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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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51-0483352
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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777 Long Ridge Road
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Stamford, Connecticut
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06902
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common stock, par value $0.001 per share
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New York Stock Exchange
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Title of class
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None
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Page
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•
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“we,” “us,” “our” and the “Company” are to SYNCHRONY FINANCIAL and its subsidiaries;
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•
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“Synchrony” are to SYNCHRONY FINANCIAL only;
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“GE” are to General Electric Company and its subsidiaries;
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“GECC” are to General Electric Capital Corporation (a subsidiary of GE) and its subsidiaries;
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the “Bank” are to Synchrony Bank (a subsidiary of Synchrony);
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the “Bank Term Loan” are to the term loan agreement, dated as of July 30, 2014, among Synchrony, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto, as amended;
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the “GECC Term Loan” are to the term loan agreement, dated as of July 30, 2014, among Synchrony, as borrower, GECC, as administrative agent, and the other Lenders party thereto, as amended; and
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“FICO” score are to a credit score developed by Fair Isaac & Co., which is widely used as a means of evaluating the likelihood that credit users will pay their obligations.
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(in thousands)
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Retail Card
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Payment Solutions
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CareCredit
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Approximate partner locations (at December 31, 2015)
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40
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115
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195
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Average active accounts for the year ended December 31, 2015
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50,358
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7,478
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4,807
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(1)
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For a definition of platform revenue, which is a non-GAAP measure, and its reconciliation to interest and fees on loans, see “
Results of Operations
—
Platform Analysis
—
Non-GAAP Measure
”.
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(*)
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Partner program previously included in Payment Solutions sales platform.
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•
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BP (program commenced May 2015)
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•
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Stash Hotels (program commenced October 2015)
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•
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Citgo (program expected to commence in the first quarter of 2016)
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(1)
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Percentages stated as a proportion of total Retail Card platform revenue for the year ended December 31, 2015.
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(2)
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Excludes certain credit card portfolios that were sold or have not been renewed which represented 1% of our total Retail Card platform revenue for the year ended December 31, 2015.
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(1)
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Based on platform revenue for the year ended December 31, 2015.
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•
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Guitar Center (program commenced third quarter of 2015)
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•
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Mattress Firm (program expected to commence second quarter of 2016)
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•
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Newegg (program commenced fourth quarter of 2015)
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The Container Store (program expected to commence in the second quarter of 2016)
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•
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Launched an endorsement program with VSP Vision Care, a leading vision insurance provider
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•
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Expanding acceptance of our CareCredit credit card to nearly 4,600 Rite Aid locations across the United States
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Promotional Offer
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Credit Product
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Standard Terms Only
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Deferred Interest
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Other Promotional
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Total
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Credit cards
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67.1
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%
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17.1
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%
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12.1
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%
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96.3
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%
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Commercial credit products
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1.9
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—
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—
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1.9
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Consumer installment loans
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—
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—
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1.7
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1.7
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Other
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0.1
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—
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—
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0.1
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Total
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69.1
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%
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17.1
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%
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13.8
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%
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100.0
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%
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•
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payment processing (more than
500 million
paper and electronic payments in
2015
);
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•
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embossing and mailing credit cards (approximately
65 million
cards in
2015
);
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•
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printing and mailing and eService delivery of credit card statements (more than
670 million
paper and electronic statements in
2015
); and
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•
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other letters mailed or sent electronically (approximately
75 million
in
2015
).
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•
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under the Basel III standardized approach, a common equity Tier 1 capital to risk-weighted assets ratio of 7% (the minimum of 4.5% plus a mandatory conservation buffer of
2.5%
, which will be fully phased-in by January 1, 2019), a Tier 1 capital to risk-weighted assets ratio of 8.5% (the minimum of 6% plus a phased-in mandatory conservation buffer of
2.5%
), and a total capital to risk-weighted assets ratio of 10.5% (a minimum of 8% plus a phased-in mandatory conservation buffer of
2.5%
); and
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•
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a leverage ratio of Tier 1 capital to total consolidated assets of
4%
.
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•
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under the Basel III standardized approach, a common equity Tier 1 capital to risk-weighted assets ratio of 7% (the minimum of 4.5% plus a mandatory conservation buffer of 2.5%, which will be fully phased-in by January 1, 2019), a Tier 1 capital to risk-weighted assets ratio of 8.5% (the minimum of 6% plus a phased-in mandatory conservation buffer of 2.5%), and a total capital to risk-weighted assets ratio of 10.5% (a minimum of 8% plus a phased-in mandatory conservation buffer of 2.5%); and
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•
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a leverage ratio of Tier 1 capital to total consolidated assets of 5%.
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Location
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Owned/Leased
(1)
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Corporate Headquarters:
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Stamford, CT
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Leased
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Bank Headquarters:
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Draper, UT
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Leased
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Payment Processing Centers:
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Atlanta, GA
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Leased
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Longwood, FL
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Leased
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Customer Service Centers:
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Canton, OH
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Leased
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Charlotte, NC
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Leased
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Frisco, TX
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Leased
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Hyderabad, India
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Leased
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Kettering, OH
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Leased
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Manila, Philippines
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Leased
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Manila, Philippines (Alabang)
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Leased
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Merriam, KS
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Owned
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Phoenix, AZ
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Leased
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Rapid City, SD
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Leased
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San Juan, PR
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Leased
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Other Support Centers:
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Alpharetta, GA
(2)
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Leased
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Bellevue, WA
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Leased
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Bentonville, AR
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Leased
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Chicago, IL
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Leased
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Costa Mesa, CA
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Leased
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San Francisco, CA
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Leased
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St. Paul, MN
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Leased
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Van Buren, MI
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Leased
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Walnut Creek, CA
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Leased
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Bank Retail Branch Location:
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Bridgewater, NJ
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Leased
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(1)
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In connection with the IPO, certain of these leased properties were assigned to us by GECC. There are two properties (Kettering, OH and Alpharetta, GA) where GECC continues to have liability for obligations under the leases, and we have agreed to indemnify GECC for any costs or expenses related to those obligations.
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Common stock market price
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||||||
($ in dollars)
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High
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Low
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||||
2015
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Fourth quarter
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$
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33.98
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$
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29.51
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Third quarter
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$
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35.99
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$
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30.56
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Second quarter
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$
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33.30
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$
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29.76
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First quarter
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$
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33.61
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$
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28.52
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2014
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Fourth quarter
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$
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30.50
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$
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24.20
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Third quarter
(1)
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$
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25.79
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$
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22.93
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(1)
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Trading commenced July 31, 2014. Prior to that date, there was no public trading market for our common stock.
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July 31, 2014
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December 31, 2014
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December 31, 2015
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||||||
Synchrony Financial
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$
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100.00
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$
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129.35
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$
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132.22
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S&P 500
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100.00
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106.64
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105.87
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S&P 500 Financials
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100.00
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110.42
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106.58
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Years Ended December 31,
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||||||||||||||||||
($ in millions, except per share data)
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2015
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2014
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2013
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2012
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2011
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Interest income
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$
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13,228
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$
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12,242
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$
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11,313
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$
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10,309
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$
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9,141
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Interest expense
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1,135
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922
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742
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745
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932
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|||||
Net interest income
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12,093
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11,320
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10,571
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9,564
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8,209
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Retailer share arrangements
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(2,738
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)
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(2,575
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)
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(2,373
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)
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(1,984
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)
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(1,428
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)
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|||||
Net interest income, after retailer share arrangements
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9,355
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8,745
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8,198
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7,580
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6,781
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|||||
Provision for loan losses
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2,952
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2,917
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3,072
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2,565
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2,258
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|||||
Net interest income, after retailer share arrangements and provision for loan losses
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6,403
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5,828
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5,126
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5,015
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4,523
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|||||
Other income
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392
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485
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500
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484
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497
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|||||
Other expense
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3,264
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2,927
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2,484
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2,123
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2,010
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|||||
Earnings before provision for income taxes
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3,531
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3,386
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3,142
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3,376
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3,010
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|||||
Provision for income taxes
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1,317
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1,277
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1,163
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1,257
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1,120
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|||||
Net earnings
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$
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2,214
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$
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2,109
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$
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1,979
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$
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2,119
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$
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1,890
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Weighted average shares outstanding (in millions)
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||||||||||
Basic
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833.8
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757.4
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705.3
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705.3
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705.3
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|||||
Diluted
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835.5
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757.6
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705.3
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705.3
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705.3
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|||||
Earnings per share
|
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||||||||||
Basic
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$
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2.66
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$
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2.78
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$
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2.81
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$
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3.00
|
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$
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2.68
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Diluted
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$
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2.65
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$
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2.78
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|
$
|
2.81
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|
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$
|
3.00
|
|
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$
|
2.68
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($ in millions)
|
At December 31,
|
||||||||||||||||||
2015
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|
2014
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2013
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|
2012
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|
2011
|
|||||||||||
Assets:
|
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||||||||||
Cash and equivalents
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$
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12,325
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$
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11,828
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|
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$
|
2,319
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|
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$
|
1,334
|
|
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$
|
1,187
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Investment securities
|
3,142
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|
|
1,598
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|
|
236
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|
193
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|
|
198
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|
|||||
Loan receivables
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68,290
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61,286
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57,254
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52,313
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|
47,741
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|
|||||
Allowance for loan losses
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(3,497
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)
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(3,236
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)
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(2,892
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)
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(2,274
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)
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(2,052
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)
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|||||
Loan receivables held for sale
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—
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332
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—
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—
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—
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|||||
Goodwill
|
949
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|
949
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949
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|
936
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|
936
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|
|||||
Intangible assets, net
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701
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|
519
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|
300
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|
255
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|
252
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|||||
Other assets
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2,225
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|
2,431
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|
919
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|
705
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1,853
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|||||
Total assets
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$
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84,135
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|
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$
|
75,707
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$
|
59,085
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$
|
53,462
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|
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$
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50,115
|
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Liabilities and Equity:
|
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||||||||||
Total deposits
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$
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43,447
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$
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34,955
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$
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25,719
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$
|
18,804
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|
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$
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17,832
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Total borrowings
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24,344
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|
|
27,460
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|
|
24,321
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|
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27,815
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|
|
25,890
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|
|||||
Accrued expenses and other liabilities
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3,740
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2,814
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3,085
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2,261
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|
|
2,065
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|
|||||
Total liabilities
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71,531
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|
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65,229
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|
|
53,125
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48,880
|
|
|
45,787
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|||||
Total equity
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12,604
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|
|
10,478
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|
|
5,960
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|
|
4,582
|
|
|
4,328
|
|
|||||
Total liabilities and equity
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$
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84,135
|
|
|
$
|
75,707
|
|
|
$
|
59,085
|
|
|
$
|
53,462
|
|
|
$
|
50,115
|
|
(1)
|
For a definition of platform revenue, which is a non-GAAP measure, and its reconciliation to interest and fees on loans, see “
Results of Operations
—
Platform Analysis
—
Non-GAAP Measure
”.
|
•
|
Private label credit cards
.
Private label credit cards are partner-branded credit cards (e.g., Lowe’s or Amazon) or program-branded credit cards (e.g., CarCareONE or CareCredit) that are used primarily for the purchase of goods and services from the partner or within the program network. In Retail Card, credit under our private label credit cards typically is extended on standard terms only, and in Payment Solutions and CareCredit, credit under our private label credit cards typically is extended pursuant to a promotional financing offer.
|
•
|
Dual Cards
.
Our patented Dual Cards are credit cards that function as private label credit cards when used to purchase goods and services from our partners and as general purpose credit cards when used elsewhere. Credit extended under our Dual Cards typically is extended under standard terms only. Currently, only Retail Card offers Dual Cards. At
December 31, 2015
, we offered Dual Cards through
16
of our
22
active Retail Card programs.
|
•
|
Growth in loan receivables and interest income
. We believe continuing improvement in the U.S. economy and employment rates will contribute to an increase in consumer credit spending. In addition, we expect the use of credit cards to continue to increase versus other forms of payment such as cash and checks. We anticipate that these trends, combined with our marketing and partner engagement strategies, will contribute to growth in our loan receivables. In the near-to-medium term, we expect our total interest income to continue to grow, driven by the expected growth in average loan receivables. Our historical growth rates in loan receivables and interest income have benefited from new partner acquisitions, and therefore, if we do not continue to acquire new partners, replace the programs that are not extended or otherwise grow our business, our growth rates in loan receivables and interest income in the future will be lower than in recent periods. In addition, we do not expect to make any significant changes to customer pricing or merchant discount pricing in the near term, and therefore we expect yields generated from interest and fees on interest-earning assets will remain relatively stable.
|
•
|
Extended duration of our Retail Card program agreements
. We have extended many of our largest Retail Card program agreements, and as a result, we expect to continue to benefit from these programs on a long-term basis as indicated by the expiration schedule, which indicates for each period the number of programs scheduled to expire and the proportion of platform revenue that these programs comprised for the year ended
December 31, 2015
. See
“Business - Retail Card”
for additional information on the expiration of these programs.
|
•
|
Increases in retailer share arrangement payments and other expense under extended program agreements.
We believe that as a result of both the overall growth of our programs, as well as amendments we have made to the terms of certain program agreements that we extended during
2015
, the payments we make to our partners under these extended retailer share arrangements, in the aggregate, are likely to increase both in absolute terms and as a percentage of our net earnings. Overall, we expect our payments to our partners under our retailer share arrangements to grow generally in line with the growth of our Retail Card loan receivables.
|
•
|
Stable asset quality.
Our credit performance continued to improve through
2015
. Our net charge-off rates decreased to
4.33%
for the year ended
December 31, 2015
from
4.51%
for the year ended
December 31, 2014
, and our over-30 day delinquency rate decreased to
4.06%
at
December 31, 2015
from
4.14%
at
December 31, 2014
, which are lower year-end levels than we experienced immediately prior to the financial crisis in 2007. In the near term, we expect the U.S. employment rate to continue to stabilize, and we do not anticipate making significant changes to our underwriting standards. Accordingly, we expect our charge-off rates to remain relatively stable in the near term. Provision for loan losses increased slightly by
$35 million
, or
1.2%
, for the year ended December 31, 2015, as the growth in loan receivables was partially offset by the benefit from improving asset quality trends. As the credit environment stabilizes, we do not believe this benefit will repeat in the near term and expect that our provision for loan losses will increase at a higher rate than we experienced in 2015, primarily driven by our receivables growth.
|
•
|
Growth in interchange revenues and loyalty program costs.
We believe that as a result of the overall growth in Dual Card transactions occurring outside of our Retail Card partners’ locations, interchange revenues will continue to increase. The expected growth in these transactions is driven, in part, by both existing and new loyalty programs with our Retail Card partners. In addition, we continue to offer and add new loyalty programs for our private label credit cards, for which we do not receive interchange fees. The growth in these existing and new loyalty programs will result in an increase in costs associated with these programs. Overall, we expect both our interchange revenues and loyalty program costs to grow in excess of the growth of our Retail Card loan receivables, and expect the increase in loyalty program costs to be higher than that expected for interchange revenues due to the additional loyalty programs for our private label credit cards. These increases have been contemplated in our program agreements with our Retail Card partners and are a component of the calculation of our payments due under our retailer share arrangements.
|
•
|
Impact of regulatory developments.
Our business and the consumer financial services industry continues to be subject to regulation from various regulatory authorities, including the CFPB, which was established through the Dodd Frank Act. For the years ended
December 31, 2015
,
2014
and 2013, we incurred
$9 million
,
$26 million
and $133 million, respectively, in expenses related to litigation and regulatory matters. The expenses incurred in 2013, primarily related to an increase to our reserve for the matters settled with the CFPB and the DOJ in late 2013 and 2014. See “
Item 1. Business—Regulation—Consumer Financial Services Regulation
.”
|
•
|
Capital and liquidity levels.
We expect to maintain sufficient capital and liquidity resources to support our daily operations, our business growth, and our credit ratings as well as regulatory and compliance requirements in a cost effective and prudent manner through expected and unexpected market environments. Following the Separation, we expect to continue to increase our capital and liquidity levels by, among other things, retaining net earnings and not paying a dividend or returning capital through stock repurchases until we have the non-objection of the Federal Reserve Board to do so. Our board of directors intends to establish dividends and share repurchases programs, in each case consistent with maintaining capital ratios well in excess of minimum regulatory requirements.
At December 31, 2015
, the Company had an estimated fully phased-in Basel III common equity Tier 1 ratio of
15.9%
. We also expect that our liquidity portfolio will continue to be sufficient to support all of our business objectives.
|
(a) Represents Tier 1 common equity calculated under Basel I regulatory capital standards, see “
Item 7. —Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital
—
Non-GAAP Measures
.”
|
(b) Calculated under Basel III regulatory capital standards, subject to transition provisions.
|
•
|
Net earnings increased
5.0%
to
$2,214 million
for the
year ended
December 31, 2015
, driven by higher net interest income, partially offset by increases in retailer share arrangements, provision for loan losses and other expenses.
|
•
|
Loan receivables increased
11.4%
to
$68,290 million
at
December 31, 2015
compared to
December 31, 2014
, primarily driven by higher purchase volume and average active account growth, and included growth associated with the BP portfolio acquired in the second quarter of 2015.
|
•
|
Net interest income increased
6.8%
to
$12,093 million
for the
year ended
December 31, 2015
, primarily due to higher average loan receivables, partially offset by higher interest expense driven by increased liquidity, funding mix and growth.
|
•
|
Retailer share arrangements increased
6.3%
to
$2,738 million
for the
year ended
December 31, 2015
, primarily as a result of growth and improved performance of the programs in which we have retailer share arrangements, partially offset with increased other expense and loyalty costs associated with these programs.
|
•
|
Loan delinquencies as a percentage of period-end loan receivables decreased with the over-30 day delinquency rate decreasing to
4.06%
at
December 31, 2015
from
4.14%
at December 31, 2014, primarily driven by improving asset quality trends and general improvement in the U.S. economy. Net charge-off rates decreased 18 basis points to
4.33%
for the
year ended
December 31, 2015
, from
4.51%
for the
year ended
December 31, 2014
reflecting these same trends.
|
•
|
Provision for loan losses increased by
$35 million
, or
1.2%
, to
$2,952 million
for the
year ended
December 31, 2015
, primarily due to portfolio growth, partially offset by improving asset quality trends. Our allowance coverage ratio (allowance for loan losses as a percent of end of period loan receivables) decreased to
5.12%
at
December 31, 2015
, as compared to
5.28%
at
December 31, 2014
,
reflecting the recent improvements in our asset quality trends.
|
•
|
Other expense increased by
$337 million
, or
11.5%
, for the year ended
December 31, 2015
, driven by investments in growth and infrastructure build in preparation for separation from GE and also included expenses for the completion of the EMV card rollout for active Dual Card accounts.
|
•
|
We continue to invest in our direct banking activities to grow our deposit base. Total deposits increased
24.3%
to
$43.4 billion
at
December 31, 2015
, compared to December 31, 2014, driven primarily by growth in our direct deposits of
50.8%
to
$29.7 billion
, partially offset by a reduction in our brokered deposits.
|
•
|
We extended our Retail Card program agreements with Amazon, Chevron, Dick's Sporting Goods and PayPal, launched our new program with BP, and announced our new partnerships with Citgo and Stash Hotel Rewards.
|
•
|
We entered into new program agreements in our Payment Solutions sales platform with Guitar Center, Mattress Firm, The Container Store and Newegg and extended our program agreements with Discount Tire, Sleepy's, P.C. Richard & Son, Conn's, Polaris Industries, Mohawk Flooring, Art Van Furniture and MEGA Group USA, a national home furnishings buying group of independent retailers.
|
•
|
In our CareCredit sales platform, we added Rite Aid to our network of providers, added a new endorsement with VSP, the nation’s largest vision insurance provider, and renewed our endorsement with the American Society of Plastic Surgeons.
|
•
|
Net earnings increased 6.6% to $2,109 million for the year ended December 31, 2014, driven by higher net interest income and a reduction in our provision for loan losses, partially offset by increases in retailer share arrangements and other expenses.
|
•
|
Loan receivables increased 7.0% to $61,286 million at December 31, 2014 compared to December 31, 2013, primarily driven by higher purchase volume and average active account growth.
|
•
|
Net interest income increased 7.1% to $11,320 million for the year ended December 31, 2014, primarily due to higher average loan receivables.
|
•
|
Retailer share arrangements increased 8.5% to $2,575 million for the year ended December 31, 2014, primarily as a result of improved performance, and the growth of the programs in which we had retailer share arrangements, as well as from changes to the terms of the retailer share arrangements for those partners with whom we extended program agreements in late 2013 and in 2014.
|
•
|
Loan delinquencies as a percentage of period-end loan receivables decreased with the over-30 day delinquency rate decreasing to 4.14% at December 31, 2014 from 4.35% at December 31, 2013, driven by continued improvement in the U.S. economy and employment rates. Net charge-off rates decreased to 4.51% for the year ended December 31, 2014, from 4.68% for the year ended December 31, 2013.
|
•
|
Provision for loan losses decreased by $155 million, or 5.0%, to $2,917 million for the year ended December 31, 2014. This decrease was driven primarily as a result of an incremental provision of $642 million recorded during 2013 relating to the enhancements to our allowance for loan loss methodology, which was not repeated in 2014. This decrease was partially offset by increased provisions in 2014 primarily driven by portfolio growth. Our allowance coverage ratio (allowance for loan losses as a percent of end of period loan receivables) increased to 5.28% at December 31, 2014, as compared to 5.05% at December 31, 2013
,
reflecting a transition to a stable credit outlook at December 31, 2014 from an improving outlook at December 31, 2013.
|
•
|
Other expense increased to $2,927 million from $2,484 million for the years ended December 31, 2014 and 2013, respectively, driven by business growth, increased marketing investments and incremental costs associated with building our stand-alone infrastructure.
|
•
|
We completed our IPO, resulting in the issuance of a total of 128.5 million shares of our common stock, and entered into our new debt financings, which increased our indebtedness with third parties and reduced our funding from GECC. The net proceeds from these transactions increased our liquidity portfolio by $7.3 billion. Our liquidity portfolio, including undrawn credit facilities, was $19.0 billion at December 31, 2014.
|
•
|
We invested in our direct banking activities to grow our deposit base. Total deposits increased 35.9% to $35.0 billion at December 31, 2014, compared to December 31, 2013, driven primarily by growth in our direct deposits of 79.1% to $19.7 billion at December 31, 2014.
|
•
|
During the year ended December 31, 2014, we extended five program agreements in Retail Card (American Eagle, Gap, Lowe's, QVC and Sam’s Club), and in February 2015, we extended our program agreement with Amazon. These programs represented, in the aggregate $22.2 billion in loan receivables at December 31, 2014. Program agreements with three Retail Card partners representing $0.5 billion in loan receivables, including loan receivables held for sale, at December 31, 2014, were not renewed.
|
•
|
During the year ended December 31, 2014, we entered into an agreement with BP, for a Retail Card program which commenced in May 2015, and which became one of our 20 largest program agreements.
|
•
|
In our Payment Solutions sales platform, we increased the number of participating partners in our network by over 2,000 partners, compared to the number of partners at December 31, 2013.
In our CareCredit network, we increased the number of provider locations by over 9,000 locations, compared to the number of locations at December 31, 2013.
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Interest income
|
$
|
13,228
|
|
|
$
|
12,242
|
|
|
$
|
11,313
|
|
Interest expense
|
1,135
|
|
|
922
|
|
|
742
|
|
|||
Net interest income
|
12,093
|
|
|
11,320
|
|
|
10,571
|
|
|||
Retailer share arrangements
|
(2,738
|
)
|
|
(2,575
|
)
|
|
(2,373
|
)
|
|||
Net interest income, after retailer share arrangements
|
9,355
|
|
|
8,745
|
|
|
8,198
|
|
|||
Provision for loan losses
|
2,952
|
|
|
2,917
|
|
|
3,072
|
|
|||
Net interest income, after retailer share arrangements and provision for loan losses
|
6,403
|
|
|
5,828
|
|
|
5,126
|
|
|||
Other income
|
392
|
|
|
485
|
|
|
500
|
|
|||
Other expense
|
3,264
|
|
|
2,927
|
|
|
2,484
|
|
|||
Earnings before provision for income taxes
|
3,531
|
|
|
3,386
|
|
|
3,142
|
|
|||
Provision for income taxes
|
1,317
|
|
|
1,277
|
|
|
1,163
|
|
|||
Net earnings
|
$
|
2,214
|
|
|
$
|
2,109
|
|
|
$
|
1,979
|
|
At and for the years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Financial Position Data (Average):
|
|
|
|
|
|
||||||
Loan receivables, including held for sale
|
$
|
62,120
|
|
|
$
|
57,101
|
|
|
$
|
52,407
|
|
Total assets
|
$
|
77,245
|
|
|
$
|
66,152
|
|
|
$
|
56,184
|
|
Deposits
|
$
|
38,300
|
|
|
$
|
30,350
|
|
|
$
|
22,911
|
|
Borrowings
|
$
|
24,352
|
|
|
$
|
24,608
|
|
|
$
|
25,209
|
|
Total equity
|
$
|
11,578
|
|
|
$
|
7,888
|
|
|
$
|
5,121
|
|
Selected Performance Metrics:
|
|
|
|
|
|
||||||
Purchase volume
(1)
|
$
|
113,615
|
|
|
$
|
103,149
|
|
|
$
|
93,858
|
|
Retail Card
|
$
|
92,190
|
|
|
$
|
83,591
|
|
|
$
|
75,739
|
|
Payment Solutions
|
$
|
13,668
|
|
|
$
|
12,447
|
|
|
$
|
11,360
|
|
CareCredit
|
$
|
7,757
|
|
|
$
|
7,111
|
|
|
$
|
6,759
|
|
Average active accounts (in thousands)
(2)
|
62,643
|
|
|
60,009
|
|
|
56,253
|
|
|||
Net interest margin
(3)
|
15.77
|
%
|
|
17.20
|
%
|
|
18.78
|
%
|
|||
Net charge-offs
|
$
|
2,691
|
|
|
$
|
2,573
|
|
|
$
|
2,454
|
|
Net charge-offs as a % of average loan receivables, including held for sale
|
4.33
|
%
|
|
4.51
|
%
|
|
4.68
|
%
|
|||
Allowance coverage ratio
(4)
|
5.12
|
%
|
|
5.28
|
%
|
|
5.05
|
%
|
|||
Return on assets
(5)
|
2.9
|
%
|
|
3.2
|
%
|
|
3.5
|
%
|
|||
Return on equity
(6)
|
19.1
|
%
|
|
26.7
|
%
|
|
38.6
|
%
|
|||
Equity to assets
(7)
|
14.99
|
%
|
|
11.92
|
%
|
|
9.11
|
%
|
|||
Other expense as a % of average loan receivables, including held for sale
|
5.25
|
%
|
|
5.13
|
%
|
|
4.74
|
%
|
|||
Efficiency ratio
(8)
|
33.5
|
%
|
|
31.7
|
%
|
|
28.6
|
%
|
|||
Effective income tax rate
|
37.3
|
%
|
|
37.7
|
%
|
|
37.0
|
%
|
|||
Selected Period End Data:
|
|
|
|
|
|
||||||
Loan receivables
|
$
|
68,290
|
|
|
$
|
61,286
|
|
|
$
|
57,254
|
|
Allowance for loan losses
|
$
|
3,497
|
|
|
$
|
3,236
|
|
|
$
|
2,892
|
|
30+ days past due as a % of period-end loan receivables
(9)
|
4.06
|
%
|
|
4.14
|
%
|
|
4.35
|
%
|
|||
90+ days past due as a % of period-end loan receivables
(9)
|
1.86
|
%
|
|
1.90
|
%
|
|
1.96
|
%
|
|||
Total active accounts (in thousands)
(2)
|
68,314
|
|
|
64,286
|
|
|
61,957
|
|
(1)
|
Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period. Purchase volume includes activity related to our portfolios classified as held for sale.
|
(2)
|
Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.
|
(3)
|
Net interest margin represents net interest income divided by average interest-earning assets.
|
(4)
|
Allowance coverage ratio represents allowance for loan losses divided by total period-end loan receivables.
|
(5)
|
Return on assets represents net earnings as a percentage of average total assets.
|
(6)
|
Return on equity represents net earnings as a percentage of average total equity.
|
(7)
|
Equity to assets represents average equity as a percentage of average total assets.
|
(8)
|
Efficiency ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income.
|
(9)
|
Based on customer statement-end balances extrapolated to the respective period-end date.
|
|
2015
|
|
2014
|
2013
|
||||||||||||||||||||||||||||
Years ended December 31 ($ in millions)
|
Average
Balance
(1)
|
|
Interest
Income /
Expense
|
|
Average
Yield /
Rate
(2)
|
|
Average
Balance
(1)
|
|
Interest
Income/
Expense
|
|
Average
Yield /
Rate
(2)
|
|
Average
Balance
(1)
|
|
Interest
Income/
Expense
|
|
Average
Yield /
Rate
(2)
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-earning cash and equivalents
(3)
|
$
|
11,406
|
|
|
$
|
28
|
|
|
0.25
|
%
|
|
$
|
8,230
|
|
|
$
|
16
|
|
|
0.19
|
%
|
|
$
|
3,651
|
|
|
$
|
10
|
|
|
0.27
|
%
|
Securities available for sale
|
3,142
|
|
|
21
|
|
|
0.67
|
%
|
|
487
|
|
|
10
|
|
|
2.05
|
%
|
|
217
|
|
|
8
|
|
|
3.69
|
%
|
||||||
Loan receivables
(4)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Credit cards, including held for sale
(5)
|
59,603
|
|
|
12,932
|
|
|
21.70
|
%
|
|
54,686
|
|
|
11,967
|
|
|
21.88
|
%
|
|
49,704
|
|
|
11,015
|
|
|
22.16
|
%
|
||||||
Consumer installment loans
|
1,119
|
|
|
104
|
|
|
9.29
|
%
|
|
1,025
|
|
|
99
|
|
|
9.66
|
%
|
|
1,336
|
|
|
129
|
|
|
9.66
|
%
|
||||||
Commercial credit products
|
1,359
|
|
|
142
|
|
|
10.45
|
%
|
|
1,373
|
|
|
149
|
|
|
10.85
|
%
|
|
1,355
|
|
|
150
|
|
|
11.07
|
%
|
||||||
Other
|
39
|
|
|
1
|
|
|
2.56
|
%
|
|
17
|
|
|
1
|
|
|
5.88
|
%
|
|
12
|
|
|
1
|
|
|
8.33
|
%
|
||||||
Total loan receivables
|
62,120
|
|
|
13,179
|
|
|
21.22
|
%
|
|
57,101
|
|
|
12,216
|
|
|
21.39
|
%
|
|
52,407
|
|
|
11,295
|
|
|
21.55
|
%
|
||||||
Total interest-earning assets
|
76,668
|
|
|
13,228
|
|
|
17.25
|
%
|
|
65,818
|
|
|
12,242
|
|
|
18.60
|
%
|
|
56,275
|
|
|
11,313
|
|
|
20.10
|
%
|
||||||
Non-interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Cash and due from banks
|
904
|
|
|
|
|
|
|
881
|
|
|
|
|
|
|
552
|
|
|
|
|
|
||||||||||||
Allowance for loan losses
|
(3,340
|
)
|
|
|
|
|
|
(3,039
|
)
|
|
|
|
|
|
(2,693
|
)
|
|
|
|
|
||||||||||||
Other assets
|
3,013
|
|
|
|
|
|
|
2,492
|
|
|
|
|
|
|
2,050
|
|
|
|
|
|
||||||||||||
Total non-interest-earning assets
|
577
|
|
|
|
|
|
|
334
|
|
|
|
|
|
|
(91
|
)
|
|
|
|
|
||||||||||||
Total assets
|
$
|
77,245
|
|
|
|
|
|
|
$
|
66,152
|
|
|
|
|
|
|
$
|
56,184
|
|
|
|
|
|
|||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest-bearing deposit accounts
|
$
|
38,148
|
|
|
$
|
607
|
|
|
1.59
|
%
|
|
$
|
30,110
|
|
|
$
|
470
|
|
|
1.56
|
%
|
|
$
|
22,405
|
|
|
$
|
374
|
|
|
1.67
|
%
|
Borrowings of consolidated securitization entities
|
13,868
|
|
|
215
|
|
|
1.55
|
%
|
|
14,835
|
|
|
215
|
|
|
1.45
|
%
|
|
16,209
|
|
|
211
|
|
|
1.30
|
%
|
||||||
Bank term loan
|
5,383
|
|
|
136
|
|
|
2.53
|
%
|
|
3,056
|
|
|
74
|
|
|
2.42
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||||
Senior unsecured notes
|
4,976
|
|
|
173
|
|
|
3.48
|
%
|
|
1,382
|
|
|
50
|
|
|
3.62
|
%
|
|
—
|
|
|
—
|
|
|
—
|
%
|
||||||
Related party debt
|
125
|
|
|
4
|
|
|
3.20
|
%
|
|
5,335
|
|
|
113
|
|
|
2.12
|
%
|
|
9,000
|
|
|
157
|
|
|
1.74
|
%
|
||||||
Total interest-bearing liabilities
|
62,500
|
|
|
1,135
|
|
|
1.82
|
%
|
|
54,718
|
|
|
922
|
|
|
1.69
|
%
|
|
47,614
|
|
|
742
|
|
|
1.56
|
%
|
||||||
Non-interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Non-interest-bearing deposit accounts
|
152
|
|
|
|
|
|
|
240
|
|
|
|
|
|
|
506
|
|
|
|
|
|
||||||||||||
Other liabilities
|
3,015
|
|
|
|
|
|
|
3,306
|
|
|
|
|
|
|
2,943
|
|
|
|
|
|
||||||||||||
Total non-interest-bearing liabilities
|
3,167
|
|
|
|
|
|
|
3,546
|
|
|
|
|
|
|
3,449
|
|
|
|
|
|
||||||||||||
Total liabilities
|
65,667
|
|
|
|
|
|
|
58,264
|
|
|
|
|
|
|
51,063
|
|
|
|
|
|
||||||||||||
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total equity
|
11,578
|
|
|
|
|
|
|
7,888
|
|
|
|
|
|
|
5,121
|
|
|
|
|
|
||||||||||||
Total liabilities and equity
|
$
|
77,245
|
|
|
|
|
|
|
$
|
66,152
|
|
|
|
|
|
|
$
|
56,184
|
|
|
|
|
|
|||||||||
Interest rate spread
(6)
|
|
|
|
|
15.43
|
%
|
|
|
|
|
|
16.91
|
%
|
|
|
|
|
|
18.54
|
%
|
||||||||||||
Net interest income
|
|
|
$
|
12,093
|
|
|
|
|
|
|
$
|
11,320
|
|
|
|
|
|
|
$
|
10,571
|
|
|
|
|||||||||
Net interest margin
(7)
|
|
|
|
|
15.77
|
%
|
|
|
|
|
|
17.20
|
%
|
|
|
|
|
|
18.78
|
%
|
(1)
|
Average balances are based on monthly balances, including beginning of period balances, except where monthly balances are unavailable and quarterly balances are used. Collection of daily averages involves undue burden and expense. We believe our average balance sheet data appropriately incorporates the seasonality in the level of our loan receivables and is representative of our operations.
|
(2)
|
Average yields/rates are based on total interest income/expense over average monthly balances.
|
(3)
|
Includes average restricted cash balances of
$566 million
,
$331 million
and
$58 million
for the years ended
December 31, 2015
,
2014
and
2013
, respectively.
|
(4)
|
Non-accrual loans are included in the average loan receivables balances.
|
(5)
|
Interest income on credit cards includes fees on loans of
$2,235 million
,
$2,129 million
and
$2,029 million
for the years ended
December 31, 2015
,
2014
and
2013
, respectively.
|
(6)
|
Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
|
(7)
|
Net interest margin represents net interest income divided by average total interest-earning assets.
|
|
2015 vs. 2014
|
|
2014 vs. 2013
|
||||||||||||||||||||
|
Increase (decrease) due to change in:
|
|
Increase (decrease) due to change in:
|
||||||||||||||||||||
($ in millions)
|
Average Volume
|
|
Average Yield / Rate
|
|
Net Change
|
|
Average Volume
|
|
Average Yield / Rate
|
|
Net Change
|
||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-earning cash and equivalents
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
12
|
|
|
$
|
10
|
|
|
$
|
(4
|
)
|
|
$
|
6
|
|
Securities available for sale
|
22
|
|
|
(11
|
)
|
|
11
|
|
|
7
|
|
|
(5
|
)
|
|
2
|
|
||||||
Loan receivables:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Credit cards, including held for sale
|
1,064
|
|
|
(99
|
)
|
|
965
|
|
|
1,092
|
|
|
(140
|
)
|
|
952
|
|
||||||
Consumer installment loans
|
9
|
|
|
(4
|
)
|
|
5
|
|
|
(30
|
)
|
|
—
|
|
|
(30
|
)
|
||||||
Commercial credit products
|
(2
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|
2
|
|
|
(3
|
)
|
|
(1
|
)
|
||||||
Other
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total loan receivables
|
1,072
|
|
|
(109
|
)
|
|
963
|
|
|
1,064
|
|
|
(143
|
)
|
|
921
|
|
||||||
Change in interest income from total interest-earning assets
|
$
|
1,101
|
|
|
$
|
(115
|
)
|
|
$
|
986
|
|
|
$
|
1,081
|
|
|
$
|
(152
|
)
|
|
$
|
929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-bearing deposit accounts
|
$
|
128
|
|
|
$
|
9
|
|
|
$
|
137
|
|
|
$
|
122
|
|
|
$
|
(26
|
)
|
|
$
|
96
|
|
Borrowings of consolidated securitization entities
|
(14
|
)
|
|
14
|
|
|
—
|
|
|
(19
|
)
|
|
23
|
|
|
4
|
|
||||||
Bank term loan
|
59
|
|
|
3
|
|
|
62
|
|
|
74
|
|
|
—
|
|
|
74
|
|
||||||
Senior unsecured notes
|
125
|
|
|
(2
|
)
|
|
123
|
|
|
50
|
|
|
—
|
|
|
50
|
|
||||||
Related party debt
|
(147
|
)
|
|
38
|
|
|
(109
|
)
|
|
(73
|
)
|
|
29
|
|
|
(44
|
)
|
||||||
Change in interest expense from total interest-bearing liabilities
|
151
|
|
|
62
|
|
|
213
|
|
|
154
|
|
|
26
|
|
|
180
|
|
||||||
Total change in net interest income
|
$
|
950
|
|
|
$
|
(177
|
)
|
|
$
|
773
|
|
|
$
|
927
|
|
|
$
|
(178
|
)
|
|
$
|
749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
purchase volumes, which are influenced by a number of factors including macroeconomic conditions and consumer confidence generally, our partners’ sales and our ability to increase our share of those sales;
|
•
|
payment rates, reflecting the extent to which customers maintain a credit balance;
|
•
|
charge-offs, reflecting the receivables that are deemed not to be collectible;
|
•
|
the size of our liquidity portfolio; and
|
•
|
portfolio acquisitions when we enter into new partner relationships.
|
•
|
pricing (contractual rates of interest, movement in prime rates, late fees and merchant discount rates);
|
•
|
changes to our mix of loans (e.g., the number of loans bearing promotional rates as compared to standard rates);
|
•
|
frequency of late fees incurred when account holders fail to make their minimum payment by the required due date;
|
•
|
credit performance and accrual status of our loans; and
|
•
|
yield earned on our liquidity portfolio.
|
($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Loan receivables, including held for sale
|
$
|
62,120
|
|
|
$
|
57,101
|
|
|
$
|
52,407
|
|
Liquidity portfolio and other
|
14,548
|
|
|
8,717
|
|
|
3,868
|
|
|||
Total average interest-earning assets
|
$
|
76,668
|
|
|
$
|
65,818
|
|
|
$
|
56,275
|
|
|
2015
|
|
2014
|
|
2013
|
|||
|
|
|
|
|
|
|||
Yield on average interest-earning assets for the prior year
|
18.60
|
%
|
|
20.10
|
%
|
|
21.22
|
%
|
Increase in liquidity portfolio invested in cash and short-term U.S. Treasuries
|
(1.18
|
)%
|
|
(1.34
|
)%
|
|
(1.01
|
)%
|
Decrease in yield on loan receivables, including held for sale
|
(0.17
|
)%
|
|
(0.16
|
)%
|
|
(0.11
|
)%
|
Yield on average interest-earning assets for the years ended
December 31
|
17.25
|
%
|
|
18.60
|
%
|
|
20.10
|
%
|
|
|
|
|
|
|
•
|
the amounts outstanding of our deposits and borrowings;
|
•
|
the interest rate environment and its effect on interest rates paid on our funding sources; and
|
•
|
the changing mix in our funding sources as we continue to increase the proportion of our funding provided by our deposits and third-party debt.
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Interest-bearing deposit accounts
|
$
|
38,148
|
|
|
$
|
30,110
|
|
|
$
|
22,405
|
|
Borrowings of consolidated securitization entities
|
13,868
|
|
|
14,835
|
|
|
16,209
|
|
|||
Third-party debt
|
10,359
|
|
|
4,438
|
|
|
—
|
|
|||
Related party debt
|
125
|
|
|
5,335
|
|
|
9,000
|
|
|||
Total average interest-bearing liabilities
|
$
|
62,500
|
|
|
$
|
54,718
|
|
|
$
|
47,614
|
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Interchange revenue
|
$
|
505
|
|
|
$
|
389
|
|
|
$
|
324
|
|
Debt cancellation fees
|
249
|
|
|
275
|
|
|
324
|
|
|||
Loyalty programs
|
(419
|
)
|
|
(281
|
)
|
|
(213
|
)
|
|||
Other
|
57
|
|
|
102
|
|
|
65
|
|
|||
Total other income
|
$
|
392
|
|
|
$
|
485
|
|
|
$
|
500
|
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Employee costs
|
$
|
1,042
|
|
|
$
|
866
|
|
|
$
|
698
|
|
Professional fees
|
645
|
|
|
563
|
|
|
449
|
|
|||
Marketing and business development
|
433
|
|
|
460
|
|
|
269
|
|
|||
Information processing
|
297
|
|
|
212
|
|
|
193
|
|
|||
Other
|
847
|
|
|
826
|
|
|
875
|
|
|||
Total other expense
|
$
|
3,264
|
|
|
$
|
2,927
|
|
|
$
|
2,484
|
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Effective tax rate
|
37.3
|
%
|
|
37.7
|
%
|
|
37.0
|
%
|
|||
Provision for income taxes
|
$
|
1,317
|
|
|
$
|
1,277
|
|
|
$
|
1,163
|
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Interest and fees on loans
|
$
|
13,179
|
|
|
$
|
12,216
|
|
|
$
|
11,295
|
|
Other income
|
392
|
|
|
485
|
|
|
500
|
|
|||
Retailer share arrangements
|
(2,738
|
)
|
|
(2,575
|
)
|
|
(2,373
|
)
|
|||
Platform revenue
|
$
|
10,833
|
|
|
$
|
10,126
|
|
|
$
|
9,422
|
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Purchase volume
|
$
|
92,190
|
|
|
$
|
83,591
|
|
|
$
|
75,739
|
|
Period-end loan receivables
|
$
|
47,412
|
|
|
$
|
42,308
|
|
|
$
|
39,834
|
|
Average loan receivables, including held for sale
|
$
|
42,687
|
|
|
$
|
39,278
|
|
|
$
|
35,716
|
|
Average active accounts (in thousands)
|
50,358
|
|
|
48,599
|
|
|
45,690
|
|
|||
|
|
|
|
|
|
||||||
Platform revenue:
|
|
|
|
|
|
||||||
Interest and fees on loans
|
$
|
9,774
|
|
|
$
|
9,040
|
|
|
$
|
8,317
|
|
Other income
|
339
|
|
|
407
|
|
|
419
|
|
|||
Retailer share arrangements
|
(2,688
|
)
|
|
(2,530
|
)
|
|
(2,331
|
)
|
|||
Platform revenue
|
$
|
7,425
|
|
|
$
|
6,917
|
|
|
$
|
6,405
|
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Purchase volume
|
$
|
13,668
|
|
|
$
|
12,447
|
|
|
$
|
11,360
|
|
Period-end loan receivables
|
$
|
13,543
|
|
|
$
|
12,095
|
|
|
$
|
10,893
|
|
Average loan receivables
|
$
|
12,436
|
|
|
$
|
11,171
|
|
|
$
|
10,469
|
|
Average active accounts (in thousands)
|
7,478
|
|
|
6,869
|
|
|
6,330
|
|
|||
|
|
|
|
|
|
||||||
Platform revenue:
|
|
|
|
|
|
||||||
Interest and fees on loans
|
$
|
1,719
|
|
|
$
|
1,582
|
|
|
$
|
1,506
|
|
Other income
|
17
|
|
|
32
|
|
|
36
|
|
|||
Retailer share arrangements
|
(45
|
)
|
|
(41
|
)
|
|
(36
|
)
|
|||
Platform revenue
|
$
|
1,691
|
|
|
$
|
1,573
|
|
|
$
|
1,506
|
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Purchase volume
|
$
|
7,757
|
|
|
$
|
7,111
|
|
|
$
|
6,759
|
|
Period-end loan receivables
|
$
|
7,335
|
|
|
$
|
6,883
|
|
|
$
|
6,527
|
|
Average loan receivables
|
$
|
6,997
|
|
|
$
|
6,652
|
|
|
$
|
6,222
|
|
Average active accounts (in thousands)
|
4,807
|
|
|
4,541
|
|
|
4,233
|
|
|||
|
|
|
|
|
|
||||||
Platform revenue:
|
|
|
|
|
|
||||||
Interest and fees on loans
|
$
|
1,686
|
|
|
$
|
1,594
|
|
|
$
|
1,472
|
|
Other income
|
36
|
|
|
46
|
|
|
45
|
|
|||
Retailer share arrangements
|
(5
|
)
|
|
(4
|
)
|
|
(6
|
)
|
|||
Platform revenue
|
$
|
1,717
|
|
|
$
|
1,636
|
|
|
$
|
1,511
|
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
At December 31 ($ in millions)
|
Amortized
Cost
|
|
Estimated Fair Value
|
|
Amortized
Cost
|
|
Estimated Fair Value
|
|
Amortized
Cost |
|
Estimated Fair Value
|
||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. government and federal agency
|
$
|
2,768
|
|
|
$
|
2,761
|
|
|
$
|
1,252
|
|
|
$
|
1,252
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and municipal
|
51
|
|
|
49
|
|
|
57
|
|
|
57
|
|
|
53
|
|
|
46
|
|
||||||
Residential mortgage-backed
|
323
|
|
|
317
|
|
|
271
|
|
|
271
|
|
|
183
|
|
|
175
|
|
||||||
U.S. corporate debt
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||||
Equity
|
15
|
|
|
15
|
|
|
15
|
|
|
15
|
|
|
15
|
|
|
15
|
|
||||||
Total
|
$
|
3,157
|
|
|
$
|
3,142
|
|
|
$
|
1,598
|
|
|
$
|
1,598
|
|
|
$
|
251
|
|
|
$
|
236
|
|
($ in millions)
|
Due in 1 Year
or Less
|
|
Due After 1
through
5 Years
|
|
Due After 5
through
10 Years
|
|
Due After
10 years
|
|
Total
|
||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and federal agency
|
$
|
1,218
|
|
|
$
|
1,543
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,761
|
|
State and municipal
|
—
|
|
|
1
|
|
|
—
|
|
|
48
|
|
|
49
|
|
|||||
Residential mortgage-backed
|
—
|
|
|
—
|
|
|
—
|
|
|
317
|
|
|
317
|
|
|||||
Total
(1)
|
$
|
1,218
|
|
|
$
|
1,544
|
|
|
$
|
—
|
|
|
$
|
365
|
|
|
$
|
3,127
|
|
Weighted average yield
(2)
|
0.3
|
%
|
|
0.7
|
%
|
|
—
|
%
|
|
3.5
|
%
|
|
0.9
|
%
|
(1)
|
Amounts stated represent estimated fair value.
|
(2)
|
Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax exempt obligations.
|
At December 31 ($ in millions)
|
2015
|
|
(%)
|
|
2014
|
|
(%)
|
|
2013
|
|
(%)
|
|
2012
|
|
(%)
|
|
2011
|
|
(%)
|
|||||||||||||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Credit cards
|
$
|
65,773
|
|
|
96.3
|
%
|
|
$
|
58,880
|
|
|
96.1
|
%
|
|
$
|
54,958
|
|
|
96.0
|
%
|
|
$
|
49,572
|
|
|
94.8
|
%
|
|
$
|
44,287
|
|
|
92.7
|
%
|
Consumer installment loans
|
1,154
|
|
|
1.7
|
|
|
1,063
|
|
|
1.7
|
|
|
965
|
|
|
1.7
|
|
|
1,424
|
|
|
2.7
|
|
|
2,078
|
|
|
4.4
|
|
|||||
Commercial credit products
|
1,323
|
|
|
1.9
|
|
|
1,320
|
|
|
2.2
|
|
|
1,317
|
|
|
2.3
|
|
|
1,307
|
|
|
2.5
|
|
|
1,350
|
|
|
2.8
|
|
|||||
Other
|
40
|
|
|
0.1
|
|
|
23
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
26
|
|
|
0.1
|
|
|||||
Total loans
|
$
|
68,290
|
|
|
100.0
|
%
|
|
$
|
61,286
|
|
|
100.0
|
%
|
|
$
|
57,254
|
|
|
100.0
|
%
|
|
$
|
52,313
|
|
|
100.0
|
%
|
|
$
|
47,741
|
|
|
100.0
|
%
|
($ in millions)
|
Within 1
Year
(1)
|
|
1-5 Years
(2)
|
|
After
5 Years
|
|
Total
|
||||||||
Loans
|
|
|
|
|
|
|
|
||||||||
Credit cards
|
$
|
65,290
|
|
|
$
|
483
|
|
|
$
|
—
|
|
|
$
|
65,773
|
|
Consumer installment loans
|
16
|
|
|
588
|
|
|
550
|
|
|
1,154
|
|
||||
Commercial credit products
|
1,319
|
|
|
4
|
|
|
—
|
|
|
1,323
|
|
||||
Other
|
7
|
|
|
24
|
|
|
9
|
|
|
40
|
|
||||
Total loans
|
$
|
66,632
|
|
|
$
|
1,099
|
|
|
$
|
559
|
|
|
$
|
68,290
|
|
Loans due after one year at fixed interest rates
|
N/A
|
|
|
$
|
1,099
|
|
|
$
|
559
|
|
|
$
|
1,658
|
|
|
Loans due after one year at variable interest rates
|
N/A
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total loans due after one year
|
N/A
|
|
|
$
|
1,099
|
|
|
$
|
559
|
|
|
$
|
1,658
|
|
(1)
|
Credit card loans have minimum payment requirements but no stated maturity and therefore are included in the due within one year category. However, many of our credit card holders will revolve their balances, which may extend their repayment period beyond one year for balances at
December 31, 2015
.
|
(2)
|
Credit card and commercial loans due after one year relate to Troubled Debt Restructuring ("TDR") assets
|
($ in millions)
|
|
Loan Receivables
Outstanding
(1)
|
|
% of Total Loan
Receivables
Outstanding
|
|||
State
|
|
||||||
Texas
|
|
$
|
6,695
|
|
|
9.8
|
%
|
California
|
|
$
|
6,595
|
|
|
9.7
|
%
|
Florida
|
|
$
|
5,368
|
|
|
7.9
|
%
|
New York
|
|
$
|
3,840
|
|
|
5.6
|
%
|
Pennsylvania
|
|
$
|
3,016
|
|
|
4.4
|
%
|
(1)
|
Based on December 2015 customer statement-end balances extrapolated to
December 31, 2015
. Individual customer balances at
December 31, 2015
are not available without undue burden and expense.
|
At December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
Non-accrual loan receivables
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
1,042
|
|
|
$
|
1,003
|
|
Loans contractually 90 days past-due and still accruing interest
|
1,270
|
|
|
1,160
|
|
|
1,119
|
|
|
15
|
|
|
36
|
|
|||||
Earning TDRs
(1)
|
712
|
|
|
670
|
|
|
741
|
|
|
866
|
|
|
1,082
|
|
|||||
Non-accrual, past-due and restructured loan receivables
|
$
|
1,985
|
|
|
$
|
1,832
|
|
|
$
|
1,862
|
|
|
$
|
1,923
|
|
|
$
|
2,121
|
|
(1)
|
At December 31, 2015
,
2014
and 2013, balances exclude
$51 million
,
$54 million
and
$70 million
, respectively, of TDRs which are included in loans contractually 90 days past-due and still accruing interest balance. See Note 4.
Loan Receivables and Allowance for Loan Losses
to our consolidated and combined financial statements for additional information on the financial effects of TDRs for the years ended
December 31, 2015
and
2014
, respectively.
|
At December 31 ($ in millions)
|
2015
|
|
2014
|
||||
Gross amount of interest income that would have been recorded in accordance with the original contractual terms
|
$
|
153
|
|
|
$
|
142
|
|
Interest income recognized
|
49
|
|
|
56
|
|
||
Total interest income foregone
|
$
|
104
|
|
|
$
|
86
|
|
Years ended December 31
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|||||
Ratio of net charge-offs to average loan receivables, including held for sale
|
4.33
|
%
|
|
4.51
|
%
|
|
4.68
|
%
|
|
4.93
|
%
|
|
5.80
|
%
|
|
Balance at January 1, 2015
|
|
Provision charged to operations
|
|
Other
(1)
|
|
Gross charge-offs
(2)
|
|
Recoveries
(2)
|
|
Balance at December 31, 2015
|
||||||||||||
($ in millions)
|
|
||||||||||||||||||||||
Credit cards
|
$
|
3,169
|
|
|
$
|
2,880
|
|
|
$
|
—
|
|
|
$
|
(3,289
|
)
|
|
$
|
660
|
|
|
$
|
3,420
|
|
Consumer installment loans
|
22
|
|
|
25
|
|
|
—
|
|
|
(35
|
)
|
|
14
|
|
|
26
|
|
||||||
Commercial credit products
|
45
|
|
|
46
|
|
|
—
|
|
|
(47
|
)
|
|
6
|
|
|
50
|
|
||||||
Other
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Total
|
$
|
3,236
|
|
|
$
|
2,952
|
|
|
$
|
—
|
|
|
$
|
(3,371
|
)
|
|
$
|
680
|
|
|
$
|
3,497
|
|
|
Balance at January 1, 2014
|
|
Provision charged to operations
|
|
Other
(1)
|
|
Gross charge-offs
(2)
|
|
Recoveries
(2)
|
|
Balance at December 31, 2014
|
||||||||||||
($ in millions)
|
|
||||||||||||||||||||||
Credit cards
|
$
|
2,827
|
|
|
$
|
2,858
|
|
|
$
|
—
|
|
|
$
|
(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
|
|
|
Balance at January 1, 2013
|
|
Provision charged to operations
|
|
Other
(1)
|
|
Gross charge-offs
(2)
|
|
Recoveries
(2)
|
|
Balance at December 31, 2013
|
||||||||||||
($ in millions)
|
|
||||||||||||||||||||||
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
|
|
|
Balance at
January 1,
2012
|
|
Provision
charged to
operations
|
|
Other
(1)
|
|
Gross charge-offs
(2)
|
|
Recoveries
(2)
|
|
Balance at December 31, 2012
|
||||||||||||
($ in millions)
|
|
||||||||||||||||||||||
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
|
|
|
Balance at
January 1,
2011
|
|
Provision
charged to
operations
|
|
Other
(1)
|
|
Gross charge-offs
(2)
|
|
Recoveries
(2)
|
|
Balance at December 31, 2011
|
||||||||||||
($ in millions)
|
|
||||||||||||||||||||||
Credit cards
|
$
|
2,137
|
|
|
$
|
2,130
|
|
|
$
|
(8
|
)
|
|
$
|
(2,850
|
)
|
|
$
|
493
|
|
|
$
|
1,902
|
|
Consumer installment loans
|
176
|
|
|
54
|
|
|
—
|
|
|
(151
|
)
|
|
34
|
|
|
113
|
|
||||||
Commercial credit products
|
49
|
|
|
74
|
|
|
—
|
|
|
(99
|
)
|
|
13
|
|
|
37
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
2,362
|
|
|
$
|
2,258
|
|
|
$
|
(8
|
)
|
|
$
|
(3,100
|
)
|
|
$
|
540
|
|
|
$
|
2,052
|
|
(1)
|
Other primarily included the effects of foreign currency exchange.
|
(2)
|
Net charge-offs (gross charge-offs less recoveries) in certain portfolios may exceed the beginning allowance for loan losses as our revolving credit portfolios turn over more than once per year or, in all portfolios, can reflect losses that are incurred subsequent to the beginning of the period due to information becoming available during the period, which may identify further deterioration of existing loan receivables.
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||
Years ended December 31 ($ in millions)
|
Average
Balance
|
|
%
|
|
Average
Rate
|
|
Average
Balance
|
|
%
|
|
Average
Rate
|
|
Average
Balance |
|
%
|
|
Average
Rate |
||||||||||||
Deposits
(1)
|
$
|
38,148
|
|
|
61.0
|
%
|
|
1.6
|
%
|
|
$
|
30,110
|
|
|
55.0
|
%
|
|
1.6
|
%
|
|
$
|
22,405
|
|
|
47.1
|
%
|
|
1.7
|
%
|
Securitized financings
|
13,868
|
|
|
22.2
|
|
|
1.6
|
|
|
14,835
|
|
|
27.1
|
|
|
1.4
|
|
|
16,209
|
|
|
34.0
|
|
|
1.3
|
|
|||
Bank term loan
|
5,383
|
|
|
8.6
|
|
|
2.5
|
|
|
3,056
|
|
|
5.6
|
|
|
2.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Senior unsecured notes
|
4,976
|
|
|
8.0
|
|
|
3.5
|
|
|
1,382
|
|
|
2.5
|
|
|
3.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Related party debt
|
125
|
|
|
0.2
|
|
|
3.2
|
|
|
5,335
|
|
|
9.8
|
|
|
2.1
|
|
|
9,000
|
|
|
18.9
|
|
|
1.7
|
|
|||
Total
|
$
|
62,500
|
|
|
100.0
|
%
|
|
1.8
|
%
|
|
$
|
54,718
|
|
|
100.0
|
%
|
|
1.7
|
%
|
|
$
|
47,614
|
|
|
100.0
|
%
|
|
1.6
|
%
|
(1)
|
Excludes
$152 million
,
$240 million
and
$506 million
average balance of non-interest-bearing deposits for the years ended
December 31, 2015
,
2014
and
2013
, respectively. Non-interest-bearing deposits comprise less than 10% of total deposits for the years ended
December 31, 2015
,
2014
and
2013
.
|
Years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||
Average
Balance
(1)
|
|
% of
Total
|
|
Average
Rate
|
|
Average
Balance
(1)
|
|
% of
Total
|
|
Average
Rate
|
|
Average
Balance (1) |
|
% of
Total |
|
Average
Rate |
|||||||||||||
Direct deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Certificates of deposit (including IRA certificates of deposit)
|
$
|
15,543
|
|
|
40.7
|
%
|
|
1.4
|
%
|
|
$
|
10,993
|
|
|
36.5
|
%
|
|
1.3
|
%
|
|
$
|
5,889
|
|
|
26.3
|
%
|
|
0.9
|
%
|
Savings accounts (including money market accounts)
|
8,775
|
|
|
23.0
|
%
|
|
1.0
|
|
|
4,365
|
|
|
14.5
|
|
|
0.9
|
|
|
2,193
|
|
|
9.8
|
|
|
0.8
|
|
|||
Brokered deposits
|
13,830
|
|
|
36.3
|
%
|
|
2.2
|
|
|
14,752
|
|
|
49.0
|
|
|
2.0
|
|
|
14,323
|
|
|
63.9
|
|
|
2.1
|
|
|||
Total interest-bearing deposits
|
$
|
38,148
|
|
|
100.0
|
%
|
|
1.6
|
%
|
|
$
|
30,110
|
|
|
100.0
|
%
|
|
1.6
|
%
|
|
$
|
22,405
|
|
|
100.0
|
%
|
|
1.7
|
%
|
(1)
|
Average balances are based on monthly balances. Calculation of daily averages at this time involves undue burden and expense. We believe our average balance data is representative of our operations.
|
($ in millions)
|
3 Months or
Less
|
|
Over
3 Months
but within
6 Months
|
|
Over
6 Months
but within
12 Months
|
|
Over
12 Months
|
|
Total
|
||||||||||
U.S. deposits (less than $100,000)
(1)
|
$
|
5,234
|
|
|
$
|
1,447
|
|
|
$
|
2,779
|
|
|
$
|
11,362
|
|
|
$
|
20,822
|
|
U.S. deposits ($100,000 or more)
|
|
|
|
|
|
|
|
|
|
||||||||||
Direct deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Certificates of deposit (including IRA certificates of deposit)
|
1,747
|
|
|
2,182
|
|
|
3,108
|
|
|
4,898
|
|
|
11,935
|
|
|||||
Savings accounts (including money market accounts)
|
9,330
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,330
|
|
|||||
Brokered deposits:
|
|
|
|
|
|
|
|
|
|
||||||||||
Sweep accounts
|
1,360
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,360
|
|
|||||
Total
|
$
|
17,671
|
|
|
$
|
3,629
|
|
|
$
|
5,887
|
|
|
$
|
16,260
|
|
|
$
|
43,447
|
|
(1)
|
Includes brokered certificates of deposit for which underlying individual deposit balances are assumed to be less than $100,000.
|
($ in millions)
|
Less Than
One Year
|
|
One Year
Through
Three
Years
|
|
Four
Years
Through
Five
Years
|
|
After Five
Years
|
|
Total
|
||||||||||
Scheduled maturities of long-term borrowings—owed to securitization investors:
|
|
|
|
|
|
|
|
|
|
||||||||||
SYNCT
(1)
|
$
|
743
|
|
|
$
|
8,242
|
|
|
$
|
2,188
|
|
|
$
|
—
|
|
|
$
|
11,173
|
|
SFT
|
—
|
|
|
1,875
|
|
|
375
|
|
|
—
|
|
|
2,250
|
|
|||||
SRT
|
99
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|
180
|
|
|||||
Total long-term borrowings—owed to securitization investors
|
$
|
842
|
|
|
$
|
10,198
|
|
|
$
|
2,563
|
|
|
$
|
—
|
|
|
$
|
13,603
|
|
(1)
|
Excludes subordinated classes of SYNCT notes that we own.
|
|
Note Principal Balance
($ in millions)
|
|
# of Series
Outstanding
|
|
Three-Month Rolling
Average Excess
Spread
(1)
|
||||
SYNCT
(2)
|
$
|
12,569
|
|
|
22
|
|
|
14.0% to 17.6%
|
|
SFT
|
$
|
2,250
|
|
|
9
|
|
|
12.8
|
%
|
SRT
|
$
|
180
|
|
|
1
|
|
|
39.3
|
%
|
(1)
|
Represents the excess spread (generally calculated as interest income collected from the applicable pool of loan receivables less applicable net charge-offs, interest expense and servicing costs, divided by the aggregate principal amount of loan receivables in the applicable pool) for each trust (or, in the case of SYNCT, represents a range of the excess spreads relating to the particular series issued within the trust), in each case calculated in accordance with the applicable trust or series documentation, for the three securitization monthly periods ending prior to
December 31, 2015
.
|
(2)
|
Includes subordinated classes of SYNCT notes that we own.
|
2015 Issuances
($ in millions)
:
|
|
|
|
|
|
|||
Issuance Date
|
Principal Amount
|
|
Maturity
|
|
Interest Rate
|
|||
February 2, 2015
|
$
|
750
|
|
|
2020
|
|
2.700
|
%
|
February 2, 2015
|
250
|
|
|
2020
|
|
Floating rate (three-month LIBOR plus 1.23%)
|
|
|
July 23, 2015
|
1,000
|
|
|
2025
|
|
4.500
|
%
|
|
December 4, 2015
|
1,000
|
|
|
2019
|
|
2.600
|
%
|
|
|
$
|
3,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basel III Transition
|
|
Basel I
|
||||||||||
|
At December 31, 2015
|
|
At December 31, 2014
|
||||||||||
($ in millions)
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||
Total risk-based capital
|
$
|
12,533
|
|
|
18.1
|
%
|
|
$
|
10,106
|
|
|
16.2
|
%
|
Tier 1 risk-based capital
|
$
|
11,633
|
|
|
16.8
|
%
|
|
$
|
9,297
|
|
|
14.9
|
%
|
Tier 1 common equity
|
N/A
|
|
|
N/A
|
|
|
$
|
9,297
|
|
|
14.9
|
%
|
|
Tier 1 leverage
(1)
|
$
|
11,633
|
|
|
14.4
|
%
|
|
$
|
9,297
|
|
|
12.5
|
%
|
Common equity Tier 1 capital
|
$
|
11,633
|
|
|
16.8
|
%
|
|
N/A
|
|
|
N/A
|
|
(1)
|
Tier 1 leverage ratio represents total tier 1 capital as a percentage of total leveraged assets.
|
|
Basel III Fully Phased-in (estimated)
|
||||||||||||
|
At December 31, 2015
|
|
At December 31, 2014
|
||||||||||
($ in millions)
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||
Common equity Tier 1 capital
|
$
|
11,234
|
|
|
15.9
|
%
|
|
$
|
9,277
|
|
|
14.5
|
%
|
At December 31 ($ in millions)
|
2015
|
|
2014
|
||||
Equity to Tier 1 capital, Tier 1 common equity and Risk-based capital
|
|
|
|
||||
Total equity
|
$
|
12,604
|
|
|
$
|
10,478
|
|
Disallowed goodwill and other disallowed intangible assets
|
(1,650
|
)
|
|
(1,181
|
)
|
||
|
|
|
|
||||
Basel I - Tier 1 capital and Tier 1 common equity
|
|
|
$
|
9,297
|
|
||
|
|
|
|
||||
Adjustments for certain other intangibles assets and deferred tax liabilities
|
|
|
(20
|
)
|
|||
Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss)
|
280
|
|
|
|
|||
|
|
|
|
||||
Basel III - Common equity Tier 1 (fully phased-in)
|
$
|
11,234
|
|
|
$
|
9,277
|
|
|
|
|
|
||||
Adjustments related to capital components during transition
|
399
|
|
|
|
|||
|
|
|
|
||||
Tier 1 capital and Tier 1 common equity
(1)
|
11,633
|
|
|
9,297
|
|
||
|
|
|
|
||||
Allowance for loan losses includible in risk-based capital
|
900
|
|
|
809
|
|
||
|
|
|
|
||||
Risk-based capital
(1)
|
$
|
12,533
|
|
|
$
|
10,106
|
|
|
|
|
|
||||
Total assets to leveraged assets
|
|
|
|
||||
Total assets
(2)
|
$
|
82,029
|
|
|
$
|
75,707
|
|
Disallowed goodwill and other disallowed intangible assets, net of related deferred tax liabilities
|
(991
|
)
|
|
(1,181
|
)
|
||
Other
|
—
|
|
|
79
|
|
||
Total assets for leverage capital purposes
(1)
|
$
|
81,038
|
|
|
$
|
74,605
|
|
|
|
|
|
Risk-weighted assets - Basel I
|
N/A
|
|
|
$
|
62,270
|
|
|
|
|
|
|
||||
Risk-weighted assets - Basel III (fully phased-in)
(3)
|
$
|
70,640
|
|
|
$
|
64,162
|
|
|
|
|
|
||||
Risk-weighted assets - Basel III (transition)
(3)
|
$
|
69,372
|
|
|
N/A
|
|
(1)
|
At December 31, 2015
, regulatory capital amounts are calculated under Basel III rules, subject to transition provisions.
At December 31, 2014
, regulatory capital amounts are calculated under Basel I rules.
|
(2)
|
Represents total average assets for the three months ended
December 31, 2015
and total assets at
December 31, 2014
.
|
(3)
|
Key differences between Basel III transition rules and fully phased-in Basel III rules relate to the calculation of risk-weighted assets including, but not limited to, risk weighting of deferred tax assets and adjustments for certain intangible assets.
|
|
Bank
|
|
Minimum to be Well-
Capitalized under Prompt Corrective Action Provisions - Basel III |
||||||||||
At December 31, 2015 ($ in millions)
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||
Total risk-based capital
|
$
|
8,443
|
|
|
16.6
|
%
|
|
$
|
5,089
|
|
|
10.0
|
%
|
Tier 1 risk-based capital
|
$
|
7,781
|
|
|
15.3
|
%
|
|
$
|
4,071
|
|
|
8.0
|
%
|
Tier 1 leverage
|
$
|
7,781
|
|
|
13.0
|
%
|
|
$
|
2,984
|
|
|
5.0
|
%
|
Common equity Tier 1 capital
|
$
|
7,781
|
|
|
15.3
|
%
|
|
$
|
3,308
|
|
|
6.5
|
%
|
|
Bank
|
|
Minimum to be Well-
Capitalized under Prompt Corrective Action Provisions - Basel I |
||||||||||
At December 31, 2014 ($ in millions)
|
Amount
|
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||
Total risk-based capital
|
$
|
7,100
|
|
|
17.1
|
%
|
|
$
|
4,152
|
|
|
10.0
|
%
|
Tier 1 risk-based capital
|
$
|
6,559
|
|
|
15.8
|
%
|
|
$
|
2,491
|
|
|
6.0
|
%
|
Tier 1 leverage
|
$
|
6,559
|
|
|
13.4
|
%
|
|
$
|
2,449
|
|
|
5.0
|
%
|
|
Payments Due by Period
|
||||||||||||||||||
($ in millions)
|
Total
|
|
2016
|
|
2017 - 2018
|
|
2019 - 2020
|
|
2021 and Thereafter
|
||||||||||
Deposits
(1)(2)
|
$
|
43,447
|
|
|
$
|
27,187
|
|
|
$
|
6,946
|
|
|
$
|
6,733
|
|
|
$
|
2,581
|
|
Securitized financings
(3)
|
13,931
|
|
|
962
|
|
|
10,363
|
|
|
2,606
|
|
|
—
|
|
|||||
Bank term loan
(4)
|
4,151
|
|
|
—
|
|
|
—
|
|
|
4,151
|
|
|
—
|
|
|||||
Senior unsecured notes
(5)
|
7,943
|
|
|
215
|
|
|
917
|
|
|
3,396
|
|
|
3,415
|
|
|||||
Operating leases
|
204
|
|
|
35
|
|
|
62
|
|
|
51
|
|
|
56
|
|
|||||
Total contractual obligations
(6)(7)
|
$
|
69,676
|
|
|
$
|
28,399
|
|
|
$
|
18,288
|
|
|
$
|
16,937
|
|
|
$
|
6,052
|
|
(1)
|
Savings accounts (including money market accounts), brokered network deposits sweeps, and non-interest-bearing deposits are assumed for purposes of this table to be due in 2016 because they may be withdrawn at any time without payment of any penalty.
|
(2)
|
Deposits do not include interest payments because the amount and timing of these payments cannot be reasonably estimated as certain deposits have early withdrawal rights and also the option to roll interest payments into the balance. The average interest rate on our interest-bearing deposits for the
year ended December 31, 2015
was
1.6%
. See Note 7.
Deposits
to our consolidated and combined financial statements.
|
(3)
|
These amounts shown exclude interest on floating rate securitized borrowings. The average interest rate for the
year ended December 31, 2015
was
1.6%
. See Note 8.
Borrowings
to our consolidated and combined financial statements.
|
(4)
|
The amounts shown exclude interest as payments of interest on these borrowings are based on floating rates. The average interest rate for the
year ended December 31, 2015
was
2.5%
for the Bank Term Loan. See Note 8.
Borrowings
to our consolidated and combined financial statements.
|
(5)
|
The amounts shown exclude interest for the
$250 million
senior unsecured debt due 2020 as payments of interest on this senior unsecured note are based on floating rates.
|
(6)
|
The table above does not include estimated payments of liabilities associated with uncertain income tax positions. The inherent complexity and uncertainty around the timing and amount of future outflows for uncertain tax positions do not permit a reasonably reliable estimate of payments, if any, to be made in connection with these liabilities. At
December 31, 2015
, we had gross unrecognized tax benefits of
$327 million
, excluding related interest and penalties. See Note 14.
Income Taxes
to the consolidated and combined financial statements.
|
(7)
|
The table above excludes our reimbursement obligations to GE for certain retiree benefits obligations of
$166 million
at December 31, 2015. See Note 11.
Employee Benefit Plans
to the consolidated and combined financial statements for additional information.
|
For the years ended December 31 ($ in millions, except per share data)
|
2015
|
|
2014
|
|
2013
|
||||||
Interest income:
|
|
|
|
|
|
||||||
Interest and fees on loans (Note 4)
|
$
|
13,179
|
|
|
$
|
12,216
|
|
|
$
|
11,295
|
|
Interest on investment securities
|
49
|
|
|
26
|
|
|
18
|
|
|||
Total interest income
|
13,228
|
|
|
12,242
|
|
|
11,313
|
|
|||
Interest expense:
|
|
|
|
|
|
||||||
Interest on deposits
|
607
|
|
|
470
|
|
|
374
|
|
|||
Interest on borrowings of consolidated securitization entities
|
215
|
|
|
215
|
|
|
211
|
|
|||
Interest on third-party debt
|
309
|
|
|
124
|
|
|
—
|
|
|||
Interest on related party debt (Note 15)
|
4
|
|
|
113
|
|
|
157
|
|
|||
Total interest expense
|
1,135
|
|
|
922
|
|
|
742
|
|
|||
Net interest income
|
12,093
|
|
|
11,320
|
|
|
10,571
|
|
|||
Retailer share arrangements
|
(2,738
|
)
|
|
(2,575
|
)
|
|
(2,373
|
)
|
|||
Net interest income, after retailer share arrangements
|
9,355
|
|
|
8,745
|
|
|
8,198
|
|
|||
Provision for loan losses (Note 4)
|
2,952
|
|
|
2,917
|
|
|
3,072
|
|
|||
Net interest income, after retailer share arrangements and provision for loan losses
|
6,403
|
|
|
5,828
|
|
|
5,126
|
|
|||
Other income:
|
|
|
|
|
|
||||||
Interchange revenue
|
505
|
|
|
389
|
|
|
324
|
|
|||
Debt cancellation fees
|
249
|
|
|
275
|
|
|
324
|
|
|||
Loyalty programs
|
(419
|
)
|
|
(281
|
)
|
|
(213
|
)
|
|||
Other
|
57
|
|
|
102
|
|
|
65
|
|
|||
Total other income
|
392
|
|
|
485
|
|
|
500
|
|
|||
Other expense:
|
|
|
|
|
|
||||||
Employee costs
|
1,042
|
|
|
866
|
|
|
698
|
|
|||
Professional fees
|
645
|
|
|
563
|
|
|
449
|
|
|||
Marketing and business development
|
433
|
|
|
460
|
|
|
269
|
|
|||
Information processing
|
297
|
|
|
212
|
|
|
193
|
|
|||
Other
|
847
|
|
|
826
|
|
|
875
|
|
|||
Total other expense
|
3,264
|
|
|
2,927
|
|
|
2,484
|
|
|||
Earnings before provision for income taxes
|
3,531
|
|
|
3,386
|
|
|
3,142
|
|
|||
Provision for income taxes (Note 14)
|
1,317
|
|
|
1,277
|
|
|
1,163
|
|
|||
Net earnings
|
$
|
2,214
|
|
|
$
|
2,109
|
|
|
$
|
1,979
|
|
|
|
|
|
|
|
||||||
Earnings per share
|
|
|
|
|
|
||||||
Basic
|
$
|
2.66
|
|
|
$
|
2.78
|
|
|
$
|
2.81
|
|
Diluted
|
$
|
2.65
|
|
|
$
|
2.78
|
|
|
$
|
2.81
|
|
For the years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Net earnings
|
$
|
2,214
|
|
|
$
|
2,109
|
|
|
$
|
1,979
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss)
|
|
|
|
|
|
||||||
Investment securities
|
(10
|
)
|
|
9
|
|
|
(10
|
)
|
|||
Currency translation adjustments
|
(11
|
)
|
|
(5
|
)
|
|
(4
|
)
|
|||
Employee benefit plans
|
(10
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|||
Other comprehensive income (loss)
|
(31
|
)
|
|
3
|
|
|
(15
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income
|
$
|
2,183
|
|
|
$
|
2,112
|
|
|
$
|
1,964
|
|
At December 31 ($ in millions)
|
2015
|
|
2014
|
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Cash and equivalents
|
$
|
12,325
|
|
|
$
|
11,828
|
|
Investment securities (Note 3)
|
3,142
|
|
|
1,598
|
|
||
Loan receivables: (Notes 4 and 5)
|
|
|
|
||||
Unsecuritized loans held for investment
|
42,826
|
|
|
34,335
|
|
||
Restricted loans of consolidated securitization entities
|
25,464
|
|
|
26,951
|
|
||
Total loan receivables
|
68,290
|
|
|
61,286
|
|
||
Less: Allowance for loan losses
|
(3,497
|
)
|
|
(3,236
|
)
|
||
Loan receivables, net
|
64,793
|
|
|
58,050
|
|
||
Loan receivables held for sale (Note 4)
|
—
|
|
|
332
|
|
||
Goodwill (Note 6)
|
949
|
|
|
949
|
|
||
Intangible assets, net (Note 6)
|
701
|
|
|
519
|
|
||
Other assets
(a)
|
2,225
|
|
|
2,431
|
|
||
Total assets
|
$
|
84,135
|
|
|
$
|
75,707
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Deposits: (Note 7)
|
|
|
|
||||
Interest-bearing deposit accounts
|
$
|
43,295
|
|
|
$
|
34,847
|
|
Non-interest-bearing deposit accounts
|
152
|
|
|
108
|
|
||
Total deposits
|
43,447
|
|
|
34,955
|
|
||
Borrowings: (Notes 5 and 8)
|
|
|
|
||||
Borrowings of consolidated securitization entities
|
13,603
|
|
|
14,967
|
|
||
Bank term loan
|
4,151
|
|
|
8,245
|
|
||
Senior unsecured notes
|
6,590
|
|
|
3,593
|
|
||
Related party debt (Note 15)
|
—
|
|
|
655
|
|
||
Total borrowings
|
24,344
|
|
|
27,460
|
|
||
Accrued expenses and other liabilities
|
3,740
|
|
|
2,814
|
|
||
Total liabilities
|
$
|
71,531
|
|
|
$
|
65,229
|
|
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common Stock, par share value $0.001 per share; 4,000,000,000 shares authorized, 833,828,340 and 833,764,589 shares issued and outstanding at December 31, 2015 and 2014, respectively
|
$
|
1
|
|
|
$
|
1
|
|
Additional paid-in capital
|
9,351
|
|
|
9,408
|
|
||
Retained earnings
|
3,293
|
|
|
1,079
|
|
||
Accumulated other comprehensive income (loss):
|
|
|
|
||||
Investment securities
|
(10
|
)
|
|
—
|
|
||
Currency translation adjustments
|
(19
|
)
|
|
(8
|
)
|
||
Other
|
(12
|
)
|
|
(2
|
)
|
||
Total equity
|
12,604
|
|
|
10,478
|
|
||
Total liabilities and equity
|
$
|
84,135
|
|
|
$
|
75,707
|
|
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
($ in millions, shares in thousands)
|
Shares
|
|
Amount
|
|
Additional Paid-in Capital
|
|
Parent's Net Investment
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Equity
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at January 1, 2013
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,580
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
4,582
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
1,979
|
|
|
—
|
|
|
—
|
|
|
1,979
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
||||||
Changes in Parent's net investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(586
|
)
|
|
—
|
|
|
—
|
|
|
(586
|
)
|
||||||
Balance at December 31, 2013
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,973
|
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
5,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at January 1, 2014
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,973
|
|
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
5,960
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
1,030
|
|
|
1,079
|
|
|
—
|
|
|
2,109
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||||
Changes in Parent's net investment
|
—
|
|
|
—
|
|
|
—
|
|
|
(603
|
)
|
|
—
|
|
|
—
|
|
|
(603
|
)
|
||||||
Conversion of parent's net investment into common stock
|
705,271
|
|
|
1
|
|
|
6,399
|
|
|
(6,400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Issuance of common stock
|
128,494
|
|
|
—
|
|
|
2,842
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,842
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
155
|
|
||||||
Balance at December 31, 2014
|
833,765
|
|
|
$
|
1
|
|
|
$
|
9,408
|
|
|
$
|
—
|
|
|
$
|
1,079
|
|
|
$
|
(10
|
)
|
|
$
|
10,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at January 1, 2015
|
833,765
|
|
|
$
|
1
|
|
|
$
|
9,408
|
|
|
$
|
—
|
|
|
$
|
1,079
|
|
|
$
|
(10
|
)
|
|
$
|
10,478
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,214
|
|
|
—
|
|
|
2,214
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
(31
|
)
|
||||||
Stock-based compensation
|
63
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
(91
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91
|
)
|
||||||
Balance at December 31, 2015
|
833,828
|
|
|
$
|
1
|
|
|
$
|
9,351
|
|
|
$
|
—
|
|
|
$
|
3,293
|
|
|
$
|
(41
|
)
|
|
$
|
12,604
|
|
For the years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows - operating activities
|
|
|
|
|
|
||||||
Net earnings
|
$
|
2,214
|
|
|
$
|
2,109
|
|
|
$
|
1,979
|
|
Adjustments to reconcile net earnings to cash provided from operating activities
|
|
|
|
|
|
||||||
Provision for loan losses
|
2,952
|
|
|
2,917
|
|
|
3,072
|
|
|||
Deferred income taxes
|
(295
|
)
|
|
(203
|
)
|
|
(237
|
)
|
|||
Depreciation and amortization
|
174
|
|
|
131
|
|
|
104
|
|
|||
(Increase) decrease in interest and fees receivable
|
(163
|
)
|
|
68
|
|
|
(152
|
)
|
|||
(Increase) decrease in other assets
|
70
|
|
|
196
|
|
|
40
|
|
|||
Increase (decrease) in accrued expenses and other liabilities
|
803
|
|
|
(172
|
)
|
|
810
|
|
|||
All other operating activities
|
429
|
|
|
294
|
|
|
63
|
|
|||
Cash from operating activities
|
6,184
|
|
|
5,340
|
|
|
5,679
|
|
|||
|
|
|
|
|
|
||||||
Cash flows - investing activities
|
|
|
|
|
|
||||||
Maturity and redemption of investment securities
|
3,538
|
|
|
27
|
|
|
40
|
|
|||
Purchases of investment securities
|
(5,102
|
)
|
|
(1,376
|
)
|
|
(100
|
)
|
|||
Acquisition of loan receivables
|
(1,051
|
)
|
|
—
|
|
|
(206
|
)
|
|||
Net cash from principal business purchased
|
—
|
|
|
—
|
|
|
6,393
|
|
|||
Net (increase) decrease in restricted cash and equivalents
|
713
|
|
|
(1,028
|
)
|
|
(20
|
)
|
|||
Proceeds from sale of loan receivables
|
392
|
|
|
1,510
|
|
|
289
|
|
|||
Net (increase) decrease in loan receivables
|
(8,852
|
)
|
|
(8,755
|
)
|
|
(7,355
|
)
|
|||
All other investing activities
|
(441
|
)
|
|
(446
|
)
|
|
(107
|
)
|
|||
Cash (used for) from investing activities
|
(10,803
|
)
|
|
(10,068
|
)
|
|
(1,066
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows - financing activities
|
|
|
|
|
|
||||||
Borrowings of consolidated securitization entities
|
|
|
|
|
|
||||||
Proceeds from issuance of securitized debt
|
3,881
|
|
|
5,176
|
|
|
866
|
|
|||
Maturities and repayment of securitized debt
|
(5,244
|
)
|
|
(5,569
|
)
|
|
(2,708
|
)
|
|||
Third-party debt
|
|
|
|
|
|
||||||
Proceeds from issuance of third-party debt
|
2,995
|
|
|
12,343
|
|
|
—
|
|
|||
Maturities and repayment of third-party debt
|
(4,094
|
)
|
|
(505
|
)
|
|
—
|
|
|||
Related party debt
|
|
|
|
|
|
||||||
Proceeds from borrowings of related party debt
|
—
|
|
|
1,615
|
|
|
—
|
|
|||
Maturities and repayment of related party debt
|
(655
|
)
|
|
(10,015
|
)
|
|
(1,649
|
)
|
|||
Net increase (decrease) in deposits
|
8,273
|
|
|
9,088
|
|
|
481
|
|
|||
Proceeds from initial public offering
|
—
|
|
|
2,842
|
|
|
—
|
|
|||
Net transfers (to) from Parent
|
—
|
|
|
(603
|
)
|
|
(586
|
)
|
|||
All other financing activities
|
(40
|
)
|
|
(135
|
)
|
|
(32
|
)
|
|||
Cash from (used for) financing activities
|
5,116
|
|
|
14,237
|
|
|
(3,628
|
)
|
|||
|
|
|
|
|
|
||||||
Increase in cash and equivalents
|
497
|
|
|
9,509
|
|
|
985
|
|
|||
Cash and equivalents at beginning of year
|
11,828
|
|
|
2,319
|
|
|
1,334
|
|
|||
Cash and equivalents at end of year
|
$
|
12,325
|
|
|
$
|
11,828
|
|
|
$
|
2,319
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
|
|
||||||
Cash paid during the year for interest
|
$
|
(1,040
|
)
|
|
$
|
(839
|
)
|
|
$
|
(729
|
)
|
Cash paid during the year for income taxes
|
$
|
(1,219
|
)
|
|
$
|
(1,787
|
)
|
|
$
|
(1,183
|
)
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||||||||||
|
|
|
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
|
$
|
2,768
|
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
2,761
|
|
|
$
|
1,252
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,252
|
|
State and municipal
|
51
|
|
|
1
|
|
|
(3
|
)
|
|
49
|
|
|
57
|
|
|
1
|
|
|
(1
|
)
|
|
57
|
|
||||||||
Residential
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
mortgage-backed
(a)
|
323
|
|
|
1
|
|
|
(7
|
)
|
|
317
|
|
|
271
|
|
|
3
|
|
|
(3
|
)
|
|
271
|
|
||||||||
U.S. corporate debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||||||
Equity
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||||
Total
|
$
|
3,157
|
|
|
$
|
2
|
|
|
$
|
(17
|
)
|
|
$
|
3,142
|
|
|
$
|
1,598
|
|
|
$
|
4
|
|
|
$
|
(4
|
)
|
|
$
|
1,598
|
|
(a)
|
At
December 31, 2015
and
2014
, 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.
|
|
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, 2015
|
|
|
|
|
|
|
|
||||||||
Debt
|
|
|
|
|
|
|
|
||||||||
U.S. government and federal agency
|
$
|
2,611
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
State and municipal
|
40
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||
Residential mortgage-backed
|
175
|
|
|
(3
|
)
|
|
91
|
|
|
(4
|
)
|
||||
Equity
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
2,827
|
|
|
$
|
(13
|
)
|
|
$
|
91
|
|
|
$
|
(4
|
)
|
|
|
|
|
|
|
|
|
||||||||
At December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Debt
|
|
|
|
|
|
|
|
||||||||
U.S. government and federal agency
|
$
|
700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State and municipal
|
—
|
|
|
—
|
|
|
34
|
|
|
(1
|
)
|
||||
Residential mortgage-backed
|
30
|
|
|
—
|
|
|
85
|
|
|
(3
|
)
|
||||
Total
|
$
|
730
|
|
|
$
|
—
|
|
|
$
|
119
|
|
|
$
|
(4
|
)
|
|
Amortized
|
|
|
Estimated
|
|
||
At December 31, 2015 ($ in millions)
|
cost
|
|
|
fair value
|
|
||
|
|
|
|
||||
Due
|
|
|
|
||||
Within one year
|
$
|
1,218
|
|
|
$
|
1,218
|
|
After one year through five years
|
$
|
1,550
|
|
|
$
|
1,544
|
|
After five years through ten years
|
$
|
—
|
|
|
$
|
—
|
|
After ten years
|
$
|
51
|
|
|
$
|
48
|
|
At December 31 ($ in millions)
|
2015
|
|
2014
|
||||
|
|
|
|
||||
Credit cards
|
$
|
65,773
|
|
|
$
|
58,880
|
|
Consumer installment loans
|
1,154
|
|
|
1,063
|
|
||
Commercial credit products
|
1,323
|
|
|
1,320
|
|
||
Other
|
40
|
|
|
23
|
|
||
Total loan receivables, before allowance for losses
(a)(b)
|
$
|
68,290
|
|
|
$
|
61,286
|
|
(a)
|
Total loan receivables include
$25.5 billion
and
$27.0 billion
of restricted loans of consolidated securitization entities at
December 31, 2015
and
2014
, respectively. See Note 5.
Variable Interest Entities
for further information on these restricted loans.
|
(b)
|
At
December 31, 2015
and
2014
, loan receivables included deferred expense, net of deferred income, of
$63
million and
$46
million, respectively.
|
($ in millions)
|
Balance at January 1, 2015
|
|
|
Provision charged to operations
|
|
|
Gross charge-offs
|
|
|
Recoveries
|
|
|
Balance at December 31, 2015
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Credit cards
|
$
|
3,169
|
|
|
$
|
2,880
|
|
|
$
|
(3,289
|
)
|
|
$
|
660
|
|
|
$
|
3,420
|
|
Consumer installment loans
|
22
|
|
|
25
|
|
|
(35
|
)
|
|
14
|
|
|
26
|
|
|||||
Commercial credit products
|
45
|
|
|
46
|
|
|
(47
|
)
|
|
6
|
|
|
50
|
|
|||||
Other
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Total
|
$
|
3,236
|
|
|
$
|
2,952
|
|
|
$
|
(3,371
|
)
|
|
$
|
680
|
|
|
$
|
3,497
|
|
($ 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
|
|
|
$
|
(3,111
|
)
|
|
$
|
595
|
|
|
$
|
3,169
|
|
Consumer installment loans
|
19
|
|
|
20
|
|
|
(30
|
)
|
|
13
|
|
|
22
|
|
|||||
Commercial credit products
|
46
|
|
|
39
|
|
|
(48
|
)
|
|
8
|
|
|
45
|
|
|||||
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
|
|
|||||
Total
|
$
|
2,274
|
|
|
$
|
3,072
|
|
|
$
|
(3,011
|
)
|
|
$
|
557
|
|
|
$
|
2,892
|
|
At December 31, 2015 ($ 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
|
$
|
1,451
|
|
|
$
|
1,257
|
|
|
$
|
2,708
|
|
|
$
|
1,257
|
|
|
$
|
—
|
|
Consumer installment loans
|
16
|
|
|
3
|
|
|
19
|
|
|
—
|
|
|
3
|
|
|||||
Commercial credit products
|
32
|
|
|
13
|
|
|
45
|
|
|
13
|
|
|
—
|
|
|||||
Total delinquent loans
|
$
|
1,499
|
|
|
$
|
1,273
|
|
|
$
|
2,772
|
|
|
$
|
1,270
|
|
|
$
|
3
|
|
Percentage of total loan receivables
(a)
|
2.2
|
%
|
|
1.9
|
%
|
|
4.1
|
%
|
|
1.9
|
%
|
|
—
|
%
|
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
|
%
|
|
—
|
%
|
(a)
|
Percentages are calculated based on period-end balances.
|
For the years ended December 31 ($ in millions)
|
2015
|
|
2014
|
||||
Credit cards
|
$
|
499
|
|
|
$
|
423
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
||
Commercial credit products
|
5
|
|
|
5
|
|
||
Total
|
$
|
504
|
|
|
$
|
428
|
|
At December 31, 2015 ($ in millions)
|
Total recorded
investment
|
|
|
Related allowance
|
|
|
Net recorded investment
|
|
|
Unpaid principal balance
|
|
||||
Credit cards
|
$
|
756
|
|
|
$
|
(256
|
)
|
|
$
|
500
|
|
|
$
|
659
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial credit products
|
7
|
|
|
(3
|
)
|
|
4
|
|
|
6
|
|
||||
Total
|
$
|
763
|
|
|
$
|
(259
|
)
|
|
$
|
504
|
|
|
$
|
665
|
|
At December 31, 2014 ($ in millions)
|
Total recorded
investment
|
|
|
Related allowance
|
|
|
Net recorded investment
|
|
|
Unpaid principal balance
|
|
||||
Credit cards
|
$
|
716
|
|
|
$
|
(217
|
)
|
|
$
|
499
|
|
|
$
|
613
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Commercial credit products
|
8
|
|
|
(3
|
)
|
|
5
|
|
|
8
|
|
||||
Total
|
$
|
724
|
|
|
$
|
(220
|
)
|
|
$
|
504
|
|
|
$
|
621
|
|
Years ended December 31,
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||||
($ 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
|
$
|
49
|
|
$
|
151
|
|
$
|
727
|
|
|
$
|
56
|
|
$
|
140
|
|
$
|
745
|
|
|
$
|
79
|
|
$
|
175
|
|
$
|
890
|
|
Consumer installment loans
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
1
|
|
3
|
|
—
|
|
|||||||||
Commercial credit products
|
—
|
|
2
|
|
7
|
|
|
—
|
|
2
|
|
10
|
|
|
1
|
|
2
|
|
12
|
|
|||||||||
Total
|
$
|
49
|
|
$
|
153
|
|
$
|
734
|
|
|
$
|
56
|
|
$
|
142
|
|
$
|
755
|
|
|
$
|
81
|
|
$
|
180
|
|
$
|
902
|
|
Years ended December 31,
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
($ in millions)
|
Accounts defaulted
|
|
|
Loans defaulted
|
|
|
Accounts defaulted
|
|
|
Loans defaulted
|
|
|
Accounts defaulted
|
|
|
Loans defaulted
|
|
|||
Credit cards
|
28,126
|
|
|
$
|
56
|
|
|
29,313
|
|
|
$
|
60
|
|
|
30,640
|
|
|
$
|
56
|
|
Consumer installment loans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98
|
|
|
3
|
|
|||
Commercial credit products
|
95
|
|
|
1
|
|
|
159
|
|
|
1
|
|
|
42
|
|
|
—
|
|
|||
Total
|
28,221
|
|
|
$
|
57
|
|
|
29,472
|
|
|
$
|
61
|
|
|
30,780
|
|
|
$
|
59
|
|
At December 31
|
2015
|
|
2014
|
||||||||||||||
|
661 or
|
|
|
601 to
|
|
|
600 or
|
|
|
661 or
|
|
|
601 to
|
|
|
600 or
|
|
|
higher
|
|
|
660
|
|
|
less
|
|
|
higher
|
|
|
660
|
|
|
less
|
|
Credit cards
|
73.0
|
%
|
|
19.8
|
%
|
|
7.2
|
%
|
|
72.5
|
%
|
|
19.9
|
%
|
|
7.6
|
%
|
Consumer installment loans
|
77.7
|
%
|
|
16.6
|
%
|
|
5.7
|
%
|
|
78.9
|
%
|
|
15.7
|
%
|
|
5.4
|
%
|
Commercial credit products
|
86.8
|
%
|
|
8.7
|
%
|
|
4.5
|
%
|
|
86.5
|
%
|
|
8.6
|
%
|
|
4.8
|
%
|
For the years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Credit cards
|
$
|
12,932
|
|
|
$
|
11,967
|
|
|
$
|
11,015
|
|
Consumer installment loans
|
104
|
|
|
99
|
|
|
129
|
|
|||
Commercial credit products
|
142
|
|
|
149
|
|
|
150
|
|
|||
Other
|
1
|
|
|
1
|
|
|
1
|
|
|||
Total
|
$
|
13,179
|
|
|
$
|
12,216
|
|
|
$
|
11,295
|
|
At December 31 ($ in millions)
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Loan receivables, net
(a)
|
$
|
24,338
|
|
|
$
|
25,645
|
|
Other assets
(b)
|
141
|
|
|
1,134
|
|
||
Total
|
$
|
24,479
|
|
|
$
|
26,779
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Borrowings
|
$
|
13,603
|
|
|
$
|
14,967
|
|
Other liabilities
|
30
|
|
|
368
|
|
||
Total
|
$
|
13,633
|
|
|
$
|
15,335
|
|
(a)
|
Includes
$1.1 billion
and
$1.3 billion
of related allowance for loan losses resulting in gross restricted loans of
$25.5 billion
and
$27.0 billion
at
December 31, 2015
and
2014
, respectively.
|
(b)
|
Includes
$118 million
and
$1.0 billion
of segregated funds held by the VIEs at
December 31, 2015
and
2014
, respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Consolidated Statements of Financial Position.
|
($ in millions)
|
2015
|
|
2014
|
||||
Balance at January 1
|
$
|
949
|
|
|
$
|
949
|
|
Acquisitions
|
—
|
|
|
—
|
|
||
Balance at December 31
|
$
|
949
|
|
|
$
|
949
|
|
|
2015
|
|
2014
|
||||||||||||||||||||
At December 31 ($ in millions)
|
Gross carrying amount
|
|
|
Accumulated amortization
|
|
|
Net
|
|
|
Gross carrying amount
|
|
|
Accumulated amortization
|
|
|
Net
|
|
||||||
Customer-related
|
$
|
1,045
|
|
|
$
|
(505
|
)
|
|
$
|
540
|
|
|
$
|
849
|
|
|
$
|
(405
|
)
|
|
$
|
444
|
|
Capitalized software
|
253
|
|
|
(92
|
)
|
|
161
|
|
|
120
|
|
|
(45
|
)
|
|
75
|
|
||||||
Total
|
$
|
1,298
|
|
|
$
|
(597
|
)
|
|
$
|
701
|
|
|
$
|
969
|
|
|
$
|
(450
|
)
|
|
$
|
519
|
|
($ in millions)
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|||||
Amortization expense
|
$
|
158
|
|
|
$
|
131
|
|
|
$
|
120
|
|
|
$
|
110
|
|
|
$
|
89
|
|
|
2015
|
|
2014
|
||||||||||
At December 31 ($ in millions)
|
Amount
|
|
Average rate
(a)
|
|
Amount
|
|
Average rate
(a)
|
||||||
|
|
|
|
|
|
|
|
||||||
Interest-bearing deposits
|
$
|
43,295
|
|
|
1.6
|
%
|
|
$
|
34,847
|
|
|
1.6
|
%
|
Non-interest-bearing deposits
|
152
|
|
|
—
|
|
|
108
|
|
|
—
|
|
||
Total deposits
|
$
|
43,447
|
|
|
|
|
$
|
34,955
|
|
|
|
(a)
|
Based on interest expense for the years ended
December 31, 2015
and
2014
and average deposits balances.
|
($ in millions)
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
Thereafter
|
|
||||||
Deposits
|
$
|
12,151
|
|
|
$
|
4,820
|
|
|
$
|
2,126
|
|
|
$
|
3,917
|
|
|
$
|
2,815
|
|
|
$
|
2,581
|
|
|
2015
|
|
2014
|
||||||||||||
At December 31 ($ in millions)
|
Maturity date
|
|
Interest Rate
|
|
Weighted average interest rate
|
|
Outstanding Amount
(a)
|
|
Outstanding Amount
(a)
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Borrowings of consolidated securitization entities:
|
|
|
|
|
|
|
|
|
|
||||||
Fixed securitized borrowings
|
2017 - 2020
|
|
1.3%-4.5%
|
|
|
1.9
|
%
|
|
$
|
6,396
|
|
|
$
|
6,315
|
|
Floating securitized borrowings
|
2016 - 2019
|
|
0.8%-1.3%
|
|
|
1.0
|
%
|
|
7,207
|
|
|
8,652
|
|
||
Total borrowings of consolidated securitization entities
|
|
|
|
|
1.4
|
%
|
|
13,603
|
|
|
14,967
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Bank term loan
|
2019
|
|
2.2
|
%
|
|
2.2
|
%
|
|
4,151
|
|
|
8,245
|
|
||
|
|
|
|
|
|
|
|
|
|
||||||
Senior unsecured notes:
|
|
|
|
|
|
|
|
|
|
||||||
Fixed senior unsecured notes
|
2017 - 2025
|
|
1.8%-4.5%
|
|
|
3.4
|
%
|
|
6,340
|
|
|
3,593
|
|
||
Floating senior unsecured notes
|
2020
|
|
1.6
|
%
|
|
1.6
|
%
|
|
250
|
|
|
—
|
|
||
Total senior unsecured notes
|
|
|
|
|
3.3
|
%
|
|
6,590
|
|
|
3,593
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
Related party debt
|
N/A
|
|
N/A
|
|
|
N/A
|
|
|
—
|
|
|
655
|
|
||
Total borrowings
|
|
|
|
|
|
|
$
|
24,344
|
|
|
$
|
27,460
|
|
(a)
|
The amounts presented for outstanding borrowings include unamortized debt premiums and discounts.
|
($ in millions)
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
Thereafter
|
|
||||||
Borrowings of consolidated securitization entities
|
$
|
842
|
|
|
$
|
5,383
|
|
|
$
|
4,815
|
|
|
$
|
1,538
|
|
|
$
|
1,025
|
|
|
$
|
—
|
|
At December 31, 2015 ($ in millions)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investment securities
|
|
|
|
|
|
|
|
||||||||
Debt
|
|
|
|
|
|
|
|
||||||||
U.S. Government and Federal Agency
|
$
|
—
|
|
|
$
|
2,761
|
|
|
$
|
—
|
|
|
$
|
2,761
|
|
State and municipal
|
—
|
|
|
—
|
|
|
49
|
|
|
49
|
|
||||
Residential mortgage-backed
|
—
|
|
|
317
|
|
|
—
|
|
|
317
|
|
||||
Equity
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
Total
|
$
|
15
|
|
|
$
|
3,078
|
|
|
$
|
49
|
|
|
$
|
3,142
|
|
|
|
|
|
|
|
|
|
||||||||
At December 31, 2014 ($ in millions)
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investment securities
|
|
|
|
|
|
|
|
||||||||
Debt
|
|
|
|
|
|
|
|
||||||||
U.S. Government and Federal Agency
|
$
|
—
|
|
|
$
|
1,252
|
|
|
$
|
—
|
|
|
$
|
1,252
|
|
State and municipal
|
—
|
|
|
—
|
|
|
57
|
|
|
57
|
|
||||
Residential mortgage-backed
|
—
|
|
|
271
|
|
|
—
|
|
|
271
|
|
||||
US Corporate
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
||||
Equity
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
Total
|
$
|
15
|
|
|
$
|
1,523
|
|
|
$
|
60
|
|
|
$
|
1,598
|
|
Years ended December 31, ($ in millions)
|
2015
|
|
2014
|
||||
|
|
|
|
||||
Balance at beginning of period
|
$
|
60
|
|
|
$
|
46
|
|
Net realized/unrealized gains (losses)
|
1
|
|
|
7
|
|
||
Purchases
|
—
|
|
|
11
|
|
||
Sales
|
(6
|
)
|
|
—
|
|
||
Settlements
|
(6
|
)
|
|
(4
|
)
|
||
Balance at end of period
|
$
|
49
|
|
|
$
|
60
|
|
|
|
|
|
||||
Net change in unrealized gains (losses) relating to instruments still held at December 31
|
$
|
1
|
|
|
$
|
7
|
|
|
Carrying
|
|
|
Corresponding fair value amount
|
|||||||||||||||
At December 31, 2015
($ 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
(a)
|
$
|
12,325
|
|
|
$
|
12,325
|
|
|
$
|
11,865
|
|
|
$
|
460
|
|
|
$
|
—
|
|
Other assets
(b)
|
$
|
391
|
|
|
$
|
391
|
|
|
$
|
391
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financial assets carried at other than fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loan receivables, net
(c)
|
$
|
64,793
|
|
|
$
|
71,386
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
71,386
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial liabilities carried at other than fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
43,447
|
|
|
$
|
43,840
|
|
|
$
|
—
|
|
|
$
|
43,840
|
|
|
$
|
—
|
|
Borrowings of consolidated securitization entities
|
$
|
13,603
|
|
|
$
|
13,562
|
|
|
$
|
—
|
|
|
$
|
7,566
|
|
|
$
|
5,996
|
|
Bank term loan
|
$
|
4,151
|
|
|
$
|
4,125
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,125
|
|
Senior unsecured notes
|
$
|
6,590
|
|
|
$
|
6,574
|
|
|
$
|
—
|
|
|
$
|
6,574
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
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
(a)
|
$
|
11,828
|
|
|
$
|
11,828
|
|
|
$
|
8,153
|
|
|
$
|
3,675
|
|
|
$
|
—
|
|
Other assets
(b)
|
$
|
1,104
|
|
|
$
|
1,104
|
|
|
$
|
1,104
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Financial assets carried at other than fair value:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loan receivables, net
(c)
|
$
|
58,050
|
|
|
$
|
64,113
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
64,113
|
|
Loan receivables held for sale
(c)
|
$
|
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
|
|
(a)
|
For cash and 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.
|
(b)
|
This balance relates to restricted cash and equivalents, which is included in other assets.
|
(c)
|
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.
|
At December 31, 2015 ($ in millions)
|
Actual
|
|
Minimum for capital
adequacy purposes
|
||||||||||
|
Amount
|
|
Ratio
(a)
|
|
|
Amount
|
|
|
Ratio
|
|
|||
|
|
|
|
|
|
|
|
||||||
Total risk-based capital
|
$
|
12,533
|
|
|
18.1
|
%
|
|
$
|
5,550
|
|
|
8.0
|
%
|
Tier 1 risk-based capital
|
$
|
11,633
|
|
|
16.8
|
%
|
|
$
|
4,162
|
|
|
6.0
|
%
|
Tier 1 leverage
|
$
|
11,633
|
|
|
14.4
|
%
|
|
$
|
3,242
|
|
|
4.0
|
%
|
Common equity Tier 1 Capital
|
$
|
11,633
|
|
|
16.8
|
%
|
|
$
|
3,122
|
|
|
4.5
|
%
|
At December 31, 2015 ($ in millions)
|
Actual
|
|
Minimum for capital
adequacy purposes
|
|
Minimum to be well-capitalized under prompt corrective action provisions
|
|||||||||||||||
|
Amount
|
|
Ratio
(a)
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total risk-based capital
|
$
|
8,443
|
|
|
16.6
|
%
|
|
$
|
4,071
|
|
|
8.0
|
%
|
|
$
|
5,089
|
|
|
10.0
|
%
|
Tier 1 risk-based capital
|
$
|
7,781
|
|
|
15.3
|
%
|
|
$
|
3,053
|
|
|
6.0
|
%
|
|
$
|
4,071
|
|
|
8.0
|
%
|
Tier 1 leverage
|
$
|
7,781
|
|
|
13.0
|
%
|
|
$
|
2,387
|
|
|
4.0
|
%
|
|
$
|
2,984
|
|
|
5.0
|
%
|
Common equity Tier 1 Capital
|
$
|
7,781
|
|
|
15.3
|
%
|
|
$
|
2,290
|
|
|
4.5
|
%
|
|
$
|
3,308
|
|
|
6.5
|
%
|
At December 31, 2014 ($ in millions)
|
Actual
|
|
Minimum for capital
adequacy purposes
|
|
Minimum to be well-capitalized under prompt corrective action provisions
|
|||||||||||||||
|
Amount
|
|
Ratio
(a)
|
|
|
Amount
|
|
|
Ratio
|
|
|
Amount
|
|
|
Ratio
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total risk-based capital
|
$
|
7,100
|
|
|
17.1
|
%
|
|
$
|
3,322
|
|
|
8.0
|
%
|
|
$
|
4,152
|
|
|
10.0
|
%
|
Tier 1 risk-based capital
|
$
|
6,559
|
|
|
15.8
|
%
|
|
$
|
1,661
|
|
|
4.0
|
%
|
|
$
|
2,491
|
|
|
6.0
|
%
|
Tier 1 leverage
|
$
|
6,559
|
|
|
13.4
|
%
|
|
$
|
1,959
|
|
|
4.0
|
%
|
|
$
|
2,449
|
|
|
5.0
|
%
|
(a)
|
Capital ratios are calculated based on the Basel III Standardized Approach rules, subject to applicable transition provisions, at
December 31, 2015
and are calculated based on Basel I capital rules at December 31, 2014.
|
|
Years ended December 31,
|
||||||||||
(in millions, except per share data)
|
2015
|
|
2014
|
|
2013
|
||||||
Net earnings
|
$
|
2,214
|
|
|
$
|
2,109
|
|
|
$
|
1,979
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding, basic
|
833.8
|
|
|
757.4
|
|
|
705.3
|
|
|||
Effect of dilutive securities
|
1.7
|
|
|
0.2
|
|
|
—
|
|
|||
Weighted average common shares outstanding, dilutive
|
835.5
|
|
|
757.6
|
|
|
705.3
|
|
|||
|
|
|
|
|
|
||||||
Earnings per basic common share
|
$
|
2.66
|
|
|
$
|
2.78
|
|
|
$
|
2.81
|
|
Earnings per diluted common share
|
$
|
2.65
|
|
|
$
|
2.78
|
|
|
$
|
2.81
|
|
For the years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
U.S.
|
$
|
3,513
|
|
|
$
|
3,377
|
|
|
$
|
3,124
|
|
Non-U.S.
|
18
|
|
|
9
|
|
|
18
|
|
|||
Earnings before provision for income taxes
|
$
|
3,531
|
|
|
$
|
3,386
|
|
|
$
|
3,142
|
|
For the years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Current provision for income taxes
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
1,443
|
|
|
$
|
1,320
|
|
|
$
|
1,280
|
|
U.S. state and local
|
158
|
|
|
153
|
|
|
115
|
|
|||
Non-U.S.
|
11
|
|
|
7
|
|
|
5
|
|
|||
Total current provision for income taxes
|
1,612
|
|
|
1,480
|
|
|
1,400
|
|
|||
|
|
|
|
|
|
||||||
Deferred (benefit) provision for income taxes
|
|
|
|
|
|
||||||
U.S. Federal
|
(263
|
)
|
|
(181
|
)
|
|
(215
|
)
|
|||
U.S. state and local
|
(32
|
)
|
|
(23
|
)
|
|
(21
|
)
|
|||
Non-U.S.
|
—
|
|
|
1
|
|
|
(1
|
)
|
|||
Deferred (benefit) provision for income taxes
|
(295
|
)
|
|
(203
|
)
|
|
(237
|
)
|
|||
Total provision for income taxes
|
$
|
1,317
|
|
|
$
|
1,277
|
|
|
$
|
1,163
|
|
For the years ended December 31
|
2015
|
|
2014
|
|
2013
|
|||
U.S. federal statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
U.S. state and local income taxes, net of federal benefit
|
2.3
|
%
|
|
2.5
|
%
|
|
1.9
|
%
|
All other, net
|
—
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
Effective tax rate
|
37.3
|
%
|
|
37.7
|
%
|
|
37.0
|
%
|
At December 31 ($ in millions)
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Allowance for loan losses
|
$
|
1,329
|
|
|
$
|
1,221
|
|
Reward programs
|
106
|
|
|
72
|
|
||
Compensation and employee benefits
|
135
|
|
|
45
|
|
||
Net operating losses
|
12
|
|
|
12
|
|
||
Other assets
|
38
|
|
|
56
|
|
||
Total deferred income tax assets before valuation allowance
|
1,620
|
|
|
1,406
|
|
||
Valuation allowance
|
(9
|
)
|
|
(10
|
)
|
||
Total deferred income tax assets
|
$
|
1,611
|
|
|
$
|
1,396
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Original issue discount
(a)
|
$
|
(332
|
)
|
|
$
|
(519
|
)
|
Goodwill and identifiable intangibles
|
(246
|
)
|
|
(259
|
)
|
||
Other liabilities
|
(18
|
)
|
|
(15
|
)
|
||
Total deferred income tax liabilities
|
(596
|
)
|
|
(793
|
)
|
||
Net deferred income tax assets
|
$
|
1,015
|
|
|
$
|
603
|
|
(a)
|
Includes the deferred tax impact of an unrecognized tax benefit of
$200 million
at December 31, 2015 related to temporary items that are expected to reverse within the next twelve months.
|
($ in millions)
|
2015
|
|
2014
|
||||
Balance at January 1
|
$
|
102
|
|
|
$
|
202
|
|
Additions:
|
|
|
|
||||
Tax positions of the current year
(a)
|
236
|
|
|
75
|
|
||
Tax positions of prior years
|
6
|
|
|
20
|
|
||
Reductions:
|
|
|
|
||||
Prior year tax positions
|
(8
|
)
|
|
(194
|
)
|
||
Settlements with tax authorities
|
(1
|
)
|
|
—
|
|
||
Expiration of the statute of limitation
|
(8
|
)
|
|
(1
|
)
|
||
Balance at December 31
|
$
|
327
|
|
|
$
|
102
|
|
Portion of balance that, if recognized, would impact the effective income tax rate
|
$
|
79
|
|
|
$
|
68
|
|
(a)
|
Included in the increase in tax positions for the year ended December 31, 2015 is an unrecognized tax benefit of
$207 million
(
$200 million
net of federal benefit) related to temporary items that are expected to reverse within the next twelve months.
|
($ in millions)
|
Years ended December 31,
|
||||||||||
|
2015
(c)
|
|
2014
|
|
2013
|
||||||
Direct costs
(a)
|
$
|
261
|
|
|
$
|
294
|
|
|
$
|
207
|
|
Indirect costs
(a)
|
—
|
|
|
134
|
|
|
230
|
|
|||
Interest expense
(b)
|
4
|
|
|
113
|
|
|
157
|
|
|||
Total expenses for services and funding provided by GECC
|
$
|
265
|
|
|
$
|
541
|
|
|
$
|
594
|
|
(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.
|
(c)
|
Represents expenses incurred through November 17, 2015, the date of Separation.
|
For the years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Interest income:
|
|
|
|
|
|
||||||
Interest income from subsidiaries
|
$
|
52
|
|
|
$
|
85
|
|
|
$
|
143
|
|
Interest on investment securities
|
7
|
|
|
1
|
|
|
—
|
|
|||
Total interest income
|
59
|
|
|
86
|
|
|
143
|
|
|||
Interest expense:
|
|
|
|
|
|
||||||
Interest on third-party debt
|
309
|
|
|
124
|
|
|
—
|
|
|||
Interest on related party debt
|
4
|
|
|
109
|
|
|
143
|
|
|||
Total interest expense
|
313
|
|
|
233
|
|
|
143
|
|
|||
Net interest income
|
(254
|
)
|
|
(147
|
)
|
|
—
|
|
|||
Dividends from bank subsidiaries
|
708
|
|
|
885
|
|
|
1,400
|
|
|||
Dividends from nonbank subsidiaries
|
—
|
|
|
1,206
|
|
|
2,500
|
|
|||
Other income
|
45
|
|
|
6
|
|
|
—
|
|
|||
Other expense
(a)
|
74
|
|
|
417
|
|
|
26
|
|
|||
Earnings before benefit from income taxes
|
425
|
|
|
1,533
|
|
|
3,874
|
|
|||
Benefit from income taxes
|
95
|
|
|
215
|
|
|
7
|
|
|||
Equity in undistributed net earnings of subsidiaries
|
1,694
|
|
|
361
|
|
|
(1,902
|
)
|
|||
Net earnings
|
$
|
2,214
|
|
|
$
|
2,109
|
|
|
$
|
1,979
|
|
|
|
|
|
|
|
||||||
Comprehensive income
|
$
|
2,183
|
|
|
$
|
2,112
|
|
|
$
|
1,964
|
|
(a)
|
Other expense for the year ended December 31, 2014, primarily included various intercompany charges that were eliminated in consolidation.
|
At December 31 ($ in millions)
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Cash and equivalents
|
$
|
5,301
|
|
|
$
|
5,643
|
|
Investment securities
|
2,014
|
|
|
1,255
|
|
||
Investments in and amounts due from subsidiaries
(a)
|
16,329
|
|
|
16,723
|
|
||
Goodwill
|
17
|
|
|
17
|
|
||
Other assets
|
334
|
|
|
148
|
|
||
Total assets
|
$
|
23,995
|
|
|
$
|
23,786
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Amounts due to subsidiaries
|
$
|
211
|
|
|
$
|
296
|
|
Bank term loan
|
4,151
|
|
|
8,245
|
|
||
Senior unsecured notes
|
6,590
|
|
|
3,593
|
|
||
Related party debt
|
—
|
|
|
655
|
|
||
Accrued expenses and other liabilities
|
439
|
|
|
519
|
|
||
Total liabilities
|
11,391
|
|
|
13,308
|
|
||
Equity:
|
|
|
|
||||
Total equity
|
12,604
|
|
|
10,478
|
|
||
Total liabilities and equity
|
$
|
23,995
|
|
|
$
|
23,786
|
|
(a)
|
Includes investments in and amounts due from bank subsidiaries of
$9.4 billion
and
$8.5 billion
at
December 31, 2015
and
2014
, respectively.
|
For the years ended December 31 ($ in millions)
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows - operating activities
|
|
|
|
|
|
||||||
Net earnings
|
$
|
2,214
|
|
|
$
|
2,109
|
|
|
$
|
1,979
|
|
Adjustments to reconcile net earnings to cash provided from operating activities
|
|
|
|
|
|
||||||
Deferred income taxes
|
19
|
|
|
(36
|
)
|
|
—
|
|
|||
(Increase) decrease in other assets
|
(133
|
)
|
|
47
|
|
|
(8
|
)
|
|||
Increase (decrease) in accrued expenses and other liabilities
|
(257
|
)
|
|
489
|
|
|
13
|
|
|||
Equity in undistributed net earnings of subsidiaries
|
(1,694
|
)
|
|
(361
|
)
|
|
1,902
|
|
|||
All other operating activities
|
181
|
|
|
(223
|
)
|
|
—
|
|
|||
Cash from operating activities
|
330
|
|
|
2,025
|
|
|
3,886
|
|
|||
|
|
|
|
|
|
||||||
Cash flows - investing activities
|
|
|
|
|
|
||||||
Net (increase) decrease in investments in and amounts due from subsidiaries
|
1,928
|
|
|
(1,030
|
)
|
|
(1,848
|
)
|
|||
Maturity and redemption of investment securities
|
3,480
|
|
|
—
|
|
|
—
|
|
|||
Purchases of investment securities
|
(4,246
|
)
|
|
(1,256
|
)
|
|
—
|
|
|||
All other investing activities
|
(6
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Cash (used for) from investing activities
|
1,156
|
|
|
(2,288
|
)
|
|
(1,848
|
)
|
|||
|
|
|
|
|
|
|
|
|
|||
Cash flows - financing activities
|
|
|
|
|
|
||||||
Third-party debt
|
|
|
|
|
|
||||||
Proceeds from issuance of third-party debt
|
2,995
|
|
|
12,343
|
|
|
—
|
|
|||
Maturities and repayment of third-party debt
|
(4,094
|
)
|
|
(505
|
)
|
|
—
|
|
|||
Related party debt
|
|
|
|
|
|
||||||
Proceeds from issuance of related party debt
|
—
|
|
|
1,615
|
|
|
—
|
|
|||
Maturities and repayment of related party debt
|
(655
|
)
|
|
(9,820
|
)
|
|
(1,452
|
)
|
|||
Proceeds from initial public offering
|
—
|
|
|
2,842
|
|
|
—
|
|
|||
Net transfers to Parent
|
—
|
|
|
(603
|
)
|
|
(586
|
)
|
|||
Increase (decrease) in amounts due to subsidiaries
|
(56
|
)
|
|
98
|
|
|
—
|
|
|||
All other financing activities
|
(18
|
)
|
|
(64
|
)
|
|
—
|
|
|||
Cash (used for) from financing activities
|
(1,828
|
)
|
|
5,906
|
|
|
(2,038
|
)
|
|||
|
|
|
|
|
|
||||||
Increase (decrease) in cash and equivalents
|
(342
|
)
|
|
5,643
|
|
|
—
|
|
|||
Cash and equivalents at beginning of year
|
5,643
|
|
|
—
|
|
|
—
|
|
|||
Cash and equivalents at end of year
|
$
|
5,301
|
|
|
$
|
5,643
|
|
|
$
|
—
|
|
|
Quarterly Periods Ended
|
||||||||||||||||||||||||||||||
($ in millions)
|
December 31, 2015
|
|
September 30,
2015
|
|
June 30,
2015
|
|
March 31,
2015
|
|
December 31, 2014
|
|
September 30,
2014 |
|
June 30,
2014 |
|
March 31,
2014 |
||||||||||||||||
Interest income
|
$
|
3,509
|
|
|
$
|
3,392
|
|
|
$
|
3,177
|
|
|
$
|
3,150
|
|
|
$
|
3,260
|
|
|
$
|
3,123
|
|
|
$
|
2,926
|
|
|
$
|
2,933
|
|
Interest expense
|
301
|
|
|
289
|
|
|
270
|
|
|
275
|
|
|
282
|
|
|
244
|
|
|
206
|
|
|
190
|
|
||||||||
Net interest income
|
3,208
|
|
|
3,103
|
|
|
2,907
|
|
|
2,875
|
|
|
2,978
|
|
|
2,879
|
|
|
2,720
|
|
|
2,743
|
|
||||||||
Earnings before provision for income taxes
|
868
|
|
|
919
|
|
|
861
|
|
|
883
|
|
|
853
|
|
|
879
|
|
|
764
|
|
|
890
|
|
||||||||
Provision for income taxes
|
321
|
|
|
345
|
|
|
320
|
|
|
331
|
|
|
322
|
|
|
331
|
|
|
292
|
|
|
332
|
|
||||||||
Net earnings
|
$
|
547
|
|
|
$
|
574
|
|
|
$
|
541
|
|
|
$
|
552
|
|
|
$
|
531
|
|
|
$
|
548
|
|
|
$
|
472
|
|
|
$
|
558
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.66
|
|
|
$
|
0.69
|
|
|
$
|
0.65
|
|
|
$
|
0.66
|
|
|
$
|
0.64
|
|
|
$
|
0.70
|
|
|
$
|
0.67
|
|
|
$
|
0.79
|
|
Diluted
|
$
|
0.65
|
|
|
$
|
0.69
|
|
|
$
|
0.65
|
|
|
$
|
0.66
|
|
|
$
|
0.64
|
|
|
$
|
0.70
|
|
|
$
|
0.67
|
|
|
$
|
0.79
|
|
Reports of Independent Registered Public Accounting Firm
|
|
Consolidated and Combined Statements of Earnings for the years ended December 31, 2015, 2014 and 2013
|
|
Consolidated and Combined Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013
|
|
Consolidated Statements of Financial Position as of December 31, 2015 and 2014
|
|
Consolidated and Combined Statements of Changes in Equity for the years ended December 31, 2015, 2014 and 2013
|
|
Consolidated and Combined Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013
|
|
Notes to the Consolidated and Combined Financial Statements
|
|
|
/s/ Brian D. Doubles
|
|
|
Brian D. Doubles
Executive Vice President and Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
|
Signature
|
|
Title
|
Date
|
|
|
|
|
/s/ Margaret M. Keane
|
|
Principal Executive Officer
Director
|
February 25, 2016
|
Margaret M. Keane
Director, President and Chief Executive Officer |
|
|
|
|
|
|
|
/s/ Brian D. Doubles
|
|
Principal Financial Officer
|
February 25, 2016
|
Brian D. Doubles
Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer) |
|
|
|
|
|
|
|
/s/ David P. Melito
|
|
Principal Accounting Officer
|
February 25, 2016
|
David P. Melito
Senior Vice President and Controller |
|
|
|
|
|
|
|
/s/ Paget L. Alves
|
|
Director
|
February 25, 2016
|
Paget L. Alves
|
|
|
|
|
|
|
|
/s/ Arthur W. Coviello, Jr.
|
|
Director
|
February 25, 2016
|
Arthur W. Coviello, Jr.
|
|
|
|
|
|
|
|
/s/ William W. Graylin
|
|
Director
|
February 25, 2016
|
William W. Graylin
|
|
|
|
|
|
|
|
/s/ Roy A. Guthrie
|
|
Director
|
February 25, 2016
|
Roy A. Guthrie
|
|
|
|
|
|
|
|
/s/ Richard C. Hartnack
|
|
Director
|
February 25, 2016
|
Richard C. Hartnack
|
|
|
|
|
|
|
|
/s/ Jeffrey G. Naylor
|
|
Director
|
February 25, 2016
|
Jeffrey G. Naylor
|
|
|
|
|
|
|
|
/s/ Laurel J. Richie
|
|
Director
|
February 25, 2016
|
Laurel J. Richie
|
|
|
|
|
|
|
|
/s/ Olympia J. Snowe
|
|
Director
|
February 25, 2016
|
Olympia J. Snowe
|
|
|
|
Exhibit Number
|
Description
|
3.1
|
Amended and Restated Certificate of Incorporation of Synchrony Financial (incorporated by reference to Exhibit 3.2 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
3.2
|
Amended and Restated Bylaws of Synchrony Financial (incorporated by reference to Exhibit 3.1 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
4.1
|
Indenture, dated as of August 11, 2014, between Synchrony Financial and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 of Form 8-K filed by Synchrony Financial on August 13, 2014)
|
4.2
|
First Supplemental Indenture, dated as of August 11, 2014, between Synchrony Financial and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.2 of Form 8-K filed by Synchrony Financial on August 13, 2014)
|
4.3
|
Second Supplemental Indenture, dated as of February 2, 2015, between Synchrony Financial and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 of Form 8-K filed by Synchrony Financial on February 2, 2015)
|
4.4
|
Third Supplemental Indenture, dated as of July 23, 2015, between Synchrony Financial and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 of Form 8-K filed by Synchrony Financial on July 23, 2015)
|
4.5
|
Fourth Supplemental Indenture, dated as of December 4, 2015, between Synchrony Financial and The Bank of New York Mellon, as Trustee (incorporated by reference to Exhibit 4.1 of Form 8-K filed by Synchrony Financial on December 4, 2015)
|
4.6
|
Form of 2.700% Senior Notes due 2020 (incorporated by reference to Exhibit 4.2 of Form 8-K filed by Synchrony Financial on February 2, 2015)
|
4.7
|
Form of Floating Rate Senior Notes due 2020 (incorporated by reference to Exhibit 4.3 of Form 8-K filed by Synchrony Financial on February 2, 2015)
|
4.8
|
Form of 4.500% Senior Notes due 2025 (incorporated by reference to Exhibit 4.2 of Form 8-K filed by Synchrony Financial on July 23, 2015)
|
4.9
|
Form of 2.600% Senior Notes due 2019 (incorporated by reference to Exhibit 4.2 of Form 8-K filed by Synchrony Financial on December 4, 2015)
|
4.10
|
Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.1
|
Master Agreement, dated as of July 30, 2014, among General Electric Capital Corporation, Synchrony Financial, and, solely for purposes of certain sections and articles set forth therein, General Electric Company (incorporated by reference to Exhibit 10.1 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.2
|
Transitional Services Agreement, dated August 5, 2014, by and among General Electric Capital Corporation, Synchrony Financial and Retail Finance International Holdings, Inc. (incorporated by reference to Exhibit 10.1 of Form 8-K filed by Synchrony Financial on August 11, 2014)
|
10.3
|
Registration Rights Agreement, dated as of August 5, 2014, by and between Synchrony Financial and General Electric Capital Corporation (incorporated by reference to Exhibit 10.2 of Form 8-K filed by Synchrony Financial on August 11, 2014)
|
10.4
|
Tax Sharing and Separation Agreement, dated as of August 5, 2014, by and between General Electric Company and Synchrony Financial (incorporated by reference to Exhibit 10.3 of Form 8-K filed by Synchrony Financial on August 11, 2014)
|
10.5
|
Employee Matters Agreement, dated as of August 5, 2014, by and among General Electric Company, General Electric Capital Corporation and Synchrony Financial (incorporated by reference to Exhibit 10.4 of Form 8-K filed by Synchrony Financial on August 11, 2014)
|
10.6
|
Transitional Trademark License Agreement, dated as of August 5, 2014, by and between GE Capital Registry, Inc. and Synchrony Financial (incorporated by reference to Exhibit 10.5 of Form 8-K filed by Synchrony Financial on August 11, 2014)
|
10.7
|
Intellectual Property Cross License Agreement, dated as of August 5, 2014, by and between General Electric Company and General Electric Capital Corporation, on the one hand, and Synchrony Financial, on the other hand (incorporated by reference to Exhibit 10.6 of Form 8-K filed by Synchrony Financial on August 11, 2014)
|
10.8
|
Credit Agreement, dated as of July 30, 2014, among Synchrony Financial, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the other Lenders party thereto (incorporated by reference to Exhibit 1.1 of Amendment No. 8 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.9
|
Credit Agreement, dated as of July 30, 2014, among Synchrony Financial, as borrower, General Electric Capital Corporation, as administrative agent, and the other Lenders party thereto (incorporated by reference to Exhibit 10.9 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.10
|
Amendment No. 1 to Credit Agreement, dated October 1, 2014, by and among Synchrony Financial and General Electric Capital Corporation (incorporated by reference to Exhibit 10.1 to Form 8-K filed by Synchrony Financial on October 6, 2014)
|
10.11
|
Amendment No. 1 to Credit Agreement, dated October 1, 2014, by and among Synchrony Financial, the Lenders party thereto and JP Morgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 to Form 8-K filed by Synchrony Financial on October 6, 2014)
|
10.12
|
Form of Synchrony 2014 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.10 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.13
|
Form of agreement for awards under Synchrony 2014 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.11 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.14
|
Form of Transaction Award Agreement, by and between GE Capital Retail Bank/GE Capital Retail Finance, Inc. and each of Margaret M. Keane, Brian D. Doubles, Jonathan S. Mothner, Thomas M. Quindlen and Glenn P. Marino (incorporated by reference to Exhibit 10.12 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.15
|
Operating Agreement, dated as of January 11, 2013, between GE Capital Retail Bank and the Office of the Comptroller of the Currency (incorporated by reference to Exhibit 10.13 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.16
|
Capital Assurance and Liquidity Maintenance Agreement, dated as of January 11, 2013, among GE Capital Retail Bank, General Electric Capital Corporation and GE Consumer Finance, Inc. (incorporated by reference to Exhibit 10.14 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.17
|
Master Indenture, dated as of September 25, 2003, between Synchrony Credit Card Master Note Trust (formerly known as GE Capital Credit Card Master Note Trust), as Issuer and Deutsche Bank Trust Company Americas, as Indenture Trustee (incorporated by reference to Exhibit 4.1 of Amendment No. 1 to Form S-3 Registration Statement filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 20, 2004 (No. 333-107495, 333-107495-01 and 333-107495-02))
|
10.18
|
Omnibus Amendment No. 1 to Securitization Documents, dated as of February 9, 2004, among RFS Holding, L.L.C., RFS Funding Trust, GE Capital Retail Bank (formerly known as Monogram Credit Card Bank of Georgia), Synchrony Credit Card Master Note Trust, Deutsche Bank Trust Company Delaware, as Trustee of RFS Funding Trust, RFS Holding, Inc. and Deutsche Bank Trust Company Americas, as Indenture Trustee (incorporated by reference to Exhibit 4.16 of Amendment No. 1 to Form S-3 Registration Statement filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 20, 2004 (No. 333-107495, 333-107495-01 and 333-107495-02))
|
10.19
|
Second Amendment to Master Indenture, dated as of June 17, 2004, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.4 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on July 2, 2004)
|
10.20
|
Third Amendment to Master Indenture, dated as of August 31, 2006, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on September 5, 2006)
|
10.21
|
Fourth Amendment to Master Indenture, dated as of June 28, 2007, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on July 3, 2007)
|
10.22
|
Fifth Amendment to Master Indenture, dated as of May 22, 2008, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 28, 2008)
|
10.23
|
Sixth Amendment to Master Indenture, dated as of August 7, 2009, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on August 7, 2009)
|
10.24
|
Seventh Amendment to Master Indenture, dated as of January 21, 2014, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on January 21, 2014)
|
10.25
|
Eighth Amendment to Master Indenture and Omnibus Supplement to Specified Indenture Supplements, dated as of March 11, 2014, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on March 14, 2014)
|
10.26
|
Ninth Amendment to Master Indenture, dated as of November 24, 2015, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on November 25, 2015)
|
10.27
|
Form of Indenture Supplement, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 4.8 of Form S-3 Registration Statement filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 16, 2012 (333-181466))
|
10.28
|
Form of VFN Indenture Supplement, between Synchrony Credit Card Master Note Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 10.24 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.29
|
Form of Loan Agreement (VFN Series, Class A), among Synchrony Credit Card Master Note Trust, the Lenders party thereto from time to time, and the Managing Agents party thereto from time to time (incorporated by reference to Exhibit 10.25 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.30
|
Trust Agreement, dated as of September 25, 2003, between RFS Holding, L.L.C. and The Bank of New York (Delaware) (incorporated by reference to Exhibit 4.3 of Amendment No. 1 to Form S-3 Registration Statement filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 20, 2004 (No. 333-107495, 333-107495-01 and 333-107495-02))
|
10.31
|
First Amendment to Trust Agreement, dated as of January 21, 2014, between RFS Holding, L.L.C. and BNY Mellon Trust of Delaware (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Master Note Trust and RFS Holding, L.L.C. on January 21, 2014)
|
10.32
|
Second Amendment to Trust Agreement, dated as of September 8, 2014, between RFS Holding, L.L.C. and BNY Mellon Trust of Delaware (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Master Note Trust and RFS Holding, L.L.C. on September 11, 2014)
|
10.33
|
Custody and Control Agreement, dated as of September 25, 2003 by and among Deutsche Bank Trust Company of Americas, in its capacity as Custodian and in its capacity as Indenture Trustee, and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.8 of Amendment No. 1 to Form S-3 Registration Statement filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 20, 2004 (No. 333-107495, 333-107495-01 and 333-107495-02))
|
10.34
|
Receivables Sale Agreement, dated as of June 27, 2003, between GE Capital Retail Bank (formerly known as Monogram Credit Card Bank of Georgia) and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.9 of Amendment No. 1 to Form S-3 Registration Statement filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 20, 2004 (No. 333-107495, 333-107495-01 and 333-107495-02))
|
10.35
|
RSA Assumption Agreement and Second Amendment to Receivables Sale Agreement, dated as of February 7, 2005, between GE Capital Retail Bank (formerly known as GE Money Bank) and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on February 11, 2005)
|
10.36
|
Third Amendment to Receivables Sale Agreement, dated as of December 21, 2006, between GE Capital Retail Bank (formerly known as GE Money Bank) and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on December 21, 2006)
|
10.37
|
Fourth Amendment to Receivables Sale Agreement, dated as of May 21, 2008, between GE Capital Retail Bank (formerly known as GE Money Bank) and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 28, 2008)
|
10.38
|
Designation of Removed Accounts and Fifth Amendment to Receivables Sale Agreement, dated as of December 29, 2008, between GE Capital Retail Bank (formerly known as GE Money Bank) and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on December 30, 2008)
|
10.39
|
Designation of Removed Accounts and Sixth Amendment to Receivables Sale Agreement, dated as of February 26, 2009, between GE Capital Retail Bank (formerly known as GE Money Bank) and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on February 26, 2009)
|
10.40
|
Seventh Amendment to Receivables Sale Agreement, dated as of November 23, 2010, between GE Capital Retail Bank (formerly known as GE Money Bank), and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on November 24, 2010)
|
10.41
|
Eighth Amendment to Receivables Sale Agreement, dated as of March 20, 2012, among GE Capital Retail Bank, RFS Holding, Inc., PLT Holding, L.L.C. and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on March 21, 2012)
|
10.42
|
Ninth Amendment to Receivables Sale Agreement, dated as of March 11, 2014, among GE Capital Retail Bank, RFS Holding, Inc., PLT Holding, L.L.C. and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on March 14, 2014)
|
10.43
|
Designation of Removed Accounts and Tenth Amendment to Receivables Sale Agreement, dated as of November 7, 2014, among Synchrony Bank (formerly known as GE Capital Retail Bank), RFS Holding Inc., PLT Holding, L.L.C. and RFS Holding, L.L.C. (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on November 14, 2014)
|
10.44
|
Transfer Agreement, dated as of September 25, 2003, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.12 of Amendment No. 1 to Form S-3 Registration Statement filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 20, 2004 (No. 333-107495, 333-107495-01 and 333-107495-02))
|
10.45
|
Second Amendment to Transfer Agreement, dated as of June 17, 2004, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.3 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on July 2, 2004)
|
10.46
|
Third Amendment to Transfer Agreement, dated as of November 21, 2004, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on November 24, 2004)
|
10.47
|
Fourth Amendment to Transfer Agreement, dated as of August 31, 2006, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on September 5, 2006)
|
10.48
|
Fifth Amendment to Transfer Agreement, dated as of December 21, 2006, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on December 21, 2006)
|
10.49
|
Sixth Amendment to Transfer Agreement, dated as of May 21, 2008, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.4 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 28, 2008)
|
10.50
|
Reassignment of Receivables in Removed Accounts and Seventh Amendment to Transfer Agreement, dated as of December 29, 2008, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on December 30, 2008)
|
10.51
|
Reassignment No. 4 of Receivables in Removed Accounts and Eighth Amendment to Transfer Agreement, dated as of February 26, 2009, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on February 26, 2009)
|
10.52
|
Ninth Amendment to Transfer Agreement, dated as of March 31, 2010, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on March 31, 2010)
|
10.53
|
Tenth Amendment to Transfer Agreement, dated as of March 20, 2012, between RFS Holding, L.L.C. and Synchrony Credit Card Master Note Trust (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on March 21, 2012)
|
10.54
|
Servicing Agreement, dated as of June 27, 2003, by and among RFS Funding Trust Synchrony Credit Card Master Note Trust and General Electric Capital Corporation, successor to GE Capital Retail Bank (formerly known as Monogram Credit Card Bank of Georgia) (incorporated by reference to Exhibit 4.13 of Amendment No. 1 to Form S-3 Registration Statement filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 20, 2004 (No. 333-107495, 333-107495-01 and 333-107495-02))
|
10.55
|
Servicing Assumption Agreement, dated as of February 7, 2005, by GE Capital Retail Bank (formerly known as GE Money Bank) (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on February 11, 2005)
|
10.56
|
First Amendment to Servicing Agreement, dated as of May 22, 2006, between Synchrony Credit Card Master Note Trust and GE Capital Retail Bank (formerly known as GE Money Bank) (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 25, 2006)
|
10.57
|
Second Amendment to Servicing Agreement, dated as of June 28, 2007, between Synchrony Credit Card Master Note Trust and GE Capital Retail Bank (formerly known as GE Money Bank) (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on June 28, 2007)
|
10.58
|
Instrument of Resignation, Appointment and Acceptance and Third Amendment to Servicing Agreement, dated as of May 22, 2008, by and among Synchrony Credit Card Master Note Trust, GE Capital Retail Bank (formerly known as GE Money Bank) and General Electric Capital Corporation (incorporated by reference to Exhibit 4.3 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 28, 2008)
|
10.59
|
Fourth Amendment to Servicing Agreement, dated as of July 16, 2014, between Synchrony Credit Card Master Note Trust and General Electric Capital Corporation (incorporated by reference to Exhibit 4.14 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on July 16, 2014)
|
10.60
|
Fifth Amendment to Servicing Agreement, dated as of November 24, 2015, between Synchrony Credit Card Master Note Trust and General Electric Capital Corporation (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on November 25, 2015)
|
10.61
|
Instrument of Resignation, Appointment and Acceptance, dated as of December 2, 2015, by and among Synchrony Credit Card Master Note Trust, General Electric Capital LLC and Synchrony Financial (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on December 4, 2015)
|
10.62
|
Servicer Performance Guaranty, dated as of December 2, 2015, between General Electric Capital LLC and Synchrony Financial (incorporated by reference to Exhibit 4.2 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on December 4, 2015)
|
10.63
|
Administration Agreement, dated as of September 25, 2003, among Synchrony Credit Card Master Note Trust, General Electric Capital Corporation, as Administrator, and The Bank of New York (Delaware), not in its individual capacity but solely as Trustee (incorporated by reference to Exhibit 4.14 of Amendment No. 1 to Form S-3 Registration Statement filed on May 20, 2004 (No. 333-107495, 333-107495-01 and 333-107495-02))
|
10.64
|
First Amendment to Administration Agreement, dated as of May 4, 2009, between Synchrony Credit Card Master Note Trust and General Electric Capital Corporation (incorporated by reference to Exhibit 4.1 of the current report on Form 8-K filed by Synchrony Credit Card Master Note Trust and RFS Holding, L.L.C. on May 6, 2009)
|
10.65
|
Master Indenture, dated as of February 29, 2012, between GE Sales Finance Master Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 10.55 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.66
|
Supplement No. 1 to Master Indenture, dated as of September 19, 2012, between GE Sales Finance Master Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 10.56 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.67
|
Supplement No. 2 to Master Indenture, dated as of March 21, 2014, between GE Sales Finance Master Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 10.57 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.68
|
Form of Indenture Supplement, between GE Sales Finance Master Trust and Deutsche Bank Trust Company Americas (incorporated by reference to Exhibit 10.58 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.69
|
Form of Loan Agreement, among GE Sales Finance Master Trust, the Lenders party thereto from time to time, and the Lender Group Agents for the Lender Groups party thereto from time to time (incorporated by reference to Exhibit 10.59 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.70
|
Amended and Restated Trust Agreement of GE Sales Finance Master Trust, dated as of February 29, 2012, between GE Sales Finance Holding, L.L.C. and BNY Mellon Trust of Delaware (incorporated by reference to Exhibit 10.60 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.71
|
Amended and Restated Receivables Participation Agreement, dated as of February 29, 2012, between GE Capital Retail Bank and GEMB Lending Inc. (incorporated by reference to Exhibit 10.61 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.72
|
First Amendment to Amended and Restated Receivables Participation Agreement, dated as of August 17, 2012, between GE Capital Retail Bank and GEMB Lending Inc. (incorporated by reference to Exhibit 10.62 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.73
|
Second Amendment to Amended and Restated Receivables Participation Agreement, dated as of August 5, 2013, between GE Capital Retail Bank and GEMB Lending Inc. (incorporated by reference to Exhibit 10.63 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.74
|
Participation Interest Sale Agreement, dated as of February 29, 2012, between GEMB Lending Inc. and GE Sales Finance Holding, L.L.C. (incorporated by reference to Exhibit 10.64 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.75
|
First Amendment to Participation Interest Sale Agreement, dated as of September 19, 2012, between GEMB Lending Inc. and GE Sales Finance Holding, L.L.C. (incorporated by reference to Exhibit 10.65 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.76
|
Second Amendment to Participation Interest Sale Agreement, dated as of March 21, 2014, between GEMB Lending Inc. and GE Sales Finance Holding, L.L.C. (incorporated by reference to Exhibit 10.66 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.77
|
Transfer Agreement, dated as of February 29, 2012, between GE Sales Finance Holding, L.L.C. and GE Sales Finance Master Trust (incorporated by reference to Exhibit 10.67 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.78
|
First Amendment to Transfer Agreement, dated as of September 19, 2012, between GE Sales Finance Holding, L.L.C. and GE Sales Finance Master Trust (incorporated by reference to Exhibit 10.68 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.79†
|
Second Amendment to Transfer Agreement, dated as of March 21, 2014, between GE Sales Finance Holding, L.L.C. and GE Sales Finance Master Trust (incorporated by reference to Exhibit 10.69 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.80†
|
Servicing Agreement, dated as of February 29, 2012, between GE Capital Retail Bank and GE Sales Finance Master Trust (incorporated by reference to Exhibit 10.70 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.81
|
Administration Agreement, dated as of February 29, 2012, between GE Sales Finance Master Trust and GE Capital Retail Bank (incorporated by reference to Exhibit 10.71 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on April 25, 2014 (No. 333-194528))
|
10.82
|
First Amended and Restated Technology Sourcing Agreement, dated as of December 10, 1998, between Retailer Credit Services, Inc. and First Data Resources, Inc., as amended (incorporated by reference to Exhibit 10.72 of Amendment No. 4 to Form S-1 Registration Statement filed by Synchrony Financial on June 27, 2014 (No. 333-194528))
|
10.83
|
First Amended and Restated Production Services Agreement, dated as of December 1, 2009, by and between Retailer Credit Services, Inc. and First Data Resources, LLC, as amended (incorporated by reference to Exhibit 10.73 of Amendment No. 4 to Form S-1 Registration Statement filed by Synchrony Financial on June 27, 2014 (No. 333-194528))
|
10.84
|
Stock Contribution Agreement, dated as of April 1, 2013, between GE Capital Retail Finance Corporation and GE Consumer Finance, Inc. (incorporated by reference to Exhibit 10.74 of Amendment No. 3 to Form S-1 Registration Statement filed by Synchrony Financial on June 6, 2014 (No. 333-194528))
|
10.85
|
Stock Contribution Agreement, dated as of August 5, 2013, between GE Capital Retail Finance Corporation and General Electric Capital Corporation (incorporated by reference to Exhibit 10.75 of Amendment No. 3 to Form S-1 Registration Statement filed by Synchrony Financial on June 6, 2014 (No. 333-194528))
|
10.86
|
General Electric Company 2007 Long-Term Incentive Plan (as amended and restated April 25, 2012) (incorporated by reference to Exhibit 99.1 of the Registration Statement on Form S-8 filed by General Electric Company on May 4, 2012 (No. 333-181177))
|
10.87
|
Form of Agreement for Stock Option Grants to Executive Officers under the General Electric Company 2007 Long-term Incentive Plan, as amended January 1, 2009 (incorporated by reference to Exhibit 10(n) of the annual report on Form 10-K filed by General Electric Company on February 18, 2009)
|
10.88
|
Form of Agreement for Periodic Restricted Stock Unit Grants to Executive Officers under the General Electric Company 2007 Long-term Incentive Plan (incorporated by reference to Exhibit 10.4 of the current report on Form 8-K filed by General Electric Company on April 27, 2007)
|
10.89
|
Form of Agreement for Long Term Performance Award Grants to Executive Officers under the General Electric Company 2007 Long-term Incentive Plan (as amended and restated April 25, 2012) (incorporated by reference to Exhibit 10(a) of the quarterly report on Form 10-Q filed by General Electric Company on July 26, 2013)
|
10.90
|
General Electric Supplementary Pension Plan, as amended effective January 1, 2011 (incorporated by reference to Exhibit 10(g) of the annual report on Form 10-K filed by General Electric Company on February 25, 2011)
|
10.91
|
GE Excess Benefits Plan, effective January 1, 2009 (incorporated by reference to Exhibit 10(k) to the annual report on Form 10-K filed by General Electric Company on February 18, 2009)
|
10.92
|
General Electric Leadership Life Insurance Program, effective January 1, 1994 (incorporated by reference to Exhibit 10(r) to the annual report on Form 10-K filed by General Electric Company on March 11, 1994)
|
10.93
|
General Electric Supplemental Life Insurance Program, as amended February 8, 1991 (incorporated by reference to Exhibit 10(i) to the annual report on Form 10-K filed by General Electric Company for the fiscal year ended December 31, 1990)
|
10.94
|
General Electric 2006 Executive Deferred Salary Plan, as amended January 1, 2009 (incorporated by reference to Exhibit 10(l) to the annual report on Form 10-K filed by General Electric Company on February 18, 2009)
|
10.95
|
Amendment to Nonqualified Deferred Compensation Plans, dated as of December 14, 2004 (incorporated by reference to Exhibit 10(w) to the annual report on Form 10-K filed by General Electric Company on March 1, 2005)
|
10.96
|
General Electric Financial Planning Program, as amended through September 1993 (incorporated by reference to Exhibit 10(h) to the annual report on Form 10-K filed by General Electric Company on March 11, 1994)
|
10.97
|
GE Capital Executive Incentive Compensation Plan (incorporated by reference to Exhibit 10.87 of Amendment No. 4 to Form S-1 Registration Statement filed by Synchrony Financial on June 27, 2014 (No. 333-194528))
|
10.98
|
Assumption Agreement, dated as of June 20, 2014, by and between General Electric Capital Corporation and Synchrony Financial (incorporated by reference to Exhibit 10.88 of Amendment No. 4 to Form S-1 Registration Statement filed by Synchrony Financial on June 27, 2014 (No. 333-194528))
|
10.99
|
Form of Indemnification Agreement for directors, executive officers and key employees (incorporated by reference to Exhibit 10.89 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.100
|
Sub-Servicing Agreement, dated as of July 30, 2014, between Synchrony Financial and General Electric Capital Corporation (incorporated by reference to Exhibit 10.90 of Amendment No. 1 to Form S-1 Registration Statement filed by Synchrony Financial on August 1, 2014 (333-197244))
|
10.101
|
Synchrony Financial Non-Employee Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.91 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 33-194528))
|
10.102
|
Revolving Credit Agreement, dated as of March 29, 1996, between GE Capital Consumer Card Co. (Macy’s) and General Electric Capital Corporation (incorporated by reference to Exhibit 10.93 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.103
|
Revolving Credit Agreement, dated as of March 29, 1996, between GE Capital Consumer Card Co. and General Electric Capital Corporation (incorporated by reference to Exhibit 10.94 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.104
|
Revolving Credit Agreement, dated as of March 29, 1996, between GE Capital Consumer Card Co. (Macy’s) and GECFS, Inc. (Macy’s) (incorporated by reference to Exhibit 10.95 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.105
|
Revolving Credit Agreement, dated as of March 29, 1996, between GE Capital Consumer Card Co. and GECFS, Inc. (Card Services) (incorporated by reference to Exhibit 10.96 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.106
|
Amendment No. 1 to Revolving Credit Agreement, dated as of October 6, 1997, between GE Capital Consumer Card Co. and GECFS, Inc. (Card Services) (incorporated by reference to Exhibit 10.97 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.107
|
Revolving Credit Agreement, dated as of May 1996, between Monogram Credit Card Bank of Georgia and General Electric Capital Corporation (incorporated by reference to Exhibit 10.98 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.108
|
Amendment No. 1 to Revolving Credit Agreement, dated as of April 18, 2003, between Monogram Credit Card Bank of Georgia and General Electric Capital Corporation (incorporated by reference to Exhibit 10.99 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.109
|
Amendment to Revolving Credit Agreements, dated as of October 1, 2008, between GE Money Bank and General Electric Capital Corporation (incorporated by reference to Exhibit 10.100 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.110
|
Amendment to Revolving Credit Agreements, dated as of June 13, 2012, between GE Capital Retail Bank and General Electric Capital Corporation (incorporated by reference to Exhibit 10.101 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.111
|
Letter, dated as of March 20, 2013, from General Electric Capital Corporation to GE Capital Retail Bank relating to revolving credit agreements (incorporated by reference to Exhibit 10.102 of Amendment No. 5 to Form S-1 Registration Statement filed by Synchrony Financial on July 18, 2014 (No. 333-194528))
|
10.112
|
Form of Synchrony Financial Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed by Synchrony Financial on September 22, 2014)
|
10.113
|
First Amendment to the Synchrony Financial Deferred Compensation Plan (incorporated by reference to Exhibit 10.109 to 2014 Annual Report on Form 10-K filed by Synchrony Financial on February 23, 2015)
|
10.114
|
Form of Restricted Stock Unit and Non-Qualified Stock Option Award (incorporated by reference to Exhibit 10.2 to Form 8-K filed by Synchrony Financial on September 22, 2014)
|
10.115
|
Form of Synchrony Financial Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed by Synchrony Financial on December 12, 2014)
|
10.116
|
Form of Synchrony Financial Restoration Plan (incorporated by reference to Exhibit 10.1 to Form 8-K filed by Synchrony Financial on May 27, 2015)
|
10.117
|
Synchrony Financial Executive Severance Plan (incorporated by reference to Exhibit 10.2 to Form 8-K filed by Synchrony Financial on May 27, 2015)
|
10.118*
|
First Amendment to the Synchrony Financial Restoration Plan
|
10.119*
|
Second Amendment to the Synchrony Financial Restoration Plan
|
10.120
|
Form of Synchrony Financial Change in Control Severance Plan (incorporated by reference to Exhibit 10.3 to Form 8-K filed by Synchrony Financial on May 27, 2015)
|
10.121
|
Services Agreement, dated as of September 15, 2015, between Retail Finance Servicing, LLC and First Data Resources, LLC (incorporated by reference to Exhibit 10.1 to Form 8-K filed by Synchrony Financial on September 15, 2015)†
|
10.122
|
Letter, dated as of October 19, 2015, delivered by General Electric Capital Corporation and acknowledged and agreed to by General Electric Company and Synchrony Financial(incorporated by reference to Exhibit 10.116 of Form S-4 Registration Statement filed by Synchrony Financial on October 16, 2015 (No. 333-207479))
|
12.1*
|
Statement of Ratio of Earnings to Fixed Charges
|
21.1
|
Subsidiaries of the Registrant (incorporated by reference to Exhibit 21.1 to 2014 Annual Report on Form 10-K filed by Synchrony Financial on February 23, 2015)
|
23.1*
|
Consent of KPMG LLP
|
24.1*
|
Powers of Attorney (included on the signature page)
|
31(a)*
|
Certification Pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended
|
31(b)*
|
Certification Pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended
|
32*
|
Certification Pursuant to 18 U.S.C. Section 1350
|
101
|
The following materials from Synchrony Financial’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated and Combined Statements of Earnings for the years ended December 31, 2015, 2014 and 2013, (ii) Consolidated and Combined Statements of Comprehensive Income for the years ended December 31, 2015, 2014 and 2013, (iii) Consolidated and Combined Statements of Financial Position at December 31, 2015 and 2014, (iv) Consolidated and Combined Statements of Changes in Equity for the years ended December 31, 2015, 2014 and 2013, (v) Consolidated and Combined Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013, and (vi) Notes to Consolidated and Combined Financial Statements
|
*
|
Filed electronically herewith.
|
†
|
Confidential treatment granted to certain portions, which portions have been provided separately to the Securities and Exchange Commission.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
SYNCHRONY FINANCIAL
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
|
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
||||||||||
|
|
|
|
||||||||||||||||||||
Earnings
(a)
|
|
$
|
3,531
|
|
|
$
|
3,386
|
|
|
$
|
3,142
|
|
|
$
|
3,376
|
|
|
$
|
3,010
|
|
|
||
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Interest included in expense
(b)
|
|
1,063
|
|
|
877
|
|
|
703
|
|
|
694
|
|
|
884
|
|
|
||||||
|
Amortization of debt expense and discount or premium on indebtedness
|
|
72
|
|
|
45
|
|
|
39
|
|
|
51
|
|
|
48
|
|
|
||||||
|
One third of rental expense
(c)
|
|
28
|
|
|
21
|
|
|
17
|
|
|
17
|
|
|
17
|
|
|
||||||
|
Adjusted "earnings"
|
|
$
|
4,694
|
|
|
$
|
4,329
|
|
|
$
|
3,901
|
|
|
$
|
4,138
|
|
|
$
|
3,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Interest included in expense
(b)
|
|
$
|
1,063
|
|
|
$
|
877
|
|
|
$
|
703
|
|
|
$
|
694
|
|
|
$
|
884
|
|
|
|
|
Amortization of debt expense and discount or premium on indebtedness
|
|
72
|
|
|
45
|
|
|
39
|
|
|
51
|
|
|
48
|
|
|
||||||
|
One third of rental expense
(c)
|
|
28
|
|
|
21
|
|
|
17
|
|
|
17
|
|
|
17
|
|
|
||||||
Total fixed charges
|
|
$
|
1,163
|
|
|
$
|
943
|
|
|
$
|
759
|
|
|
$
|
762
|
|
|
$
|
949
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
4.0
|
|
|
4.6
|
|
|
5.1
|
|
|
5.4
|
|
|
4.2
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(a)
|
Earnings before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(b)
|
Includes interest on tax deficiencies
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(c)
|
Considered to be representative of interest factor in rental expense
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
I have reviewed this annual report on Form 10-K of Synchrony Financial;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have
:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Margaret M. Keane
|
Margaret M. Keane
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Synchrony Financial;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have
:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles
;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Brian D. Doubles
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Brian D. Doubles
Chief Financial Officer
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1.
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The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
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/s/ Margaret M. Keane
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Margaret M. Keane
President and Chief Executive Officer
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/s/ Brian D. Doubles
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Brian D. Doubles
Chief Financial Officer
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