millions) | Years ended December 31, | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Direct costs(a) | $ | 294 | $ | 207 | $ | 184 | ||||||
Indirect costs(a) | 134 | 230 | 206 | |||||||||
Interest expense(b) | 113 | 157 | 155 | |||||||||
Total expenses for services and funding provided by GECC | $ | 541 | $ | 594 | $ | 545 | ||||||
_______________________ | ||||||||||||
(a) | Direct and indirect costs are included in the other expense line items in our Consolidated and Combined Statements of Earnings. | |||||||||||
(b) | Included in interest expense in our Consolidated and Combined Statements of Earnings. |
Parent_Company_Financial_Infor1
Parent Company Financial Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||
Condensed Statements of Earnings | Condensed Statements of Earnings | |||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||
Interest income: | ||||||||||||
Interest income from subsidiaries | $ | 85 | $ | 143 | $ | 154 | ||||||
Interest on investment securities | 1 | — | — | |||||||||
Total interest income | 86 | 143 | 154 | |||||||||
Interest expense: | ||||||||||||
Interest on third-party debt | (124 | ) | — | — | ||||||||
Interest on related party debt | (109 | ) | (143 | ) | (154 | ) | ||||||
Total interest expense | (233 | ) | (143 | ) | (154 | ) | ||||||
Net interest income | (147 | ) | — | — | ||||||||
Dividends from bank subsidiaries | 885 | 1,400 | 745 | |||||||||
Dividends from nonbank subsidiaries | 1,206 | 2,500 | — | |||||||||
Other income | 6 | — | — | |||||||||
Other expense: | ||||||||||||
Employee costs | 23 | — | — | |||||||||
Professional fees | 14 | — | — | |||||||||
Other(a) | 380 | 26 | — | |||||||||
Total other expense | 417 | 26 | — | |||||||||
Earnings before benefit from income taxes | 1,533 | 3,874 | 745 | |||||||||
Benefit from income taxes | 215 | 7 | — | |||||||||
Equity in undistributed net earnings of subsidiaries | 361 | (1,902 | ) | 1,374 | ||||||||
Net earnings | $ | 2,109 | $ | 1,979 | $ | 2,119 | ||||||
Comprehensive income | $ | 2,112 | $ | 1,964 | $ | 2,123 | ||||||
_____________ | ||||||||||||
(a) | Other expense primarily includes various intercompany charges that are eliminated in consolidation. | |||||||||||
Condensed Statements of Financial Position | Condensed Statements of Financial Position | |||||||||||
At December 31 ($ in millions) | 2014 | 2013 | ||||||||||
Assets | ||||||||||||
Cash and equivalents | $ | 5,643 | $ | — | ||||||||
Investment securities | 1,255 | — | ||||||||||
Investments in and amounts due from subsidiaries(a)(b)(c) | 16,723 | 14,713 | ||||||||||
Goodwill | 17 | 17 | ||||||||||
Other assets | 148 | 8 | ||||||||||
Total assets | $ | 23,786 | $ | 14,738 | ||||||||
Liabilities and Equity | ||||||||||||
Amounts due to subsidiaries | $ | 296 | $ | — | ||||||||
Bank term loan | 8,245 | — | ||||||||||
Senior unsecured notes | 3,593 | — | ||||||||||
Related party debt(b) | 655 | 8,764 | ||||||||||
Accrued expenses and other liabilities | 519 | 14 | ||||||||||
Total liabilities | 13,308 | 8,778 | ||||||||||
Equity: | ||||||||||||
Total equity | 10,478 | 5,960 | ||||||||||
Total liabilities and equity | $ | 23,786 | $ | 14,738 | ||||||||
_____________ | ||||||||||||
(a) | Includes investments in and amounts due from bank subsidiaries of $8.5 billion at December 31, 2014. | |||||||||||
(b) | Related party debt at December 31, 2013 included $195 million of related party debt issued by a subsidiary of the Company. As described in Note 16. Related Party Transactions, the portion of our parent’s total investment in our combined business on which we were assessed an interest cost is presented as related party debt at December 31, 2013. Except for the subsidiary-issued debt referred to above, we have reflected related party debt at December 31, 2013 as loans to the Company at the parent level. This funding was used by our subsidiaries and is reflected above as interest-bearing loan receivables. | |||||||||||
(c) | At December 31, 2013, $651 million of deposits issued by the Bank were held by GECC and have been reflected as being held by our company. While these amounts have been eliminated in our consolidated and combined financial statements, in accordance with the basis of presentation described in Note 2. Basis of Presentation and Summary of Significant Accounting Policies, we have presented them above as investments in and amounts due from subsidiaries. | |||||||||||
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows | |||||||||||
For the years ended December 31 ($ in millions) | 2014 | 2013 | 2012 | |||||||||
Cash flows - operating activities | ||||||||||||
Net earnings | $ | 2,109 | $ | 1,979 | $ | 2,119 | ||||||
Adjustments to reconcile net earnings to cash provided from operating activities | ||||||||||||
Deferred income taxes | (36 | ) | — | — | ||||||||
(Increase) decrease in other assets | 47 | (8 | ) | — | ||||||||
Increase (decrease) in accrued expenses and other liabilities | 489 | 13 | — | |||||||||
Equity in undistributed net earnings of subsidiaries | (361 | ) | 1,902 | (1,374 | ) | |||||||
All other operating activities | (223 | ) | — | — | ||||||||
Cash from operating activities | 2,025 | 3,886 | 745 | |||||||||
Cash flows - investing activities | ||||||||||||
Net (increase) decrease in investments in and amounts due from subsidiaries | (1,030 | ) | (1,848 | ) | 2,614 | |||||||
Purchases of investment securities | (1,256 | ) | — | — | ||||||||
All other investing activities | (2 | ) | — | — | ||||||||
Cash (used for) from investing activities | (2,288 | ) | (1,848 | ) | 2,614 | |||||||
Cash flows - financing activities | ||||||||||||
Third-party debt | ||||||||||||
Proceeds from issuance of third-party debt | 12,343 | — | — | |||||||||
Maturities and repayment of third-party debt | (505 | ) | — | — | ||||||||
Related party debt | ||||||||||||
Proceeds from issuance of related party debt | 1,615 | — | — | |||||||||
Maturities and repayment of related party debt | (9,820 | ) | (1,452 | ) | (1,490 | ) | ||||||
Proceeds from initial public offering | 2,842 | — | — | |||||||||
Net transfers to Parent | (603 | ) | (586 | ) | (1,869 | ) | ||||||
Increase (decrease) in amounts due to subsidiaries | 98 | — | — | |||||||||
All other financing activities | (64 | ) | — | — | ||||||||
Cash (used for) from financing activities | 5,906 | (2,038 | ) | (3,359 | ) | |||||||
Increase (decrease) in cash and equivalents | 5,643 | — | — | |||||||||
Cash and equivalents at beginning of year | — | — | — | |||||||||
Cash and equivalents at end of year | $ | 5,643 | $ | — | $ | — | ||||||
Selected_Quarterly_Financial_I1
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | ||||||||||||||||||||||||||||||||
Quarterly Periods Ended | ||||||||||||||||||||||||||||||||
($ in millions) | December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||||||||||
2014 | 2014 | 2014 | 2014 | 2013 | 2013 | 2013 | 2013 | |||||||||||||||||||||||||
Interest income | $ | 3,260 | $ | 3,123 | $ | 2,926 | $ | 2,933 | $ | 3,037 | $ | 2,886 | $ | 2,686 | $ | 2,704 | ||||||||||||||||
Interest expense | 282 | 244 | 206 | 190 | 188 | 183 | 178 | 193 | ||||||||||||||||||||||||
Net interest income | 2,978 | 2,879 | 2,720 | 2,743 | 2,849 | 2,703 | 2,508 | 2,511 | ||||||||||||||||||||||||
Earnings before provision for income taxes | 853 | 879 | 764 | 890 | 692 | 1,021 | 856 | 573 | ||||||||||||||||||||||||
Provision for income taxes | 322 | 331 | 292 | 332 | 249 | 380 | 320 | 214 | ||||||||||||||||||||||||
Net earnings | $ | 531 | $ | 548 | $ | 472 | $ | 558 | $ | 443 | $ | 641 | $ | 536 | $ | 359 | ||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||||||||
Basic | $ | 0.64 | $ | 0.7 | $ | 0.67 | $ | 0.79 | $ | 0.63 | $ | 0.91 | $ | 0.76 | $ | 0.51 | ||||||||||||||||
Diluted | $ | 0.64 | $ | 0.7 | $ | 0.67 | $ | 0.79 | $ | 0.63 | $ | 0.91 | $ | 0.76 | $ | 0.51 | ||||||||||||||||
Business_Description_Details
Business Description (Details) | 0 Months Ended | 3 Months Ended | 0 Months Ended |
In Thousands, unless otherwise specified | Aug. 05, 2014 | Sep. 30, 2014 | Sep. 03, 2014 |
General Electric | |||
Subsidiary, Sale of Stock [Line Items] | |||
Percentage of ownership after transaction | 84.60% | 84.60% | |
IPO | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares issued in IPO | 125,000 | 125,000 | |
Over-Allotment Option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Shares issued in IPO | 3,500 | 3,500 |
Basis_of_Presentation_and_Summ2
Basis of Presentation and Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 12 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 | Sep. 30, 2013 |
segment | |||
Financing Receivable, Impaired [Line Items] | |||
Number of Reportable Segments | 1 | ||
Financing receivables reclassified as accrual | $949 | ||
Credit cards | |||
Financing Receivable, Impaired [Line Items] | |||
Accrual period on past due balances | 180 days | 90 days |
Acquisitions_Details
Acquisitions (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 11, 2013 |
Business Acquisition [Line Items] | ||||
Goodwill | $949,000,000 | $949,000,000 | $936,000,000 | |
MetLife Bank, N.A. | ||||
Business Acquisition [Line Items] | ||||
Deposit liabilities | 6,400,000,000 | |||
Cash | 6,400,000,000 | |||
Deferred tax assets | 8,000,000 | |||
Goodwill | 13,000,000 | |||
Core Deposits | MetLife Bank, N.A. | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | 19,000,000 | |||
Other Intangible Assets | MetLife Bank, N.A. | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangibles | $8,000,000 |
Investment_Securities_Schedule
Investment Securities - Schedule of Available for Sale Securities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Equity | ||||
Amortized cost | $15 | $15 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Estimated fair value | 15 | 15 | ||
Total | ||||
Amortized cost | 1,598 | 251 | ||
Gross unrealized gains | 4 | 1 | ||
Gross unrealized losses | -4 | -16 | ||
Estimated fair value | 1,598 | 236 | ||
U.S. government and federal agency | ||||
Debt | ||||
Amortized cost | 1,252 | 0 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Estimated fair value | 1,252 | 0 | ||
State and municipal | ||||
Debt | ||||
Amortized cost | 57 | 53 | ||
Gross unrealized gains | 1 | 0 | ||
Gross unrealized losses | -1 | -7 | ||
Estimated fair value | 57 | 46 | ||
Residential mortgage-backed | ||||
Debt | ||||
Amortized cost | 271 | [1] | 183 | [1] |
Gross unrealized gains | 3 | [1] | 1 | [1] |
Gross unrealized losses | -3 | [1] | -9 | [1] |
Estimated fair value | 271 | [1] | 175 | [1] |
U.S. corporate debt | ||||
Debt | ||||
Amortized cost | 3 | 0 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Estimated fair value | $3 | $0 | ||
[1] | At December 31, 2014 and 2013 all of our residential mortgage-backed securities related to securities issued by government-sponsored entities and are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. All residential mortgage-backed securities are collateralized by U.S. mortgages. |
Investment_Securities_Continuo
Investment Securities - Continuous Unrealized Losses (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Estimated fair value | |||
Less than 12 months | $730,000,000 | $164,000,000 | |
12 months or more | 119,000,000 | 40,000,000 | |
Gross unrealized losses | |||
Less than 12 months | 0 | -9,000,000 | |
12 months or more | -4,000,000 | -7,000,000 | |
Other than temporary impairment | 0 | 0 | 0 |
State and municipal | |||
Estimated fair value | |||
Less than 12 months | 0 | 23,000,000 | |
12 months or more | 34,000,000 | 20,000,000 | |
Gross unrealized losses | |||
Less than 12 months | 0 | -2,000,000 | |
12 months or more | -1,000,000 | -5,000,000 | |
Residential mortgage-backed | |||
Estimated fair value | |||
Less than 12 months | 30,000,000 | 127,000,000 | |
12 months or more | 85,000,000 | 20,000,000 | |
Gross unrealized losses | |||
Less than 12 months | 0 | -7,000,000 | |
12 months or more | -3,000,000 | -2,000,000 | |
U.S. government and federal agency | |||
Estimated fair value | |||
Less than 12 months | 700,000,000 | ||
12 months or more | 0 | ||
Gross unrealized losses | |||
Less than 12 months | 0 | ||
12 months or more | 0 | ||
Equity | |||
Estimated fair value | |||
Less than 12 months | 14,000,000 | ||
12 months or more | 0 | ||
Gross unrealized losses | |||
Less than 12 months | 0 | ||
12 months or more | $0 |
Investment_Securities_Contract
Investment Securities - Contractual Maturities (Details) (State and municipal, USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
State and municipal | |
Amortized Cost | |
Within one year | $1,005 |
After one year through five years | 250 |
After five years through ten years | 1 |
After ten years | 56 |
Estimated Fair Value | |
Within one year | 1,005 |
After one year through five years | 250 |
After five years through ten years | 1 |
After ten years | $56 |
Loan_Receivables_and_Allowance2
Loan Receivables and Allowance for Loan Losses - Loan Receivables (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan receivable | $61,286 | [1],[2] | $57,254 | [1],[2] |
Loans and Leases Receivable, Deferred Income | 46 | 8 | ||
Variable Interest Entity, Primary Beneficiary | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan receivable | 27,000 | 26,100 | ||
Credit cards | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan receivable | 58,880 | 54,958 | ||
Consumer installment loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan receivable | 1,063 | 965 | ||
Commercial credit products | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan receivable | 1,320 | 1,317 | ||
Other | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan receivable | $23 | $14 | ||
[1] | At December 31, 2014 and 2013, loan receivables included deferred expense, net of deferred income, of $46 million and $8 million, respectively. | |||
[2] | Total loan receivables include $27.0 billion and $26.1 billion of restricted loans of consolidated securitization entities at December 31, 2014 and 2013, respectively. See Note 6. Variable Interest Entities for further information on these restricted loans. |
Loan_Receivables_and_Allowance3
Loan Receivables and Allowance for Loan Losses - Allowance for Loan Losses (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | $2,892 | $2,274 | $2,052 | |
Provision charged to operations | 2,917 | 3,072 | 2,565 | |
Gross charge-offs | -3,189 | -3,011 | -2,890 | |
Recoveries | 616 | 557 | 547 | |
Ending Balance | 3,236 | 2,892 | 2,274 | |
Credit cards | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 2,827 | 2,174 | 1,902 | |
Provision charged to operations | 2,858 | [1] | 2,970 | 2,438 |
Gross charge-offs | -3,111 | -2,847 | -2,680 | |
Recoveries | 595 | 530 | 514 | |
Ending Balance | 3,169 | 2,827 | 2,174 | |
Consumer installment loans | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 19 | 62 | 113 | |
Provision charged to operations | 20 | 49 | 54 | |
Gross charge-offs | -30 | -111 | -130 | |
Recoveries | 13 | 19 | 25 | |
Ending Balance | 22 | 19 | 62 | |
Commercial credit products | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 46 | 38 | 37 | |
Provision charged to operations | 39 | 53 | 69 | |
Gross charge-offs | -48 | -53 | -76 | |
Recoveries | 8 | 8 | 8 | |
Ending Balance | 45 | 46 | 38 | |
Other | ||||
Allowance for Loan and Lease Losses [Roll Forward] | ||||
Beginning Balance | 0 | 0 | 0 | |
Provision charged to operations | 0 | 0 | 4 | |
Gross charge-offs | 0 | 0 | -4 | |
Recoveries | 0 | 0 | 0 | |
Ending Balance | $0 | $0 | $0 | |
[1] | Includes a $61 million reduction in provision for loan losses associated with the classification of certain loan receivables as held for sale. |
Loan_Receivables_and_Allowance4
Loan Receivables and Allowance for Loan Losses - Delinquent and Non Accrual Status (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Financing Receivable, Past Due Amount | ||||
30-89 days delinquent | $1,374 | $1,367 | ||
90 or more days delinquent | 1,162 | 1,121 | ||
Total Past Due | 2,536 | 2,488 | ||
90 or more days delinquent and accruing | 1,160 | 1,119 | ||
Total non-accruing | 2 | 2 | ||
Financing Receivable, Percentage of Total Loan Receivables | ||||
Percentage of Total Loan Receivables, 30-89 Days Past Due | 2.20% | [1] | 2.40% | [1] |
Percentage of Total Loan Receivables, Equal to Greater than 90 Days Past Due | 1.90% | [1] | 2.00% | [1] |
Percentage of Total Loan Receivables, Past Due | 4.10% | [1] | 4.30% | [1] |
Percentage of Total Loan Receivables, 90 Days Past Due and Still Accruing | 1.90% | [1] | 2.00% | [1] |
Percentage of Total Loan Receivables, Nonaccrual Status | 0.00% | [1] | 0.00% | [1] |
Credit cards | ||||
Financing Receivable, Past Due Amount | ||||
30-89 days delinquent | 1,331 | 1,327 | ||
90 or more days delinquent | 1,147 | 1,105 | ||
Total Past Due | 2,478 | 2,432 | ||
90 or more days delinquent and accruing | 1,147 | 1,105 | ||
Total non-accruing | 0 | 0 | ||
Consumer installment loans | ||||
Financing Receivable, Past Due Amount | ||||
30-89 days delinquent | 15 | 12 | ||
90 or more days delinquent | 2 | 2 | ||
Total Past Due | 17 | 14 | ||
90 or more days delinquent and accruing | 0 | 0 | ||
Total non-accruing | 2 | 2 | ||
Commercial credit products | ||||
Financing Receivable, Past Due Amount | ||||
30-89 days delinquent | 28 | 28 | ||
90 or more days delinquent | 13 | 14 | ||
Total Past Due | 41 | 42 | ||
90 or more days delinquent and accruing | 13 | 14 | ||
Total non-accruing | $0 | $0 | ||
[1] | Percentages are calculated based on period-end balances |
Loan_Receivables_and_Allowance5
Loan Receivables and Allowance for Loan Losses - Loans Entered into a Loan Modification Program (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | $428 | $539 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | 423 | 506 |
Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | 0 | 26 |
Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | $5 | $7 |
Loan_Receivables_and_Allowance6
Loan Receivables and Allowance for Loan Losses - Classified as TDRs (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | $724 | $811 |
Related allowance | -220 | -251 |
Net recorded investment | 504 | 560 |
Unpaid principal balance | 621 | 704 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 716 | 799 |
Related allowance | -217 | -246 |
Net recorded investment | 499 | 553 |
Unpaid principal balance | 613 | 692 |
Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 0 | 0 |
Related allowance | 0 | 0 |
Net recorded investment | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 8 | 12 |
Related allowance | -3 | -5 |
Net recorded investment | 5 | 7 |
Unpaid principal balance | $8 | $12 |
Loan_Receivables_and_Allowance7
Loan Receivables and Allowance for Loan Losses - Financial Effects of TDRs (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | $56 | $81 | $77 |
Interest income that would have been recorded with original terms | 142 | 180 | 180 |
Average recorded investment | 755 | 902 | 993 |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | 56 | 79 | 75 |
Interest income that would have been recorded with original terms | 140 | 175 | 173 |
Average recorded investment | 745 | 890 | 908 |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | 0 | 1 | 1 |
Interest income that would have been recorded with original terms | 0 | 3 | 4 |
Average recorded investment | 0 | 0 | 80 |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | 0 | 1 | 1 |
Interest income that would have been recorded with original terms | 2 | 2 | 3 |
Average recorded investment | $10 | $12 | $5 |
Loan_Receivables_and_Allowance8
Loan Receivables and Allowance for Loan Losses - Payment Defaults (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
account | account | account | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | 29,472 | 30,780 | 43,833 |
Loans defaulted | $61 | $59 | $86 |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | 29,313 | 30,640 | 43,609 |
Loans defaulted | 60 | 56 | 82 |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | 0 | 98 | 129 |
Loans defaulted | 0 | 3 | 4 |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | 159 | 42 | 95 |
Loans defaulted | $1 | $0 | $0 |
Loan_Receivables_and_Allowance9
Loan Receivables and Allowance for Loan Losses - Credit Quality Indicators (Details) | Dec. 31, 2014 | Dec. 31, 2013 |
661 or higher | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 72.50% | 71.70% |
661 or higher | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 78.90% | 78.20% |
661 or higher | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 86.50% | 85.30% |
601 to 660 | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 19.90% | 20.00% |
601 to 660 | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 15.70% | 15.50% |
601 to 660 | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 8.60% | 9.40% |
600 or less | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 7.60% | 8.30% |
600 or less | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 5.40% | 6.30% |
600 or less | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 4.80% | 5.30% |
Recovered_Sheet1
Loan Receivables and Allowance for Loan Losses - Interest Income by Product (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | $12,216 | $11,295 | $10,300 |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 11,967 | 11,015 | 9,967 |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 99 | 129 | 176 |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 149 | 150 | 156 |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | $1 | $1 | $1 |
Recovered_Sheet2
Loan Receivables and Allowance for Loan Losses - Narrative (Details) (USD $) | 12 Months Ended | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
retail_partner | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables held for sale (Note 5) | $332,000,000 | $332,000,000 | $0 |
Maximum period for temporary modification program | 12 months | ||
Maximum maturity period for loans in permanent modification program | 60 months | ||
Percentage of loan receivable with no FICO score | 0.80% | 0.80% | 1.10% |
Credit Card Receivable [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of retail partners | 1 | 2 | |
Loan receivables held for sale (Note 5) | 332,000,000 | 332,000,000 | |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Reduction in provision for loan losses | 61,000,000 | ||
Unused line of credit | 297,000,000,000 | 297,000,000,000 | 277,000,000,000 |
Other income | Credit Card Receivable [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Gain (loss) on sale of credit card portfolio | $46,000,000 |
Variable_Interest_Entities_Det
Variable Interest Entities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
In Millions, unless otherwise specified | ||||||
Variable Interest Entity [Line Items] | ||||||
Loan receivables, net | $58,050 | $54,362 | ||||
Other assets | 2,431 | [1] | 919 | [1] | ||
Total assets | 75,707 | 59,085 | ||||
Total liabilities | 65,229 | 53,125 | ||||
Allowance for loan losses | 3,236 | 2,892 | 2,274 | 2,052 | ||
Loan receivable | 61,286 | [2],[3] | 57,254 | [2],[3] | ||
Variable Interest Entity, Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Loan receivables, net | 25,645 | [4] | 24,766 | [4] | ||
Other assets | 1,134 | 20 | ||||
Total assets | 26,779 | 24,786 | ||||
Borrowings | 14,967 | 15,362 | ||||
Other liabilities | 368 | 228 | ||||
Total liabilities | 15,335 | 15,590 | ||||
Allowance for loan losses | 1,300 | 1,300 | ||||
Loan receivable | $27,000 | $26,100 | ||||
[1] | Other assets include restricted cash and equivalents of $1,104 million and $76 million at December 31, 2014 and 2013, respectively. | |||||
[2] | At December 31, 2014 and 2013, loan receivables included deferred expense, net of deferred income, of $46 million and $8 million, respectively. | |||||
[3] | Total loan receivables include $27.0 billion and $26.1 billion of restricted loans of consolidated securitization entities at December 31, 2014 and 2013, respectively. See Note 6. Variable Interest Entities for further information on these restricted loans. | |||||
[4] | Includes $1.3 billion of related allowance for loan losses for both periods presented, resulting in gross restricted loans of $27.0 billion and $26.1 billion at December 31, 2014 and 2013, respectively. |
Variable_Interest_Entities_Nar
Variable Interest Entities - Narrative (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Variable Interest Entity [Line Items] | |||||||||||
Interest and fees on loans | $12,216,000,000 | $11,295,000,000 | $10,300,000,000 | ||||||||
Provision charged to operations | 2,917,000,000 | 3,072,000,000 | 2,565,000,000 | ||||||||
Interest expense | 282,000,000 | 244,000,000 | 206,000,000 | 190,000,000 | 188,000,000 | 183,000,000 | 178,000,000 | 193,000,000 | 922,000,000 | 742,000,000 | 745,000,000 |
Variable Interest Entity, Primary Beneficiary | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Intercompany payable | 9,000,000 | 4,100,000,000 | 9,000,000 | 4,100,000,000 | |||||||
Intercompany receivable | 3,300,000,000 | 3,300,000,000 | |||||||||
Interest and fees on loans | 5,200,000,000 | 5,300,000,000 | 4,800,000,000 | ||||||||
Provision charged to operations | 1,100,000,000 | 1,200,000,000 | 1,300,000,000 | ||||||||
Interest expense | 215,000,000 | 211,000,000 | 228,000,000 | ||||||||
Other Assets | Variable Interest Entity, Primary Beneficiary | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Restricted cash and cash equivalents | 1,000,000,000 | 1,000,000,000 | |||||||||
General Electric Capital Corporation Affiliate | Other Assets | Variable Interest Entity, Primary Beneficiary | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Due from related parties | 75,000,000 | 75,000,000 | |||||||||
Subservicing Agreement | General Electric Capital Corporation | General Electric Capital Corporation Affiliate | |||||||||||
Variable Interest Entity [Line Items] | |||||||||||
Due from related parties | $36,000,000 | $36,000,000 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets- Schedule of Goodwill (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill [Roll Forward] | ||
Beginning balance | $949 | $936 |
Acquisitions | 0 | 13 |
Ending balance | $949 | $949 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $969 | $641 |
Accumulated amortization | -450 | -341 |
Net | 519 | 300 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 849 | 586 |
Accumulated amortization | -405 | -312 |
Net | 444 | 274 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 120 | 55 |
Accumulated amortization | -45 | -29 |
Net | $75 | $26 |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets Narrative (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired | $328 | ||
Customer-related | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired | 263 | ||
Weighted average useful life of finite-lived intangible assets acquired | 8 years | ||
Marketing Expense | Retail Partner Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | 81 | 60 | 53 |
Other Expense | Finite-Lived Intangible Assets, Excluding Retail Partner Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $28 | $23 | $15 |
Goodwill_and_Other_Intangible_5
Goodwill and Other Intangible Assets- Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Amortization expense, 2015 | $116 |
Amortization expense, 2016 | 114 |
Amortization expense, 2017 | 92 |
Amortization expense, 2018 | 64 |
Amortization expense, 2019 | $54 |
Deposits_Details
Deposits (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Banking and Thrift [Abstract] | ||||
Interest-bearing deposits, amount | $34,847 | $25,360 | ||
Interest-bearing deposits, average rate | 1.60% | [1] | 1.70% | [1] |
Non-interest-bearing deposits, amount | 108 | 359 | ||
Total deposits | $34,955 | $25,719 | ||
[1] | Based on interest expense for the years ended December 31, 2014 and 2013 and average deposits balances. |
Deposits_Maturity_Schedule_Det
Deposits - Maturity Schedule (Details) (USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Banking and Thrift [Abstract] | |
2015 | $11,626 |
2016 | 3,453 |
2017 | 2,556 |
2018 | 1,894 |
2019 | 3,880 |
Thereafter | $2,693 |
Deposits_Narrative_Details
Deposits - Narrative (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Interest bearing deposits with certificates of $100,000 or more | $9,400,000,000 | $5,700,000,000 |
Program Arranger | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Broker network deposit sweeps | 2,600,000,000 | |
Brokered network deposit sweeps terminating in the next fiscal year | 2,400,000,000 | |
Brokered network deposit sweeps terminating in two fiscal years | 262,000,000 | |
Demand deposits | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Demand deposits | $6,100,000,000 |
Borrowings_Borrowings_Details
Borrowings - Borrowings (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Amount | ||||
Related party debt | $655 | [1] | $8,959 | [1] |
Total borrowings | 27,460 | [1] | 24,321 | [1] |
Average rate | ||||
Related party debt | 4.20% | 1.70% | [1] | |
Senior unsecured notes | ||||
Amount | ||||
Unsecured debt | 3,593 | [1] | 0 | [1] |
Average rate | ||||
Weighted average interest rate | 3.40% | 0.00% | ||
New Bank Term Loan Facility | ||||
Amount | ||||
Unsecured debt | 8,245 | [1] | 0 | [1] |
Average rate | ||||
Weighted average interest rate | 2.10% | 0.00% | ||
Variable Interest Entity, Primary Beneficiary | ||||
Amount | ||||
Borrowings of consolidated securitization entities | $14,967 | [1] | $15,362 | [1] |
Average rate | ||||
Weighted average interest rate | 1.20% | 1.20% | ||
[1] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. |
Borrowings_Borrowings_Maturity
Borrowings - Borrowings Maturity Schedule (Details) (Variable Interest Entity, Primary Beneficiary, USD $) | Dec. 31, 2014 |
In Millions, unless otherwise specified | |
Variable Interest Entity, Primary Beneficiary | |
Debt Instrument [Line Items] | |
2015 | $2,604 |
2016 | 2,165 |
2017 | 7,351 |
2018 | 1,684 |
2019 | 1,163 |
Thereafter | $0 |
Borrowings_Narrative_Details
Borrowings - Narrative (Details) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 2 Months Ended | 0 Months Ended | ||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 05, 2014 | Oct. 31, 2014 | Aug. 11, 2014 | Feb. 20, 2015 | Dec. 31, 2014 | Feb. 02, 2015 | ||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of related party debt | $10,015,000,000 | $1,649,000,000 | $1,099,000,000 | |||||||||
Related party debt | 655,000,000 | [1] | 8,959,000,000 | [1] | 655,000,000 | [1] | ||||||
General Electric Capital Corporation Affiliate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of related party debt | 8,000,000,000 | |||||||||||
Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Related party debt | 449,000,000 | |||||||||||
New Bank Term Loan Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility, increase (decrease), net | 750,000,000 | |||||||||||
Weighted average interest rate | 2.10% | 0.00% | 2.10% | |||||||||
Unsecured debt | 8,245,000,000 | [1] | 0 | [1] | 8,245,000,000 | [1] | ||||||
Unsecured Debt | New Bank Term Loan Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | 8,000,000,000 | |||||||||||
Repayment of third party debt | 505,000,000 | |||||||||||
Weighted average interest rate | 2.06% | 2.06% | ||||||||||
Unsecured Debt | New Bank Term Loan Facility | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayment of third party debt | 2,500,000,000 | |||||||||||
Unsecured debt | 5,700,000,000 | |||||||||||
Unsecured Debt | New Bank Term Loan Facility | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 0.90% | |||||||||||
Unsecured Debt | New Bank Term Loan Facility | Base Rate | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 0.65% | |||||||||||
Unsecured Debt | New Bank Term Loan Facility | Base Rate | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 1.40% | |||||||||||
Unsecured Debt | New Bank Term Loan Facility | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 1.90% | |||||||||||
Unsecured Debt | New Bank Term Loan Facility | LIBOR | Minimum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 1.65% | |||||||||||
Unsecured Debt | New Bank Term Loan Facility | LIBOR | Maximum | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 2.40% | |||||||||||
Unsecured Debt | New GECC Term Loan Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of related party debt | 845,000,000 | |||||||||||
Unsecured Debt | New GECC Term Loan Facility | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Repayments of related party debt | 206,000,000 | |||||||||||
Senior unsecured notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | 3,600,000,000 | |||||||||||
Weighted average interest rate | 3.40% | 0.00% | 3.40% | |||||||||
Unsecured debt | 3,593,000,000 | [1] | 0 | [1] | 3,593,000,000 | [1] | ||||||
Senior unsecured notes | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | 1,000,000,000 | |||||||||||
Senior unsecured notes | 1.875% Senior Notes Due 2017 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | 500,000,000 | |||||||||||
Stated interest rate | 1.88% | |||||||||||
Senior unsecured notes | 3% Senior Notes Due 2019 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | 1,100,000,000 | |||||||||||
Stated interest rate | 3.00% | |||||||||||
Senior unsecured notes | 3.75% Percent Senior Notes Due 2021 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | 750,000,000 | |||||||||||
Stated interest rate | 3.75% | |||||||||||
Senior unsecured notes | 4.25% Senior Notes Due 2024 | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | 1,250,000,000 | |||||||||||
Stated interest rate | 4.25% | |||||||||||
Senior unsecured notes | 2.700% Senior Notes Due 2020 | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | 750,000,000 | |||||||||||
Stated interest rate | 2.70% | |||||||||||
Senior unsecured notes | Floating Rate Senior Notes Due 2020 | Subsequent Event | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | 250,000,000 | |||||||||||
Variable Interest Entity, Primary Beneficiary | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Undrawn secured borrowing commitments | 6,100,000,000 | 6,100,000,000 | ||||||||||
Proceeds from issuance of third party debt | 5,200,000,000 | 866,000,000 | ||||||||||
Weighted average interest rate | 1.20% | 1.20% | 1.20% | |||||||||
General Electric Capital Corporation | Unsecured Debt | New GECC Term Loan Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Principal amount | $1,500,000,000 | |||||||||||
General Electric Capital Corporation | Unsecured Debt | New GECC Term Loan Facility | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 3.00% | |||||||||||
General Electric Capital Corporation | Unsecured Debt | New GECC Term Loan Facility | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Basis spread on variable rate | 4.00% | |||||||||||
[1] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. |
Fair_Value_Measurement_Recurri
Fair Value Measurement - Recurring Fair Value Measurements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity securities | $15 | $15 | ||
Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity securities | 15 | 15 | ||
Total | 1,598 | 236 | ||
Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity securities | 15 | 15 | ||
Total | 15 | 15 | ||
Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity securities | 0 | 0 | ||
Total | 1,523 | 175 | ||
Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity securities | 0 | 0 | ||
Total | 60 | 46 | ||
U.S. Government and Federal Agency | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 1,252 | 0 | ||
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 1,252 | |||
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 0 | |||
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 1,252 | |||
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 0 | |||
State and municipal | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 57 | 46 | ||
State and municipal | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 57 | 46 | ||
State and municipal | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 0 | 0 | ||
State and municipal | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 0 | 0 | ||
State and municipal | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 57 | 46 | ||
Residential mortgage-backed | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 271 | [1] | 175 | [1] |
Residential mortgage-backed | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 271 | 175 | ||
Residential mortgage-backed | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 0 | 0 | ||
Residential mortgage-backed | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 271 | 175 | ||
Residential mortgage-backed | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 0 | 0 | ||
U.S Corporate | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 3 | 0 | ||
U.S Corporate | Fair Value, Measurements, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 3 | |||
U.S Corporate | Fair Value, Measurements, Recurring | Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 0 | |||
U.S Corporate | Fair Value, Measurements, Recurring | Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | 0 | |||
U.S Corporate | Fair Value, Measurements, Recurring | Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt securities | $3 | |||
[1] | At December 31, 2014 and 2013 all of our residential mortgage-backed securities related to securities issued by government-sponsored entities and are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. All residential mortgage-backed securities are collateralized by U.S. mortgages. |
Fair_Value_Measurement_Changes
Fair Value Measurement - Changes in Level 3 Instruments (Details) (Fair Value, Measurements, Recurring, USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $46 | $39 |
Net realized/unrealized gains (losses) included in accumulated other comprehensive income | 7 | -4 |
Purchases | 11 | 16 |
Settlements | -4 | -5 |
Balance at end of period | 60 | 46 |
Net change in unrealized gains (losses) relating to instruments still held at December 31 | $7 | ($4) |
Fair_Value_Measurement_Fair_Va
Fair Value Measurement - Fair Value Asset and Liabilities Carried at Other than Fair Value (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Carrying Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and equivalents | $11,828 | [1] | $2,319 | |
Other assets | 1,104 | [2] | 76 | [2] |
Loan receivables, net | 58,050 | 54,362 | ||
Loan receivables held for sale(d) | 332 | |||
Deposits | 34,955 | 25,719 | ||
Related party debt | 655 | 8,959 | [3] | |
Total | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and equivalents | 11,828 | [1] | 2,319 | |
Other assets | 1,104 | [2] | 76 | [2] |
Loan receivables, net | 64,113 | 60,344 | ||
Loan receivables held for sale(d) | 351 | |||
Deposits | 35,442 | 25,994 | ||
Related party debt | 655 | 209 | [3] | |
Level 1 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and equivalents | 8,153 | [1] | 2,319 | |
Other assets | 1,104 | [2] | 76 | [2] |
Level 2 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Cash and equivalents | 3,675 | [1] | ||
Deposits | 35,442 | 25,994 | ||
Related party debt | 209 | [3] | ||
Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Loan receivables, net | 64,113 | 60,344 | ||
Loan receivables held for sale(d) | 351 | |||
Related party debt | 655 | |||
Variable Interest Entity, Primary Beneficiary | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Related party debt | 195 | |||
Variable Interest Entity, Primary Beneficiary | Carrying Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Borrowings of consolidated securitization entities | 14,967 | 15,362 | ||
Variable Interest Entity, Primary Beneficiary | Total | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Borrowings of consolidated securitization entities | 14,985 | 15,308 | ||
Variable Interest Entity, Primary Beneficiary | Level 2 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Borrowings of consolidated securitization entities | 7,912 | 8,206 | ||
Variable Interest Entity, Primary Beneficiary | Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Borrowings of consolidated securitization entities | 7,073 | 7,102 | ||
Unsecured Debt | Carrying Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument | 8,245 | |||
Unsecured Debt | Total | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument | 8,204 | |||
Unsecured Debt | Level 3 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument | 8,204 | |||
Senior unsecured notes | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Unsecured debt | 3,593 | [4] | 0 | [4] |
Senior unsecured notes | Carrying Value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument | 3,593 | |||
Senior unsecured notes | Total | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument | 3,660 | |||
Senior unsecured notes | Level 2 | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument | $3,660 | |||
[1] | For cash and cash equivalents carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less. | |||
[2] | This balance relates to restricted cash and equivalents which is included in other assets. | |||
[3] | The fair value of the related party debt at December 31, 2013 relates to $195 million of debt issued by one of our securitization entities which was held by a GECC affiliate. This related party debt was repurchased by the Company during the year ended December 31, 2014 and is now eliminated in our consolidated and combined financial statements at December 31, 2014. | |||
[4] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. |
Regulatory_and_Capital_Adequac2
Regulatory and Capital Adequacy (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Total risk-based capital | ||||
Actual | $7,100 | $6,010 | ||
Actual (percent) | 17.10% | [1] | 17.30% | [1] |
Minimum for capital adequacy purposes | 3,322 | [2] | 2,784 | [2] |
Minimum for capital adequacy purposes (percent) | 8.00% | [2] | 8.00% | [2] |
Minimum to be well-capitalized under prompt corrective action provisions | 4,152 | 3,480 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 10.00% | 10.00% | ||
Tier 1 risk-based capital | ||||
Actual | 6,559 | 5,559 | ||
Actual (percent) | 15.80% | [1] | 16.00% | [1] |
Minimum for capital adequacy purposes | 1,661 | [2] | 1,392 | [2] |
Minimum for capital adequacy purposes (percent) | 4.00% | [2] | 4.00% | [2] |
Minimum to be well-capitalized under prompt corrective action provisions | 2,491 | 2,088 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 6.00% | 6.00% | ||
Tier 1 leverage | ||||
Actual | 6,559 | 5,559 | ||
Actual (percent) | 13.40% | [1] | 14.90% | [1] |
Minimum for capital adequacy purposes | 1,959 | [2] | 1,495 | [2] |
Minimum for capital adequacy purposes (percent) | 4.00% | [2] | 4.00% | [2] |
Minimum to be well-capitalized under prompt corrective action provisions | $2,449 | $1,869 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 5.00% | 5.00% | ||
[1] | Represent Basel I capital ratios calculated for the Bank. | |||
[2] | In addition to the Basel I requirements, under the Bank’s Operating Agreement with the OCC entered into on January 11, 2013, the Bank must maintain minimum levels of capital as follows:At December 31 ($ in millions)2014 2013 Amount Ratio Amount RatioTotal risk-based capital$4,568 11.0% $3,828 11.0%Tier 1 risk-based capital$2,907 7.0% $2,436 7.0%Tier 1 leverage$2,938 6.0% $2,243 6.0% |
Regulatory_and_Capital_Adequac3
Regulatory and Capital Adequacy - OCC Requirements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Millions, unless otherwise specified | ||||
Total risk-based capital | ||||
Minimum for capital adequacy purposes | $3,322 | [1] | $2,784 | [1] |
Minimum for capital adequacy purposes (percent) | 8.00% | [1] | 8.00% | [1] |
Tier 1 risk-based capital | ||||
Minimum for capital adequacy purposes | 1,661 | [1] | 1,392 | [1] |
Minimum for capital adequacy purposes (percent) | 4.00% | [1] | 4.00% | [1] |
Tier 1 leverage | ||||
Minimum for capital adequacy purposes | 1,959 | [1] | 1,495 | [1] |
Minimum for capital adequacy purposes (percent) | 4.00% | [1] | 4.00% | [1] |
Office of the Comptroller of the Currency | ||||
Total risk-based capital | ||||
Minimum for capital adequacy purposes | 4,568 | 3,828 | ||
Minimum for capital adequacy purposes (percent) | 11.00% | 11.00% | ||
Tier 1 risk-based capital | ||||
Minimum for capital adequacy purposes | 2,907 | 2,436 | ||
Minimum for capital adequacy purposes (percent) | 7.00% | 7.00% | ||
Tier 1 leverage | ||||
Minimum for capital adequacy purposes | $2,938 | $2,243 | ||
Minimum for capital adequacy purposes (percent) | 6.00% | 6.00% | ||
[1] | In addition to the Basel I requirements, under the Bank’s Operating Agreement with the OCC entered into on January 11, 2013, the Bank must maintain minimum levels of capital as follows:At December 31 ($ in millions)2014 2013 Amount Ratio Amount RatioTotal risk-based capital$4,568 11.0% $3,828 11.0%Tier 1 risk-based capital$2,907 7.0% $2,436 7.0%Tier 1 leverage$2,938 6.0% $2,243 6.0% |
Employee_Benefit_Plans_Narrati
Employee Benefit Plans- Narrative (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic benefit cost | $164 | $124 | $107 |
General Electric | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of match | 50.00% | ||
Maximum annual contributions per employee, percent | 8.00% |
Earnings_Per_Share_Basic_and_D
Earnings Per Share - Basic and Diluted Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Abstract] | |||||||||||
Net earnings | $531 | $548 | $472 | $558 | $443 | $641 | $536 | $359 | $2,109 | $1,979 | $2,119 |
Weighted average common shares outstanding, basic (in shares) | 757.4 | 705.3 | 705.3 | ||||||||
Effect of dilutive securities (in shares) | 0.2 | 0 | 0 | ||||||||
Weighted average common shares outstanding, dilutive (in shares) | 757.6 | 705.3 | 705.3 | ||||||||
Earnings per basic common share (in usd per share) | $0.64 | $0.70 | $0.67 | $0.79 | $0.63 | $0.91 | $0.76 | $0.51 | $2.78 | $2.81 | $3 |
Earnings per diluted common share (in usd per share) | $0.64 | $0.70 | $0.67 | $0.79 | $0.63 | $0.91 | $0.76 | $0.51 | $2.78 | $2.81 | $3 |
Earnings_Per_Share_Narrative_D
Earnings Per Share - Narrative (Details) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
Earnings Per Share [Abstract] | |
Antidilutive securities excluded from computation of earnings per share, amount | 6 |
Equity_and_Other_Stock_Related1
Equity and Other Stock Related Information Equity and Other Stock Related Information (Details) (USD $) | 0 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Aug. 05, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 03, 2014 | Jul. 31, 2014 |
Subsidiary, Sale of Stock [Line Items] | |||||||
Common stock shares outstanding | 705,000,000 | 833,764,589 | |||||
Proceeds from initial public offering | $2,800 | $2,842 | $0 | $0 | |||
Unrecognized compensation cost related to non-vested RSUs and Options | 111 | ||||||
IPO | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Shares issued in IPO | 125,000,000 | 125,000,000 | |||||
Price per share (in usd per share) | $23 | ||||||
Over-Allotment Option | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Shares issued in IPO | 3,500,000 | 3,500,000 | |||||
General Electric | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Percentage of ownership after transaction | 84.60% | 84.60% | |||||
Transitional trademark license agreement, minimum required ownership percentage of common stock | 50.00% | ||||||
Unrecognized compensation cost related to non-vested stock options | $14 | ||||||
Restricted Stock Units | IPO | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Restricted stock units | 3,300,000 | ||||||
Vesting period | 4 years | ||||||
Employee Stock Option | IPO | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock options outstanding | 4,900,000 | ||||||
Vesting period | 4 years | ||||||
Employee Stock Option | General Electric | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Expiration period | 10 years | ||||||
Employee Stock Option | General Electric | Minimum | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Vesting period | 1 year | ||||||
Employee Stock Option | General Electric | Maximum | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Vesting period | 5 years | ||||||
2014 annual grant | Restricted Stock Units | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Restricted stock units | 500,000 | ||||||
Share-based compensation, annual vesting percentage | 20.00% | ||||||
2014 annual grant | Employee Stock Option | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock options outstanding | 700,000 | ||||||
Share-based compensation, annual vesting percentage | 20.00% | ||||||
Common Stock | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Stock split, conversion ratio | 5,262.35 | ||||||
Common stock shares outstanding | 833,765,000 | ||||||
Shares issued in IPO | 128,494,000 |
Income_Taxes_Income_Taxes_Earn
Income Taxes Income Taxes- Earnings Before Income Tax Provision (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Before Provision For Income Taxes | |||||||||||
U.S. | $3,377 | $3,124 | $3,352 | ||||||||
Non-U.S. | 9 | 18 | 24 | ||||||||
Earnings before benefit from income taxes | $853 | $879 | $764 | $890 | $692 | $1,021 | $856 | $573 | $3,386 | $3,142 | $3,376 |
Income_Taxes_Significant_Compo
Income Taxes- Significant Components of Income Tax Provision (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current provision for income taxes | |||||||||||
U.S. Federal | ($1,320) | ($1,280) | ($1,152) | ||||||||
Non-U.S. | -7 | -5 | -7 | ||||||||
U.S. state and local | -153 | -115 | -116 | ||||||||
Total current provision for income taxes | -1,480 | -1,400 | -1,275 | ||||||||
Deferred benefit (provision) for income taxes | |||||||||||
U.S. Federal | 181 | 215 | 16 | ||||||||
Non-U.S. | -1 | 1 | 0 | ||||||||
U.S. state and local | 23 | 21 | 2 | ||||||||
Deferred benefit (provision) for income taxes from temporary differences | 203 | 237 | 18 | ||||||||
Total provision for income taxes | ($322) | ($331) | ($292) | ($332) | ($249) | ($380) | ($320) | ($214) | ($1,277) | ($1,163) | ($1,257) |
Income_Taxes_Effective_Income_
Income Taxes- Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Effective Income Tax Rate Reconciliation | |||
U.S. federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
U.S. state and local income taxes, net of federal benefit | 2.50% | 1.90% | 2.20% |
All other, net | 0.20% | 0.10% | 0.00% |
Effective tax rate | 37.70% | 37.00% | 37.20% |
Income_Taxes_Deferred_Tax_Asse
Income Taxes- Deferred Tax Assets and Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Assets | ||
Allowance for loan losses | $1,147 | $1,027 |
Reward programs | 68 | 34 |
State and local income taxes | 56 | 40 |
State net operating losses | 12 | 0 |
Other assets | 100 | 55 |
Total deferred income tax assets before valuation allowance | 1,383 | 1,156 |
Valuation allowance | -10 | 0 |
Total deferred income tax assets | 1,373 | 1,156 |
Liabilities | ||
Original issue discount | -488 | -508 |
Goodwill and identifiable intangibles | -229 | -216 |
Other liabilities | -53 | -24 |
Total deferred income tax liabilities | -770 | -748 |
Net deferred income tax assets | $603 | $408 |
Income_Taxes_Narrative_Details
Income Taxes- Narrative (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | |||
Operating Loss Carryforwards [Line Items] | |||
Temporary differences due to investments in non-U..S. subsidiaries | $23 | $20 | |
Operating loss carryforward | 19 | ||
State net operating losses | 12 | 0 | |
Valuation allowance, gross | 16 | ||
Valuation allowance | 10 | 0 | |
Unrecognized tax benefits | 102 | 202 | 167 |
Unrecognized tax benefits that would impact effective tax rate | 68 | 131 | |
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | 520 | ||
Unrecognized tax benefits | $21 |
Income_Taxes_Unrecognized_Tax_
Income Taxes- Unrecognized Tax Benefits (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $202 | $167 |
Additions: | ||
Tax positions of the current year | 75 | 59 |
Tax positions of prior years | 20 | 0 |
Reductions: | ||
Prior year tax positions | -194 | 0 |
Settlements with tax authorities | 0 | -4 |
Expiration of the statute of limitation | -1 | -20 |
Ending balance | $102 | $202 |
Income_Taxes_Unrecognized_Tax_1
Income Taxes- Unrecognized Tax Benefits Additional Information (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 |
Income Tax Contingency [Line Items] | ||||
Tax positions of prior years | $20 | $0 | ||
Unrecognized tax benefits | 102 | 202 | 167 | 102 |
Interest expense | 5 | 5 | 3 | |
Income tax related interest and penalties, accrued | 1 | 17 | 1 | |
State and Local Jurisdiction | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefits | 21 | 21 | ||
General Electric Capital Corporation | ||||
Income Tax Contingency [Line Items] | ||||
Tax positions of prior years | 194 | |||
Increase in additional paid in capital related to TSSA | $147 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Related Party Transaction [Line Items] | ||||||
Interest expense | $113 | $157 | $155 | |||
General Electric | ||||||
Related Party Transaction [Line Items] | ||||||
Total expenses for services and funding provided by GECC | 541 | 594 | 545 | |||
Other Expense | Direct costs | General Electric | ||||||
Related Party Transaction [Line Items] | ||||||
Selling, general and administrative expenses | 294 | [1] | 207 | [1] | 184 | [1] |
Other Expense | Indirect costs | General Electric | ||||||
Related Party Transaction [Line Items] | ||||||
Selling, general and administrative expenses | 134 | [1] | 230 | [1] | 206 | [1] |
Interest Expense | General Electric | ||||||
Related Party Transaction [Line Items] | ||||||
Interest expense | $113 | [2] | $157 | [2] | $155 | [2] |
[1] | Direct and indirect costs are included in the other expense line items in our Consolidated and Combined Statements of Earnings. | |||||
[2] | Included in interest expense in our Consolidated and Combined Statements of Earnings. |
Related_Party_Transactions_Nar
Related Party Transactions - Narrative (Details) | 0 Months Ended |
Aug. 05, 2014 | |
Related Party Transaction [Line Items] | |
Transitional trademark license agreement, allowable period after ownership percentage is not met | 3 years |
General Electric | |
Related Party Transaction [Line Items] | |
Employee matters agreement, minimum required ownership percentage of common stock | 50.00% |
Transitional trademark license agreement, minimum required ownership percentage of common stock | 50.00% |
Parent_Company_Financial_Infor2
Parent Company Financial Information- Additional Information (Details) (Subsidiaries, USD $) | Dec. 31, 2014 |
In Billions, unless otherwise specified | |
Subsidiaries | |
Condensed Financial Statements, Captions [Line Items] | |
Restricted Assets | $8 |
Parent_Company_Financial_Infor3
Parent Company Financial Information- Condensed Statements of Earnings (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Condensed Income Statements, Captions [Line Items] | ||||||||||||||
Interest on investment securities | $26 | $18 | $9 | |||||||||||
Total interest income | 3,260 | 3,123 | 2,926 | 2,933 | 3,037 | 2,886 | 2,686 | 2,704 | 12,242 | 11,313 | 10,309 | |||
Interest on third-party debt | -124 | 0 | 0 | |||||||||||
Interest on related party debt | -113 | -157 | -155 | |||||||||||
Total interest expense | -282 | -244 | -206 | -190 | -188 | -183 | -178 | -193 | -922 | -742 | -745 | |||
Net interest income | 2,978 | 2,879 | 2,720 | 2,743 | 2,849 | 2,703 | 2,508 | 2,511 | 11,320 | 10,571 | 9,564 | |||
Other income | 102 | 65 | 87 | |||||||||||
Employee costs | 866 | 698 | 620 | |||||||||||
Professional fees | 607 | 486 | 451 | |||||||||||
Other | 782 | 838 | 679 | |||||||||||
Earnings before benefit from income taxes | 853 | 879 | 764 | 890 | 692 | 1,021 | 856 | 573 | 3,386 | 3,142 | 3,376 | |||
Benefit from income taxes | -322 | -331 | -292 | -332 | -249 | -380 | -320 | -214 | -1,277 | -1,163 | -1,257 | |||
Net earnings | 531 | 548 | 472 | 558 | 443 | 641 | 536 | 359 | 2,109 | 1,979 | 2,119 | |||
Comprehensive income | 2,112 | 1,964 | 2,123 | |||||||||||
Parent Company | ||||||||||||||
Condensed Income Statements, Captions [Line Items] | ||||||||||||||
Interest income from subsidiaries | 85 | 143 | 154 | |||||||||||
Interest on investment securities | 1 | 0 | 0 | |||||||||||
Total interest income | 86 | 143 | 154 | |||||||||||
Interest on third-party debt | -124 | 0 | 0 | |||||||||||
Interest on related party debt | -109 | -143 | -154 | |||||||||||
Total interest expense | -233 | -143 | -154 | |||||||||||
Net interest income | -147 | 0 | 0 | |||||||||||
Dividends from bank subsidiaries | 885 | 1,400 | 745 | |||||||||||
Dividends from nonbank subsidiaries | 1,206 | 2,500 | 0 | |||||||||||
Other income | 6 | 0 | 0 | |||||||||||
Employee costs | 23 | 0 | 0 | |||||||||||
Professional fees | 14 | 0 | 0 | |||||||||||
Other | 380 | [1] | 26 | [1] | 0 | [1] | ||||||||
Total other expense | 417 | 26 | 0 | |||||||||||
Earnings before benefit from income taxes | 1,533 | 3,874 | 745 | |||||||||||
Benefit from income taxes | 215 | 7 | 0 | |||||||||||
Equity in undistributed net earnings of subsidiaries | 361 | -1,902 | 1,374 | |||||||||||
Net earnings | 2,109 | 1,979 | 2,119 | |||||||||||
Comprehensive income | $2,112 | $1,964 | $2,123 | |||||||||||
[1] | Other expense primarily includes various intercompany charges that are eliminated in consolidation. |
Parent_Company_Financial_Infor4
Parent Company Financial Information- Condensed Statements of Financial Position (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
In Millions, unless otherwise specified | ||||||
Assets | ||||||
Cash and equivalents | $11,828 | $2,319 | $1,334 | $1,187 | ||
Investment securities (Note 4) | 1,598 | 236 | ||||
Goodwill | 949 | 949 | 936 | |||
Other assets | 2,431 | [1] | 919 | [1] | ||
Total assets | 75,707 | 59,085 | ||||
Liabilities and Equity | ||||||
Related party debt | 655 | [2] | 8,959 | [2] | ||
Accrued expenses and other liabilities | 2,814 | 3,085 | ||||
Total liabilities | 65,229 | 53,125 | ||||
Equity: | ||||||
Total equity | 10,478 | 5,960 | 4,582 | 4,328 | ||
Total liabilities and equity | 75,707 | 59,085 | ||||
Senior unsecured notes | ||||||
Liabilities and Equity | ||||||
Unsecured debt | 3,593 | [2] | 0 | [2] | ||
Bank term loan | ||||||
Liabilities and Equity | ||||||
Unsecured debt | 8,245 | [2] | 0 | [2] | ||
Subsidiaries | ||||||
Liabilities and Equity | ||||||
Related party debt | 195 | |||||
Parent Company | ||||||
Assets | ||||||
Cash and equivalents | 5,643 | 0 | 0 | 0 | ||
Investment securities (Note 4) | 1,255 | 0 | ||||
Investments in amounts due from subsidiaries | 16,723 | [3],[4],[5] | 14,713 | [3],[4],[5] | ||
Goodwill | 17 | 17 | ||||
Other assets | 148 | 8 | ||||
Total assets | 23,786 | 14,738 | ||||
Liabilities and Equity | ||||||
Amounts due to subsidiaries | 296 | 0 | ||||
Related party debt | 655 | [5] | 8,764 | [5] | ||
Accrued expenses and other liabilities | 519 | 14 | ||||
Total liabilities | 13,308 | 8,778 | ||||
Equity: | ||||||
Total equity | 10,478 | 5,960 | ||||
Total liabilities and equity | 23,786 | 14,738 | ||||
Parent Company | Senior unsecured notes | ||||||
Liabilities and Equity | ||||||
Unsecured debt | 3,593 | 0 | ||||
Parent Company | Bank term loan | ||||||
Liabilities and Equity | ||||||
Bank term loan | $8,245 | $0 | ||||
[1] | Other assets include restricted cash and equivalents of $1,104 million and $76 million at December 31, 2014 and 2013, respectively. | |||||
[2] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. | |||||
[3] | At December 31, 2013, $651 million of deposits issued by the Bank were held by GECC and have been reflected as being held by our company. While these amounts have been eliminated in our consolidated and combined financial statements, in accordance with the basis of presentation described in Note 2. Basis of Presentation and Summary of Significant Accounting Policies, we have presented them above as investments in and amounts due from subsidiaries. | |||||
[4] | Includes investments in and amounts due from bank subsidiaries of $8.5 billion at December 31, 2014. | |||||
[5] | Related party debt at December 31, 2013 included $195 million of related party debt issued by a subsidiary of the Company. As described in Note 16. Related Party Transactions, the portion of our parent’s total investment in our combined business on which we were assessed an interest cost is presented as related party debt at December 31, 2013. Except for the subsidiary-issued debt referred to above, we have reflected related party debt at December 31, 2013 as loans to the Company at the parent level. This funding was used by our subsidiaries and is reflected above as interest-bearing loan receivables. |
Parent_Company_Financial_Infor5
Parent Company Financial Information- Condensed Statements of Financial Position- Additional Information (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Related party debt | $655,000,000 | [1] | $8,959,000,000 | [1] |
Subsidiaries | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Related party debt | 195,000,000 | |||
Parent Company | ||||
Condensed Balance Sheet Statements, Captions [Line Items] | ||||
Investment in amounts due from bank subsidiaries | 8,500,000,000 | |||
Related party debt | 655,000,000 | [2] | 8,764,000,000 | [2] |
Loan receivables from subsidiaries | $651,000,000 | |||
[1] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. | |||
[2] | Related party debt at December 31, 2013 included $195 million of related party debt issued by a subsidiary of the Company. As described in Note 16. Related Party Transactions, the portion of our parent’s total investment in our combined business on which we were assessed an interest cost is presented as related party debt at December 31, 2013. Except for the subsidiary-issued debt referred to above, we have reflected related party debt at December 31, 2013 as loans to the Company at the parent level. This funding was used by our subsidiaries and is reflected above as interest-bearing loan receivables. |
Parent_Company_Financial_Infor6
Parent Company Financial Information- Condensed Statements of Cash Flows (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows - operating activities | |||
Net earnings | $2,109 | $1,979 | $2,119 |
Adjustments to reconcile net earnings to cash provided from operating activities | |||
Deferred income taxes | -203 | -237 | -18 |
(Increase) decrease in other assets | 196 | 40 | 1,180 |
Increase (decrease) in accrued expenses and other liabilities | -172 | 810 | 189 |
All other operating activities | 294 | 63 | 60 |
Cash from operating activities | 5,340 | 5,679 | 5,637 |
Cash flows - investing activities | |||
Purchases of investment securities | -1,376 | -100 | -31 |
All other investing activities | -446 | -107 | -106 |
Cash (used for) from investing activities | -10,068 | -1,066 | -6,452 |
Cash flows - financing activities | |||
Proceeds from initial public offering | 2,842 | 0 | 0 |
Proceeds from issuance of third-party debt | 12,343 | 0 | 0 |
Maturities and repayment of third-party debt | -505 | 0 | 0 |
Proceeds from borrowings of related party debt | 1,615 | 0 | 0 |
Maturities and repayment of related party debt | -10,015 | -1,649 | -1,099 |
Net transfers (to) from Parent | -603 | -586 | -1,869 |
All other financing activites | -135 | -32 | -66 |
Cash (used for) from financing activities | 14,237 | -3,628 | 962 |
Increase in cash and equivalents | 9,509 | 985 | 147 |
Cash and equivalents at beginning of year | 2,319 | 1,334 | 1,187 |
Cash and equivalents at end of year | 11,828 | 2,319 | 1,334 |
Parent Company | |||
Cash flows - operating activities | |||
Net earnings | 2,109 | 1,979 | 2,119 |
Adjustments to reconcile net earnings to cash provided from operating activities | |||
Deferred income taxes | -36 | 0 | 0 |
(Increase) decrease in other assets | 47 | -8 | 0 |
Increase (decrease) in accrued expenses and other liabilities | 489 | 13 | 0 |
Equity in undistributed net earnings of subsidiaries | -361 | 1,902 | -1,374 |
All other operating activities | -223 | 0 | 0 |
Cash from operating activities | 2,025 | 3,886 | 745 |
Cash flows - investing activities | |||
Net (increase) decrease in investments in and amounts due from subsidiaries | -1,030 | -1,848 | 2,614 |
Purchases of investment securities | -1,256 | 0 | 0 |
All other investing activities | -2 | 0 | 0 |
Cash (used for) from investing activities | -2,288 | -1,848 | 2,614 |
Cash flows - financing activities | |||
Proceeds from initial public offering | 2,842 | 0 | 0 |
Proceeds from issuance of third-party debt | 12,343 | 0 | 0 |
Maturities and repayment of third-party debt | -505 | 0 | 0 |
Proceeds from borrowings of related party debt | 1,615 | 0 | 0 |
Maturities and repayment of related party debt | -9,820 | -1,452 | -1,490 |
Net transfers (to) from Parent | -603 | -586 | -1,869 |
Increase (decrease) in amounts due to subsidiaries | 98 | 0 | 0 |
All other financing activites | -64 | 0 | 0 |
Cash (used for) from financing activities | 5,906 | -2,038 | -3,359 |
Increase in cash and equivalents | 5,643 | 0 | 0 |
Cash and equivalents at beginning of year | 0 | 0 | 0 |
Cash and equivalents at end of year | $5,643 | $0 | $0 |
Legal_Proceedings_and_Regulato1
Legal Proceedings and Regulatory Matters (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | |
Jun. 19, 2014 | Dec. 31, 2014 | Jan. 17, 2014 | Dec. 10, 2013 | |
Loss Contingencies [Line Items] | ||||
Number of putative class actions | 4 | |||
CareCredit CFPB Consent Order | ||||
Loss Contingencies [Line Items] | ||||
Maximum amount of settlement | $34,100,000 | |||
CareCredit CFPB Consent Order | Customer refund | ||||
Loss Contingencies [Line Items] | ||||
Amount of settlement | 56,000,000 | |||
2014 CFPB Consent Order [Member] | ||||
Loss Contingencies [Line Items] | ||||
Customer refunds paid | 11,000,000 | |||
Payment of Civil Money Penalties | 3,500,000 | |||
2014 CFPB and DOJ Consent Order [Member] | ||||
Loss Contingencies [Line Items] | ||||
Customer refunds paid | 132,000,000 | |||
Additional payments, balance credits, and balance waivers | 37,000,000 | |||
Remediation | 207,000,000 | 38,000,000 | ||
Outstanding amount of settlement left to be refunded | 75,000,000 | 32,000,000 | ||
Amount of settlement that consists of balance credits and waivers to previously charged-off account | 190,000,000 | |||
Travaglio et al. v. GE Capital Retail Bank and Allied Interstate LLC | ||||
Loss Contingencies [Line Items] | ||||
Damages sought per violation | $1,500 |
Selected_Quarterly_Financial_I2
Selected Quarterly Financial Information (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $3,260 | $3,123 | $2,926 | $2,933 | $3,037 | $2,886 | $2,686 | $2,704 | $12,242 | $11,313 | $10,309 |
Interest expense | 282 | 244 | 206 | 190 | 188 | 183 | 178 | 193 | 922 | 742 | 745 |
Net interest income | 2,978 | 2,879 | 2,720 | 2,743 | 2,849 | 2,703 | 2,508 | 2,511 | 11,320 | 10,571 | 9,564 |
Earnings before benefit from income taxes | 853 | 879 | 764 | 890 | 692 | 1,021 | 856 | 573 | 3,386 | 3,142 | 3,376 |
Provision for income taxes | 322 | 331 | 292 | 332 | 249 | 380 | 320 | 214 | 1,277 | 1,163 | 1,257 |
Net earnings | $531 | $548 | $472 | $558 | $443 | $641 | $536 | $359 | $2,109 | $1,979 | $2,119 |
Earnings per share | |||||||||||
Basic (in usd per share) | $0.64 | $0.70 | $0.67 | $0.79 | $0.63 | $0.91 | $0.76 | $0.51 | $2.78 | $2.81 | $3 |
Diluted (in usd per share) | $0.64 | $0.70 | $0.67 | $0.79 | $0.63 | $0.91 | $0.76 | $0.51 | $2.78 | $2.81 | $3 |