Synchrony Financial - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
EX-99.4 - EXHIBIT 99.4 - Synchrony Financial	non-gaapmeasures1q18.htm
EX-99.3 - EXHIBIT 99.3 - Synchrony Financial	a1q18earningspresentatio.htm
EX-99.1 - EXHIBIT 99.1 - Synchrony Financial	earningsrelease1q18.htm
8-K - 8-K - Synchrony Financial	a8-k1q18earnings.htm

Exhibit 99.2



SYNCHRONY FINANCIAL
FINANCIAL SUMMARY
(unaudited, in millions, except per share statistics)
	Quarter Ended
	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			1Q'18 vs. 1Q'17
EARNINGS
Net interest income	$	3,842		$	3,916		$	3,876		$	3,637		$	3,587		$	255		7.1	%
Retailer share arrangements	(720		)	(779		)	(805		)	(669		)	(684		)	(36		)	5.3	%
Net interest income, after retailer share arrangements	3,122			3,137			3,071			2,968			2,903			219			7.5	%
Provision for loan losses	1,362			1,354			1,310			1,326			1,306			56			4.3	%
Net interest income, after retailer share arrangements and provision for loan losses	1,760			1,783			1,761			1,642			1,597			163			10.2	%
Other income	75			62			76			57			93			(18		)	(19.4	)%
Other expense	988			970			958			911			908			80			8.8	%
Earnings before provision for income taxes	847			875			879			788			782			65			8.3	%
Provision for income taxes	207			490			324			292			283			(76		)	(26.9	)%
Net earnings	$	640		$	385		$	555		$	496		$	499		$	141		28.3	%
Net earnings attributable to common stockholders	$	640		$	385		$	555		$	496		$	499		$	141		28.3	%

Adjusted net earnings⁽¹⁾	$	640		$	545		$	555		$	496		$	499		$	141		28.3	%

COMMON SHARE STATISTICS
Basic EPS	$	0.84		$	0.49		$	0.70		$	0.62		$	0.61		$	0.23		37.7	%
Diluted EPS	$	0.83		$	0.49		$	0.70		$	0.61		$	0.61		$	0.22		36.1	%
Adjusted diluted EPS⁽¹⁾	$	0.83		$	0.70		$	0.70		$	0.61		$	0.61		$	0.22		36.1	%
Dividend declared per share	$	0.15		$	0.15		$	0.15		$	0.13		$	0.13		$	0.02		15.4	%
Common stock price	$	33.53		$	38.61		$	31.05		$	29.82		$	34.30		$	(0.77	)	(2.2	)%
Book value per share	$	18.88		$	18.47		$	18.40		$	18.02		$	17.71		$	1.17		6.6	%
Tangible common equity per share⁽¹⁾	$	16.55		$	16.22		$	16.15		$	15.79		$	15.47		$	1.08		7.0	%

Beginning common shares outstanding	770.5			782.6			795.3			810.8			817.4			(46.9		)	(5.7	)%
Issuance of common shares	—			—			—			—			—			—			—	%
Stock-based compensation	0.2			0.1			0.1			0.2			—			0.2			NM
Shares repurchased	(10.4		)	(12.2		)	(12.8		)	(15.7		)	(6.6		)	(3.8		)	57.6	%
Ending common shares outstanding	760.3			770.5			782.6			795.3			810.8			(50.5		)	(6.2	)%

Weighted average common shares outstanding	763.7			778.7			787.3			804.0			813.1			(49.4		)	(6.1	)%
Weighted average common shares outstanding (fully diluted)	770.3			784.0			790.9			807.4			817.1			(46.8		)	(5.7	)%

(1) Adjusted net earnings and Adjusted diluted EPS are non-GAAP measures. These measures represent the corresponding GAAP measure, adjusted to exclude the effects to Provision for income taxes in the quarter ended December 31, 2017, resulting from the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The effects primarily relate to additional tax expense arising from the remeasurement of our net deferred tax asset to reflect the reduction in the U.S. corporate tax rate from 35% to 21%. For a corresponding reconciliation to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(2) Tangible Common Equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.



SYNCHRONY FINANCIAL
SELECTED METRICS
(unaudited, $ in millions, except account data)
	Quarter Ended
	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			1Q'18 vs. 1Q'17
PERFORMANCE METRICS
Return on assets⁽¹⁾	2.7		%	1.6		%	2.4		%	2.2		%	2.3		%				0.4	%
Return on equity⁽²⁾	18.2		%	10.5		%	15.3		%	13.8		%	14.1		%				4.1	%
Return on tangible common equity⁽³⁾	20.7		%	12.0		%	17.4		%	15.7		%	16.1		%				4.6	%
Adjusted return on assets⁽⁴⁾	2.7		%	2.3		%	2.4		%	2.2		%	2.3		%				0.4	%
Adjusted return on equity⁽⁴⁾	18.2		%	14.9		%	15.3		%	13.8		%	14.1		%				4.1	%
Adjusted return on tangible common equity⁽⁵⁾	20.7		%	17.0		%	17.4		%	15.7		%	16.1		%				4.6	%
Net interest margin⁽⁶⁾	16.05		%	16.24		%	16.74		%	16.20		%	16.18		%				(0.13	)%
Efficiency ratio⁽⁷⁾	30.9		%	30.3		%	30.4		%	30.1		%	30.3		%				0.6	%
Other expense as a % of average loan receivables, including held for sale	5.07		%	4.91		%	4.99		%	4.93		%	4.97		%				0.10	%
Effective income tax rate	24.4		%	56.0		%	36.9		%	37.1		%	36.2		%				(11.8	)%

CREDIT QUALITY METRICS
Net charge-offs as a % of average loan receivables, including held for sale	6.14		%	5.78		%	4.95		%	5.42		%	5.33		%				0.81	%
30+ days past due as a % of period-end loan receivables⁽⁸⁾	4.52		%	4.67		%	4.80		%	4.25		%	4.25		%				0.27	%
90+ days past due as a % of period-end loan receivables⁽⁸⁾	2.28		%	2.28		%	2.22		%	1.90		%	2.06		%				0.22	%
Net charge-offs	$	1,198		$	1,141		$	950		$	1,001		$	974		$	224		23.0	%
Loan receivables delinquent over 30 days⁽⁸⁾	$	3,521		$	3,831		$	3,694		$	3,208		$	3,120		$	401		12.9	%
Loan receivables delinquent over 90 days⁽⁸⁾	$	1,776		$	1,869		$	1,707		$	1,435		$	1,508		$	268		17.8	%

Allowance for loan losses (period-end)	$	5,738		$	5,574		$	5,361		$	5,001		$	4,676		$	1,062		22.7	%
Allowance coverage ratio⁽⁹⁾	7.37		%	6.80		%	6.97		%	6.63		%	6.37		%				1.00	%

BUSINESS METRICS
Purchase volume⁽¹⁰⁾	$	29,626		$	36,565		$	32,893		$	33,476		$	28,880		$	746		2.6	%
Period-end loan receivables	$	77,853		$	81,947		$	76,928		$	75,458		$	73,350		$	4,503		6.1	%
Credit cards	$	74,952		$	79,026		$	73,946		$	72,492		$	70,587		$	4,365		6.2	%
Consumer installment loans	$	1,590		$	1,578		$	1,561		$	1,514		$	1,411		$	179		12.7	%
Commercial credit products	$	1,275		$	1,303		$	1,384		$	1,386		$	1,311		$	(36	)	(2.7	)%
Other	$	36		$	40		$	37		$	66		$	41		$	(5	)	(12.2	)%
Average loan receivables, including held for sale	$	79,090		$	78,369		$	76,165		$	74,090		$	74,132		$	4,958		6.7	%
Period-end active accounts (in thousands)⁽¹¹⁾	68,891			74,541			69,008			69,277			67,905			986			1.5	%
Average active accounts (in thousands)⁽¹¹⁾	71,323			71,348			69,331			68,635			69,629			1,694			2.4	%

LIQUIDITY
Liquid assets
Cash and equivalents	$	13,044		$	11,602		$	13,915		$	12,020		$	11,392		$	1,652		14.5	%
Total liquid assets	$	18,557		$	15,087		$	16,391		$	15,274		$	16,158		$	2,399		14.8	%
Undrawn credit facilities
Undrawn credit facilities	$	6,000		$	6,000		$	5,650		$	6,650		$	5,600		$	400		7.1	%
Total liquid assets and undrawn credit facilities	$	24,557		$	21,087		$	22,041		$	21,924		$	21,758		$	2,799		12.9	%
Liquid assets % of total assets	19.42		%	15.75		%	17.71		%	16.76		%	18.14		%				1.28	%
Liquid assets including undrawn credit facilities % of total assets	25.70		%	22.01		%	23.82		%	24.06		%	24.43		%				1.27	%

(1) Return on assets represents net earnings as a percentage of average total assets.
(2) Return on equity represents net earnings as a percentage of average total equity.
(3) Return on tangible common equity represents net earnings as a percentage of average tangible common equity. Tangible common equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(4) Adjusted return on assets represents Adjusted net earnings as a percentage of average total assets. Adjusted return on equity represents Adjusted net earnings as a percentage of average total equity. Adjusted net earnings is a non-GAAP measure. For a corresponding reconciliation of Adjusted net earnings to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(5) Adjusted return on tangible common equity represents Adjusted net earnings as a percentage of average tangible common equity. Both Adjusted net earnings and tangible common equity are non-GAAP measures. For corresponding reconciliations to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(6) Net interest margin represents net interest income divided by average interest-earning assets.
(7) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income.
(8) Based on customer statement-end balances extrapolated to the respective period-end date.
(9) Allowance coverage ratio represents allowance for loan losses divided by total period-end loan receivables.
(10) 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.
(11) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.



SYNCHRONY FINANCIAL
STATEMENTS OF EARNINGS
(unaudited, $ in millions)
	Quarter Ended
	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			1Q'18 vs. 1Q'17
Interest income:
Interest and fees on loans	$	4,172		$	4,233		$	4,182		$	3,927		$	3,877		$	295		7.6	%
Interest on investment securities	72			58			51			43			36			36			100.0	%
Total interest income	4,244			4,291			4,233			3,970			3,913			331			8.5	%

Interest expense:
Interest on deposits	249			233			219			202			194			55			28.4	%
Interest on borrowings of consolidated securitization entities	74			70			65			63			65			9			13.8	%
Interest on third-party debt	79			72			73			68			67			12			17.9	%
Total interest expense	402			375			357			333			326			76			23.3	%

Net interest income	3,842			3,916			3,876			3,637			3,587			255			7.1	%

Retailer share arrangements	(720		)	(779		)	(805		)	(669		)	(684		)	(36		)	5.3	%
Net interest income, after retailer share arrangements	3,122			3,137			3,071			2,968			2,903			219			7.5	%

Provision for loan losses	1,362			1,354			1,310			1,326			1,306			56			4.3	%
Net interest income, after retailer share arrangements and provision for loan losses	1,760			1,783			1,761			1,642			1,597			163			10.2	%

Other income:
Interchange revenue	158			179			164			165			145			13			9.0	%
Debt cancellation fees	66			69			67			68			68			(2		)	(2.9	)%
Loyalty programs	(155		)	(193		)	(168		)	(206		)	(137		)	(18		)	13.1	%
Other	6			7			13			30			17			(11		)	(64.7	)%
Total other income	75			62			76			57			93			(18		)	(19.4	)%

Other expense:
Employee costs⁽¹⁾	358			330			333			318			323			35			10.8	%
Professional fees	166			159			161			158			151			15			9.9	%
Marketing and business development	121			156			124			124			94			27			28.7	%
Information processing	104			99			96			88			90			14			15.6	%
Other⁽¹⁾	239			226			244			223			250			(11		)	(4.4	)%
Total other expense	988			970			958			911			908			80			8.8	%

Earnings before provision for income taxes	847			875			879			788			782			65			8.3	%
Provision for income taxes	207			490			324			292			283			(76		)	(26.9	)%
Net earnings attributable to common shareholders	$	640		$	385		$	555		$	496		$	499		$	141		28.3	%


(1) We have reclassified certain amounts within Employee costs to Other for all periods in 2017 to conform to the current period classifications.



SYNCHRONY FINANCIAL
STATEMENTS OF FINANCIAL POSITION
(unaudited, $ in millions)
	Quarter Ended
	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			Mar 31, 2018 vs. Mar 31, 2017
Assets
Cash and equivalents	$	13,044		$	11,602		$	13,915		$	12,020		$	11,392		$	1,652		14.5	%
Debt securities	6,259			4,473			3,302			3,982			5,313			946			17.8	%
Loan receivables:
Unsecuritized loans held for investment	52,469			55,526			53,997			52,550			50,398			2,071			4.1	%
Restricted loans of consolidated securitization entities	25,384			26,421			22,931			22,908			22,952			2,432			10.6	%
Total loan receivables	77,853			81,947			76,928			75,458			73,350			4,503			6.1	%
Less: Allowance for loan losses	(5,738		)	(5,574		)	(5,361		)	(5,001		)	(4,676		)	(1,062		)	22.7	%
Loan receivables, net	72,115			76,373			71,567			70,457			68,674			3,441			5.0	%
Goodwill	991			991			991			991			992			(1		)	(0.1	)%
Intangible assets, net	780			749			772			787			826			(46		)	(5.6	)%
Other assets	2,370			1,620			2,001			2,903			1,853			517			27.9	%
Total assets	$	95,559		$	95,808		$	92,548		$	91,140		$	89,050		$	6,509		7.3	%

Liabilities and Equity
Deposits:
Interest-bearing deposit accounts	$	56,285		$	56,276		$	54,232		$	52,659		$	51,359		$	4,926		9.6	%
Non-interest-bearing deposit accounts	285			212			222			226			246			39			15.9	%
Total deposits	56,570			56,488			54,454			52,885			51,605			4,965			9.6	%
Borrowings:
Borrowings of consolidated securitization entities	12,214			12,497			11,891			12,204			12,433			(219		)	(1.8	)%
Senior unsecured notes	8,801			8,302			8,008			8,505			7,761			1,040			13.4	%
Total borrowings	21,015			20,799			19,899			20,709			20,194			821			4.1	%
Accrued expenses and other liabilities	3,618			4,287			3,793			3,214			2,888			730			25.3	%
Total liabilities	81,203			81,574			78,146			76,808			74,687			6,516			8.7	%
Equity:
Common stock	1			1			1			1			1			—			—	%
Additional paid-in capital	9,470			9,445			9,429			9,415			9,405			65			0.7	%
Retained earnings	7,334			6,809			6,543			6,109			5,724			1,610			28.1	%
Accumulated other comprehensive income:	(86		)	(64		)	(40		)	(49		)	(55		)	(31		)	56.4	%
Treasury Stock	(2,363		)	(1,957		)	(1,531		)	(1,144		)	(712		)	(1,651		)	NM
Total equity	14,356			14,234			14,402			14,332			14,363			(7		)	(0.0)%
Total liabilities and equity	$	95,559		$	95,808		$	92,548		$	91,140		$	89,050		$	6,509		7.3	%



SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
(unaudited, $ in millions)

	Quarter Ended
	Mar 31, 2018							Dec 31, 2017							Sep 30, 2017							Jun 30, 2017							Mar 31, 2017
				Interest		Average					Interest		Average					Interest		Average					Interest		Average					Interest		Average
	Average			Income/		Yield/		Average			Income/		Yield/		Average			Income/		Yield/		Average			Income/		Yield/		Average			Income/		Yield/
	Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate		Balance			Expense		Rate
Assets
Interest-earning assets:
Interest-earning cash and equivalents	$	12,434		$	47	1.53	%	$	13,591		$	43	1.26	%	$	11,895		$	37	1.23	%	$	10,758		$	28	1.04	%	$	10,552		$	21	0.81	%
Securities available for sale	5,584			25		1.82	%	3,725			15		1.60	%	3,792			14		1.46	%	5,195			15		1.16	%	5,213			15		1.17	%

Loan receivables:
Credit cards, including held for sale	76,181			4,099		21.82	%	75,389			4,161		21.90	%	73,172			4,111		22.29	%	71,206			3,858		21.73	%	71,365			3,811		21.66	%
Consumer installment loans	1,572			36		9.29	%	1,568			36		9.11	%	1,543			35		9.00	%	1,461			34		9.33	%	1,389			32		9.34	%
Commercial credit products	1,286			36		11.35	%	1,375			35		10.10	%	1,392			36		10.26	%	1,378			34		9.90	%	1,317			34		10.47	%
Other	51			1		NM		37			1		NM		58			—		—	%	45			1		NM		61			—		—	%
Total loan receivables, including held for sale	79,090			4,172		21.39	%	78,369			4,233		21.43	%	76,165			4,182		21.78	%	74,090			3,927		21.26	%	74,132			3,877		21.21	%
Total interest-earning assets	97,108			4,244		17.72	%	95,685			4,291		17.79	%	91,852			4,233		18.28	%	90,043			3,970		17.68	%	89,897			3,913		17.65	%

Non-interest-earning assets:
Cash and due from banks	1,197							1,037							877							829							802
Allowance for loan losses	(5,608		)					(5,443		)					(5,125		)					(4,781		)					(4,408		)
Other assets	3,010							3,219							3,517							3,303							3,177
Total non-interest-earning assets	(1,401		)					(1,187		)					(731		)					(649		)					(429		)

Total assets	$	95,707						$	94,498						$	91,121						$	89,394						$	89,468

Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts	$	56,356		$	249	1.79	%	$	55,690		$	233	1.66	%	$	53,294		$	219	1.63	%	$	51,836		$	202	1.56	%	$	51,829		$	194	1.52	%
Borrowings of consolidated securitization entities	12,410			74		2.42	%	12,425			70		2.24	%	11,759			65		2.19	%	12,213			63		2.07	%	12,321			65		2.14	%
Senior unsecured notes	8,795			79		3.64	%	7,940			72		3.60	%	8,251			73		3.51	%	7,933			68		3.44	%	7,760			67		3.50	%

Total interest-bearing liabilities	77,561			402		2.10	%	76,055			375		1.96	%	73,304			357		1.93	%	71,982			333		1.86	%	71,910			326		1.84	%

Non-interest-bearing liabilities
Non-interest-bearing deposit accounts	300							218							232							218							240
Other liabilities	3,570							3,716							3,154							2,752							2,995
Total non-interest-bearing liabilities	3,870							3,934							3,386							2,970							3,235

Total liabilities	81,431							79,989							76,690							74,952							75,145

Equity
Total equity	14,276							14,509							14,431							14,442							14,323

Total liabilities and equity	$	95,707						$	94,498						$	91,121						$	89,394						$	89,468
Net interest income				$	3,842						$	3,916						$	3,876						$	3,637						$	3,587

Interest rate spread⁽¹⁾						15.62	%						15.83	%						16.35	%						15.82	%						15.81	%
Net interest margin⁽²⁾						16.05	%						16.24	%						16.74	%						16.20	%						16.18	%


(1) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(2) Net interest margin represents net interest income divided by average interest-earning assets.



SYNCHRONY FINANCIAL
BALANCE SHEET STATISTICS
(unaudited, $ in millions, except per share statistics)

	Quarter Ended
	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			Mar 31, 2018 vs. Mar 31, 2017
BALANCE SHEET STATISTICS
Total common equity	$	14,356		$	14,234		$	14,402		$	14,332		$	14,363		$	(7	)	(0.0)%
Total common equity as a % of total assets	15.02		%	14.86		%	15.56		%	15.73		%	16.13		%				(1.11	)%

Tangible assets	$	93,788		$	94,068		$	90,785		$	89,362		$	87,232		$	6,556		7.5	%
Tangible common equity⁽¹⁾	$	12,585		$	12,494		$	12,639		$	12,554		$	12,545		$	40		0.3	%
Tangible common equity as a % of tangible assets⁽¹⁾	13.42		%	13.28		%	13.92		%	14.05		%	14.38		%				(0.96	)%
Tangible common equity per share⁽¹⁾	$	16.55		$	16.22		$	16.15		$	15.79		$	15.47		$	1.08		7.0	%

REGULATORY CAPITAL RATIOS⁽²⁾
	Basel III Fully Phased-in⁽³⁾			Basel III Transition
Total risk-based capital ratio⁽⁴⁾	18.1		%	17.3		%	18.7		%	18.7		%	19.3		%
Tier 1 risk-based capital ratio⁽⁵⁾	16.8		%	16.0		%	17.3		%	17.4		%	18.0		%
Tier 1 leverage ratio⁽⁶⁾	13.7		%	13.8		%	14.6		%	14.8		%	14.8		%
Common equity Tier 1 capital ratio	16.8		%	16.0		%	17.3		%	17.4		%	18.0		%

	Basel III Fully Phased-in
Common equity Tier 1 capital ratio	16.8		%	15.8		%	17.2		%	17.2		%	17.7		%


(1) Tangible common equity ("TCE") is a non-GAAP measure. We believe TCE is a more meaningful measure of the net asset value of the Company to investors. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(2) Regulatory capital metrics at March 31, 2018 are preliminary and therefore subject to change.
(3) Amounts presented do not reflect certain modifications to the regulatory capital rules proposed by the federal banking agencies in September 2017, which among other things, may increase the risk weighting of certain deferred tax assets from 100% to 250% if the proposed rule becomes effective.
(4) Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.
(5) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.
(6) Tier 1 leverage ratio is the ratio of Tier 1 capital divided by total average assets, after certain adjustments. Tier 1 leverage ratios are based upon the use of daily averages for all periods presented.



SYNCHRONY FINANCIAL
PLATFORM RESULTS
(unaudited, $ in millions)
	Quarter Ended
	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017			1Q'18 vs. 1Q'17
RETAIL CARD
Purchase volume⁽¹⁾⁽²⁾	$	23,382		$	29,839		$	26,347		$	27,101		$	22,952		$	430		1.9	%
Period-end loan receivables	$	52,531		$	56,230		$	52,119		$	51,437		$	49,905		$	2,626		5.3	%
Average loan receivables, including held for sale	$	53,673		$	53,256		$	51,817		$	50,533		$	50,644		$	3,029		6.0	%
Average active accounts (in thousands)⁽²⁾⁽³⁾	55,927			56,113			54,471			54,058			55,049			878			1.6	%

Interest and fees on loans⁽²⁾	$	3,096		$	3,133		$	3,102		$	2,900		$	2,888		$	208		7.2	%
Other income⁽²⁾	$	65		$	49		$	61		$	25		$	77		$	(12	)	(15.6	)%
Retailer share arrangements⁽²⁾	$	(714	)	$	(771	)	$	(795	)	$	(657	)	$	(681	)	$	(33	)	4.8	%

PAYMENT SOLUTIONS
Purchase volume⁽¹⁾	$	3,823		$	4,366		$	4,178		$	3,930		$	3,686		$	137		3.7	%
Period-end loan receivables	$	16,513		$	16,857		$	16,153		$	15,595		$	15,320		$	1,193		7.8	%
Average loan receivables	$	16,629		$	16,386		$	15,848		$	15,338		$	15,424		$	1,205		7.8	%
Average active accounts (in thousands)⁽³⁾	9,545			9,421			9,183			9,031			9,090			455			5.0	%

Interest and fees on loans	$	562		$	574		$	559		$	533		$	515		$	47		9.1	%
Other income	$	2		$	2		$	2		$	6		$	4		$	(2	)	(50.0	)%
Retailer share arrangements	$	(4	)	$	(5	)	$	(9	)	$	(9	)	$	(1	)	$	(3	)	NM

CARECREDIT
Purchase volume⁽¹⁾	$	2,421		$	2,360		$	2,368		$	2,445		$	2,242		$	179		8.0	%
Period-end loan receivables	$	8,809		$	8,860		$	8,656		$	8,426		$	8,125		$	684		8.4	%
Average loan receivables	$	8,788		$	8,727		$	8,500		$	8,219		$	8,064		$	724		9.0	%
Average active accounts (in thousands)⁽³⁾	5,851			5,814			5,677			5,546			5,490			361			6.6	%

Interest and fees on loans	$	514		$	526		$	521		$	494		$	474		$	40		8.4	%
Other income	$	8		$	11		$	13		$	26		$	12		$	(4	)	(33.3	)%
Retailer share arrangements	$	(2	)	$	(3	)	$	(1	)	$	(3	)	$	(2	)	$	—		—	%

TOTAL SYF
Purchase volume⁽¹⁾⁽²⁾	$	29,626		$	36,565		$	32,893		$	33,476		$	28,880		$	746		2.6	%
Period-end loan receivables	$	77,853		$	81,947		$	76,928		$	75,458		$	73,350		$	4,503		6.1	%
Average loan receivables, including held for sale	$	79,090		$	78,369		$	76,165		$	74,090		$	74,132		$	4,958		6.7	%
Average active accounts (in thousands)⁽²⁾⁽³⁾	71,323			71,348			69,331			68,635			69,629			1,694			2.4	%

Interest and fees on loans⁽²⁾	$	4,172		$	4,233		$	4,182		$	3,927		$	3,877		$	295		7.6	%
Other income⁽²⁾	$	75		$	62		$	76		$	57		$	93		$	(18	)	(19.4	)%
Retailer share arrangements⁽²⁾	$	(720	)	$	(779	)	$	(805	)	$	(669	)	$	(684	)	$	(36	)	5.3	%

(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.
(2) Includes activity and balances associated with loan receivables held for sale.
(3) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.



SYNCHRONY FINANCIAL
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES⁽¹⁾
(unaudited, $ in millions, except per share statistics)
	Quarter Ended
	Mar 31, 2018			Dec 31, 2017			Sep 30, 2017			Jun 30, 2017			Mar 31, 2017
COMMON EQUITY MEASURES
GAAP Total common equity	$	14,356		$	14,234		$	14,402		$	14,332		$	14,363
Less: Goodwill	(991		)	(991		)	(991		)	(991		)	(992		)
Less: Intangible assets, net	(780		)	(749		)	(772		)	(787		)	(826		)
Tangible common equity	$	12,585		$	12,494		$	12,639		$	12,554		$	12,545

Adjustments for certain deferred tax liabilities and certain items in accumulated comprehensive income (loss)	278			254			344			337			340
Basel III - Common equity Tier 1 (fully phased-in)	$	12,863		$	12,748		$	12,983		$	12,891		$	12,885
Adjustment related to capital components during transition				142			142			146			154
Basel III - Common equity Tier 1 (transition)				$	12,890		$	13,125		$	13,037		$	13,039

RISK-BASED CAPITAL
Common equity Tier 1	$	12,863		$	12,890		$	13,125		$	13,037		$	13,039
Add: Allowance for loan losses includible in risk-based capital	1,015			1,064			1,001			985			954
Risk-based capital	$	13,878		$	13,954		$	14,126		$	14,022		$	13,993

ASSET MEASURES
Total average assets	$	95,707		$	94,498		$	91,121		$	89,394		$	89,468
Adjustments for:
Disallowed goodwill and other disallowed intangible assets (net of related deferred tax liabilities) and other	(1,560		)	(1,392		)	(1,304		)	(1,325		)	(1,358		)
Total assets for leverage purposes	$	94,147		$	93,106		$	89,817		$	88,069		$	88,110

Risk-weighted assets - Basel III (fully phased-in)	$	76,509		$	80,526		$	75,614		$	74,748		$	72,596
Risk-weighted assets - Basel III (transition)				$	80,669		$	75,729		$	74,792		$	72,627

TANGIBLE COMMON EQUITY PER SHARE
GAAP book value per share	$	18.88		$	18.47		$	18.40		$	18.02		$	17.71
Less: Goodwill	(1.30		)	(1.29		)	(1.27		)	(1.25		)	(1.22		)
Less: Intangible assets, net	(1.03		)	(0.96		)	(0.98		)	(0.98		)	(1.02		)
Tangible common equity per share	$	16.55		$	16.22		$	16.15		$	15.79		$	15.47

ADJUSTED NET EARNINGS
GAAP net earnings	$	640		$	385		$	555		$	496		$	499
Adjustment for tax law change⁽²⁾	—			160			—			—			—
Adjusted net earnings	$	640		$	545		$	555		$	496		$	499

ADJUSTED DILUTED EPS
GAAP diluted EPS	$	0.83		$	0.49		$	0.70		$	0.61		$	0.61
Adjustment for tax law change⁽²⁾	—			0.21			—			—			—
Adjusted diluted EPS	$	0.83		$	0.70		$	0.70		$	0.61		$	0.61


(1) Regulatory measures at March 31, 2018 are presented on an estimated basis.
(2) Adjustment to exclude the effects to Provision for income taxes in the quarter ended December 31, 2017, resulting from the Tax Act.

Synchrony Financial - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - April 20, 2018

Attached files

Synchrony Financial Reports