0001101215-24-000041 | 10-K | XBRL Viewer | Bread Financial Holdings INC

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LEASES - Supplemental lease information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities – operating cash flows	$ 27	$ 23	$ 25
Right-of-use assets obtained in exchange for operating leases – non-cash	$ 37	$ 0	$ 5

STOCKHOLDERS' EQUITY - Restricted Stock Unit Awards and Stock Options (Details) - $ / shares	1 Months Ended	12 Months Ended
	Nov. 30, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Restricted Stock Units
Number of Shares
Balance at the beginning of the period (in shares)		1,272,609	759,435	577,267
Shares granted (in shares)		1,348,052	848,691	888,245
Shares vested (in shares)		(443,303)	(227,060)	(192,400)
Shares forfeited (in shares)		(87,527)	(108,457)	(513,677)
Balance at the end of the period (in shares)		2,089,831	1,272,609	759,435
Outstanding and Expected to Vest (in shares)		1,978,963
Weighted Average Fair Value
Balance at the beginning of the period (in dollars per share)		$ 68.86	$ 89.14	$ 103.89
Shares granted (in dollars per share)		38.02	63.22	88.18
Shares vested (in dollars per share)		67.49	78.23	118.78
Shares forfeited (in dollars per share)		53.82	65.83	93.16
Balance at the end of the period (in dollars per share)		49.89	$ 68.86	$ 89.14
Outstanding and Expected to Vest (in dollars per share)		$ 50.25
Market-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)		0	19,067	22,227
Shares granted (in shares)		0	0	2,641
Shares vested (in shares)		0	0	0
Shares forfeited (in shares)		0	(19,067)	(5,801)
Balance at the end of the period (in shares)		0	0	19,067
Weighted Average Fair Value
Attainment percentage		100.00%	100.00%	100.00%
Increase in granted shares	2,641
Performance-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)		164,946	91,416	221,226
Shares granted (in shares)		175,587	82,513	111,542
Shares vested (in shares)		(9,254)	(8,983)	(24,677)
Shares forfeited (in shares)		0	0	(216,675)
Balance at the end of the period (in shares)		331,279	164,946	91,416
Weighted Average Fair Value
Attainment percentage		100.00%	100.00%	100.00%
Increase in granted shares	12,659
Service-based restricted stock unit awards
Number of Shares
Balance at the beginning of the period (in shares)		1,107,663	648,952	333,814
Shares granted (in shares)		1,172,465	766,178	774,062
Shares vested (in shares)		(434,049)	(218,077)	(167,723)
Shares forfeited (in shares)		(87,527)	(89,390)	(291,201)
Balance at the end of the period (in shares)		1,758,552	1,107,663	648,952
Weighted Average Fair Value
Increase in granted shares	96,556

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accounting Policies [Line Items]
Period for which interest and fee income accrue until balance, interest and fees paid or charged off	180 days
Period for which interest and fee income accrue until balance, interest and other fees are paid or charged off on installment loan receivables	120 days
Amortization term of direct loan amortization costs	1 year
Unamortized deferred costs related to loan origination	$ 60,000,000	$ 46,000,000
Unamortized contract costs	285,000,000	344,000,000
Impairment of contract costs	7,000,000	0	$ 0
Cash and due from banks	410,000,000	288,000,000
Interest-bearing deposits	2,900,000,000	3,500,000,000
Short-term investments	250,000,000	130,000,000
Restricted cash included within Other Assets	26,000,000	36,000,000	877,000,000
Depreciation	19,000,000	19,000,000	26,000,000
Unamortized capitalized software costs	78,000,000	112,000,000
Amortization on capitalized software	60,000,000	68,000,000	37,000,000
Impairment charges	$ 0	$ 0	0
Minimum \| Furniture and Equipment
Accounting Policies [Line Items]
Estimated useful life	1 year
Minimum \| Leasehold Improvements
Accounting Policies [Line Items]
Estimated useful life	1 year
Minimum \| Internal-Use Software
Accounting Policies [Line Items]
Estimated useful life	1 year
Maximum \| Furniture and Equipment
Accounting Policies [Line Items]
Estimated useful life	11 years
Maximum \| Leasehold Improvements
Accounting Policies [Line Items]
Estimated useful life	24 years
Maximum \| Internal-Use Software
Accounting Policies [Line Items]
Estimated useful life	10 years
Customer Concentration Risk \| Revenue Benchmark \| Five Largest Credit Card Programs
Accounting Policies [Line Items]
Concentration risk	47.00%
Customer Concentration Risk \| Revenue Benchmark \| BJs Wholesale Club (BJs)
Accounting Policies [Line Items]
Concentration risk		10.00%
Customer Concentration Risk \| Liabilities, Total \| Five Largest Credit Card Programs
Accounting Policies [Line Items]
Concentration risk	37.00%
Customer Concentration Risk \| Liabilities, Total \| BJs Wholesale Club (BJs)
Accounting Policies [Line Items]
Concentration risk		11.00%
Interchange Revenue, Net of Retailer Share Arrangements
Accounting Policies [Line Items]
Amortization of contract costs	$ 59,000,000	$ 72,000,000	64,000,000
Non-Interest Expenses
Accounting Policies [Line Items]
Amortization of contract costs	$ 12,000,000	$ 12,000,000	$ 11,000,000

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE BUSINESS

We are a tech-forward financial services company that provides simple, personalized payment, lending and saving solutions. We create opportunities for our customers and partners through digitally enabled choices that offer ease, empowerment, financial flexibility and exceptional customer experiences. Driven by a digital-first approach, data insights and white-label technology, we deliver growth for our partners through a comprehensive product suite, including private label and co-brand credit cards and buy now, pay later (BNPL) products such as installment loans and our “split-pay” offerings. We also offer direct-to-consumer solutions that give customers more access, choice and freedom through our branded Bread CashbackTM American Express® Credit Card and Bread SavingsTM products.

Our partner base consists of large consumer-based businesses, including well-known brands such as (alphabetically) AAA, Academy Sports + Outdoors, Caesars, Dell Technologies, the NFL, Signet, Ulta and Victoria’s Secret, as well as small- and medium-sized businesses (SMBs). Our partner base is well diversified across a broad range of industries, including travel and entertainment, health and beauty, jewelry, sporting goods, home goods, technology and electronics and the industry in which we first began, specialty apparel. We believe our comprehensive suite of payment, lending and saving solutions, along with our related marketing and data and analytics, allows us to offer products relevant across all customer segments (Gen Z, Millennial, Gen X and Baby Boomers). The breadth and quality of our product and service offerings have enabled us to establish and maintain long-standing partner relationships. We operate our business through a single reportable segment, with our primary source of revenue being from Interest and fees on loans from our various credit card and other loan products, and to a lesser extent from contractual relationships with our brand partners.

Throughout this report, unless stated or the context implies otherwise, the terms “Bread Financial”, “BFH”, the “Company”, “we”, “our” or “us” refer to Bread Financial Holdings, Inc. and its subsidiaries on a consolidated basis. References to “Parent Company” refer to Bread Financial Holdings, Inc. on a parent-only standalone basis. In addition, in this report we may refer to the retailers and other companies with whom we do business as our “partners”, “brand partners”, or “clients”, provided that the use of the term “partner”, “partnering” or any similar term does not mean or imply a formal legal partnership, and is not meant in any way to alter the terms of Bread Financial’s relationship with any third parties. We offer our credit products through our insured depository institution subsidiaries, Comenity Bank and Comenity Capital Bank, which together are referred to herein as the “Banks”. In December 2020 we acquired Lon Inc., known at the time as Bread, which has been fully integrated into our ongoing business strategy and operations.

Effective March 23, 2022, we changed our corporate name to Bread Financial Holdings, Inc. from Alliance Data Systems Corporation, and on April 4, 2022, we changed our ticker to “BFH” from “ADS” on the NYSE. Neither the name change nor the NYSE ticker change affected our legal entity structure, nor did either change have an impact on our audited Consolidated Financial Statements.

BASIS OF PRESENTATION

The audited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Beginning in the year ended December 31, 2021, as a result of the spinoff of our LoyaltyOne segment and its classification as discontinued operations, we adjusted the presentation of our audited Consolidated Financial Statements from our historical approach under Securities and Exchange Commission (SEC) Regulation S-X Article 5, which is broadly applicable to all “commercial and industrial companies”, to Article 9, which is applicable to “bank holding companies” (BHCs). While neither BFH nor any of our subsidiaries are considered a “bank” within the meaning of the Bank Holding Company Act, the changes from the historical presentation, to the BHC presentation, the most significant of which reflect a reclassification of Interest expense within Net interest income, are intended to reflect our operations going forward and better align us with peers for comparability purposes.

The audited Consolidated Financial Statements also include amounts that relate to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. Such amounts have been classified within Discontinued operations and primarily relate to the after-tax impact of contractual indemnification and tax-related matters. For additional information about the adjusted presentation of our audited Consolidated Financial Statements and our previously disclosed discontinued operations please refer to Note

22, “Discontinued Operations and Bank Holding Company Presentation” in our Annual Report on Form 10-K for the year ended December 31, 2021.

SIGNIFICANT ACCOUNTING POLICIES

We present our accounting policies within the Notes to the audited Consolidated Financial Statements to which they relate; the table below lists such accounting policies and the related Notes. The remaining significant accounting policies applied are included following the table.

Significant Accounting Policy

Note Number

Note Title

Credit Card and Other Loans

Note 2

Credit Card and Other Loans

Allowance for Credit Losses

Note 3

Allowance for Credit Losses

Transfers of Financial Assets

Note 4

Securitizations

Investments

Note 5

Investments

Goodwill

Note 6

Goodwill and Intangible Assets, Net

Intangible Assets, Net

Note 6

Goodwill and Intangible Assets, Net

Leases

Note 8

Leases

Stock Compensation Expense

Note 18

Stockholders' Equity

Income Taxes

Note 19

Income Taxes

Earnings Per Share

Note 20

Earnings Per Share

Principles of Consolidation

The accompanying audited Consolidated Financial Statements include the accounts of BFH and all subsidiaries in which we have a controlling financial interest. For voting interest entities, a controlling financial interest is determined when we are able to exercise control over the operating and financial decisions of the investee. For variable interest entities (VIEs), which are themselves determined based on the amount and characteristics of the equity in the entity, we have a controlling financial interest when we are determined to be the primary beneficiary. The primary beneficiary is the party having both the power to exercise control over the activities that most significantly impact the VIE’s financial performance, as well as the obligation to absorb the losses of, or the right to receive the benefits from, the VIE that could potentially be significant to that VIE. We are the primary beneficiary of our securitization trusts (the Trusts) and therefore consolidate these Trusts within our audited Consolidated Financial Statements.

In cases where we do not have a controlling financial interest, but we are able to exert significant influence over the operating and financial decisions of the entity, we account for such investments under the equity method.

All intercompany transactions have been eliminated.

Amounts Based on Estimates and Judgments

The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments about future events that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the audited Consolidated Financial Statements, as well as the reported amounts of income and expenses during the reporting periods. The most significant of those estimates and judgments relate to our Allowance for credit losses, Provision for income taxes and Goodwill; actual results could differ.

Consolidated Statements of Income

Our primary source of revenue is from Interest and fees on loans from our various credit card and other loan products, and to a lesser extent from contractual relationships with our brand partners. The following describes our recognition policies across the various sources of revenue we earn.

Interest and fees on loans: Represents revenue earned on customer accounts owned by us, and is recognized in the period earned in accordance with the contractual provisions of the credit agreements. Interest and fees continue to accrue on all accounts, except in limited circumstances, until the account balance and all related interest and fees are paid, or charged-off which happens in the month during which an account becomes 180 days past due for credit card loans or 120 days past due for other loans, which consist primarily of buy now, pay later (BNPL) products such as installment loans and our “split-pay” offerings. Charge-offs for unpaid interest and fees, as well as any adjustments to the Allowance for credit losses associated with unpaid interest and fees, are recorded as a reduction of Interest and fees on loans. Direct loan origination costs on Credit card and other loans are deferred and amortized on a straight-line basis over a one-year period for credit card loans, or for BNPL loans over the life of the loan, and are recorded as a reduction of Interest and fees on loans. As of December 31, 2023 and 2022, the remaining unamortized deferred direct loan origination costs were $60 million and $46 million, respectively, and included in Total credit card and other loans.

Interest on cash and investment securities: Represents revenue earned on cash and cash equivalents as well as investments

in debt securities, and is recognized in the period earned.

Interchange revenue, net of retailer share arrangements: Represents revenue earned from merchants, including our brand partners, and cardholders from processing and servicing accounts, and is recognized as such services are performed. Revenue earned from merchants, including our brand partners, primarily consists of merchant and interchange fees, which are transaction fees charged to the merchant for the processing of credit card transactions and are recognized at the time the cardholder transaction occurs. Costs of cardholder reward arrangements are recognized when the rewards are earned by the cardholders and are generally classified as a reduction of revenue with the related liability included in Other liabilities on the Consolidated Balance Sheets. Our credit card program agreements may also provide for royalty payments to our brand partners based on purchased volume or if certain contractual incentives are met, such as if the economic performance of the program exceeds a contractually defined threshold, or for payments for new accounts. These amounts are recorded as a reduction of revenue in the period incurred.

Other non-interest income: Represents ancillary revenues earned from cardholders, consisting primarily of monthly fees from the purchase of certain payment protection products which are recognized based on the average cardholder account balance over time and can be cancelled at any point by the cardholder, as well as gains or losses on the sales of loan portfolios, and losses from our equity method investment in Loyalty Ventures Inc. (LVI).

Contract Costs: We recognize as an asset contract costs, such as up-front payments made pursuant to contractual agreements with brand partners. Such costs are deferred and recognized on a straight-line basis over the term of the related agreement. Depending on the nature of the contract costs, the amortization is recorded as a reduction to Non-interest income, or as a charge to Non-interest expenses, in the Consolidated Statements of Income. Amortization of contract costs recorded as a reduction of Interchange revenue, net of retailer share arrangements, was $59 million, $72 million and $64 million for the years ended December 31, 2023, 2022 and 2021, respectively; amortization of contract costs recorded across various Non-interest expense categories totaled $12 million, $12 million and $11 million for those same years, respectively. As of December 31, 2023 and 2022, the remaining unamortized contract costs were $285 million and $344 million, respectively, and are included in Other assets on the Consolidated Balance Sheets.

We perform an impairment assessment when events or changes in circumstances indicate that the carrying amount of our contract costs may not be recoverable. Our impairment assessment for certain of our deferred contract costs resulted in a $7 million impairment charge which has been recognized in Other non-interest expenses in our Consolidated Statements of Income for the year ended December 31, 2023. No such impairment charges were recognized during either of the years ended December 31, 2022 or 2021.

Interest expense: Represents interest incurred primarily to fund Credit card and other loans, general corporate purposes and liquidity needs, and is recognized as incurred. Interest expense is divided between Interest on deposits, which relates to interest expense on Deposits taken from customers, and Interest on borrowings, which relates to interest expense on our Long-term and other debt.

Card and processing expenses: Primarily represents costs incurred in relation to customer service activities, including embossing, and postage and mailing, as well as fraud and credit bureau inquiries. These costs are expensed as incurred.

Information processing and communication expenses: Represents costs incurred in relation to data processing, and software license and maintenance charges. These costs are expensed as incurred.

Marketing expenses: Represents costs incurred in campaign development and initial placement of advertising, which are expensed in the period in which the advertising first takes place. Other marketing expenses are expensed as incurred.

Consolidated Balance Sheets

Cash and cash equivalents: Includes cash and due from banks, interest-bearing cash balances such as those invested in money market funds, as well as other highly liquid short-term investments with an original maturity of three months or less, and restricted cash. As of December 31, 2023 and 2022, respectively, cash and due from banks was $410 million and $288 million, interest-bearing cash balances were $2.9 billion and $3.5 billion, and short-term investments were $250 million and $130 million. Restricted cash primarily represents cash restricted for principal and interest repayments of debt issued by our consolidated VIEs, and is recorded in Other assets on the Consolidated Balance Sheets. Restricted cash totaled $26 million and $36 million as of December 31, 2023 and 2022, respectively.

Derivative financial instruments: From time to time, we use derivative financial instruments to manage our exposure to various financial risks; we do not trade or speculate in derivatives. Subject to the criteria set forth in GAAP, we will either designate our derivatives in hedging relationships, or as economic hedges should the criteria in GAAP not be met. Our derivative financial instruments were insignificant to the audited Consolidated Financial Statements for the periods presented.

Property and equipment: Furniture, equipment, buildings and leasehold improvements are carried at cost less accumulated depreciation, and depreciation is recognized on a straight-line basis. Costs incurred during construction are capitalized; depreciation begins once the asset is placed in service and is also recognized on a straight-line basis. Our furniture and equipment is depreciated over the estimated useful lives of the assets, which range from less than one year to 11 years, while leasehold improvements are depreciated over the lesser of the remaining terms of the respective leases, or the economic lives of the improvements, and range from less than one year to 24 years. Depreciation expense, including

purchased software, totaled $19 million, $19 million and $26 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Costs associated with the acquisition or development of internal-use software are also capitalized and recorded in Property and equipment. Once the internal-use software is ready for its intended use, the cost is amortized on a straight-line basis over the software’s estimated useful life. As of December 31, 2023, our internal-use software has estimated useful lives ranging from one year to 10 years. As of December 31, 2023 and 2022, the net amount of unamortized capitalized internal-use software costs included in Property and equipment on the Consolidated Balance Sheets was $78 million and $112 million, respectively. Amortization expense on capitalized internal-use software costs totaled $60 million, $68 million and $37 million for the years ended December 31, 2023, 2022 and 2021, respectively.

We review long-lived assets and asset groups for impairment whenever events or circumstances indicate their carrying amounts may not be recoverable. An impairment is recognized if the carrying amount is not recoverable and exceeds the asset or asset group’s fair value. No impairment was recognized during the years ended December 31, 2023, 2022 and 2021.

CONCENTRATIONS

We depend on a limited number of large partner relationships for a significant portion of our revenue. As of and for the year ended December 31, 2023, our five largest credit card programs accounted for approximately 47% of our Total net interest and non-interest income excluding the gain on sale and 37% of our End-of-period credit card and other loans. In particular, our programs with (alphabetically) Signet Jewelers, Ulta Beauty and Victoria’s Secret & Co. and its retail affiliates each accounted for more than 10% of our Total net interest and non-interest income for the year ended December 31, 2023. A decrease in business from, or the loss of, any of our significant partners for any reason, could have a material adverse effect on our business. We previously announced the non-renewal of our contract with BJ’s Wholesale Club (BJ’s) and the sale of the BJ’s portfolio, which closed in late February 2023. For the year ended December 31, 2022, BJ’s branded co-brand accounts generated approximately 10% of our Total net interest and non-interest income, and BJ’s branded co-brand accounts were responsible for approximately 11% of our Total credit card and other loans as of December 31, 2022.

RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS

In March 2022, the FASB issued new accounting and disclosure guidance for troubled debt restructurings effective January 1, 2023, with early adoption permitted. Specifically, the new guidance eliminates the previous recognition and measurement guidance for troubled debt restructurings while enhancing the disclosure requirements for certain loan modifications and write-offs. Effective January 1, 2023 we adopted the guidance, with no significant impact on our results of operations, financial position, regulatory risk-based capital, or on our operational processes, controls and governance in support of the new guidance.

In March 2023, the FASB issued new accounting guidance expanding the election to apply the proportional amortization method of accounting to tax credit investments beyond low-income-housing tax credit investments, when certain conditions are met. Effective January 1, 2024 we adopted the guidance; the accounting policy election from which did not have a significant impact on our results of operations, financial position, regulatory risk-based capital, or on our operational processes, controls and governance in support of the new guidance.

In November 2023, the FASB issued new segment reporting guidance that will be effective beginning with segment disclosures for our Annual Report on Form 10-K for the year ending December 31, 2024, and effective for interim reporting periods beginning in 2025. Early adoption is permitted; although, we do not plan to early adopt. The new guidance requires interim and annual disclosure of significant segment expense categories and amounts that are regularly provided to the chief operating decision maker, as well as disclosure of the aggregate amount and description of other segment items beyond significant segment expenses. The guidance will result in expanded disclosures for our single reportable segment but is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.

In December 2023, the Financial Accounting Standards Board (FASB) issued new income tax disclosure guidance, with the biggest changes impacting disclosures provided on an annual basis, that will be effective beginning with our income tax disclosures for our Annual Report on Form 10-K for the year ending December 31, 2025. Early adoption is permitted;

although, we do not plan to early adopt. The new guidance requires greater disaggregation of rate reconciliation and income taxes paid information, as well as other changes intended to enhance the transparency and decision-usefulness of income tax disclosures. The new guidance will require enhancements to our income tax disclosures but is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2023

Stockholders' Equity Note [Abstract]

Schedule of performance-based and service-based restricted stock unit awards

The following table summarizes RSUs activity for our equity compensation plans:


	Market- Based(1)	Performance- Based(1)	Service- Based	Total	Weighted Average Fair Value
Balance as of January 1, 2021	22,227	221,226	333,814	577,267	$	103.89
Shares granted(2)	2,641	111,542	774,062	888,245	88.18
Shares vested	—	(24,677)	(167,723)	(192,400)	118.78
Shares forfeited	(5,801)	(216,675)	(291,201)	(513,677)	93.16
Balance as of December 31, 2021	19,067	91,416	648,952	759,435	$	89.14
Shares granted	—	82,513	766,178	848,691	63.22
Shares vested	—	(8,983)	(218,077)	(227,060)	78.23
Shares forfeited	(19,067)	—	(89,390)	(108,457)	65.83
Balance as of December 31, 2022	—	164,946	1,107,663	1,272,609	$	68.86
Shares granted	—	175,587	1,172,465	1,348,052	38.02
Shares vested	—	(9,254)	(434,049)	(443,303)	67.49
Shares forfeited	—	—	(87,527)	(87,527)	53.82
Balance as of December 31, 2023	—	331,279	1,758,552	2,089,831	$	49.89
Outstanding and Expected to Vest				1,978,963	$	50.25

______________________________

(1) Shares granted reflect a 100% target attainment of the respective market-based or performance-based metric. Shares forfeited include those RSUs forfeited as a result of the Company not meeting the respective market-based or performance-based metric conditions.

(2) Shares granted reflect a November 2021 make-whole equity adjustment to unvested shares due to the reduction in the share value resulting from the spinoff of LVI. This adjustment increased shares granted by 2,641 shares, 12,659 shares and 96,556 shares for Market-based, Performance-based and Service-based awards, respectively. These shares were excluded from the weighted average fair value calculation.

INCOME TAXES - Reconciliation (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Expected expense at statutory rate	$ 203	$ 63	$ 219
Increase (decrease) in income taxes resulting from:
State and local income taxes, net of federal benefit	27	(2)	33
Impact of 2017 Tax Reform	0	0	(8)
Non-deductible expenses	8	6	4
IRC Section 199, net of tax reserves	0	4	0
Basis difference in unconsolidated subsidiaries	0	(8)	0
Valuation allowance	(5)	16	0
Other	(2)	(3)	(1)
Total Provision for income taxes	$ 231	$ 76	$ 247

COMMITMENTS AND CONTINGENCIES (Details) - Discontinued Operations, Disposed of by Sale $ in Millions			1 Months Ended
	Jan. 19, 2021 USD ($) installment	Dec. 31, 2020 USD ($)	Jan. 31, 2022 USD ($)	Jan. 31, 2021 USD ($)
Loss Contingencies [Line Items]
Loss contingency, loss in period		$ 150
Epsilon
Loss Contingencies [Line Items]
Loss contingency, total	$ 150
Number of installment payments \| installment	2
Loss contingency, payment			$ 75	$ 75

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted net income per share

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the years ended December 31:


	2023		2022		2021
(Millions, except per share amounts)
Numerator
Income from continuing operations	$	737	$	224	$	797
(Loss) income from discontinued operations, net of income taxes(1)	(19)		(1)		4
Net income	$	718	$	223	$	801

Denominator
Basic: Weighted average common stock	49.8		49.9		49.7
Weighted average effect of dilutive securities
Net effect of dilutive unvested restricted stock awards(2)	0.2		0.1		0.3
Denominator for diluted calculation	50.0		50.0		50.0

Basic EPS
Income from continuing operations	$	14.79	$	4.48	$	16.02
(Loss) income from discontinued operations	$	(0.40)	$	(0.01)	$	0.07
Net income per share	$	14.39	$	4.47	$	16.09

Diluted EPS
Income from continuing operations	$	14.74	$	4.47	$	15.95
(Loss) income from discontinued operations	$	(0.40)	$	(0.01)	$	0.07
Net income per share	$	14.34	$	4.46	$	16.02

______________________________

(1)Includes amounts that related to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. For additional information refer to Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” to the audited Consolidated Financial Statements.

(2)For the years ended December 31, 2023, 2022 and 2021, approximately 1.2 million, 0.9 million, and 0.1 million restricted stock awards were excluded from each calculation of weighted average dilutive common shares as the effect would have been anti-dilutive.

FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value of Instruments (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Financial assets
Credit card and other loans, net	$ 19,802	$ 21,328
Investment securities	217	221
Financial liabilities
Deposits	13,583	13,731
Debt issued by consolidated VIEs	3,900	6,115
Carrying Amount
Financial assets
Credit card and other loans, net	17,005	18,901
Investment securities	217	221
Financial liabilities
Deposits	13,620	13,826
Debt issued by consolidated VIEs	3,898	6,115
Long-term and other debt	1,394	1,892
Fair Value
Financial assets
Credit card and other loans, net	19,802	21,328
Investment securities	217	221
Financial liabilities
Deposits	13,583	13,731
Debt issued by consolidated VIEs	3,900	6,115
Long-term and other debt	$ 1,457	$ 1,759

STOCKHOLDERS' EQUITY - Stock Repurchase Programs (Details) - USD ($) shares in Millions	3 Months Ended	6 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jul. 27, 2023
Stockholders' Equity Note [Abstract]
Stock repurchase program, authorized amount						$ 35,000,000
Diluted (in shares)		50.0	50.0	50.0	50.0
Number of shares repurchased (in shares)	0.9
Total cost of shares repurchased	$ 35,000,000		$ 35,000,000	$ 12,000,000

GOODWILL AND INTANGIBLE ASSETS, NET - Maturity Schedule (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Estimated amortization expense related to intangible assets for the next five years and thereafter
2024	$ 33
2025	25
2026	24
2027	21
2028	6
Thereafter	15
Net	$ 124	$ 161

REGULATORY MATTERS AND CAPITAL ADEQUACY

12 Months Ended

Dec. 31, 2023

Regulated Operations [Abstract]

REGULATORY MATTERS AND CAPITAL ADEQUACY

CB is regulated, supervised and examined by the State of Delaware and the Federal Deposit Insurance Corporation (FDIC). Our industrial bank, CCB, is regulated, supervised and examined by the State of Utah and the FDIC.

The Consumer Financial Protection Bureau (CFPB) promulgates regulations for the federal consumer financial protection laws and supervises and examines large banks (those with more than $10 billion of total assets) with respect to those laws. Banks in a multi-bank organization, such as CB and CCB, are subject to supervision and examination by the CFPB with respect to the federal consumer financial protection laws if at least one bank reports total assets over $10 billion for four consecutive quarters. While the Banks were subject to supervision and examination by the CFPB with respect to the federal consumer financial protection laws between 2016 and 2021, this reverted to the FDIC in 2022. However, CCB’s total assets then exceeded $10 billion for four consecutive quarters as of September 30, 2022, and both Banks are now again subject to supervision and examination by the CFPB with respect to federal consumer protection laws.

Quantitative measures, established by regulations to ensure capital adequacy, require the Banks to maintain minimum amounts and ratios of Tier 1 capital to average assets, and Common equity tier 1, Tier 1 capital and Total capital, all to risk weighted assets. Failure to meet these minimum capital requirements can result in certain mandatory, and possibly additional discretionary actions by the Banks’ regulators that if undertaken, could have a direct material effect on CB’s and/or CCB’s operating activities, as well as our operating activities. Based on these regulations, as of December 31, 2023 and 2022, each Bank met all capital requirements to which it was subject, and maintained capital ratios in excess of the minimums required to qualify as well capitalized. The Banks seek to maintain capital levels and ratios in excess of the minimum regulatory requirements inclusive of the 2.5% Capital Conservation Buffer. Although Bread Financial is not a bank holding company as defined, we seek to maintain capital levels and ratios in excess of the minimums required for bank holding companies. As of December 31, 2023 the actual capital ratios and minimum ratios for each Bank, as well as Bread Financial, are as follows as of December 31, 2023:


	Actual Ratio			Minimum Ratio for Capital Adequacy Purposes		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
Total Company
Common equity tier 1 capital ratio(1)	12.2		%	4.5	%	6.5	%
Tier 1 capital ratio(2)	12.2			6.0		8.0
Total risk-based capital ratio(3)	13.6			8.0		10.0
Tier 1 leverage capital ratio(4)	11.2			4.0		5.0
Total risk-weighted assets(5)	$	20,140

Comenity Bank
Common equity tier 1 capital ratio(1)	19.7		%	4.5	%	6.5	%
Tier 1 capital ratio(2)	19.7			6.0		8.0
Total risk-based capital ratio(3)	21.1			8.0		10.0
Tier 1 leverage capital ratio(4)	17.9			4.0		5.0

Comenity Capital Bank
Common equity tier 1 capital ratio(1)	16.6		%	4.5	%	6.5	%
Tier 1 capital ratio(2)	16.6			6.0		8.0
Total risk-based capital ratio(3)	18.0			8.0		10.0
Tier 1 leverage capital ratio(4)	15.2			4.0		5.0

__________________________________

(1)The Common equity tier 1 capital ratio represents common equity tier 1 capital divided by total risk-weighted assets.

(2)The Tier 1 capital ratio represents tier 1 capital divided by total risk-weighted assets.

(3)The Total risk-based capital ratio represents total capital divided by total risk-weighted assets.

(4)The Tier 1 leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

(5)Total risk-weighted assets are generally measured by allocating assets, and specified off-balance sheet exposures, to various risk categories as defined by the Basel III standardized approach.

We are also involved, from time to time, in reviews, investigations, subpoenas, supervisory actions and other proceedings (both formal and informal) by governmental agencies regarding our business, which could subject us to significant fines, penalties, obligations to change our business practices, significant restrictions on our existing business or ability to develop new business, cease-and-desist orders, safety-and-soundness directives or other requirements resulting in increased expenses, diminished income and damage to our reputation.

On November 20, 2023, following the consent of the Board of Managers of Comenity Servicing LLC (the Servicer), the FDIC issued a consent order to the Servicer. The Servicer is not one of our Bank subsidiaries, but is our wholly-owned subsidiary that services substantially all of our loans. The consent order arose out of the June 2022 transition of our credit card processing services to strategic outsourcing partners and addresses certain shortcomings in the Servicer’s information technology (IT) systems development, project management, business continuity management, cloud operations, and third-party oversight. The Servicer entered into the consent order for the purpose of resolving these matters without admitting or denying any violations of law or regulation set forth in the order. The Servicer has taken significant steps to strengthen the organization’s IT governance and address the other issues identified in the consent order, and we are committed to ensuring that all of the requirements of the consent order are met. The consent order does not contain any monetary penalties or fines.

ALLOWANCE FOR CREDIT LOSSES - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit loss	$ 2,328	$ 2,464	$ 1,832	$ 2,008
BNPL and other loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Allowance for credit loss	$ 32	$ 21

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

GOODWILL AND INTANGIBLE ASSETS, NET - Finite Lived Assets and Indefinite Lived Assets (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Assets	$ 233	$ 241
Accumulated Amortization	(109)	(80)
Net	124	161
Total Intangible Assets
Gross Assets	237	245
Accumulated Amortization	(109)	(80)
Net	128	165
Tradename
Indefinite-lived Intangible Assets [Line Items]
Tradename	4	4
Premium on purchased credit card loan portfolios
Finite-Lived Intangible Assets [Line Items]
Gross Assets	231	230
Accumulated Amortization	(108)	(73)
Net	123	157
Total Intangible Assets
Accumulated Amortization	$ (108)	$ (73)
Premium on purchased credit card loan portfolios \| Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life	5 years	4 years
Premium on purchased credit card loan portfolios \| Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life	13 years	13 years
Customer contracts and lists
Finite-Lived Intangible Assets [Line Items]
Gross Assets		$ 9
Accumulated Amortization		(6)
Net		$ 3
Useful Life		3 years
Total Intangible Assets
Accumulated Amortization		$ (6)
Non-compete agreements
Finite-Lived Intangible Assets [Line Items]
Gross Assets	$ 2	2
Accumulated Amortization	(1)	(1)
Net	$ 1	$ 1
Useful Life	5 years	5 years
Total Intangible Assets
Accumulated Amortization	$ (1)	$ (1)

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS - Narrative (Details) - USD ($) $ in Millions		12 Months Ended
	Nov. 05, 2021	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net unrealized loss		$ 0	$ 0	$ (7)
LoyaltyOne
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net unrealized loss	$ 7

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

CREDIT CARD AND OTHER LOANS - Amortized Cost Basis Credit Card and Loan Receivables (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	$ 18,927	$ 21,031
Unbilled to cardholders	371	307
Total delinquent
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	1,554	1,472
31 to 60 days delinquent
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	422	444
61 to 90 days delinquent
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	323	296
91 or more days delinquent
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	809	732
Current
Financing Receivable, Past Due [Line Items]
Total credit card and other loans	$ 17,373	$ 19,559

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 80
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479294/326-20-55-80

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 79
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479294/326-20-55-79

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 45
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479344/326-20-45-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(3)(b))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (1)
-Publisher SEC

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (2)
-Publisher SEC

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1404
-Paragraph (a)
-Publisher SEC

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479319/326-20-50-14

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section 50
-Paragraph 7A
-SubTopic 10
-Topic 310
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481962/310-10-50-7A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 326
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479319/326-20-50-5

+ Details

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2023
Audit Information [Abstract]
Auditor Firm ID	34
Auditor Name	Deloitte & Touche LLP
Auditor Location	Columbus, Ohio

SECURITIZATIONS (Details) - USD ($) $ in Millions	12 Months Ended
SECURITIZATIONS (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Offsetting Assets [Line Items]
Total credit card loans – available to settle obligations of consolidated VIEs	$ 12,844	$ 15,383
Of which: principal amount of credit card loans 91 days or more past due	323	307
Net principal losses of securitized credit card loans	$ 801	$ 554	$ 453
Minimum
Offsetting Assets [Line Items]
Minimum interests requirement (as a percent)	4.00%
Maximum
Offsetting Assets [Line Items]
Minimum interests requirement (as a percent)	10.00%

LEASES (Tables)

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Schedule of lease cost

Supplemental lease-related cash flow information was as follows for the years ended December 31:


	2023		2022		2021
(Millions)
Cash paid for amounts included in the measurement of lease liabilities – operating cash flows	$	27	$	23	$	25
Right-of-use assets obtained in exchange for operating leases – non-cash	$	37	$	—	$	5

Schedule of maturities of lease liabilities

Future maturities of our operating lease liabilities, by year, were as follows as of December 31, 2023:


(Millions)
2024	$	24
2025	25
2026	24
2027	21
2028	20
Thereafter	84
Total undiscounted lease liabilities	198
Less: Amount representing interest	(50)
Total present value of minimum lease payments	$	148

OTHER LIABILITIES (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Other Liabilities [Abstract]
Accounts payable and other brand partner liabilities	$ 422	$ 398
Accrued liabilities	273	306
Long-term tax reserves	286	306
Operating lease liabilities	148	126
Other	182	173
Total other liabilities	$ 1,311	$ 1,309
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Total other liabilities	Total other liabilities

CREDIT CARD AND OTHER LOANS - Credit Quality on Amortized Cost Basis (Details) - Credit card loans - No Score	Dec. 31, 2023	Dec. 31, 2022
661 or Higher
Financing Receivable, Credit Quality Indicator [Line Items]
Credit card loans	57.00%	62.00%
601 to 660
Financing Receivable, Credit Quality Indicator [Line Items]
Credit card loans	27.00%	26.00%
600 or Less
Financing Receivable, Credit Quality Indicator [Line Items]
Credit card loans	16.00%	12.00%

SECURITIZATIONS (Tables)

12 Months Ended

Dec. 31, 2023

Offsetting [Abstract]

Schedule of securitized credit card receivables, delinquencies and net charge-offs

The following tables provide the total securitized credit card loans and related delinquencies as of December 31, and net principal losses of securitized credit card loans for the years ended December 31:


	2023		2022
(Millions)
Total credit card loans – available to settle obligations of consolidated VIEs	$	12,844	$	15,383
Of which: principal amount of credit card loans 91 days or more past due	$	323	$	307


	2023		2022		2021
(Millions)
Net principal losses of securitized credit card loans	$	801	$	554	$	453

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of components of income before income taxes and components of income tax expense

The components of our Provision for income taxes included in the Consolidated Statements of Income were as follows for the years ended December 31:


	2023		2022		2021
(Millions)
Current
Federal	$	262	$	280	$	218
State	37		41		49
Total current income tax expense	299		321		267
Deferred
Federal	(66)		(201)		(13)
State	(2)		(44)		(7)
Total deferred income tax benefit	(68)		(245)		(20)
Total Provision for income taxes	$	231	$	76	$	247

Summary of reconciliation of recorded federal provision for income taxes to the expected amount computed by applying the federal statutory rate

A reconciliation of our expected income tax expense computed by applying the federal statutory rate to Income from continuing operations before income taxes, to the recorded Provision for income taxes, is as follows for the years ended December 31:


	2023		2022		2021
(Millions)
Expected expense at statutory rate	$	203	$	63	$	219
Increase (decrease) in income taxes resulting from:
State and local income taxes, net of federal benefit	27		(2)		33
Impact of 2017 Tax Reform	—		—		(8)
Non-deductible expenses	8		6		4
IRC Section 199, net of tax reserves	—		4		—
Basis difference in unconsolidated subsidiaries	—		(8)		—
Valuation allowance	(5)		16		—
Other	(2)		(3)		(1)
Total	$	231	$	76	$	247

Summary of deferred tax assets and liabilities

The following table reflects the significant components of Deferred tax assets and liabilities as of December 31:


	2023		2022
(Millions)
Deferred tax assets
Deferred revenue	$	14	$	14
Allowance for credit losses	554		598
Net operating loss carryforwards and other carryforwards	51		39
Operating lease liabilities	34		30
Depreciation	24		—
Accrued expenses and other	79		88
Total deferred tax assets	756		769
Valuation allowance	(21)		(26)
Deferred tax assets, net of valuation allowance	735		743
Deferred tax liabilities
Deferred income	$	73	$	148
Depreciation	—		7
Right of use assets	22		20
Intangible assets	11		16
Total deferred tax liabilities	106		191

Net deferred tax assets	$	629	$	552

Amounts recognized on the Consolidated Balance Sheets:
Other assets	$	629	$	552

Summary of reconciliation of unrecognized tax benefits

The following table presents changes in unrecognized tax benefits:


(Millions)
Balance as of December 31, 2020	$	255
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(13)
Increases related to current year tax positions	12
Settlements during the period	(8)
Balance as of December 31, 2021	$	247
Increases related to prior years’ tax positions	8
Decreases related to prior years’ tax positions	(25)
Increases related to current year tax positions	14
Settlements during the period	(2)
Balance as of December 31, 2022	$	242
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(11)
Increases related to current year tax positions	13
Settlements during the period	(10)
Lapses of applicable statutes of limitations	(20)
Balance as of December 31, 2023	$	215

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Credit card and loan receivables restricted for securitization investors	$ 12,844	$ 15,383
Investments fair value	217	221
Accumulated depreciation and amortization	$ 343	$ 287
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares (in shares)	200.0	200.0
Common stock, issued shares (in shares)	49.3	49.9
Variable Interest Entity, Primary Beneficiay
Credit card and loan receivables restricted for securitization investors	$ 12,844	$ 15,383

REGULATORY MATTERS AND CAPITAL ADEQUACY (Tables)

12 Months Ended

Dec. 31, 2023

Regulated Operations [Abstract]

Schedule of actual capital ratios and minimum ratios


	Actual Ratio			Minimum Ratio for Capital Adequacy Purposes		Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions
Total Company
Common equity tier 1 capital ratio(1)	12.2		%	4.5	%	6.5	%
Tier 1 capital ratio(2)	12.2			6.0		8.0
Total risk-based capital ratio(3)	13.6			8.0		10.0
Tier 1 leverage capital ratio(4)	11.2			4.0		5.0
Total risk-weighted assets(5)	$	20,140

Comenity Bank
Common equity tier 1 capital ratio(1)	19.7		%	4.5	%	6.5	%
Tier 1 capital ratio(2)	19.7			6.0		8.0
Total risk-based capital ratio(3)	21.1			8.0		10.0
Tier 1 leverage capital ratio(4)	17.9			4.0		5.0

Comenity Capital Bank
Common equity tier 1 capital ratio(1)	16.6		%	4.5	%	6.5	%
Tier 1 capital ratio(2)	16.6			6.0		8.0
Total risk-based capital ratio(3)	18.0			8.0		10.0
Tier 1 leverage capital ratio(4)	15.2			4.0		5.0

__________________________________

(1)The Common equity tier 1 capital ratio represents common equity tier 1 capital divided by total risk-weighted assets.

(2)The Tier 1 capital ratio represents tier 1 capital divided by total risk-weighted assets.

(3)The Total risk-based capital ratio represents total capital divided by total risk-weighted assets.

(4)The Tier 1 leverage capital ratio represents tier 1 capital divided by total average assets, after certain adjustments.

(5)Total risk-weighted assets are generally measured by allocating assets, and specified off-balance sheet exposures, to various risk categories as defined by the Basel III standardized approach.

EMPLOYEE BENEFIT PLANS	12 Months Ended
EMPLOYEE BENEFIT PLANS	Dec. 31, 2023
Retirement Benefits [Abstract]
EMPLOYEE BENEFIT PLANS	EMPLOYEE BENEFIT PLANS Employee Stock Purchase Plan In March 2015, our Board of Directors adopted the 2015 Employee Stock Purchase Plan (the 2015 ESPP), which was subsequently approved by our stockholders on June 3, 2015. The 2015 ESPP became effective July 1, 2015 with no definitive expiration date; however, our Board of Directors may at any time and for any reason terminate or amend the 2015 ESPP. No employee may purchase more than $25,000 worth of stock under the 2015 ESPP in any calendar year, and no employee may purchase stock under the 2015 ESPP if such purchase would cause the employee to own more than 5% of the voting rights or value of our common stock. The 2015 ESPP provides for six-month offering periods, commencing on the first trading day of the first and third calendar quarter of each year and ending on the last trading day of each subsequent calendar quarter. The purchase price of the common stock upon exercise is 85% of the fair market value of shares on the applicable purchase date as determined by averaging the high and low trading prices of the last trading day of each six-month period as defined above. An employee elects to participate and have contributions deducted through payroll deductions. The 2015 ESPP also provides for the issuance of any remaining shares available for issuance under our 2005 Employee Stock Purchase Plan, which were 441,327 shares at June 30, 2015. The 2015 ESPP reserved an additional 1,000,000 shares of our common stock for issuance under the 2015 Plan, bringing the maximum number of shares reserved for issuance under the 2015 ESPP to 1,441,327 shares, subject to adjustment as provided in the 2015 ESPP. During the year ended December 31, 2023, we issued 140,633 shares of common stock under the 2015 ESPP at a weighted-average issue price of $27.43. Since the 2015 ESPP became effective on July 1, 2015, 813,409 shares of common stock have been issued, with 627,918 shares therefore available for issuance. 401(k) Retirement Savings Plan The Bread Financial 401(k) Plan (the Plan), as amended, is a defined contribution plan that is qualified under Section 401(k) of the Internal Revenue Code of 1986. The Plan is an IRS-approved safe harbor plan design that eliminates the need for most discrimination testing. Eligible employees can participate in the Plan immediately upon joining the Company and begin receiving Company matching contributions and safe-harbor non-elective contributions. The Plan covers U.S. employees of Bread Financial Holdings, Inc. who are at least 18 years old, employees of one of our wholly-owned subsidiaries and any other subsidiary or affiliated organization that adopts the Plan; employees of the Company and all of its U.S. subsidiaries are currently covered. The Plan permits eligible employees to make Roth elective deferrals, which are included in the employee’s taxable income at the time of contribution, but not when distributed. Regular, or Non-Roth elective deferrals made by employees, together with our contributions to the Plan, and income earned on these contributions, are not taxable until withdrawn from the Plan. In 2023, we expanded our contributions to the Plan with an automatic annual deposit for eligible employees. We now automatically deposit three percent of an employee’s eligible annual pay in their 401(k) account on an annual basis, regardless of their contributions. In addition, we match an employee’s contribution fifty cents-per-dollar, up to six percent of the employee’s eligible annual compensation. For the years ended December 31, 2023, 2022 and 2021, Company matching contributions were $30 million, $17 million and $15 million, respectively. Participants in the Plan can direct their contributions and our matching contribution to numerous investment options, including the Company’s common stock. On July 20, 2001, we registered 1,500,000 shares of our common stock for issuance in accordance with the RSP pursuant to a Registration Statement on Form S-8, File No. 333-65556. As of December 31, 2023, 182,927 of such shares remain available for issuance. Executive Deferred Compensation Plan We also maintain an Executive Deferred Compensation Plan (EDCP). The EDCP permits a defined group of management and highly compensated employees to defer on a pre-tax basis a portion of their base salary and incentive compensation (as defined in the EDCP) payable for services rendered. Deferrals under the EDCP are unfunded and subject to the claims of our creditors. Each participant in the EDCP is 100% vested in their account, and account balances accrue interest at a rate established and adjusted periodically by the Compensation & Human Capital committee of our Board of Directors. As of December 31, 2023 and 2022, the Company’s outstanding liability related to the EDCP, which was included in Other liabilities on the Consolidated Balance Sheets, was $24 million and $20 million, respectively.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings (Accumulated Deficit)	Accumulated Other Comprehensive Loss
Balance (in shares) at Dec. 31, 2020		117.1
Beginning balance at Dec. 31, 2020	$ 1,522	$ 1	$ 3,427	$ (6,733)	$ 4,832	$ (5)
Increase (Decrease) in Stockholders' Equity
Net income	801				801
Other comprehensive income (loss)	3					3
Stock-based compensation	29		29
Dividends and dividend equivalent rights declared	(42)				(42)
Retirement of treasury stock (in shares)		(67.0)
Retirement of treasury stock	0		(1,280)	6,733	(5,453)
Spinoff of Loyalty Ventures Inc.	(225)				(225)
Issuance of shares to employees, net of shares withheld for employee taxes (in shares)		0.1
Issuance of shares to employees, net of shares withheld for employee taxes	(2)		(2)
Balance (in shares) at Dec. 31, 2021		49.8
Ending balance at Dec. 31, 2021	2,086	$ 1	2,174	0	(87)	(2)
Increase (Decrease) in Stockholders' Equity
Net income	223				223
Other comprehensive income (loss)	(19)					(19)
Stock-based compensation	33		33
Dividends and dividend equivalent rights declared	(43)				(43)
Repurchase of common stock (in shares)		(0.2)
Repurchase of common stock	(12)		(12)
Issuance of shares to employees, net of shares withheld for employee taxes (in shares)		0.3
Issuance of shares to employees, net of shares withheld for employee taxes	(3)		(3)
Balance (in shares) at Dec. 31, 2022		49.9
Ending balance at Dec. 31, 2022	2,265	$ 1	2,192	0	93	(21)
Increase (Decrease) in Stockholders' Equity
Net income	718				718
Other comprehensive income (loss)	2					2
Stock-based compensation	44		44
Capped call transactions for convertible senior notes due 2028, net of tax	(30)		(30)
Dividends and dividend equivalent rights declared	(44)				(44)
Repurchase of common stock (in shares)		(0.9)
Repurchase of common stock	(35)		(35)
Issuance of shares to employees, net of shares withheld for employee taxes (in shares)		0.3
Issuance of shares to employees, net of shares withheld for employee taxes	(2)		(2)
Balance (in shares) at Dec. 31, 2023		49.3
Ending balance at Dec. 31, 2023	$ 2,918	$ 1	$ 2,169	$ 0	$ 767	$ (19)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 718	$ 223	$ 801
Other comprehensive income (loss)
Unrealized gain (loss) on available-for-sale debt securities	2	(25)	(24)
Tax benefits	0	6	2
Unrealized gain (loss) on available-for-sale debt securities, net of tax	2	(19)	(22)
Unrealized gain on cash flow hedges	0	0	1
Tax benefits	0	0	0
Unrealized gain on cash flow hedges	0	0	1
Unrealized gain on net investment hedge	0	0	20
Tax expense	0	0	(13)
Unrealized gain on net investment hedge, net of tax	0	0	7
Foreign currency translation adjustments (inclusive of deconsolidation of $54 million for the year ended December 31, 2021, related to the disposition of business)	0	0	17
Other comprehensive income (loss), net of tax	2	(19)	3
Total comprehensive income, net of tax	$ 720	$ 204	$ 804

BORROWINGS OF LONG-TERM AND OTHER DEBT - Maturities (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Long-term and other debt:
2024	$ 0
2025	0
2026	500
2027	0
2028	316
Thereafter	600
Long-term and other debt	1,416
Unamortized debt issuance costs	(22)
Total long-term and other debt	1,394	$ 1,892
Debt issued by consolidated VIEs:
2024	260
2025	3,290
2026	350
2027	0
2028	0
Thereafter	0
Total maturities	3,900
Unamortized debt issuance costs	(2)
Total debt issued by consolidated VIEs	3,898	$ 6,115
2024	260
2025	3,290
2026	850
2027	0
2028	316
Thereafter	600
Total maturities	5,316
Unamortized debt issuance costs	(24)
Long-term debt and other debt	$ 5,292

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2023

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Stock Repurchase Programs

On July 27, 2023, our Board of Directors approved a stock repurchase program to acquire up to $35 million in shares of our outstanding common stock in the open market during the period ended December 31, 2023. The rationale for this repurchase program, and the amount thereof, was to offset the impact of dilution associated with issuances of employee restricted stock units, with the objective of reducing the Company’s weighted average diluted share count to approximately 50 million shares for the second half of 2023, subject to then current estimates and assumptions applicable as of the date of approval.

During the quarter ended September 30, 2023, under the authorized stock repurchase program, we acquired a total of 0.9 million shares of our common stock for $35 million. Following their repurchase, these 0.9 million shares ceased to be outstanding shares of common stock and are now treated as authorized but unissued shares of common stock.

Stock Compensation Plans

We have adopted equity compensation plans to advance the interests of the Company by rewarding certain employees for their contributions to the financial success of the Company and thereby motivating them to continue to make such contributions in the future.

The 2020 Omnibus Incentive Plan (the 2020 Plan) became effective July 1, 2020 and reserved 2,400,000 shares of common stock for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock unit awards (RSUs), performance share awards, cash incentive awards, deferred stock units, and other stock-based and cash-based awards to selected officers, employees, non-employee directors and consultants performing services for us or our affiliates, with only employees being eligible to receive incentive stock options. The 2020 Plan expires on June 30, 2030; provided that, pursuant to the terms of the 2022 Omnibus Incentive Plan (as defined below), no new grants shall be made under the 2020 Plan.

In March 2022, our Board of Directors adopted the 2022 Omnibus Incentive Plan (the 2022 Plan), which was subsequently approved by our stockholders on May 24, 2022. The 2022 Plan became effective July 1, 2022 and expires on June 30, 2032. The 2022 Plan reserves 3,075,000 shares of common stock for grants of nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, RSUs, performance share awards, cash incentive awards, deferred stock units, and other stock-based and cash-based awards to selected officers, employees, non-employee directors and consultants performing services for us or our affiliates, with only employees being eligible to receive incentive stock options. The maximum amount that may be awarded to any independent member of our Board of Directors in any one calendar year may not exceed $1 million. On June 22, 2022, we registered 3,075,000 shares of our common stock for issuance in accordance with the 2022 Plan pursuant to a Registration Statement on Form S-8, File No. 333-265771. Terms of all awards under the 2022 Plan are determined by the Board of Directors or the Compensation & Human Capital Committee of the Board of Directors or its designee at the time of award.

Stock Compensation Expense

Stock-based compensation expense is measured at the grant date of the award, based on the fair value of the award, and is recognized ratably over the requisite service period. Stock-based compensation expense recognized in Employee compensation and benefits expense in the Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 was $44 million, $33 million and $25 million, respectively, with corresponding income tax benefits of $8 million, $5 million and $4 million, respectively.

As the amount of stock-based compensation expense recognized is based on awards ultimately expected to vest, the amount recognized in the Consolidated Statements of Income has been reduced for estimated forfeitures. We estimate forfeitures at each grant date based on historical experience, with forfeiture estimates to be revised, if necessary, in subsequent periods should actual forfeitures differ from those estimates; forfeitures were estimated at 5% for each of the years ended December 31, 2023, 2022 and 2021.

As of December 31, 2023, there was approximately $51 million of unrecognized expense, adjusted for estimated forfeitures, related to non-vested, stock-based equity awards granted to employees, which is expected to be recognized over a weighted average remaining period of approximately 2.1 years.

Restricted Stock Unit Awards

The following table summarizes RSUs activity for our equity compensation plans:


	Market- Based(1)	Performance- Based(1)	Service- Based	Total	Weighted Average Fair Value
Balance as of January 1, 2021	22,227	221,226	333,814	577,267	$	103.89
Shares granted(2)	2,641	111,542	774,062	888,245	88.18
Shares vested	—	(24,677)	(167,723)	(192,400)	118.78
Shares forfeited	(5,801)	(216,675)	(291,201)	(513,677)	93.16
Balance as of December 31, 2021	19,067	91,416	648,952	759,435	$	89.14
Shares granted	—	82,513	766,178	848,691	63.22
Shares vested	—	(8,983)	(218,077)	(227,060)	78.23
Shares forfeited	(19,067)	—	(89,390)	(108,457)	65.83
Balance as of December 31, 2022	—	164,946	1,107,663	1,272,609	$	68.86
Shares granted	—	175,587	1,172,465	1,348,052	38.02
Shares vested	—	(9,254)	(434,049)	(443,303)	67.49
Shares forfeited	—	—	(87,527)	(87,527)	53.82
Balance as of December 31, 2023	—	331,279	1,758,552	2,089,831	$	49.89
Outstanding and Expected to Vest				1,978,963	$	50.25

______________________________

For Service-based and Performance-based awards, the fair value of the RSUs was estimated using our closing share price on the date of grant. Service-based RSUs typically vest ratably over a three year period. Performance-based RSUs typically cliff vest at the end of three years, if specified performance measures tied to our financial performance are met, which are measured annually over the three year period. The predefined vesting criteria typically permit a range from 0% to 150% to be earned. Accruals of compensation cost for an award with a performance condition are based on the probable outcome of that performance condition.

For RSUs vested during the years ended December 31, 2023, 2022 and 2021, the total fair value, based upon our stock price at the date the RSUs vested, was $30 million, $18 million and $23 million, respectively. As of December 31, 2023, the aggregate intrinsic value of RSUs outstanding and expected to vest was $65 million.

Dividends

For the years ended December 31, 2023, 2022 and 2021, we paid $42 million, $43 million and $42 million, respectively, in dividends to holders of our common stock. On January 25, 2024, our Board of Directors declared a quarterly cash dividend of $0.21 per share on our common stock, payable on March 15, 2024, to stockholders of record at the close of business on February 9, 2024.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (i)
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-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 18: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Statement of Stockholders' Equity [Abstract]
Common stock dividends and dividend equivalent rights declared (in dollars per share)	$ 0.84	$ 0.84	$ 0.84

INVESTMENTS - Investments (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Available-for-sale debt securities	$ 171	$ 152
Equity securities	46	44
Total investment securities	217	196
Equity method and other investments	36	25
Total Investments	$ 253	$ 221

INVESTMENTS

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

INVESTMENTS

Investments include investment securities and various other investments primarily held by the Banks for Community Reinvestment Act (CRA) purposes. Investment securities consist of available-for-sale (AFS) debt securities, which are mortgage-backed securities and municipal bonds, and equity securities, which are mutual funds. Investment securities are carried at fair value on the Consolidated Balance Sheets. We also have other investments, which primarily include a portfolio of investments in certain limited partnerships and limited liability companies accounted for under the equity method, and therefore are recorded at cost and adjusted each period for our share of the investee’s earnings or losses, less any impairment.

The following table provides a summary of our Investments as of December 31:


	2023		2022
(Millions)
Investment securities:
Available-for-sale debt securities	$	171	$	152
Equity securities(1)	46		44
Total investment securities	217		196
Equity method and other investments(1)	36		25
Total Investments(1)	$	253	$	221

______________________________

(1)As of December 31, 2023, to increase transparency certain types of investments, including our equity method investments, are now separately disclosed within this table; there was no impact on our audited Consolidated Financial Statements as a result of this separate disclosure. Prior period amounts above conform with current period presentation.

For AFS debt securities in an unrealized loss position, any estimated credit losses are recognized in the Consolidated Statements of Income by establishing or adjusting an existing Allowance for credit losses for such losses. We typically invest in highly-rated securities with low probabilities of default and therefore did not have any credit losses for the periods

presented. Any unrealized gains, or any portion of an AFS debt security’s non-credit-related unrealized losses are recorded in the Consolidated Statements of Comprehensive Income, net of tax. Realized gains and losses are recorded in Other non-interest expenses in the Consolidated Statements of Income upon disposition of the AFS debt security, using the specific identification method.

Gains and losses on investments in equity securities and CRA-related equity method investments are recorded in Other non-interest expenses in the Consolidated Statements of Income.

The table below reflects unrealized gains and losses on AFS debt securities as of December 31, 2023 and December 31, 2022:


	2023								2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
(Millions)
Available-for-sale debt securities	$	192	$	—	$	(21)	$	171	$	175	$	—	$	(23)	$	152
Total	$	192	$	—	$	(21)	$	171	$	175	$	—	$	(23)	$	152

The following tables provide information about AFS debt securities in a gross unrealized loss position and the length of time that individual securities have been in a continuous unrealized loss position, as of December 31, 2023 and December 31, 2022:


	December 31, 2023
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale debt securities	$	23	$	—	$	141	$	(21)	$	164	$	(21)
Total	$	23	$	—	$	141	$	(21)	$	164	$	(21)


	December 31, 2022
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale debt securities	$	95	$	(9)	$	57	$	(14)	$	152	$	(23)
Total	$	95	$	(9)	$	57	$	(14)	$	152	$	(23)

As of December 31, 2023, our AFS debt securities included mortgage-backed securities, which do not have a single maturity date, with an amortized cost and estimated fair value of $167 million and $148 million, respectively, and municipal bonds, all of which have a maturity date greater than ten years, with an amortized cost and estimated fair value of $25 million and $23 million, respectively.

There were no realized gains or losses from the sale of any investments for the years ended December 31, 2023, 2022 and 2021.

STOCKHOLDERS' EQUITY - Dividends (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jan. 25, 2024
Stockholders' Equity Note [Abstract]
Dividends paid	$ 42	$ 43	$ 42
Subsequent Event
Subsequent Event [Line Items]
Cash dividend (usd per share)				$ 0.21

INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

We file income tax returns in federal, state, local and foreign jurisdictions, as applicable. Provisions for current income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions and provisions for uncertain tax positions.

Differences between the audited Consolidated Financial Statements and tax bases of assets and liabilities give rise to deferred tax assets and liabilities, which measure the future tax effects of items recognized in the audited Consolidated Financial Statements. Changes in deferred income tax assets and liabilities associated with components of Other comprehensive income (loss) are charged or credited directly to Other comprehensive income (loss). Otherwise, changes in deferred income tax assets and liabilities are included as a component of Provision for income taxes. The effect on deferred income tax assets and liabilities attributable to changes in enacted tax rates is charged or credited to Provision for income taxes in the period of enactment.

Deferred tax assets require certain estimates and judgments in order to determine whether it is more likely than not that all or a portion of the benefit of a deferred tax asset will not be realized. In evaluating our deferred tax assets on a quarterly basis as new facts and circumstances emerge, we analyze and estimate the impact of future taxable income, reversing temporary differences and available tax planning strategies. Uncertainties can lead to changes in the ultimate realization of deferred tax assets. A liability for unrecognized tax benefits, representing the difference between a tax position taken or expected to be taken in a tax return and the benefit recognized in the audited Consolidated Financial Statements, inherently requires estimates and judgments. A tax position is recognized only when it is more likely than not to be sustained, based purely on its technical merits after examination by the relevant taxing authority, and the amount recognized is the benefit we believe is more likely than not to be realized upon ultimate settlement. We evaluate our tax positions as new facts and circumstances become available, making adjustments to unrecognized tax benefits as appropriate. Uncertainties can mean the tax benefits ultimately realized differ from amounts previously recognized, with any differences recorded in Provision for income taxes, along with amounts for estimated interest and penalties related to uncertain tax positions.

The components of our Provision for income taxes included in the Consolidated Statements of Income were as follows for the years ended December 31:


	2023		2022		2021
(Millions)
Current
Federal	$	262	$	280	$	218
State	37		41		49
Total current income tax expense	299		321		267
Deferred
Federal	(66)		(201)		(13)
State	(2)		(44)		(7)
Total deferred income tax benefit	(68)		(245)		(20)
Total Provision for income taxes	$	231	$	76	$	247


	2023		2022		2021
(Millions)
Expected expense at statutory rate	$	203	$	63	$	219
Increase (decrease) in income taxes resulting from:
State and local income taxes, net of federal benefit	27		(2)		33
Impact of 2017 Tax Reform	—		—		(8)
Non-deductible expenses	8		6		4
IRC Section 199, net of tax reserves	—		4		—
Basis difference in unconsolidated subsidiaries	—		(8)		—
Valuation allowance	(5)		16		—
Other	(2)		(3)		(1)
Total	$	231	$	76	$	247

For the year ended December 31, 2023, we utilized a portion of our capital loss, and therefore released the associated portion of the valuation allowance against it.

For the year ended December 31, 2022, we increased our reserve for Internal Revenue Code (IRC) Section 199 deductions by approximately $4 million as a result of an unfavorable court ruling. In addition, we recorded an income tax benefit (deferred tax asset) of approximately $8 million related to the initial recognition of the basis difference in an unconsolidated subsidiary, against which we recorded a $16 million valuation allowance as of December 31, 2022.

H.R. 1, originally known as the Tax Cuts and Jobs Act of 2017 (the 2017 Tax Reform) was enacted on December 22, 2017 and permanently reduced the corporate tax rate to 21% from 35%, effective January 1, 2018. For the year ended December 31, 2021, we recorded an income tax benefit of approximately $8 million related to the 2017 Tax Reform rate differential that was released from Other comprehensive income (loss) due to the divestiture of our former LoyaltyOne segment.

On August 16, 2022, the Inflation Reduction Act (the Act) was signed into law in the U.S., which includes a new 15% corporate minimum tax on certain large corporations and a one percent excise tax on stock repurchases made after

December 31, 2022. Effective January 1, 2023 we adopted the applicable provisions under the Act, which did not have a significant impact on our financial position, results of operations or cash flows, nor did it result in significant changes to the supporting operational processes, controls or governance.

The following table reflects the significant components of Deferred tax assets and liabilities as of December 31:


	2023		2022
(Millions)
Deferred tax assets
Deferred revenue	$	14	$	14
Allowance for credit losses	554		598
Net operating loss carryforwards and other carryforwards	51		39
Operating lease liabilities	34		30
Depreciation	24		—
Accrued expenses and other	79		88
Total deferred tax assets	756		769
Valuation allowance	(21)		(26)
Deferred tax assets, net of valuation allowance	735		743
Deferred tax liabilities
Deferred income	$	73	$	148
Depreciation	—		7
Right of use assets	22		20
Intangible assets	11		16
Total deferred tax liabilities	106		191

Net deferred tax assets	$	629	$	552

Amounts recognized on the Consolidated Balance Sheets:
Other assets	$	629	$	552

As of December 31, 2023, included in our U.S. tax returns are approximately $118 million of U.S. federal net operating loss carryovers (NOLs), approximately $34 million of foreign tax credits, and federal capital losses of approximately $51 million to offset capital gains. With the exception of NOLs generated after December 31, 2017, these attributes expire at various times through the year 2037. As of December 31, 2023, we have state NOLs of approximately $238 million and state credits of approximately $1 million, both available to offset future state taxable income, as well as state capital losses of approximately $26 million to offset capital gains. With the exception of some state NOLs generated after December 31, 2017, these NOLs, credits and capital losses will expire at various times through the year 2042.

We use the portfolio approach relating to the release of stranded tax effects recorded in Accumulated other comprehensive loss.

The following table presents changes in unrecognized tax benefits:


(Millions)
Balance as of December 31, 2020	$	255
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(13)
Increases related to current year tax positions	12
Settlements during the period	(8)
Balance as of December 31, 2021	$	247
Increases related to prior years’ tax positions	8
Decreases related to prior years’ tax positions	(25)
Increases related to current year tax positions	14
Settlements during the period	(2)
Balance as of December 31, 2022	$	242
Increases related to prior years’ tax positions	1
Decreases related to prior years’ tax positions	(11)
Increases related to current year tax positions	13
Settlements during the period	(10)
Lapses of applicable statutes of limitations	(20)
Balance as of December 31, 2023	$	215

We recognize potential accrued interest and penalties related to unrecognized tax benefits in Provision for income taxes. We have potential cumulative interest and penalties with respect to unrecognized tax benefits of approximately $84 million, $74 million and $76 million as of December 31, 2023, 2022 and 2021, respectively; for those same years we recorded approximately a $9 million expense, $1 million benefit and $8 million expense, respectively, in Provision for income taxes for potential interest and penalties for unrecognized tax benefits.

As of December 31, 2023, 2022 and 2021, we had unrecognized tax benefits of approximately $226 million, $238 million and $241 million, respectively, that, if recognized, would impact the effective tax rate. We do not anticipate a significant change to the total amount of unrecognized tax benefits over the next twelve months.

We file income tax returns in U.S. federal, state and foreign jurisdictions, as applicable. With some exceptions, the tax returns filed by us are no longer subject to U.S. federal income tax, and state and local examinations for the years before 2015, or foreign income tax examinations for years before 2018.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

DEPOSITS - Deposits by Type (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Deposit Liability [Line Items]
Certificates of deposit	$ 6,997
Cardholder credit balances	26	$ 39
Deposits	13,620	13,826
Direct-to-consumer (retail)
Deposit Liability [Line Items]
Savings accounts	2,863	2,782
Certificates of deposit	3,591	2,684
Wholesale
Deposit Liability [Line Items]
Savings accounts	3,734	3,954
Certificates of deposit	3,406	4,367
Cardholder credit balances
Deposit Liability [Line Items]
Cardholder credit balances	$ 26	$ 39

ALLOWANCE FOR CREDIT LOSSES (Tables)

12 Months Ended

Dec. 31, 2023

Credit Loss [Abstract]

Schedule of Company's allowance for loan loss

The following table presents our Allowance for credit losses for our Credit card and other loans. The amount of the related Allowance for credit losses on BNPL and other loans is insignificant and therefore has been included in the table below. The amounts presented are for the years ended December 31:


	2023		2022		2021
(Millions)
Beginning balance	$	2,464	$	1,832	$	2,008

Provision for credit losses(1)	1,229		1,594		544
Change in estimate for uncollectible unpaid interest and fees	10		10		—
Net principal losses(2)	(1,375)		(972)		(720)
Ending balance	$	2,328	$	2,464	$	1,832

______________________________

(1)Provision for credit losses includes a build/release for the Allowance for credit losses, as well as replenishment of Net principal losses.

(2)Net principal losses are presented net of recoveries of $332 million, $187 million and $163 million for the years ended December 31, 2023, 2022 and 2021, respectively. Net principal losses for the years ended December 31, 2023 and 2022 include an adjustment of $10 million and $5 million, respectively, related to the effects of the purchase of previously written-off accounts that were sold to a third-party debt collection agency; no such adjustment was made for the year ended December 31, 2021.

BORROWINGS OF LONG-TERM AND OTHER DEBT - Schedule of Long Term Debt and Other Debt (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2020	Dec. 31, 2019
Long-term and other debt:
Long-term and other debt	$ 1,416
Less: Unamortized debt issuance costs	22
Total long-term and other debt	1,394	$ 1,892
Debt issued by consolidated VIEs:
Less: Unamortized debt issuance costs	2
Total debt issued by consolidated VIEs	3,898	6,115
Total borrowings of long-term and other debt	5,292	8,007
Long-term and other debt
Long-term and other debt:
Long-term and other debt	1,416	1,906
Less: Unamortized debt issuance costs	22	14
Total long-term and other debt	1,394	1,892
Convertible Debt
Long-term and other debt:
Long-term and other debt	$ 316	0
Debt issued by consolidated VIEs:
Interest Rates	4.25%
2017 term loans \| Line of Credit
Long-term and other debt:
Long-term and other debt	$ 0	556
Senior notes due 2024 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 0	850
Debt issued by consolidated VIEs:
Interest Rates	4.75%			4.75%
Senior notes due 2026 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 500	500
Debt issued by consolidated VIEs:
Interest Rates	7.00%		7.00%
Senior notes due 2029 \| Senior Notes
Long-term and other debt:
Long-term and other debt	$ 600	0
Debt issued by consolidated VIEs:
Interest Rates	9.75%
Debt issued by consolidated VIEs
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	$ 3,900	6,115
Less: Unamortized debt issuance costs	2	0
Total debt issued by consolidated VIEs	3,898	6,115
Fixed rate asset-backed term note securities
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	$ 350	0
Interest Rates	5.02%
Conduit asset-backed securities
Debt issued by consolidated VIEs:
Debt issued by consolidated VIEs	$ 3,550	$ 6,115
Weighted average interest rate	6.48%	5.38%
Conduit asset-backed securities \| Minimum
Debt issued by consolidated VIEs:
Interest Rates	6.36%	5.08%
Conduit asset-backed securities \| Maximum
Debt issued by consolidated VIEs:
Interest Rates	6.59%	5.93%
Revolving Credit Facility \| Line of Credit
Long-term and other debt:
Long-term and other debt	$ 0	$ 0

PARENT COMPANY FINANCIAL STATEMENTS (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Assets:
Cash and cash equivalents	$ 3,590	$ 3,891	$ 3,046
Investment in LVI	0	6
Other assets	1,364	1,400
Total assets	23,141	25,407
Liabilities:
Long-term and other debt	1,394	1,892
Other liabilities	1,311	1,309
Total liabilities	20,223	23,142
Stockholders’ equity	2,918	2,265	2,086	$ 1,522
Total liabilities and stockholders’ equity	23,141	25,407
Statements of Income
Total interest income	5,145	4,684	3,868
Total interest expense	879	503	383
Net interest income	4,266	4,181	3,485
Loss from equity method investment	(6)	(44)	2
Total net interest and non-interest income	4,289	3,826	3,272
Total non-interest expenses	2,092	1,932	1,684
Income from continuing operations before income taxes	968	300	1,044
Benefit for income taxes	(231)	(76)	(247)
Net income	718	223	801
Other comprehensive income (loss)
Net income	718	223	801
Other comprehensive income, net of tax	2	(19)	3
Total comprehensive income, net of tax	720	204	804
Statements of Cash Flows
Net cash used in operating activities	1,987	1,848	1,543
Cash flows from investing activities:
Net cash provided by (used in) investing activities	788	(5,111)	(1,691)
Cash flows from financing activities:
Debt proceeds from spinoff of LVI	0	0	652
Payment of deferred financing costs	(63)	(13)	(13)
Payment of capped call transactions	(39)	0	0
Dividends paid	(42)	(43)	(42)
Repurchase of common stock	(35)	(12)	0
Other	(2)	(3)	(4)
Net cash (used in) provided by financing activities	(3,086)	3,267	608
Change in cash, cash equivalents and restricted cash	(311)	4	460
Cash, cash equivalents and restricted cash at end of period	3,616	3,927	3,923
Cash, cash equivalents and restricted cash at beginning of period	3,927	3,923	3,463
Bread Financial Payments, Inc.
Non-cash investing items
Equity method investment	318
Parent Company
Assets:
Cash and cash equivalents	2	5
Investment in subsidiaries	3,615	4,159
Intercompany receivables, net	612	0
Investment in LVI	0	6
Other assets	147	119
Total assets	4,376	4,289
Liabilities:
Long-term and other debt	1,394	1,892
Intercompany liabilities, net	0	86
Other liabilities	64	46
Total liabilities	1,458	2,024
Stockholders’ equity	2,918	2,265
Total liabilities and stockholders’ equity	4,376	4,289
Statements of Income
Total interest income	12	11	12
Total interest expense	111	107	103
Net interest income	(99)	(96)	(91)
Dividends from subsidiaries	1,063	382	535
Loss from equity method investment	(6)	(44)	0
Total net interest and non-interest income	958	242	444
Total non-interest expenses	12	1	1
Income from continuing operations before income taxes	946	241	443
Benefit for income taxes	31	22	36
Income before equity in undistributed net income of subsidiaries	977	263	479
Equity in undistributed net (loss) income of subsidiaries	(259)	(40)	322
Net income	718	223	801
Other comprehensive income (loss)
Net income	718	223	801
Other comprehensive income, net of tax	0	(3)	7
Total comprehensive income, net of tax	718	220	808
Statements of Cash Flows
Net cash used in operating activities	(422)	(219)	(398)
Cash flows from investing activities:
Dividends received	1,063	383	533
Purchases of available-for-sale securities	0	0	(10)
Net cash provided by (used in) investing activities	1,063	383	523
Cash flows from financing activities:
Debt proceeds from spinoff of LVI	0	0	750
Borrowings under debt agreements	1,401	218	38
Repayments of borrowings under debt agreements	(1,882)	(319)	(864)
Payment of deferred financing costs	(45)	0	(4)
Payment of capped call transactions	(39)	0	0
Dividends paid	(42)	(43)	(42)
Repurchase of common stock	(35)	(12)	0
Other	(2)	(3)	(3)
Net cash (used in) provided by financing activities	(644)	(159)	(125)
Change in cash, cash equivalents and restricted cash	(3)	5	0
Cash, cash equivalents and restricted cash at end of period	2	5	0
Cash, cash equivalents and restricted cash at beginning of period	$ 5	$ 0	0
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff
Non-cash investing items
Equity method investment			$ 48

LEASES

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

LEASES

We have various operating leases for facilities and equipment which are recorded as lease-related assets (i.e., right-of-use assets) and liabilities for those leases with terms greater than 12 months. We do not have any finance leases. We determine if an arrangement is a lease or contains a lease at inception, and we do not separate lease and non-lease components. Right-of-use assets are recognized as of the lease commencement date at amounts equal to the respective lease liabilities, adjusted for any prepaid lease payments, initial direct costs and lease incentives. Our lease liabilities are recognized as of the lease commencement date, or upon modification of the lease, at the present value of the contractual fixed lease payments, discounted using our incremental borrowing rate (as the rate implicit in the lease is typically not readily determinable). Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred.

As of December 31, 2023 and 2022, the weighted average discount rate applied was 6.9% and 5.8%, respectively. As of December 31, 2023, our leases have remaining lease terms ranging from less than one year, to up to 15 years, some of which may include renewal options; the weighted average remaining lease term was 8.4 years and 8.8 years as of December 31, 2023 and 2022, respectively. Leases with an initial term of 12 months or less are not recognized on the Consolidated Balance Sheets; lease expense for these leases is recognized on a straight-line basis over the lease term.

As with other long-lived assets, right-of-use assets are reviewed for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable.

Total lease expense for the years ended December 31, 2023, 2022 and 2021 was $25 million, $13 million, and $20 million, respectively, including variable lease costs and sublease income, which were insignificant.

Supplemental lease-related cash flow information was as follows for the years ended December 31:


	2023		2022		2021
(Millions)
Cash paid for amounts included in the measurement of lease liabilities – operating cash flows	$	27	$	23	$	25
Right-of-use assets obtained in exchange for operating leases – non-cash	$	37	$	—	$	5

Future maturities of our operating lease liabilities, by year, were as follows as of December 31, 2023:


(Millions)
2024	$	24
2025	25
2026	24
2027	21
2028	20
Thereafter	84
Total undiscounted lease liabilities	198
Less: Amount representing interest	(50)
Total present value of minimum lease payments	$	148

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2023

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in each component of Accumulated other comprehensive loss, net of tax effects, are as follows:


	Net Unrealized Gains (Losses) on AFS Securities		Net Unrealized Losses on Cash Flow Hedges		Net Unrealized Losses on Net Investment Hedge		Foreign Currency Translation Losses(1)		Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2020	$	23	$	(1)	$	(7)	$	(20)	$	(5)
Changes in other comprehensive (loss) income	(21)		2		—		(37)		(56)
Recognition resulting from the spinoff of LoyaltyOne's foreign subsidiaries	(1)		(1)		7		54		59
Balance as of December 31, 2021	$	1	$	—	$	—	$	(3)	$	(2)
Changes in other comprehensive (loss)	(19)		—		—		—		(19)
Balance as of December 31, 2022	$	(18)	$	—	$	—	$	(3)	$	(21)
Changes in other comprehensive income	2		—		—		—		2

Balance as of December 31, 2023	$	(16)	$	—	$	—	$	(3)	$	(19)

______________________________

(1)Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates from our former LoyaltyOne segment, which was spun off in November 2021.

With the spinoff of our former LoyaltyOne segment on November 5, 2021, the $7 million net unrealized loss on our net investment hedge related to our net investment in BrandLoyalty was reclassified into net income.

FAIR VALUES OF FINANCIAL INSTRUMENTS - Fair Value Level Disclosure (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Assets disclosed at fair value
Investment securities	$ 217	$ 221
Total assets measured at fair value	217	221
Level 1
Assets disclosed at fair value
Investment securities	46	44
Total assets measured at fair value	46	44
Level 2
Assets disclosed at fair value
Investment securities	171	177
Total assets measured at fair value	171	177
Level 3
Assets disclosed at fair value
Investment securities	0	0
Total assets measured at fair value	$ 0	$ 0

INVESTMENTS - Narrative (Details) - USD ($)	12 Months Ended
INVESTMENTS - Narrative (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Debt Securities, Available-for-Sale [Line Items]
Gains or losses from the sale of AFS securities	$ 0	$ 0	$ 0
Collateralized Mortgage-Backed Securities
Debt Securities, Available-for-Sale [Line Items]
Available-for-sale, mortgage-backed securities with no stated maturities, amortized cost	167,000,000
Available-for-sale, mortgage-backed securities with no stated maturities, fair value	148,000,000
Municipal Bonds
Debt Securities, Available-for-Sale [Line Items]
Available-for-sale, mortgage-backed securities with stated maturities - greater than ten years, amortized cost	25,000,000
Available-for-sale, mortgage-backed securities with stated maturities - greater than ten years, fair value	$ 23,000,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (aaa)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-2

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 320
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481800/320-10-50-3

+ Details

FAIR VALUES OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

FAIR VALUES OF FINANCIAL INSTRUMENTS

Fair value is defined under GAAP as the price that would be required to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; with such a transaction based on the principal market, or in the absence of a principal market the most advantageous market for the specific instrument. GAAP provides for a three-level fair value hierarchy that classifies the inputs to valuation techniques used to measure fair value, defined as follows:

Level 1: Inputs that are unadjusted quoted prices for identical assets or liabilities in active markets that the entity can access.

Level 2: Inputs, other than those included within Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including quoted prices for similar assets or liabilities in

active markets, quoted prices for identical or similar assets or liabilities in inactive markets, or inputs other than quoted prices that are observable for the asset or liability.

Level 3: Inputs that are unobservable (e.g., internally derived assumptions) and reflect an entity’s own estimates about estimates market participants would use in pricing the asset or liability based on the best information available under the circumstances. In particular, Level 3 inputs and valuation techniques involve judgment and as a result are not necessarily indicative of amounts we would realize in a current market exchange. The use of different assumptions or estimation techniques may have a material effect on the estimated fair value amounts.

We monitor the market conditions and evaluate the fair value hierarchy levels at least quarterly. For the years ended December 31, 2023 and 2022, there were no transfers into or out of Level 3, and no transfers between Levels 1 and 2.

The following table summarizes the carrying values and fair values of our financial assets and financial liabilities as of December 31:


	2023				2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Millions)
Financial assets
Credit card and other loans, net	$	17,005	$	19,802	$	18,901	$	21,328
Investment securities	217		217		221		221
Financial liabilities
Deposits	13,620		13,583		13,826		13,731
Debt issued by consolidated VIEs	3,898		3,900		6,115		6,115
Long-term and other debt	1,394		1,457		1,892		1,759

Valuation Techniques Used in the Fair Value Measurement of Financial Assets and Financial Liabilities

Credit card and other loans, net: Our Credit card and other loans are recorded at amortized cost, less the Allowance for credit losses, on the Consolidated Balance Sheets. In estimating the fair values, we use a discounted cash flow model (i.e., Level 3 inputs), primarily because a comparable whole loan sales market for similar loans does not exist, and therefore there is a lack of observable pricing inputs. We use various internally derived inputs, including projected income, discount rates and forecasted write-offs; economic value attributable to future loans generated by the cardholder accounts is not included in the fair values.

Investment securities: Investment securities consist of AFS debt securities, including both mortgage-backed securities and municipal bonds, as well as equity securities, which are mutual funds, and are recorded at fair value on the Consolidated Balance Sheets. Quoted prices of identical or similar investment securities in active markets are used to estimate the fair values (i.e., Level 1 or Level 2 inputs).

Deposits: Money market and other non-maturity deposits carrying values approximate their fair values because they are short-term in duration and have no defined maturity. GAAP requires that the fair values of deposit liabilities with no stated maturities equal their carrying values, and does not permit recognition of the inherent funding value of these instruments. Certificates of deposit are recorded at their historical issuance cost on the Consolidated Balance Sheets, adjusted for unamortized fees, with the fair value being estimated based on the currently observable market rates available to us for similar deposits with similar remaining maturities (i.e., Level 2 inputs). Interest payable is included within Other liabilities on the Consolidated Balance Sheets.

Debt issued by consolidated VIEs: We record debt issued by our consolidated VIEs at amortized cost (including unamortized fees, issuance costs, premiums and discounts, where applicable) on the Consolidated Balance Sheets. Interest payable is included within Other liabilities on the Consolidated Balance Sheets. Fair value is estimated based on the currently observable market rates available to us for similar debt instruments with similar remaining maturities or quoted market prices for the same transaction (i.e., Level 2 inputs).

Long-term and other debt: We record long-term and other debt at amortized cost (including unamortized fees, issuance costs, premiums and discounts, where applicable) on the Consolidated Balance Sheets. Interest payable is included within Other liabilities on the Consolidated Balance Sheets. The fair value is estimated based on the currently observable market rates available to us for similar debt instruments with similar remaining maturities, or quoted market prices for the same transaction (i.e., Level 2 inputs).

Financial Instruments Measured at Fair Value on a Recurring Basis

The following tables summarize our financial instruments measured at fair value on a recurring basis, categorized by the fair value hierarchy described in the preceding paragraphs, as of December 31:


	2023
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	217	$	46	$	171	$	—
Total assets measured at fair value	$	217	$	46	$	171	$	—


	2022
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	221	$	44	$	177	$	—
Total assets measured at fair value	$	221	$	44	$	177	$	—

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including equity method investments, property and equipment, right-of-use assets, deferred contract costs, goodwill and intangible assets. These assets are not measured at fair value on a recurring basis but are subject to fair value adjustments in certain circumstances, such as upon impairment. In particular, for the year ended December 31, 2022, we recognized a $44 million write-down of our equity method investment in LVI; as of December 31, 2022, the carrying amount of our investment was $6 million and the fair value was $11 million. For the year ended December 31, 2023 we wrote-off the remaining $6 million of our equity method investment in LVI. As well, see Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” for a discussion of the impairment of certain deferred contract costs.

Financial Instruments Disclosed but Not Carried at Fair Value

The following tables summarize our financial assets and financial liabilities that are measured at amortized cost, and not required to be carried at fair value on a recurring basis, as of December 31, 2023 and 2022, respectively. The fair values of these financial instruments are estimates, and require management’s judgment; therefore, these fair value estimates may not be indicative of future fair values, nor can our fair value be estimated by aggregating all of the amounts presented.


	2023
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets:
Credit card and other loans, net	$	19,802	$	—	$	—	$	19,802
Total	$	19,802	$	—	$	—	$	19,802

Financial liabilities:
Deposits	$	13,583	$	—	$	13,583	$	—
Debt issued by consolidated VIEs	3,900		—		3,900		—
Long-term and other debt	1,457		—		1,457		—
Total	$	18,940	$	—	$	18,940	$	—


	2022
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets:
Credit card and other loans, net	$	21,328	$	—	$	—	$	21,328
Total	$	21,328	$	—	$	—	$	21,328

Financial liabilities:
Deposits	$	13,731	$	—	$	13,731	$	—
Debt issued by consolidated VIEs	6,115		—		6,115		—
Long-term and other debt	1,759		—		1,759		—
Total	$	21,605	$	—	$	21,605	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

DEPOSITS - Interest and Non-Interest Bearing (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Interest-bearing	$ 13,594	$ 13,787
Cardholder credit balances	26	39
Total deposits	$ 13,620	$ 13,826

GOODWILL AND INTANGIBLE ASSETS, NET

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill is recognized for business acquisitions when the purchase price is higher than the fair value of acquired net assets. Goodwill is not amortized but is tested for impairment at least annually.

We evaluate goodwill for impairment annually as of July 1, or more frequently if events or circumstances arise that would more likely than not reduce the fair value of our single reporting unit below its carrying value. We have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying value. Alternatively, we can perform a more detailed quantitative assessment of goodwill impairment.

Qualitative factors considered in evaluating goodwill impairment include macroeconomic conditions, industry and market considerations, our overall financial performance and other relevant entity-specific factors, and/or a sustained decrease in our share price. If, after assessing these qualitative factors we conclude that it is not more likely than not that the fair value of our reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is not necessary. However, if the qualitative factors indicate it is more likely than not that the fair value of our reporting unit is less than its carrying amount, or we elect to skip the qualitative assessment, we would perform a quantitative impairment test.

The quantitative test compares the fair value of our reporting unit with its current carrying amount, including goodwill. When measuring the fair value we use widely accepted valuation techniques, leveraging a combination of the income approach based on discounted cash flows and the market approach based on valuation multiples. The key assumptions used to determine the fair value are primarily unobservable inputs (i.e., Level 3 inputs) including internally developed forecasts to estimate future cash flows, growth rates and discount rates, as well as market valuation multiples (for the market approach). Estimated cash flows are based on internal forecasts grounded in historical performance and future expectations. To discount the estimated cash flows, we use the expected cost of equity taking into account a combination of industry and Company-specific factors we believe a third party market participant would incorporate. We believe the discount rate applied appropriately reflects the risks and uncertainties in the financial markets generally and specifically in our internally developed forecasts. When using valuation multiples under the market approach, we apply comparable publicly traded companies’ multiples (e.g., price to tangible book value or return on tangible equity) to our reporting unit’s operating results. For the year ended December 31, 2023, we performed a quantitative assessment in connection with our annual goodwill impairment evaluation and concluded that the fair value of our reporting unit was in excess of its carrying value. For the year ended December 31, 2022, we performed a qualitative assessment and determined that it was more likely than not that the fair value of our reporting unit exceeded its carrying value.

Goodwill was $634 million as of December 31, 2023, 2022 and 2021. No goodwill impairment was recognized during any of those years, and there were no accumulated goodwill impairment losses as of December 31, 2023.

Intangible Assets, net

Our identifiable intangible assets consist of both amortizable and non-amortizable intangible assets. Definite-lived intangible assets are subject to amortization and are amortized on a straight-line basis over their estimated useful lives; indefinite-lived intangible assets are not amortized. We review long-lived assets and asset groups, including intangible assets, for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable; recognizing an impairment if the carrying amount is not recoverable and exceeds the fair value of the asset or asset group.

Intangible assets consisted of the following as of December 31:


	2023
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Premium on purchased credit card loan portfolios	$	231	$	(108)	$	123	5-13 years
Non-compete agreements	2		(1)		1		5 years
	233		(109)		124
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	237	$	(109)	$	128


	2022
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Customer contracts and lists	$	9	$	(6)	$	3	3 years
Premium on purchased credit card loan portfolios	230		(73)		157		4-13 years
Non-compete agreements	2		(1)		1		5 years
	$	241	$	(80)	$	161
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	245	$	(80)	$	165

Amortization expense related to intangible assets was approximately $37 million, $26 million and $29 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows for the years ending December 31:


(Millions)
2024			33
2025			25
2026			24
2027			21
2028			6
Thereafter			15
			124

EMPLOYEE BENEFIT PLANS (Details) - USD ($)	12 Months Ended
EMPLOYEE BENEFIT PLANS (Details) - USD ($)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jun. 30, 2017	Jul. 01, 2015	Jul. 20, 2001
Defined Contribution Plan Disclosure [Line Items]
Employee contribution	3.00%
Percent of matching contribution	50.00%
Percentage of employees' contribution matched by employer	6.00%
Pension Plan
Defined Contribution Plan Disclosure [Line Items]
Number of shares available for issuance (in shares)	182,927
Minimum age limit of employees covered by the plan	18 years
Company's matching and discretionary contributions	$ 30,000,000	$ 17,000,000	$ 15,000,000
Number of shares registered for issuance (in shares)						1,500,000
Supplemental Employee Retirement Plan
Defined Contribution Plan Disclosure [Line Items]
Vested percentage	100.00%
Deferred compensation liability	$ 24,000,000	$ 20,000,000
2015 Employee Stock Purchase Plan \| Employee Stock
Defined Contribution Plan Disclosure [Line Items]
Maximum amount of common stock permitted to be purchased annually per employee	$ 25,000
Maximum percentage of voting power after purchase of common stock under ESPP	5.00%
Offering period under ESPP	6 months
Purchase price of common stock as a percentage of fair market value of shares	85.00%
Number of shares available for issuance (in shares)	627,918			1,441,327	1,000,000
Number of shares issued under the ESPP (in shares)	140,633
Weighted-average issue price of shares issued under the ESPP (in dollars per share)	$ 27.43
Number of shares issued under the ESPP since the inception of the plan (in shares)	813,409
2005 Employee Stock Purchase Plan \| Employee Stock
Defined Contribution Plan Disclosure [Line Items]
Number of shares available for issuance (in shares)				441,327

DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2023

Other Liabilities Disclosure [Abstract]

Deposit by type

Deposits were categorized as interest-bearing or non-interest-bearing as follows, as of December 31:


	2023		2022
(Millions)
Interest-bearing	$	13,594	$	13,787
Non-interest-bearing (including cardholder credit balances)	26		39
Total deposits	$	13,620	$	13,826

Deposits by deposit type were as follows as of December 31:


	2023		2022
(Millions)
Savings accounts
Direct-to-consumer (retail)	$	2,863	$	2,782
Wholesale	3,734		3,954
Certificates of deposit
Direct-to-consumer (retail)	3,591		2,684
Wholesale	3,406		4,367
Cardholder credit balances	26		39
Total deposits	$	13,620	$	13,826

Time deposit maturities

The scheduled maturities of certificates of deposit were as follows as of December 31, 2023:


(Millions)
2024(1)	$	4,617
2025	1,142
2026	429
2027	635
2028	174
Thereafter	—
Total certificates of deposit	$	6,997

__________________________________

(1) The 2023 balance includes $6 million in unamortized debt issuance costs, which are associated with the entire portfolio of certificates of deposit.

- Definition

Tabular disclosure of type of deposit liability.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Publisher SEC

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (1)
-Publisher SEC

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (2)
-Publisher SEC

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (3)
-Publisher SEC

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (4)
-Publisher SEC

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (5)
-Publisher SEC

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (c)
-Publisher SEC

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (d)
-Publisher SEC

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (e)
-Publisher SEC

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (1)
-Publisher SEC

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)
-Publisher SEC

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)
-Publisher SEC

Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(ii)
-Publisher SEC

Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iii)
-Publisher SEC

Reference 15: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iv)
-Publisher SEC

+ Details

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
ASSETS
Cash and cash equivalents	$ 3,590	$ 3,891
Credit card and other loans
Total credit card and other loans (includes loans available to settle obligations of consolidated variable interest entities: 2023, $12,844; 2022, $15,383)	19,333	21,365
Allowance for credit losses	(2,328)	(2,464)
Credit card and other loans, net	17,005	18,901
Investments (Fair value: 2023, $217; 2022, $221)	253	221
Property and equipment (less accumulated depreciation and amortization: 2023, $343; 2022, $287)	167	195
Goodwill and intangible assets, net	762	799
Other assets	1,364	1,400
Total assets	23,141	25,407
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits	13,620	13,826
Debt issued by consolidated variable interest entities	3,898	6,115
Long-term and other debt	1,394	1,892
Other liabilities	1,311	1,309
Total liabilities	20,223	23,142
Commitments and contingencies (Note 15)
Stockholders’ equity
Common stock, $0.01 par value; authorized, 200.0 million shares; issued: 2023, 49.3 million shares; 2022, 49.9 million shares	1	1
Additional paid-in capital	2,169	2,192
Retained earnings	767	93
Accumulated other comprehensive loss	(19)	(21)
Total stockholders’ equity	2,918	2,265
Total liabilities and stockholders’ equity	$ 23,141	$ 25,407

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)
Deconsolidation related to sale of businesses	$ 59
LoyaltyOne
Deconsolidation related to sale of businesses	$ 54

CREDIT CARD AND OTHER LOANS - Financing Receivable (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	$ 19,333	$ 21,365
Less: Allowance for credit losses	(2,328)	(2,464)	$ (1,832)	$ (2,008)
Credit card and other loans, net	17,005	18,901
Credit card and loan receivables restricted for securitization investors	12,844	15,383
Unbilled to cardholders	371	307
Variable Interest Entity, Primary Beneficiay
Financing Receivable, Allowance for Credit Loss [Line Items]
Credit card and loan receivables restricted for securitization investors	12,844	15,383
Credit card loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	18,999	21,065
BNPL and other loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans	334	300
Less: Allowance for credit losses	$ (32)	$ (21)

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Millions, $ in Millions

12 Months Ended

Dec. 31, 2023

Dec. 31, 2022

Dec. 31, 2021

Interest income

Interest and fees on loans

$ 4,961

$ 4,615

$ 3,861

Interest on cash and investment securities

184

Total interest income

5,145

4,684

3,868

Interest expense

Interest on deposits

541

243

167

Interest on borrowings

338

260

216

Total interest expense

879

503

383

Net interest income

4,266

4,181

3,485

Non-interest income

Interchange revenue, net of retailer share arrangements

(335)

(469)

(369)

Gain on portfolio sale

230

Other

128

114

146

Total non-interest income

(355)

(213)

Total net interest and non-interest income

4,289

3,826

3,272

Provision for credit losses

1,229

1,594

544

Total net interest and non-interest income, after provision for credit losses

3,060

2,232

2,728

Non-interest expenses

Employee compensation and benefits

867

779

671

Card and processing expenses

428

359

323

Information processing and communication

301

274

216

Marketing expenses

161

180

160

Depreciation and amortization

116

113

Other

219

227

222

Total non-interest expenses

2,092

1,932

1,684

Income from continuing operations before income taxes

968

300

1,044

Provision for income taxes

231

247

Income from continuing operations

737

224

797

(Loss) income from discontinued operations, net of income taxes

^[1]

(19)

(1)

Net income

$ 718

$ 223

$ 801

Basic income per share

Income from continuing operations (in dollars per share)

$ 14.79

$ 4.48

$ 16.02

(Loss) income from discontinued operations (in dollars per share)

(0.40)

(0.01)

0.07

Net income per share (in dollars per share)

14.39

4.47

16.09

Diluted income per share

Income from continuing operations (in dollars per share)

14.74

4.47

15.95

(Loss) income from discontinued operations (in dollars per share)

(0.40)

(0.01)

0.07

Net income per share (in dollars per share)

$ 14.34

$ 4.46

$ 16.02

Weighted average common shares outstanding

Basic (in shares)

49.8

49.9

49.7

Diluted (in shares)

50.0

[1]

Includes amounts that related to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. For additional information refer to Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” to the audited Consolidated Financial Statements.

ALLOWANCE FOR CREDIT LOSSES

12 Months Ended

Dec. 31, 2023

Credit Loss [Abstract]

ALLOWANCE FOR CREDIT LOSSES

The Allowance for credit losses represents our estimate of expected credit losses over the estimated life of our Credit card and other loans, incorporating future macroeconomic forecasts in addition to information about past events and current conditions. Our estimate under the Current Expected Credit Loss (CECL) approach is significantly influenced by the composition, characteristics and quality of our portfolio of credit card and other loans, as well as the prevailing economic conditions and forecasts utilized. The estimate of the Allowance for credit losses includes an estimate for uncollectible principal as well as unpaid interest and fees. Principal losses, net of recoveries are deducted from the Allowance for credit losses. Losses of unpaid interest and fees as well as any adjustments to the Allowance for credit losses associated with unpaid interest and fees are recorded as a reduction to Interest and fees on loans. The Allowance for credit losses is maintained through an adjustment to the Provision for credit losses and is evaluated for appropriateness on a quarterly basis.

In estimating our Allowance for credit losses, for each identified segment of loans sharing similar risk characteristics, management uses modeling and estimation techniques based on historical loss experience, current conditions, reasonable and supportable forecasts and other relevant factors. This modeling uses historical data and applicable macroeconomic variables with statistical analysis and behavioral relationships, to determine expected credit performance. Our quantitative estimate of expected credit losses under CECL is impacted by certain forecasted macroeconomic variables. We consider the macroeconomic forecast used to be reasonable and supportable over the estimated life of the Credit card and other loans portfolio, with no reversion period. In addition to the quantitative estimate of expected credit losses, we also incorporate qualitative adjustments for certain factors such as Company-specific risks, changes in current macroeconomic conditions that may not be captured in the quantitatively derived results, or other relevant factors to ensure the Allowance for credit losses reflects our best estimate of current expected credit losses.

Credit Card Loans

We use a “pooled” approach to estimate expected credit losses for financial assets with similar risk characteristics. We have evaluated multiple risk characteristics across our credit card loans portfolio, and determined delinquency status and overall credit quality to be the most significant characteristics for estimating expected credit losses. To estimate our Allowance for credit losses, we segment our credit card loans on the basis of delinquency status, credit quality risk score and product. These risk characteristics are evaluated on at least an annual basis, or more frequently as facts and circumstances warrant. In determining the estimated life of our credit card loans, payments were applied to the measurement date balance with no payments allocated to future purchase activity. We use a combination of First In First Out and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act) methodologies to model balance paydown.

BNPL Loans

We measure our Allowance for credit losses on BNPL loans using a statistical model to estimate projected losses over the remaining terms of the loans, inclusive of an assumption for prepayments. The model is based on the historical statistical

relationship between loan loss performance and certain macroeconomic data pooled based on credit quality risk score, term of the underlying loans, vintage and geographic location. As of December 31, 2023 and 2022, the Allowance for credit losses on BNPL loans was $32 million and $21 million, respectively.

Allowance for Credit Losses Rollforward


	2023		2022		2021
(Millions)
Beginning balance	$	2,464	$	1,832	$	2,008

Provision for credit losses(1)	1,229		1,594		544
Change in estimate for uncollectible unpaid interest and fees	10		10		—
Net principal losses(2)	(1,375)		(972)		(720)
Ending balance	$	2,328	$	2,464	$	1,832

______________________________

(1)Provision for credit losses includes a build/release for the Allowance for credit losses, as well as replenishment of Net principal losses.

For the year ended December 31, 2023, the factors that influenced the decrease in the Allowance for credit losses are lower Credit Card and other loans, primarily driven by the sale of the BJ’s portfolio; partially offset by higher principal losses and a higher reserve rate due to the compounding effect of persistent inflation relative to wage growth, the increased cost of consumer debt, the possibility of higher unemployment levels and the potential impacts from the resumption of federal student loan payments.

OTHER LIABILITIES

12 Months Ended

Dec. 31, 2023

Other Liabilities [Abstract]

OTHER LIABILITIES

The following is a summary of Other liabilities as of December 31:


	2023		2022
(Millions)
Accounts payable and other brand partner liabilities	$	422	$	398
Accrued liabilities(1)	273		306
Long-term tax reserves	286		306
Operating lease liabilities	148		126
Other(2)	182		173
Total other liabilities	$	1,311	$	1,309

______________________________

(1)Primarily related to accrued payroll and benefits, marketing, taxes and professional services expenses.

(2)Primarily comprised of long-term unearned revenue and cardholder liabilities.

INVESTMENTS - Continuous Loss Position (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Less than 12 months, Fair Value	$ 23	$ 95
Less than 12 months, Unrealized Losses	0	(9)
12 Months or Greater, Fair Value	141	57
12 Months or Greater, Unrealized Losses	(21)	(14)
Fair Value	164	152
Unrealized Losses	$ (21)	$ (23)

Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Dec. 31, 2023	Feb. 12, 2024	Jun. 30, 2023
Cover [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2023
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-15749
Entity Registrant Name	BREAD FINANCIAL HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	31-1429215
Entity Address, Address Line One	3095 Loyalty Circle
Entity Address, City or Town	Columbus
Entity Address, State or Province	OH
Entity Address, Postal Zip Code	43219
City Area Code	614
Local Phone Number	729-4000
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	BFH
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Document Financial Statement Error Correction Flag	false
Entity Public Float			$ 1.6
Entity Common Stock, Shares Outstanding		49,424,247
Documents Incorporated by Reference	Certain information called for by Part III is incorporated by reference to certain sections of the Proxy Statement for the 2024 Annual Meeting of our stockholders, which will be filed with the Securities and Exchange Commission not later than 120 days after December 31, 2023.
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Entity Central Index Key	0001101215
Amendment Flag	false

INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
INCOME TAXES - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Operating Loss Carryforwards [Line Items]
IRC Section 199, net of tax reserves	$ 0	$ 4	$ 0
Basis difference in unconsolidated subsidiaries	0	8	0
Valuation allowance	(5)	16	0
Impact of reform, benefit	0	0	8
Cumulative interest and penalties with respect to unrecognized tax benefits	84	74	76
Potential interest and penalties with respect to unrecognized tax benefits, expense (benefit)	9	(1)	8
Unrecognized tax benefits, if recognized, would impact effective tax rate	226	$ 238	$ 241
Capital Loss Carryforward
Operating Loss Carryforwards [Line Items]
Capital loss carryforward	26
Domestic Tax Authority
Operating Loss Carryforwards [Line Items]
Net operating loss carryovers	118
Capital loss carryforward	51
Foreign Tax Authority
Operating Loss Carryforwards [Line Items]
Tax credits	34
State and Local Jurisdiction
Operating Loss Carryforwards [Line Items]
Net operating loss carryovers	238
Tax credits	$ 1

ALLOWANCE FOR CREDIT LOSSES - Rollforward (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 2,464	$ 1,832	$ 2,008
Provision for credit losses	1,229	1,594	544
Change in estimate for uncollectible unpaid interest and fees	10	10	0
Net principal losses	(1,375)	(972)	(720)
Ending balance	2,328	2,464	1,832
Recovery	332	187	$ 163
Recovery adjustment	$ 10	$ 5

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

GOODWILL AND INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 634,000,000	$ 634,000,000	$ 634,000,000
Goodwill impairment	0	0	0
Accumulated goodwill impairment losses	0
Amortization of intangible assets	$ 37,000,000	$ 26,000,000	$ 29,000,000

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

OTHER LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2023

Other Liabilities [Abstract]

Schedule of other liabilities

The following is a summary of Other liabilities as of December 31:


	2023		2022
(Millions)
Accounts payable and other brand partner liabilities	$	422	$	398
Accrued liabilities(1)	273		306
Long-term tax reserves	286		306
Operating lease liabilities	148		126
Other(2)	182		173
Total other liabilities	$	1,311	$	1,309

______________________________

(1)Primarily related to accrued payroll and benefits, marketing, taxes and professional services expenses.

(2)Primarily comprised of long-term unearned revenue and cardholder liabilities.

DEPOSITS - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Other Liabilities [Abstract]
Time deposits, at or above FDIC insurance limit	$ 509	$ 719
Time deposits, at or above FDIC insurance limit of total deposits	4.00%	5.00%

FAIR VALUES OF FINANCIAL INSTRUMENTS - Assets and Liabilities Not Carried at Fair Value (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Financial assets
Credit card and other loans, net	$ 19,802	$ 21,328
Total assets measured at fair value	19,802	21,328
Financial liabilities
Deposits	13,583	13,731
Debt issued by consolidated VIEs	3,900	6,115
Long-term and other debt	1,457	1,759
Total liabilities measured at fair value	18,940	21,605
Level 1
Financial assets
Credit card and other loans, net	0	0
Total assets measured at fair value	0	0
Financial liabilities
Deposits	0	0
Debt issued by consolidated VIEs	0	0
Long-term and other debt	0	0
Total liabilities measured at fair value	0	0
Level 2
Financial assets
Credit card and other loans, net	0	0
Total assets measured at fair value	0	0
Financial liabilities
Deposits	13,583	13,731
Debt issued by consolidated VIEs	3,900	6,115
Long-term and other debt	1,457	1,759
Total liabilities measured at fair value	18,940	21,605
Level 3
Financial assets
Credit card and other loans, net	19,802	21,328
Total assets measured at fair value	19,802	21,328
Financial liabilities
Deposits	0	0
Debt issued by consolidated VIEs	0	0
Long-term and other debt	0	0
Total liabilities measured at fair value	$ 0	$ 0

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

EARNINGS PER SHARE

Basic earnings (losses) per share (EPS) is based only on the weighted average number of common shares outstanding, excluding any dilutive effects of unvested restricted stock awards or other dilutive securities. Diluted EPS is based on the weighted average number of common and potentially dilutive common shares (unvested restricted stock awards and other dilutive securities outstanding during the year) pursuant to the Treasury Stock method.

The following table sets forth the computation of basic and diluted EPS attributable to common stockholders for the years ended December 31:


	2023		2022		2021
(Millions, except per share amounts)
Numerator
Income from continuing operations	$	737	$	224	$	797
(Loss) income from discontinued operations, net of income taxes(1)	(19)		(1)		4
Net income	$	718	$	223	$	801

Denominator
Basic: Weighted average common stock	49.8		49.9		49.7
Weighted average effect of dilutive securities
Net effect of dilutive unvested restricted stock awards(2)	0.2		0.1		0.3
Denominator for diluted calculation	50.0		50.0		50.0

Basic EPS
Income from continuing operations	$	14.79	$	4.48	$	16.02
(Loss) income from discontinued operations	$	(0.40)	$	(0.01)	$	0.07
Net income per share	$	14.39	$	4.47	$	16.09

Diluted EPS
Income from continuing operations	$	14.74	$	4.47	$	15.95
(Loss) income from discontinued operations	$	(0.40)	$	(0.01)	$	0.07
Net income per share	$	14.34	$	4.46	$	16.02

______________________________

OTHER ASSETS (Tables)

12 Months Ended

Dec. 31, 2023

Other Assets [Abstract]

Schedule of other assets

The following is a summary of Other assets as of December 31:


	2023		2022
(Millions)
Deferred tax asset, net	$	629	$	552
Deferred contract costs(1)	285		344
Accounts receivable, net(2)	144		164
Right-of-use assets - operating	98		88
Restricted cash(3)	26		36
Investment in LVI	—		6
Other(4)	182		210
Total other assets	$	1,364	$	1,400

______________________________

(1)See Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” for discussion of impairment of certain deferred contract costs.

(2)Primarily related to federal, state and foreign income tax receivables (including a tax-related receivable in the amount of approximately $50 million, net, which we are entitled to receive through LVI), and amounts receivable from various brand partners.

(3)The balance as of December 31, 2022 represents principal accumulation for the repayment of debt issued by consolidated VIEs that matured in 2023.

(4)Primarily comprised of prepaid expenses and non-income-based tax receivables.

FAIR VALUES OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of estimated fair value of Company's financial instruments

The following table summarizes the carrying values and fair values of our financial assets and financial liabilities as of December 31:


	2023				2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Millions)
Financial assets
Credit card and other loans, net	$	17,005	$	19,802	$	18,901	$	21,328
Investment securities	217		217		221		221
Financial liabilities
Deposits	13,620		13,583		13,826		13,731
Debt issued by consolidated VIEs	3,898		3,900		6,115		6,115
Long-term and other debt	1,394		1,457		1,892		1,759

Schedule of assets and liabilities carried at fair value measured on recurring basis

The following tables summarize our financial instruments measured at fair value on a recurring basis, categorized by the fair value hierarchy described in the preceding paragraphs, as of December 31:


	2023
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	217	$	46	$	171	$	—
Total assets measured at fair value	$	217	$	46	$	171	$	—


	2022
	Total		Level 1		Level 2		Level 3
(Millions)
Investment securities	$	221	$	44	$	177	$	—
Total assets measured at fair value	$	221	$	44	$	177	$	—

Schedule of assets and liabilities disclosed but not carried at fair value


	2023
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets:
Credit card and other loans, net	$	19,802	$	—	$	—	$	19,802
Total	$	19,802	$	—	$	—	$	19,802

Financial liabilities:
Deposits	$	13,583	$	—	$	13,583	$	—
Debt issued by consolidated VIEs	3,900		—		3,900		—
Long-term and other debt	1,457		—		1,457		—
Total	$	18,940	$	—	$	18,940	$	—


	2022
	Fair Value		Level 1		Level 2		Level 3
(Millions)
Financial assets:
Credit card and other loans, net	$	21,328	$	—	$	—	$	21,328
Total	$	21,328	$	—	$	—	$	21,328

Financial liabilities:
Deposits	$	13,731	$	—	$	13,731	$	—
Debt issued by consolidated VIEs	6,115		—		6,115		—
Long-term and other debt	1,759		—		1,759		—
Total	$	21,605	$	—	$	21,605	$	—

INCOME TAXES - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Balance at the beginning of the period	$ 242	$ 247	$ 255
Increases related to prior years’ tax positions	1	8	1
Decreases related to prior years’ tax positions	(11)	(25)	(13)
Increases related to current year tax positions	13	14	12
Settlements during the period	(10)	(2)	(8)
Lapses of applicable statute of limitations	(20)
Balance at the end of the period	$ 215	$ 242	$ 247

CREDIT CARD AND OTHER LOANS (Tables)

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

Schedule of components of credit card and other loans

The following table presents Credit card and other loans, as of December 31:


	2023		2022
(Millions)
Credit card loans	$	18,999	$	21,065
BNPL and other loans	334		300
Total credit card and other loans(1)(2)	19,333		21,365
Less: Allowance for credit losses	(2,328)		(2,464)
Credit card and other loans, net	$	17,005	$	18,901

__________________________________

(1)Includes $12.8 billion and $15.4 billion of Credit card and other loans available to settle obligations of consolidated VIEs as of December 31, 2023 and December 31, 2022, respectively.

(2)Includes $371 million and $307 million, of accrued interest and fees that have not yet been billed to cardholders as of December 31, 2023 and December 31, 2022, respectively.

Schedule of aging analysis of total credit card and other loans portfolio at amortized cost

The following table presents the delinquency trends of our Credit card and other loans portfolio based on the amortized cost:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Other Loans (1)
	31 to 60 days delinquent		61 to 90 days delinquent		91 or more days delinquent		Total delinquent		Current		Total
(Millions)
As of December 31, 2023	$	422	$	323	$	809	$	1,554	$	17,373	$	18,927

As of December 31, 2022	$	444	$	296	$	732	$	1,472	$	19,559	$	21,031

______________________________

(1)BNPL and other loan delinquencies have been included with credit card loan delinquencies in the table above, as amounts were insignificant as of each period presented. As permitted by GAAP, the primary difference between the amortized cost basis included in the table above and the carrying value of our Credit card and other loans relates to the exclusion of unbilled finance charges and fees from the amortized cost basis. As of December 31, 2023 and 2022, accrued interest and fees that have not yet been billed to cardholders were $371 million and $307 million, respectively, included in Credit card and other loans on the Consolidated Balance Sheets.

The following table presents the performance of our credit card loans that were modified on or after January 1, 2023 and remain in a Loan Modification program:


	Aging Analysis of Delinquent Amortized Cost Loan Modifications - Credit Card Loans
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
As of December 31, 2023	$	17	$	16	$	22	$	55	$	214	$	269

Schedule of composition of obligor credit quality

The following table reflects the distribution of credit card loans by Vantage score as of December 31:


	Vantage
	2023						2022
	661 or Higher		601 to 660		600 or Less		661 or Higher		601 to 660		600 or Less
Credit card loans	57	%	27	%	16	%	62	%	26	%	12	%

Schedule of information on credit card loans that are considered troubled debt restructurings

The following table provides information relating to credit card loans to borrowers experiencing financial difficulty that were granted a concession under a Loan Modification program during the year ended December 31:


	2023
	Account Balances(1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)
(Millions, except percentages)
Credit card loans	$	269	1.4	%	19.2	%

__________________________________

(1)Represents the outstanding balance as of December 31, 2023 of all Loan Modifications undertaken in the past twelve months, for credit card loans that remain in modification programs on December 31, 2023. The outstanding balance includes principal, accrued interest and fees.

The following table provides additional information regarding credit card Loan Modifications that have subsequently defaulted within 12 months of their modification dates, for the year ended December 31, 2023; the probability of default is factored into the Allowance for credit losses:


	2023
	Number of Modifications	Outstanding Balance
(Millions, except for Number of modifications)
Loan Modifications that subsequently defaulted	14,196	$	23

Troubled Debt Restructurings (TDRs)

The following table provides information on credit card loans modified as troubled debt restructurings (TDRs) in accordance with the applicable accounting guidance in effect during the periods presented, which was effective prior to our adoption of the new guidance that eliminated TDRs effective January 1, 2023.


	2022
	Number of Restructurings	Pre-modification Outstanding Balance		Post-modification Outstanding Balance
(Millions, except for Number of restructurings)
Troubled debt restructurings	149,815	$	227	$	227

The following table provides additional information regarding credit card loans modified as TDRs that have subsequently defaulted within 12 months of their modification dates, for the year ended December 31, 2022; the probability of default is factored into the Allowance for credit losses:


	2022
	Number of Restructurings	Outstanding Balance
(Millions, except for Number of restructurings)
Troubled debt restructurings that subsequently defaulted	63,726	$	88

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

12 Months Ended

Dec. 31, 2023

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of changes in each component of accumulated comprehensive income (loss), net of tax effects

The changes in each component of Accumulated other comprehensive loss, net of tax effects, are as follows:


	Net Unrealized Gains (Losses) on AFS Securities		Net Unrealized Losses on Cash Flow Hedges		Net Unrealized Losses on Net Investment Hedge		Foreign Currency Translation Losses(1)		Accumulated Other Comprehensive Loss
(Millions)
Balance as of December 31, 2020	$	23	$	(1)	$	(7)	$	(20)	$	(5)
Changes in other comprehensive (loss) income	(21)		2		—		(37)		(56)
Recognition resulting from the spinoff of LoyaltyOne's foreign subsidiaries	(1)		(1)		7		54		59
Balance as of December 31, 2021	$	1	$	—	$	—	$	(3)	$	(2)
Changes in other comprehensive (loss)	(19)		—		—		—		(19)
Balance as of December 31, 2022	$	(18)	$	—	$	—	$	(3)	$	(21)
Changes in other comprehensive income	2		—		—		—		2

Balance as of December 31, 2023	$	(16)	$	—	$	—	$	(3)	$	(19)

______________________________

(1)Primarily related to the impact of changes in the Canadian dollar and Euro foreign currency exchange rates from our former LoyaltyOne segment, which was spun off in November 2021.

CREDIT CARD AND OTHER LOANS - Aging Analysis (Details) $ in Millions	Dec. 31, 2023 USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	$ 269
Total delinquent
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	55
31 to 60 Days Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	17
61 to 90 Days Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	16
91 or more Days Past Due
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	22
Current
Financing Receivable, Troubled Debt Restructuring [Line Items]
Amortized cost basis	$ 214

OTHER ASSETS

12 Months Ended

Dec. 31, 2023

Other Assets [Abstract]

OTHER ASSETS

The following is a summary of Other assets as of December 31:


	2023		2022
(Millions)
Deferred tax asset, net	$	629	$	552
Deferred contract costs(1)	285		344
Accounts receivable, net(2)	144		164
Right-of-use assets - operating	98		88
Restricted cash(3)	26		36
Investment in LVI	—		6
Other(4)	182		210
Total other assets	$	1,364	$	1,400

______________________________

(1)See Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” for discussion of impairment of certain deferred contract costs.

(3)The balance as of December 31, 2022 represents principal accumulation for the repayment of debt issued by consolidated VIEs that matured in 2023.

(4)Primarily comprised of prepaid expenses and non-income-based tax receivables.

PARENT COMPANY FINANCIAL STATEMENTS

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

PARENT COMPANY FINANCIAL STATEMENTS

The following Parent Company financial statements are provided in accordance with the rules of the SEC, which require such disclosure when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets.

Certain of our subsidiaries may be restricted in distributing cash or other assets to the Parent Company, which could be utilized to service our indebtedness. The stand-alone parent-only financial statements are presented below.

Parent Company – Condensed Balance Sheets


	December 31,
	2023		2022
(Millions)
Assets
Cash and cash equivalents	$	2	$	5
Investment in subsidiaries	3,615		4,159
Intercompany receivables, net	612		—
Investment in LVI	—		6
Other assets	147		119
Total assets	$	4,376	$	4,289
Liabilities
Long-term and other debt	$	1,394	$	1,892
Intercompany liabilities, net	—		86
Other liabilities	64		46
Total liabilities	1,458		2,024
Stockholders’ equity	2,918		2,265
Total liabilities and stockholders’ equity	$	4,376	$	4,289

Parent Company – Condensed Statements of Income


	Years Ended December 31,
	2023		2022		2021
(Millions)
Total interest income	$	12	$	11	$	12
Total interest expense	111		107		103
Net interest expense	(99)		(96)		(91)
Dividends from subsidiaries	1,063		382		535
Loss from equity method investment	(6)		(44)		—
Total net interest and non-interest income	958		242		444
Total non-interest expenses	12		1		1
Income before income taxes and equity in undistributed net income of subsidiaries	946		241		443
Benefit for income taxes	31		22		36
Income before equity in undistributed net income of subsidiaries	977		263		479
Equity in undistributed net (loss) income of subsidiaries	(259)		(40)		322
Net income	$	718	$	223	$	801

Parent Company – Condensed Statements of Comprehensive Income


	Years Ended December 31,
	2023		2022		2021
(Millions)
Net income	$	718	$	223	$	801
Other comprehensive income (loss), net of tax	—		(3)		7
Total comprehensive income, net of tax	$	718	$	220	$	808

Parent Company – Condensed Statements of Cash Flows


	Years Ended December 31,
	2023		2022			2021
(Millions)
Net cash used in operating activities	$	(422)	$	(219)		$	(398)
Cash flows from investing activities:

Dividends received	1,063		383			533
Purchases of available-for-sale securities	—		—			(10)
Net cash provided by investing activities	1,063		383			523
Cash flows from financing activities:
Debt proceeds from spinoff of LVI	—		—			750
Borrowings under debt agreements	1,401		218			38
Repayments of borrowings under debt agreements	(1,882)		(319)			(864)
Payment of deferred financing costs	(45)		—			(4)
Payment of capped call transactions	(39)		—			—
Dividends paid	(42)		(43)			(42)
Repurchase of common stock	(35)		(12)		—	—
Other	(2)		(3)			(3)
Net cash used in financing activities	(644)		(159)			(125)
Change in cash, cash equivalents and restricted cash	(3)		5			—
Cash, cash equivalents and restricted cash at beginning of year	5		—			—
Cash, cash equivalents and restricted cash at end of year	$	2	$	5		$	—

Non-cash investing activities related to the Parent Company – Condensed Statements of Cash Flows for the year ended December 31, 2023 include a $318 million non-cash dividend in the form of an intercompany return of capital from Bread Financial Payments, Inc. to the Parent Company.

Non-cash investing and financing activities related to the Parent Company – Condensed Statements of Cash Flows for the year ended December 31, 2022 included the dissolution of a subsidiary, ADS Foreign Holdings, Inc.

Non-cash investing and financing activities related to the Parent Company – Condensed Statements of Cash Flows for the year ended December 31, 2021 included our equity method investment in LVI upon spinoff, on November 5, 2021, which totaled $48 million.

CREDIT CARD AND OTHER LOANS - Narrative (Details) $ in Millions	1 Months Ended				12 Months Ended
	Oct. 31, 2023 USD ($)	Feb. 28, 2023 USD ($)	Oct. 31, 2022 USD ($)	Apr. 30, 2022 USD ($)	Dec. 31, 2023 USD ($) loan portfolio_sale	Dec. 31, 2022 USD ($) loan	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Financing Receivable, Allowance for Credit Loss [Line Items]
Re-aged accounts as percentage of total credit card and loan receivables					2.60%	1.40%	1.70%
Number of days a loan is contractually past due before resulting in charge-off					30 days
Delinquency rate					6.50%	5.50%
Actual charge-offs for unpaid interest and fees					$ 954	$ 651	$ 456
Net principal loss rate					7.50%	5.40%
Percentage of financing receivable outstanding (less than in 2023)					0.10%	0.60%
Total credit card and other loans					$ 18,927	$ 21,031
Maximum percentage of credit card receivables to total portfolio						1.00%
Impaired credit card and loan receivables						$ 257
Allowance for loan loss on impaired credit card receivables						70
Average recorded investment in impaired credit card receivables						257
Interest income on modified credit card receivables						15
Unused credit card lines available to cardholders					$ 113,000	$ 128,000
Credit card loans held for sale \| loan					0	0
Number of portfolio sales \| portfolio_sale					0
Proceeds from sale of credit card loan portfolios					$ 2,499	$ 0	512
Gain on sales of credit card portfolio					230	0	10
Allowance for credit loss					2,328	2,464	$ 1,832	$ 2,008
BJs Wholesale Club (BJs)
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans		$ 2,300
Proceeds from sale of credit card loan portfolios		2,500
Gain on sales of credit card portfolio		$ 230
Customer Relationships
Financing Receivable, Allowance for Credit Loss [Line Items]
Acquired intangible assets			$ 118
BNPL and other loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Total credit card and other loans					317	299
Allowance for credit loss					$ 32	$ 21
BNPL and other loans \| FICO Score, From 660 and Above
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding					82	86
BNPL and other loans \| FICO Score Below 660
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding					18
BNPL and other loans \| FICO Score, From 660 and Below
Financing Receivable, Allowance for Credit Loss [Line Items]
Percentage of total amortized cost basis of revolving loan receivables outstanding						14
Credit Card Loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Payments to acquire loans receivable	$ 388		1,600	$ 249
Allowance for credit loss			$ 1,500
Credit card loans
Financing Receivable, Allowance for Credit Loss [Line Items]
Maximum period of time temporary programs' concessions remain in place					12 months

BORROWINGS OF LONG-TERM AND OTHER DEBT - Narrative (Details)		1 Months Ended			12 Months Ended
	Jun. 13, 2023 USD ($) d $ / shares	Jan. 31, 2024 USD ($)	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($) $ / shares	Sep. 30, 2023 USD ($)	Aug. 31, 2023 USD ($)	Jun. 14, 2023 USD ($)	Jun. 08, 2023 $ / shares	Jun. 07, 2023 USD ($)	May 31, 2023 USD ($)	Apr. 30, 2023 USD ($)	Feb. 28, 2023 USD ($)	Jan. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Debt repaid by the company					$ 500,000,000
Share price (usd per share) \| $ / shares									$ 30.74
Convertible Debt
Debt Instrument [Line Items]
Stated interest rate					4.25%
2023 Credit Agreement \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity										$ 575,000,000
2023 Credit Agreement \| Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity										700,000,000
Remaining borrowing capacity										$ 700,000,000
Term Loan Facility
Debt Instrument [Line Items]
Proceeds from lines of credit			$ 300,000,000
Senior notes due 2024 \| Senior Notes
Debt Instrument [Line Items]
Debt amount issued																	$ 850,000,000
Stated interest rate					4.75%												4.75%
Discount amount for each $1000								$ 980
Repurchase amount					$ 285,000,000			$ 565,000,000
Senior notes due 2026 \| Subsequent Event
Debt Instrument [Line Items]
Repurchase amount		$ 400,000,000
Senior notes due 2026 \| Senior Notes
Debt Instrument [Line Items]
Debt amount issued																$ 500,000,000
Stated interest rate					7.00%											7.00%
Senior notes due 2026 \| Senior Notes \| Subsequent Event
Debt Instrument [Line Items]
Repurchase amount		400,000,000
Repurchase amount, cash portion		100,000,000
4.250% Convertible Senior Notes Due 2028
Debt Instrument [Line Items]
Conversion price premium	25.00%
Share price (usd per share) \| $ / shares									$ 30.74
Stock price trigger (usd per share) \| $ / shares	$ 38.43
Convertible debt carrying amount of equity component					$ 39,000,000
4.250% Convertible Senior Notes Due 2028 \| Minimum
Debt Instrument [Line Items]
Stock price trigger (usd per share) \| $ / shares	38.43
4.250% Convertible Senior Notes Due 2028 \| Maximum
Debt Instrument [Line Items]
Stock price trigger (usd per share) \| $ / shares	$ 61.48
4.250% Convertible Senior Notes Due 2028 \| Debt Conversion Terms One
Debt Instrument [Line Items]
Redemption price	100.00%
4.250% Convertible Senior Notes Due 2028 \| Debt Conversion Terms Two
Debt Instrument [Line Items]
Redemption price	100.00%
4.250% Convertible Senior Notes Due 2028 \| Convertible Debt
Debt Instrument [Line Items]
Debt amount issued	$ 316,000,000
Stated interest rate	4.25%
Conversion ratio	0.0260247
Conversion price premium					100.00%
Conversion price (usd per share) \| $ / shares					$ 61.48
4.250% Convertible Senior Notes Due 2028 \| Convertible Debt \| Debt Conversion Terms One
Debt Instrument [Line Items]
Threshold for redemption, days prior to maturity \| d	51
Senior notes due 2029 \| Subsequent Event
Debt Instrument [Line Items]
Repurchase amount, cash portion		100,000,000
Senior notes due 2029 \| Senior Notes
Debt Instrument [Line Items]
Debt amount issued					$ 600,000,000
Stated interest rate					9.75%
Senior notes due 2029 \| Senior Notes \| Subsequent Event
Debt Instrument [Line Items]
Debt amount issued		$ 300,000,000
Redemption price		101.00%
Series 2023-A Asset-Backed Term Notes
Debt Instrument [Line Items]
Debt amount issued											$ 399,000,000
Series 2023-A Asset-Backed Term Notes - Class A
Debt Instrument [Line Items]
Debt amount issued											$ 350,000,000
Stated interest rate											5.02%
Series 2023-A Asset-Backed Term Notes - Class M
Debt Instrument [Line Items]
Debt amount issued											$ 31,000,000
Stated interest rate											5.27%
Series 2023-A Asset-Backed Term Notes - Class B
Debt Instrument [Line Items]
Debt amount issued											$ 18,000,000
Conduit asset-backed securities
Debt Instrument [Line Items]
Maximum borrowing capacity															$ 6,500,000,000
Conduit asset-backed securities \| Minimum
Debt Instrument [Line Items]
Stated interest rate					6.36%										5.08%
Conduit asset-backed securities \| Maximum
Debt Instrument [Line Items]
Stated interest rate					6.59%										5.93%
Conduit asset-backed securities \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity					$ 5,400,000,000
Line of credit facility decrease				$ 1,000,000,000
2009-VFN Conduit Facility \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity				$ 2,500,000,000								$ 2,300,000,000	$ 2,700,000,000	$ 2,800,000,000
Line of Credit Maturity September 2025 \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 250,000,000
Line of Credit - Maturity October 2024 \| Line of Credit
Debt Instrument [Line Items]
Maximum borrowing capacity							$ 100,000,000

SECURITIZATIONS

12 Months Ended

Dec. 31, 2023

Offsetting [Abstract]

SECURITIZATIONS

We account for transfers of financial assets as either sales or financings. Transfers of financial assets that are accounted for as a sale are removed from the Consolidated Balance Sheets with any realized gain or loss reflected in the Consolidated Statements of Income during the period in which the sale occurs. Transfers of financial assets that are not accounted for as a sale are treated as a financing.

We regularly securitize the majority of our credit card loans through the transfer of those loans to one of our Trusts. We perform the decision making for the Trusts, as well as servicing the cardholder accounts that generate the credit card loans held by the Trusts. In our capacity as a servicer, we administer the loans, collect payments and charge-off uncollectible balances. Servicing fees are earned by a subsidiary, which are eliminated in consolidation.

The Trusts are consolidated VIEs because they have insufficient equity at risk to finance their activities – the issuance of debt securities and notes, collateralized by the underlying credit card loans. Because we perform the decision making and servicing for the Trusts, we have the power to direct the activities that most significantly impact the Trusts’ economic performance (the collection of the underlying credit card loans). In addition, we hold all of the variable interests in the Trusts, with the exception of the liabilities held by third-parties. These variable interests provide us with the right to receive benefits and the obligation to absorb losses, which could be significant to the Trusts. As a result of these considerations, we are deemed to be the primary beneficiary of the Trusts and therefore consolidate the Trusts.

The Trusts issue debt securities and notes, which are non-recourse to us. The collections on the securitized credit card loans held by the Trusts are available only for payment of those debt securities and notes, or other obligations arising in the securitization transactions. For our securitized credit card loans, during the initial phase of a securitization reinvestment

period, we generally retain principal collections in exchange for the transfer of additional credit card loans into the securitized pool of assets. During the amortization or accumulation period of a securitization, the investors’ share of principal collections (in certain cases, up to a maximum specified amount each month) is either distributed to the investors or held in an account until it accumulates to the total amount due, at which time it is paid to the investors in a lump sum.

We are required to maintain minimum interests in our Trusts ranging from 4% to 10% of the securitized credit card loans. This requirement is met through a transferor’s interest and is supplemented through excess funding deposits which represent cash amounts deposited with the trustee of the securitizations. Cash collateral, restricted deposits are generally released proportionately as investors are repaid. Under the terms of the Trusts, the occurrence of certain triggering events associated with the performance of the securitized credit card loans in each Trust could result in certain required actions, including payment of Trust expenses, the establishment of reserve funds, or early amortization of the debt securities and/or notes, in a worst-case scenario. During the years ended December 31, 2023, 2022 and 2021, no such triggering events occurred.


	2023		2022
(Millions)
Total credit card loans – available to settle obligations of consolidated VIEs	$	12,844	$	15,383
Of which: principal amount of credit card loans 91 days or more past due	$	323	$	307


	2023		2022		2021
(Millions)
Net principal losses of securitized credit card loans	$	801	$	554	$	453

LEASES (Details) - USD ($) $ in Millions	12 Months Ended
LEASES (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Lessee, Lease, Description [Line Items]
Weighted-average discount rate : operating leases	6.90%	5.80%
Weighted-average remaining lease term (in years): operating leases	8 years 4 months 24 days	8 years 9 months 18 days
Lease cost	$ 25	$ 13	$ 20
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	15 years

COMMITMENTS AND CONTINGENCIES	12 Months Ended
COMMITMENTS AND CONTINGENCIES	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Indemnification On July 1, 2019, we completed the sale of our Epsilon segment to Publicis Groupe S.A. (Publicis). Under the terms of the agreement governing that transaction, we agreed to indemnify Publicis and its affiliates from and against any losses arising out of or related to a U.S. Department of Justice (DOJ) investigation. The DOJ investigation related to third-party marketers who sent, or allegedly sent, deceptive mailings and the provision of data and services to those marketers by Epsilon’s data practice. Epsilon actively cooperated with the DOJ in connection with the investigation. On January 19, 2021, Epsilon entered into a deferred prosecution agreement (DPA) with the DOJ to resolve the matters that were the subject of the investigation. Pursuant to the DPA, Epsilon agreed, among other things, to pay penalties and consumer compensation in the aggregate amount of $150 million, to be paid in two equal installments, the first in January 2021 and the second in January 2022. A $150 million loss contingency was recorded as of December 31, 2020. Pursuant to our contractual indemnification obligation, in January 2021 we paid $75 million to Publicis, and in January 2022 we paid the remaining $75 million installment to Publicis. Our indemnification obligation also covers certain ongoing legal, consulting and claims administration fees and expenses incurred in connection with this matter. Legal Proceedings From time to time we are subject to various lawsuits, claims, disputes, or potential claims or disputes, and other proceedings, arising in the ordinary course of business that we believe, based on our current knowledge, will not have a material adverse effect on our business, consolidated financial condition or liquidity, including claims and lawsuits alleging breaches of our contractual obligations, arbitrations, class actions and other litigation, arising in connection with our business activities.

CREDIT CARD AND OTHER LOANS - Credit Cards (Details) - Credit Card Loans - Contractual Interest Rate Reduction $ in Millions	12 Months Ended
	Dec. 31, 2023 USD ($)
Financing Receivable, Troubled Debt Restructuring [Line Items]
Account Balances	$ 269
% of Total Credit Card Loans	1.40%
Weighted Average Interest Rate Reduction (% points)	19.20%

EARNINGS PER SHARE (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions

6 Months Ended

12 Months Ended

Dec. 31, 2023

Dec. 31, 2022

Dec. 31, 2021

Numerator:

Income from continuing operations

$ 737

$ 224

$ 797

(Loss) income from discontinued operations, net of income taxes

^[1]

(19)

(1)

Net income

$ 718

$ 223

$ 801

Denominator:

Basic: Weighted average common stock (in shares)

49.8

49.9

49.7

Net effect of dilutive unvested restricted stock awards (in shares)

0.2

0.1

0.3

Denominator for diluted calculation (in shares)

50.0

Basic EPS

Income from continuing operations (in dollars per share)

$ 14.79

$ 4.48

$ 16.02

(Loss) income from discontinued operations (in dollars per share)

(0.40)

(0.01)

0.07

Net income per share (in dollars per share)

14.39

4.47

16.09

Diluted EPS

Income from continuing operations (in dollars per share)

14.74

4.47

15.95

(Loss) income from discontinued operations (in dollars per share)

(0.40)

(0.01)

0.07

Net income per share (in dollars per share)

$ 14.34

$ 4.46

$ 16.02

Share awards excluded in the computation of diluted earnings per share (in shares)

1.2

0.9

0.1

[1]

INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2023

Investments, Debt and Equity Securities [Abstract]

Investment

The following table provides a summary of our Investments as of December 31:


	2023		2022
(Millions)
Investment securities:
Available-for-sale debt securities	$	171	$	152
Equity securities(1)	46		44
Total investment securities	217		196
Equity method and other investments(1)	36		25
Total Investments(1)	$	253	$	221

______________________________

Schedule of gain (loss) on investments

The table below reflects unrealized gains and losses on AFS debt securities as of December 31, 2023 and December 31, 2022:


	2023								2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
(Millions)
Available-for-sale debt securities	$	192	$	—	$	(21)	$	171	$	175	$	—	$	(23)	$	152
Total	$	192	$	—	$	(21)	$	171	$	175	$	—	$	(23)	$	152

Schedule of unrealized losses and fair value for investments that were in an unrealized loss position, aggregated by investment category and the length of time that individual securities have been in a continuous loss position


	December 31, 2023
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale debt securities	$	23	$	—	$	141	$	(21)	$	164	$	(21)
Total	$	23	$	—	$	141	$	(21)	$	164	$	(21)


	December 31, 2022
	Less than 12 months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
(Millions)
Available-for-sale debt securities	$	95	$	(9)	$	57	$	(14)	$	152	$	(23)
Total	$	95	$	(9)	$	57	$	(14)	$	152	$	(23)

STOCKHOLDERS' EQUITY - Stock Compensation Plans and Expense (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jun. 22, 2022	Jul. 01, 2020
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)				3,075,000
Maximum award amount	$ 1,000,000
Stock-based compensation expense	44,000,000	$ 33,000,000	$ 25,000,000
Income tax benefits related to stock-based compensation expense	$ 8,000,000	$ 5,000,000	$ 4,000,000
Forfeiture rate (as a percent)	5.00%	5.00%	5.00%
Unrecognized expenses	$ 51,000,000
Approximate weighted average period for recognizing expenses	2 years 1 month 6 days
2020 Omnibus Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares of common stock reserved for grant (in shares)					2,400,000
2022 Omnibus Incentive Plan
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock reserved for future issuance (in shares)				3,075,000
Service-based restricted stock unit awards
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award vesting period	3 years
Performance-based restricted stock unit awards
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Award vesting period	3 years
Performance-based restricted stock unit awards \| Minimum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Earned percentage	0.00%
Performance-based restricted stock unit awards \| Maximum
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Earned percentage	150.00%
Restricted Stock Units
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Total fair value of units vested	$ 30,000,000	$ 18,000,000	$ 23,000,000
Aggregate intrinsic value of units outstanding and expected to vest	$ 65,000,000

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES (Tables)

12 Months Ended

Dec. 31, 2023

Other Non-Interest Income and Other Non-Interest Expenses [Abstract]

Components of other non-interest income

The following table provides the components of Other non-interest income for the years ended December 31:


	2023		2022		2021
(Millions)
Payment protection products	$	132	$	154	$	141
(Loss) income from equity method investment in LVI	(6)		(44)		2
Other	2		4		3
Total other non-interest income	$	128	$	114	$	146

Components of other non-interest expenses

The following table provides the components of Other non-interest expenses for the years ended December 31:


	2023		2022		2021
(Millions)
Professional services and regulatory fees	$	128	$	142	$	136
Occupancy expense	22		23		26
Other(1)	69		62		60
Total other non-interest expense	$	219	$	227	$	222

______________________________

(1) Primarily related to costs associated with various other individually insignificant operating activities.

GOODWILL AND INTANGIBLE ASSETS, NET (Tables)

12 Months Ended

Dec. 31, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of finite-lived intangible assets

Intangible assets consisted of the following as of December 31:


	2023
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Premium on purchased credit card loan portfolios	$	231	$	(108)	$	123	5-13 years
Non-compete agreements	2		(1)		1		5 years
	233		(109)		124
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	237	$	(109)	$	128


	2022
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Customer contracts and lists	$	9	$	(6)	$	3	3 years
Premium on purchased credit card loan portfolios	230		(73)		157		4-13 years
Non-compete agreements	2		(1)		1		5 years
	$	241	$	(80)	$	161
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	245	$	(80)	$	165

Schedule of indefinite-lived intangible assets

Intangible assets consisted of the following as of December 31:


	2023
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Premium on purchased credit card loan portfolios	$	231	$	(108)	$	123	5-13 years
Non-compete agreements	2		(1)		1		5 years
	233		(109)		124
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	237	$	(109)	$	128


	2022
	Gross Assets		Accumulated Amortization		Net		Useful Life
(Millions)
Definite-Lived Assets
Customer contracts and lists	$	9	$	(6)	$	3	3 years
Premium on purchased credit card loan portfolios	230		(73)		157		4-13 years
Non-compete agreements	2		(1)		1		5 years
	$	241	$	(80)	$	161
Indefinite-Lived Assets
Tradename	4		—		4		Indefinite life
Total intangible assets	$	245	$	(80)	$	165

Schedule of estimated amortization expense related to intangible assets

The estimated amortization expense related to intangible assets for the next five years and thereafter is as follows for the years ending December 31:


(Millions)
2024			33
2025			25
2026			24
2027			21
2028			6
Thereafter			15
			124

LEASES - Maturities of lease liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Lease liabilities
2024	$ 24
2025	25
2026	24
2027	21
2028	20
Thereafter	84
Total undiscounted lease liabilities	198
Less: Amount representing interest	(50)
Total present value of minimum lease payments	$ 148	$ 126

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Other Noninterest Income [Abstract]
Payment protection products	$ 132	$ 154	$ 141
(Loss) income from equity method investment in LVI	(6)	(44)	2
Other	2	4	3
Total other non-interest income	128	114	146
Other Noninterest Expenses [Abstract]
Professional services and regulatory fees	128	142	136
Occupancy expense	22	23	26
Other	69	62	60
Total other non-interest expense	$ 219	$ 227	$ 222

INVESTMENTS - Amortized Cost (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]
Amortized Cost	$ 192	$ 175
Unrealized Gains	0	0
Unrealized Losses	(21)	(23)
Fair Value	$ 171	$ 152

CREDIT CARD AND OTHER LOANS

12 Months Ended

Dec. 31, 2023

Receivables [Abstract]

CREDIT CARD AND OTHER LOANS

Our payment and lending solutions result in the origination of Credit card and other loans, which are recorded at the time a borrower enters into a point-of-sale transaction with a merchant. Credit card loans represent revolving lines of credit and have a range of terms that include credit limits, interest rates and fees, which can be revised over time based on new information about the cardholder, in accordance with applicable regulations and the governing terms and conditions. Cardholders choosing to make a payment of less than the full balance due, instead of paying in full, are subject to finance charges and are required to make monthly payments based on pre-established amounts. Other loans, which consist primarily of BNPL products such as installment loans and our “split-pay” offerings, have a range of fixed terms such as interest rates, fees and repayment periods, and borrowers are required to make pre-established monthly payments over the term of the loan in accordance with the applicable terms and conditions. Credit card and other loans include principal and any related accrued interest and fees and are presented on the Consolidated Balance Sheets net of the Allowance for credit losses. We continue to accrue interest and fee income on all accounts, except in limited circumstances, until the related balance and all related interest and fees are paid or charged-off.

We generally classify our Credit card and other loans as held for investment. We sell a majority of our Credit card loans originated by Comenity Bank (CB) and by Comenity Capital Bank (CCB), which together are referred to herein as the “Banks”, to certain of our master trusts (the Trusts), which are consolidated VIEs, and therefore these loans are restricted for securitization investors. All new originations of Credit card and other loans are determined to be held for investment at origination because we have the intent and ability to hold them for the foreseeable future. In determining what constitutes the foreseeable future, we consider the average life and homogenous nature of our Credit card and other loans. In assessing whether our Credit card and other loans continue to be held for investment, we also consider capital levels and scheduled maturities of funding instruments used. The assertion regarding the intent and ability to hold Credit card and other loans for the foreseeable future can be made with a high degree of certainty given the maturity distribution of our direct-to-consumer (DTC or retail) deposits and other funding instruments; the demonstrated ability to replace maturing time-based deposits and other borrowings with new deposits or borrowings; and historic payment activity on Credit card and other loans. Due to the homogenous nature of our Credit card loans, amounts are classified as held for investment on a brand partner portfolio basis. From time to time certain Credit card loans are classified as held for sale, as determined on a brand partner portfolio basis. We carry held for sale assets at the lower of aggregate cost or fair value and continue to recognize finance charges on an accrual basis. Cash flows associated with Credit card and other loans originated or purchased for investment are classified as Cash flows from investing activities, regardless of any subsequent change in intent and ability.

The following table presents Credit card and other loans, as of December 31:


	2023		2022
(Millions)
Credit card loans	$	18,999	$	21,065
BNPL and other loans	334		300
Total credit card and other loans(1)(2)	19,333		21,365
Less: Allowance for credit losses	(2,328)		(2,464)
Credit card and other loans, net	$	17,005	$	18,901

__________________________________

(1)Includes $12.8 billion and $15.4 billion of Credit card and other loans available to settle obligations of consolidated VIEs as of December 31, 2023 and December 31, 2022, respectively.

(2)Includes $371 million and $307 million, of accrued interest and fees that have not yet been billed to cardholders as of December 31, 2023 and December 31, 2022, respectively.

Credit Card and Other Loans Aging

The following table presents the delinquency trends of our Credit card and other loans portfolio based on the amortized cost:


	Aging Analysis of Delinquent Amortized Cost Credit Card and Other Loans (1)
	31 to 60 days delinquent		61 to 90 days delinquent		91 or more days delinquent		Total delinquent		Current		Total
(Millions)
As of December 31, 2023	$	422	$	323	$	809	$	1,554	$	17,373	$	18,927

As of December 31, 2022	$	444	$	296	$	732	$	1,472	$	19,559	$	21,031

______________________________

From time to time we may re-age cardholders’ accounts, with the intent of assisting delinquent cardholders who have experienced financial difficulties but who demonstrate both an ability and willingness to repay the amounts due, this practice affects credit card loan delinquencies and principal losses. Accounts meeting specific defined criteria are re-aged when the cardholder makes one or more consecutive payments aggregating to a certain pre-defined amount of their account balance. Upon re-aging, the outstanding balance of a delinquent account is returned to current status. Our re-aged accounts as a percentage of Total credit card and other loans represented 2.6%, 1.4% and 1.7%, for the years ended December 31, 2023, 2022, and 2021 respectively. Our re-aging practices comply with regulatory guidelines.

Credit Quality Indicators for Our Credit Card and Other Loans

Given the nature of our business, the credit quality of our assets, in particular our Credit card and other loans, is a key determinant underlying our ongoing financial performance and overall financial condition. When it comes to our Credit card and other loans portfolio, we closely monitor Delinquency rates and Net principal loss rates, which reflect, among other factors, our underwriting, the inherent credit risk in our portfolio and the success of our collection and recovery efforts. These rates also reflect, more broadly, the general macroeconomic conditions, including the effects of persistent inflation and high interest rates. Our Delinquency and Net principal loss rates are also impacted by the magnitude of our Credit card and other loans portfolio, which serves as the denominator in the calculation of these rates. Accordingly, changes in the magnitude of our portfolio (whether due to credit tightening, acquisitions or dispositions of portfolios or otherwise) may cause movements in our Delinquency and Net principal loss rates that are not necessarily indicative of the underlying credit quality of the overall portfolio.

Delinquencies: An account is contractually delinquent if we do not receive the minimum payment due by the specified due date. Our policy is to continue to accrue interest and fee income on all accounts, except in limited circumstances, until the balance and all related interest and fees are paid or charged-off. After an account becomes 30 days past due, a proprietary collection scoring algorithm automatically scores the risk of the account becoming further delinquent; based upon the level of risk indicated, a collection strategy is deployed. If after exhausting all in-house collection efforts we are unable to collect on the account, we may engage collection agencies or outside attorneys to continue those efforts, or sell the charged-off balances.

The Delinquency rate is calculated by dividing outstanding principal balances that are contractually delinquent (i.e., balances greater than 30 days past due) as of the end of the period, by the outstanding principal amount of Credit cards and other loans as of the same period-end. As of December 31, 2023 and December 31, 2022, our Delinquency rates were 6.5% and 5.5%, respectively.

Net Principal Losses: Our net principal losses include the principal amount of losses that are deemed uncollectible, less recoveries, and exclude charged-off interest, fees and third-party fraud losses (including synthetic fraud). Charged-off

interest and fees reduce Interest and fees on loans, while third-party fraud losses are recorded in Card and processing expenses. Credit card loans, including unpaid interest and fees, are generally charged-off in the month during which an account becomes 180 days past due. BNPL loans such as our installment loans and our “split-pay” offerings, including unpaid interest, are generally charged-off when a loan becomes 120 days past due. However, in the case of a customer bankruptcy or death, Credit card and other loans, including unpaid interest and fees, as applicable, are charged-off 60 days after receipt of the notification of the bankruptcy or death, but in any case no later than 180 days past due for Credit card loans and 120 days past due for BNPL loans. We record the actual losses for unpaid interest and fees as a reduction to Interest and fees on loans, which were $954 million, $651 million and $456 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The net principal loss rate is calculated by dividing net principal losses for the period by the Average credit card and other loans for the same period. Average credit card and other loans represent the average balance of the loans at the beginning and end of each month, averaged over the periods indicated. For the years ended December 31, 2023 and 2022, our Net principal loss rates were 7.5% and 5.4%, respectively.

Overall Credit Quality: As part of our credit risk management activities for our credit card loans portfolio, we assess overall credit quality by reviewing information from credit bureaus and other sources relating to our cardholders’ broader credit performance. We utilize VantageScore (Vantage) credit scores to assist in our assessment of credit quality. Vantage credit scores are obtained at origination of the account and are refreshed monthly thereafter to assist in predicting customer behavior. We categorize these Vantage credit scores into the following three credit score categories: (i) 661 or higher, which are considered the strongest credits and therefore have the lowest credit risk; (ii) 601 to 660, considered to have moderate credit risk; and (iii) 600 or less, which are considered weaker credits and therefore have the highest credit risk. In certain limited circumstances there are customer accounts for which a Vantage score is not available and we use alternative sources to assess credit risk and predict behavior. The table below excludes less than 0.1% and approximately 0.6% of the total credit card loans balance as of December 31, 2023 and 2022, respectively, representing those customer accounts for which a Vantage credit score is not available. The following table reflects the distribution of credit card loans by Vantage score as of December 31:


	Vantage
	2023						2022
	661 or Higher		601 to 660		600 or Less		661 or Higher		601 to 660		600 or Less
Credit card loans	57	%	27	%	16	%	62	%	26	%	12	%

As part of our credit risk management activities for our BNPL loans portfolio, we also assess overall credit quality by reviewing information from credit bureaus. In this case we utilize Fair Isaac Corporation (FICO) credit scores to assist in our assessment of credit quality. The amortized cost basis of BNPL loans totaled $317 million and $299 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023, approximately 82% of these loans were originated with customers with FICO scores of 661 or above, and correspondingly approximately 18% of these loans were originated with customers with FICO scores below 661. Similarly, as of December 31, 2022, approximately 86% and 14% of these loans were originated with customers with FICO scores of 661 or above, and below 661, respectively.

Modified Credit Card Loans

Forbearance Programs

As part of our collections strategy, we may offer temporary, short term (six-months or less) forbearance programs in order to improve the likelihood of collections and meet the needs of our customers. Our modifications for customers who have requested assistance and meet certain qualifying requirements, come in the form of reduced or deferred payment requirements, interest rate reductions and late fee waivers. We do not offer programs involving the forgiveness of principal. These temporary loan modifications may assist in cases where we believe the customer will recover from the short-term hardship and resume scheduled payments. Under these forbearance programs, those accounts receiving relief may not advance to the next delinquency cycle, including charge-off, in the same time frame that would have occurred had the relief not been granted. We evaluate our forbearance programs to determine if they represent a more than insignificant delay in payment granted to borrowers experiencing financial difficulty, in which case they would then be considered a Loan Modification. Loans in these short term programs that are determined to be Loan Modifications, will be included as such in the disclosure below.

Credit Card Loans - Modifications for Borrowers Experiencing Financial Difficulty (Loan Modifications)

In instances where cardholders are experiencing financial difficulty, we may modify our credit card loans with the intention of minimizing losses and improving collectability, while providing cardholders with financial relief; such credit card loans are classified as Loan Modifications, exclusive of the temporary, short-term forbearance programs described above. Loan Modifications include concessions consisting primarily of a reduced minimum payment, late fee waiver, and/or an interest rate reduction. The majority of concessions remain in place for a period no longer than twelve months; however, for certain modifications the concessions remain in place through the payoff of the credit card loans if the cardholder complies with the terms of the program.

Loan Modification concessions do not include the forgiveness of unpaid principal, but may involve the reversal of certain unpaid interest or fee assessments, and the cardholder’s ability to make future purchases is either limited, or suspended until the cardholder successfully exits from the modification program. In accordance with the terms of our workout programs, the credit agreement reverts back to its original contractual terms (including the contractual interest rate) when the customer exits the program, which is either when all payments have been made in accordance with the program, or when the customer defaults out of the program.

Loan Modifications are collectively evaluated for impairment on a pooled basis in measuring the appropriate Allowance for credit losses. The following table provides information relating to credit card loans to borrowers experiencing financial difficulty that were granted a concession under a Loan Modification program during the year ended December 31:


	2023
	Account Balances(1)		% of Total Credit Card Loans		Weighted Average Interest Rate Reduction (% points)
(Millions, except percentages)
Credit card loans	$	269	1.4	%	19.2	%

__________________________________

The following table presents the performance of our credit card loans that were modified on or after January 1, 2023 and remain in a Loan Modification program:


	Aging Analysis of Delinquent Amortized Cost Loan Modifications - Credit Card Loans
	31 to 60 Days Past Due		61 to 90 Days Past Due		91 or more Days Past Due		Total		Total Current		Total
(Millions)
As of December 31, 2023	$	17	$	16	$	22	$	55	$	214	$	269


	2023
	Number of Modifications	Outstanding Balance
(Millions, except for Number of modifications)
Loan Modifications that subsequently defaulted	14,196	$	23

Troubled Debt Restructurings (TDRs)


	2022
	Number of Restructurings	Pre-modification Outstanding Balance		Post-modification Outstanding Balance
(Millions, except for Number of restructurings)
Troubled debt restructurings	149,815	$	227	$	227

TDRs are collectively evaluated for impairment on a pooled basis in measuring the appropriate Allowance for credit losses. Our impaired credit card loans represented 1% of total credit card loans as of December 31, 2022. As of the same date, our recorded investment in impaired credit card loans was $257 million, with an associated Allowance for credit losses of $70 million. The average recorded investment in impaired credit card loans was $257 million for the year ended December 31, 2022.

Interest income on these impaired credit card loans is accounted for in the same manner as non-impaired credit card loans, and cash collections are allocated according to the same payment hierarchy methodology applied for credit card loans not accounted for as TDRs. We recognized $15 million in interest income associated with credit card loans accounted for as TDRs for the year ended December 31, 2022.


	2022
	Number of Restructurings	Outstanding Balance
(Millions, except for Number of restructurings)
Troubled debt restructurings that subsequently defaulted	63,726	$	88

Unfunded Lending Commitments

We manage potential credit risk in unfunded lending commitments by reviewing each potential customer’s credit application and evaluating the applicant’s financial history and ability and perceived willingness to repay. Credit card loans are made primarily on an unsecured basis, and our Cardholders reside throughout the U.S. and are not significantly concentrated in any one geographic area.

We manage our potential risk in credit commitments by limiting the total amount of credit, both by individual customer and across our credit card loan portfolio, by monitoring the size and maturity of our loan portfolio, and applying consistent risk-based underwriting standards reflective of current and anticipated macroeconomic conditions. We have the unilateral ability to cancel or reduce unused credit card lines at any time. Unused credit card lines available to cardholders totaled approximately $113 billion and $128 billion as of December 31, 2023 and 2022, respectively. While this amount represented the total available unused credit card lines, we have not experienced and do not anticipate that all cardholders will access their entire available line at any given point in time.

Portfolio Sales

As of December 31, 2023 and 2022, there were no credit card loans held for sale and no portfolio sales were made during the year end December 31, 2022.

We previously announced the non-renewal of our contract with BJ’s Wholesale Club (BJ’s) and the sale of the BJ’s portfolio, which closed in late February 2023, for a total purchase price of $2.5 billion on a loan portfolio of $2.3 billion, resulting in a $230 million Gain on portfolio sale.

Portfolio Acquisitions

In October 2023, we acquired a credit card portfolio for cash consideration of $388 million.

In October 2022, we acquired the AAA credit card portfolio for cash consideration of $1.6 billion, which primarily consisted of $1.5 billion of credit card loans, and also included $118 million of intangible assets (primarily purchased credit card relationships) and reward liabilities.

In April 2022, we acquired a credit card portfolio for cash consideration of $249 million, which primarily consisted of credit card loans, and also included intangible assets (primarily purchased credit card relationships) and rewards liabilities. For audited Consolidated Financial Statement disclosure purposes, allocation of the purchase price to the credit card loans and intangible assets acquired is not significant.

INCOME TAXES - Schedule of Components of Tax (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Current
Federal	$ 262	$ 280	$ 218
State	37	41	49
Total current income tax expense	299	321	267
Federal
Federal	(66)	(201)	(13)
State	(2)	(44)	(7)
Total deferred income tax benefit	(68)	(245)	(20)
Total Provision for income taxes	$ 231	$ 76	$ 247

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

REGULATORY MATTERS AND CAPITAL ADEQUACY (Details) $ in Millions	Dec. 31, 2023 USD ($)
Tier 1 Leverage Capital Ratio
Total risk-weighted asset, Actual	$ 20,140
Combined Banks
Common equity tier 1 capital ratio
Actual Ratio	0.122
Minimum Ratio for Capital Adequacy Purposes	4.50%
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	6.50%
Tier 1 capital ratio
Actual Ratio	0.122
Minimum Ratio for Capital Adequacy Purposes	0.060
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.080
Total risk-based capital ratio
Actual Ratio	0.136
Minimum Ratio for Capital Adequacy Purposes	0.080
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.100
Tier 1 Leverage Capital Ratio
Actual Ratio	0.112
Minimum Ratio for Capital Adequacy Purposes	0.040
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.050
Comenity Bank
Common equity tier 1 capital ratio
Actual Ratio	0.197
Minimum Ratio for Capital Adequacy Purposes	6.00%
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	8.00%
Tier 1 capital ratio
Actual Ratio	0.197
Minimum Ratio for Capital Adequacy Purposes	0.045
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.065
Total risk-based capital ratio
Actual Ratio	0.211
Minimum Ratio for Capital Adequacy Purposes	0.080
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.100
Tier 1 Leverage Capital Ratio
Actual Ratio	0.179
Minimum Ratio for Capital Adequacy Purposes	0.040
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.050
Comenity Capital Bank
Common equity tier 1 capital ratio
Actual Ratio	0.166
Minimum Ratio for Capital Adequacy Purposes	6.00%
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	8.00%
Tier 1 capital ratio
Actual Ratio	0.166
Minimum Ratio for Capital Adequacy Purposes	0.045
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.065
Total risk-based capital ratio
Actual Ratio	0.180
Minimum Ratio for Capital Adequacy Purposes	0.080
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.100
Tier 1 Leverage Capital Ratio
Actual Ratio	0.152
Minimum Ratio for Capital Adequacy Purposes	0.040
Minimum Ratio to be Well Capitalized under Prompt Corrective Action Provisions	0.050

BORROWINGS OF LONG-TERM AND OTHER DEBT

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

BORROWINGS OF LONG-TERM AND OTHER DEBT

Long-term and other debt consisted of the following as of December 31:


Description	2023		2022		Contractual Maturities	Interest Rates
(Millions, except percentages)
Long-term and other debt:
Revolving line of credit	$	—	$	—	June 2026	(1)

2017 term loans	—		556		July 2024	(1)
Convertible senior notes due 2028	316		—		June 2028	4.25%
Senior notes due 2024	—		850		December 2024	4.75%
Senior notes due 2026	500		500		January 2026	7.00%
Senior notes due 2029	600		—		March 2029	9.75%
Subtotal	1,416		1,906
Less: Unamortized debt issuance costs	22		14
Total long-term and other debt	$	1,394	$	1,892

Debt issued by consolidated VIEs:
Fixed rate asset-backed term note securities	$	350	$	—	May 2026	5.02%
Conduit asset-backed securities	3,550		6,115		Various – Oct. 2024 to Oct. 2025	(2)
Subtotal	3,900		6,115
Less: Unamortized debt issuance costs	2		—
Total debt issued by consolidated VIEs	$	3,898	$	6,115

Total borrowings of long-term and other debt	$	5,292	$	8,007

______________________________

(1)The interest rate is based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin.

(2)The interest rate is based upon SOFR, or the asset-backed commercial paper costs of each individual conduit provider plus an applicable margin. As of December 31, 2023, the interest rates ranged from 6.36% to 6.59% with a weighted average rate of 6.48%. As of December 31, 2022, the interest rates ranged from 5.08% to 5.93% with a weighted average rate of 5.38%.

Certain of our long-term debt agreements include various restrictive financial and non-financial covenants. If we do not comply with certain of these covenants and an event of default occurs and remains uncured, the maturity of amounts outstanding may be accelerated and become payable, and, with respect to our credit agreement, the associated commitments may be terminated. As of December 31, 2023, we were in compliance with all such covenants.

Long-term and Other Debt

Throughout 2023, we engaged in a number of financing transactions, including entering into a new credit agreement, repaying in full and terminating our prior credit agreement, repaying in full and cancelling an existing series of senior notes, repaying in full a term loan, and consummating certain debt capital markets transactions, including an offering of convertible senior notes, a tender offer to repurchase certain outstanding senior notes, an offering of senior notes and an offering of asset-backed term notes through one of our securitization trusts. In connection with these transactions, during 2023, we reduced our outstanding Parent Company debt by approximately $500 million and refinanced our nearer-term debt maturities. Each of these transactions are described in more detail below.

Credit Agreement

In June 2023, we entered into a new credit agreement (the 2023 Credit Agreement) with Parent Company, as borrower, certain of our domestic subsidiaries, as guarantors, JPMorgan Chase Bank, N.A., as administrative agent and lender, and various other financial institutions, as lenders, which provides for a $700 million senior unsecured revolving credit facility (the Revolving Credit Facility) and a $575 million senior unsecured delayed draw term loan facility (the Term Loan Facility), all on terms and subject to the conditions set forth in the 2023 Credit Agreement. The 2023 Credit Agreement replaced, in its entirety, our prior credit agreement dated June 14, 2017, as amended (the 2017 Credit Agreement), which

was repaid in full and terminated in June 2023 in connection with the closing of our offering of convertible notes, described below. The 2023 Credit Agreement matures on June 13, 2026.

As of December 31, 2023 under the 2023 Credit Agreement, all $700 million remained available for future borrowings under the Revolving Credit Facility, and we did not have any term loans outstanding or available for future borrowings under the Term Loan Facility as discussed in further detail below. The proceeds from the Term Loan Facility were to be used for refinancing existing debt and paying fees, expenses and premiums in connection therewith, while the proceeds from the Revolving Credit Facility may be used for general corporate purposes and working capital needs, including refinancing existing debt, investments, payment of dividends and repurchases of capital stock. Borrowings under the 2023 Credit Agreement bear interest at an annual rate equal to, at our option, either (a) Term Secured Overnight Financing Rate (SOFR) plus a credit adjustment spread and the applicable margin, (b) Daily Simple SOFR plus a credit adjustment spread and the applicable margin or (c) a base rate set forth in the 2023 Credit Agreement plus the applicable margin, with the applicable margin in each case dependent upon our ratio of (i) consolidated tangible net worth to (ii) consolidated total assets, minus the sum of goodwill and intangible assets, net.

In June 2023, we borrowed $300 million under the Term Loan Facility and used those borrowings, together with cash on hand, to repurchase the Senior Notes due 2024 that were tendered in the Tender Offer (as defined below). In December 2023, we repaid all such borrowings outstanding under the Term Loan Facility with a portion of the net proceeds from our December 2023 offering of 9.750% Senior Notes due 2029 (Senior Notes due 2029) and permanently terminated all commitments under the Term Loan Facility. See “—9.750% Senior Notes due 2029” below.

Senior Notes Due 2024 and 2026

The Senior Notes set forth below are each governed by their respective indentures that include usual and customary negative covenants and events of default. These Senior Notes are unsecured and are guaranteed on a senior unsecured basis by certain of our existing and future domestic restricted subsidiaries that incur or in any other manner become liable for any debt under our domestic credit facilities, including the 2023 Credit Agreement.

Due December 15, 2024: In December 2019, we issued and sold $850 million aggregate principal amount of 4.750% Senior Notes due December 15, 2024 (the Senior Notes due 2024). The Senior Notes due 2024 accrue interest on the outstanding principal amount at the rate of 4.750% per annum from December 20, 2019, payable semi-annually in arrears, on June 15 and December 15 of each year. Concurrently with the launch of the convertible notes offering (see further discussion below), we commenced a cash tender offer (the Tender Offer) for any and all of the $850 million in aggregate principal amount of our 4.750% Senior Notes due 2024. The consideration offered for each $1,000 principal amount of the Senior Notes due 2024 was $980, plus accrued and unpaid interest, for any and all notes validly tendered. In June 2023, we repurchased and cancelled $565 million in aggregate principal amount of Senior Notes due 2024 that were validly tendered in the Tender Offer. In December 2023, we redeemed the remaining $285 million of these notes with a portion of the net proceeds from our December 2023 offering of Senior Notes due 2029, and there were no Senior Notes due 2024 outstanding as of December 31, 2023. See “—9.750% Senior Notes due 2029” below.

Due January 15, 2026: In September 2020, we issued and sold $500 million aggregate principal amount of 7.000% Senior Notes due January 15, 2026 (the Senior Notes due 2026). The Senior Notes due 2026 accrue interest on the outstanding principal amount at the rate of 7.000% per annum from September 22, 2020, payable semi-annually in arrears, on March 15 and September 15 of each year, beginning on March 15, 2021. The Senior Notes due 2026 will mature on January 15, 2026, subject to earlier repurchase or redemption. In January 2024, we redeemed $400 million in aggregate principal among of the Senior Notes due 2026 with the net proceeds from the January 2024 offering of Senior Notes due 2029, together with $100 million of cash on hand. See “—9.750% Senior Notes due 2029” below.

4.25% Convertible Senior Notes Due 2028

In June 2023, we issued and sold $316 million aggregate principal amount of 4.25% Convertible Senior Notes due 2028 (the Convertible Notes). The Convertible Notes bear interest at an annual rate of 4.25%, payable semi-annually in arrears on June 15 and December 15 of each year, beginning on December 15, 2023. The Convertible Notes mature on June 15, 2028, unless earlier repurchased, redeemed or converted. We used the net proceeds from the offering of the Convertible Notes to repay in full and terminate the 2017 Credit Agreement.

The Convertible Notes are convertible, under certain conditions, until March 15, 2028, and on or after such date without condition, at an initial conversion rate of 26.0247 shares of our common stock per $1,000 principal amount of Convertible Notes, subject to adjustment, which represents a 25% conversion premium based on the last reported sale price of our common stock of $30.74 on June 8, 2023 prior to issuing the Convertible Notes. Upon any such conversion, we will pay cash up to the aggregate principal amount of the Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock (at our election), in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.

At our option, we may redeem for cash, all or a portion of the Convertible Notes on or after June 21, 2026, and before the 51st scheduled trading day before the maturity date, but only if the closing price of our common stock reaches specified targets as defined in the indenture governing the Convertible Notes. The redemption price will equal 100% of the principal amount of the redeemed Convertible Notes plus accrued interest, if any.

If we experience a fundamental change, as defined in the indenture governing the Convertible Notes, the note holders may require us to purchase for cash all or a portion of their notes, subject to specified exceptions, at a price equal to 100% of the principal amount of the Convertible Notes plus any accrued and unpaid interest.

In connection with the issuance of the Convertible Notes, we entered into privately negotiated capped call transactions (the Capped Call) with certain financial institution counterparties. These transactions are expected generally to reduce potential dilution to our common stock upon any conversion of Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of the Convertible Notes, with such reduction and/or offset subject to a cap, based on the cap price. The base price of the Capped Call transactions is $38.43, representing a premium of 25% over the last reported sale price of our common stock of $30.74 on June 8, 2023, while the cap price is initially $61.48, which represents a premium of 100% over that same sale price on June 8, 2023. Within the share price range of $38.43 to $61.48 the Capped Call transactions provide economic value to us from the counterparties, upon maturity or earlier conversion. The Capped Call transactions met the conditions under the related accounting guidance for equity classification and are not measured at fair value on a recurring basis; the price paid of $39 million was recorded in Additional paid-in capital, net of tax, in the Consolidated Balance Sheet.

9.750% Senior Notes Due 2029

In December 2023, we issued and sold $600 million aggregate principal amount of 9.750% Senior Notes due 2029 (the Senior Notes due 2029). The Senior Notes due 2029 accrue interest on the outstanding principal amount at the rate of 9.750% per annum from December 22, 2023, payable semi-annually in arrears, on March 15 and September 15 of each year, beginning on March 15, 2024. The Senior Notes due 2029 will mature on March 15, 2029, subject to earlier repurchase or redemption. We used the proceeds of the December 2023 offering of Senior Notes due 2029 to redeem in full the outstanding Senior Notes due 2024 and repay in full the outstanding term loans under the Term Loan Facility of our Credit Agreement.

Subsequent to December 31, 2023, in January 2024 we issued and sold an additional $300 million aggregate principal amount of Senior Notes due 2029. The Senior Notes due 2029 issued in January 2024 were issued as additional notes under the same indenture pursuant to which the initial $600 million of Senior Notes due 2029 were issued in December 2023. The Senior Notes due 2029 that were issued in both December 2023 and January 2024 constitute a single series of notes and have the same terms, other than the issue date and issue price. We sold the additional $300 million of Senior Notes due 2029 at an issue price of 101.00% of principal plus accrued interest from December 22, 2023. We used the proceeds of the January 2024 offering of Senior Notes due 2029, together with $100 million of cash on hand, to fund the redemption of $400 million in aggregate principal amount of our outstanding 7.000% Senior Notes due 2026.

Debt Issued by Consolidated VIEs

An asset-backed security is a security whose value and income payments are derived from and collateralized by a specified pool of underlying assets – in our case, our credit card loans. The sale of the pool of underlying assets to general investors is accomplished through a securitization process. We regularly sell our credit card loans to our Trusts, which are consolidated. The liabilities of these consolidated VIEs include asset-backed securities for which creditors, or beneficial interest holders, do not have recourse to our general credit.

Fixed Rate Asset-Backed Term Notes

In May 2023, World Financial Network Credit Card Master Note Trust issued $399 million of Series 2023-A public term asset-backed notes, which mature in May 2026. The offering consisted of $350 million of Class A notes with a fixed interest rate of 5.02% per year, $31 million of Class M notes with a fixed interest rate of 5.27% per year, and $18 million of zero coupon Class B notes. The Class M and B notes were retained by us and eliminated from the Consolidated Balance Sheet.

Conduit Facilities

We maintained committed syndicated bank Conduit Facilities to support the funding of our credit card loans for our Trusts. Borrowings outstanding under each private Conduit Facility bear interest at a margin above SOFR, or the asset-backed commercial paper costs of each individual conduit provider.

As of December 31, 2022, total capacity under our Conduit Facilities was $6.5 billion, of which $6.1 billion had been drawn down and was included in Debt issued by consolidated variable interest entities (VIEs) in the Consolidated Balance Sheet.

During the twelve months ended December 31, 2023, we renewed lender commitments under our Conduit Facilities, bringing our capacity to $5.4 billion, and extended the various maturities to October 2024, February 2025, September 2025 and October 2025. Specifically, in February 2023, the World Financial Network Credit Card Master Note Trust amended its 2009-VFN Conduit Facility, decreasing the capacity from $2.8 billion to $2.7 billion and extending the maturity to October 2024. In December 2023, this facility was again amended extending the maturity to October 2025. In February 2023, in connection with the sale of the BJ’s portfolio, the World Financial Capital Master Note Trust amended its 2009-VFN Conduit Facility removing the assets related to the BJ’s portfolio. In April 2023, this facility was again amended decreasing the capacity from $2.5 billion to $2.3 billion and extending the maturity to February 2025. In March 2023, CCB repaid the Comenity Capital Asset Securitization Trust’s 2022-VFN Conduit Facility and terminated the related lending commitment, decreasing capacity by $1.0 billion. However, the structure of the applicable Trust did not change, including the Trust assets, providing for the option to pledge those assets in the future, and in September 2023, the Comenity Capital Asset Securitization Trust was amended to include a new credit commitment of $250 million with a maturity of September 2025. In June 2023, the World Financial Network Credit Card Master Trust III amended its 2009-VFC conduit facility, extending a portion of the maturity to October 2023, and another portion of the maturity to October 2024. In August 2023, this same facility was amended to replace the maturing commitment with a new $100 million commitment with a maturity of October 2024.

As of December 31, 2023, total capacity under our Conduit Facilities was $5.4 billion, of which $3.6 billion had been drawn and included in Debt issued by consolidated VIEs in the Consolidated Balance Sheet.

Maturities

The future principal payments for our Long-term and other debt are as follows, as of December 31, 2023:


Year	Long-Term and Other Debt		Debt Issued by Consolidated VIEs		Total
(Millions)
2024	$	—	$	260	$	260
2025	—		3,290		3,290
2026	500		350		850
2027	—		—		—
2028	316		—		316
Thereafter	600		—		600
Total maturities	1,416		3,900		5,316
Unamortized debt issuance costs	(22)		(2)		(24)
	$	1,394	$	3,898	$	5,292

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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-Subparagraph (a)
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Jan. 01, 2020
Deferred tax assets
Deferred revenue	$ 14	$ 14
Allowance for credit losses	554	598
Net operating loss carryforwards and other carryforwards	51	39
Operating lease liabilities	34	30
Depreciation	24	0
Accrued expenses and other	79	88
Total deferred tax assets	756	769
Valuation allowance	(21)	(26)
Deferred tax assets, net of valuation allowance	735	743
Deferred tax liabilities
Deferred income	73	148
Depreciation	0	7
Right of use assets	22	20
Intangible assets	11	16
Total deferred tax liabilities	106	191
Net deferred tax assets	629	552	$ 629
Deferred Tax Assets [Line Items]
Deferred tax asset, net	629	552	$ 629
Other Assets
Deferred tax liabilities
Net deferred tax assets	629	552
Deferred Tax Assets [Line Items]
Deferred tax asset, net	$ 629	$ 552

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

12 Months Ended

Dec. 31, 2023

Other Non-Interest Income and Other Non-Interest Expenses [Abstract]

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSE

OTHER NON-INTEREST INCOME AND OTHER NON-INTEREST EXPENSES

The following table provides the components of Other non-interest income for the years ended December 31:


	2023		2022		2021
(Millions)
Payment protection products	$	132	$	154	$	141
(Loss) income from equity method investment in LVI	(6)		(44)		2
Other	2		4		3
Total other non-interest income	$	128	$	114	$	146

The following table provides the components of Other non-interest expenses for the years ended December 31:


	2023		2022		2021
(Millions)
Professional services and regulatory fees	$	128	$	142	$	136
Occupancy expense	22		23		26
Other(1)	69		62		60
Total other non-interest expense	$	219	$	227	$	222

______________________________

(1) Primarily related to costs associated with various other individually insignificant operating activities.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 2,265	$ 2,086	$ 1,522
Changes in other comprehensive (loss) income	2	(19)	(56)
Recognition resulting from the spinoff of LoyaltyOne's foreign subsidiaries			59
Ending balance	2,918	2,265	2,086
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(21)	(2)	(5)
Ending balance	(19)	(21)	(2)
Net Unrealized Losses on AFS Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(18)	1	23
Changes in other comprehensive (loss) income	2	(19)	(21)
Recognition resulting from the spinoff of LoyaltyOne's foreign subsidiaries			(1)
Ending balance	(16)	(18)	1
Net Unrealized Losses on Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	0	0	(1)
Changes in other comprehensive (loss) income	0	0	2
Recognition resulting from the spinoff of LoyaltyOne's foreign subsidiaries			(1)
Ending balance	0	0	0
Net Unrealized Losses on Net Investment Hedge
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	0	0	(7)
Changes in other comprehensive (loss) income	0	0	0
Recognition resulting from the spinoff of LoyaltyOne's foreign subsidiaries			7
Ending balance	0	0	0
Foreign Currency Translation Adjustments
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(3)	(3)	(20)
Changes in other comprehensive (loss) income	0	0	(37)
Recognition resulting from the spinoff of LoyaltyOne's foreign subsidiaries			54
Ending balance	$ (3)	$ (3)	$ (3)

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 852
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481372/852-10-55-10

Reference 2: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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-Paragraph 12
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-URI https://asc.fasb.org//1943274/2147480167/946-830-55-12

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(4)(b))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 3
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-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 3
-Subparagraph (SX 210.6-09(7))
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-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 11: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 12: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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-URI https://asc.fasb.org//1943274/2147480566/210-10-S99-1

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 14: http://fasb.org/us-gaap/role/ref/legacyRef
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-Paragraph 2
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480418/310-10-S99-2

+ Details

OTHER ASSETS (Details) - USD ($) $ in Millions	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021	Jan. 01, 2020
Other Assets [Line Items]
Deferred tax asset, net	$ 629	$ 552		$ 629
Deferred contract costs	285	344
Accounts receivable, net	144	164
Right-of-use assets - operating	98	88
Restricted cash included within Other Assets	26	36	$ 877
Investment in LVI	0	6
Other	182	210
Total other assets	$ 1,364	$ 1,400
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Total other assets	Total other assets
LVI
Other Assets [Line Items]
Restricted cash included within Other Assets	$ 50

DEPOSITS - Maturity of Deposits (Details) $ in Millions	Dec. 31, 2023 USD ($)
Other Liabilities [Abstract]
2024	$ 4,617
2025	1,142
2026	429
2027	635
2028	174
Thereafter	0
Certificates of deposit	6,997
Time deposits, unamortized debt discount	$ 6

BORROWINGS OF LONG-TERM AND OTHER DEBT (Tables)

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of debt

Long-term and other debt consisted of the following as of December 31:


Description	2023		2022		Contractual Maturities	Interest Rates
(Millions, except percentages)
Long-term and other debt:
Revolving line of credit	$	—	$	—	June 2026	(1)

2017 term loans	—		556		July 2024	(1)
Convertible senior notes due 2028	316		—		June 2028	4.25%
Senior notes due 2024	—		850		December 2024	4.75%
Senior notes due 2026	500		500		January 2026	7.00%
Senior notes due 2029	600		—		March 2029	9.75%
Subtotal	1,416		1,906
Less: Unamortized debt issuance costs	22		14
Total long-term and other debt	$	1,394	$	1,892

Debt issued by consolidated VIEs:
Fixed rate asset-backed term note securities	$	350	$	—	May 2026	5.02%
Conduit asset-backed securities	3,550		6,115		Various – Oct. 2024 to Oct. 2025	(2)
Subtotal	3,900		6,115
Less: Unamortized debt issuance costs	2		—
Total debt issued by consolidated VIEs	$	3,898	$	6,115

Total borrowings of long-term and other debt	$	5,292	$	8,007

______________________________

(1)The interest rate is based upon the Secured Overnight Financing Rate (SOFR) plus an applicable margin.

Schedule of maturity of debt

The future principal payments for our Long-term and other debt are as follows, as of December 31, 2023:


Year	Long-Term and Other Debt		Debt Issued by Consolidated VIEs		Total
(Millions)
2024	$	—	$	260	$	260
2025	—		3,290		3,290
2026	500		350		850
2027	—		—		—
2028	316		—		316
Thereafter	600		—		600
Total maturities	1,416		3,900		5,316
Unamortized debt issuance costs	(22)		(2)		(24)
	$	1,394	$	3,898	$	5,292

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 718	$ 223	$ 801
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	1,229	1,594	544
Depreciation and amortization	116	113	123
Deferred income taxes	(68)	(245)	(15)
Non-cash stock compensation	44	33	29
Amortization of deferred financing costs	26	24	31
Amortization of deferred origination costs	92	86	75
Gain on portfolio sale	(230)	0	(10)
Change in other operating assets and liabilities, net of acquisitions and dispositions
Change in other assets	28	(134)	(30)
Change in other liabilities	0	87	(11)
Other	32	67	6
Net cash provided by operating activities	1,987	1,848	1,543
CASH FLOWS FROM INVESTING ACTIVITIES
Change in credit card and other loans	(1,154)	(3,222)	(1,805)
Change in redemption settlement assets	0	0	(113)
Payments for acquired businesses, net of cash and restricted cash	0	0	(75)
Proceeds from sale of credit card loan portfolios	2,499	0	512
Purchases of credit card loan portfolios	(473)	(1,804)	(110)
Purchases of investments	(50)	(43)	(93)
Maturities of investments	14	30	73
Other, including capital expenditures	(48)	(72)	(80)
Net cash provided by (used in) investing activities	788	(5,111)	(1,691)
CASH FLOWS FROM FINANCING ACTIVITIES
Unsecured borrowings under debt agreements	1,401	218	38
Repayments/maturities of unsecured borrowings under debt agreements	(1,882)	(319)	(864)
Debt issued by consolidated variable interest entities	2,592	4,248	4,278
Repayments/maturities of debt issued by consolidated variable interest entities	(4,807)	(3,587)	(4,538)
Net (decrease) increase in deposits	(209)	2,778	1,228
Debt proceeds from spinoff of Loyalty Ventures Inc.	0	0	652
Transfers to Loyalty Ventures Inc. related to spinoff	0	0	(127)
Payment of deferred financing costs	(63)	(13)	(13)
Payment of capped call transactions	(39)	0	0
Dividends paid	(42)	(43)	(42)
Repurchase of common stock	(35)	(12)	0
Other	(2)	(3)	(4)
Net cash (used in) provided by financing activities	(3,086)	3,267	608
Change in cash, cash equivalents and restricted cash	(311)	4	460
Cash, cash equivalents and restricted cash at beginning of period	3,927	3,923	3,463
Cash, cash equivalents and restricted cash at end of period	3,616	3,927	3,923
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for interest	861	466	357
Cash paid during the year for income taxes, net	292	338	325
Cash and cash equivalents reconciliation
Cash and cash equivalents	3,590	3,891	3,046
Restricted cash included within Other Assets	26	36	877
Total cash, cash equivalents and restricted cash	$ 3,616	$ 3,927	$ 3,923

PARENT COMPANY FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of balance sheets

Parent Company – Condensed Balance Sheets


	December 31,
	2023		2022
(Millions)
Assets
Cash and cash equivalents	$	2	$	5
Investment in subsidiaries	3,615		4,159
Intercompany receivables, net	612		—
Investment in LVI	—		6
Other assets	147		119
Total assets	$	4,376	$	4,289
Liabilities
Long-term and other debt	$	1,394	$	1,892
Intercompany liabilities, net	—		86
Other liabilities	64		46
Total liabilities	1,458		2,024
Stockholders’ equity	2,918		2,265
Total liabilities and stockholders’ equity	$	4,376	$	4,289

Schedule of statements of income

Parent Company – Condensed Statements of Income


	Years Ended December 31,
	2023		2022		2021
(Millions)
Total interest income	$	12	$	11	$	12
Total interest expense	111		107		103
Net interest expense	(99)		(96)		(91)
Dividends from subsidiaries	1,063		382		535
Loss from equity method investment	(6)		(44)		—
Total net interest and non-interest income	958		242		444
Total non-interest expenses	12		1		1
Income before income taxes and equity in undistributed net income of subsidiaries	946		241		443
Benefit for income taxes	31		22		36
Income before equity in undistributed net income of subsidiaries	977		263		479
Equity in undistributed net (loss) income of subsidiaries	(259)		(40)		322
Net income	$	718	$	223	$	801

Schedule of statements of comprehensive income

Parent Company – Condensed Statements of Comprehensive Income


	Years Ended December 31,
	2023		2022		2021
(Millions)
Net income	$	718	$	223	$	801
Other comprehensive income (loss), net of tax	—		(3)		7
Total comprehensive income, net of tax	$	718	$	220	$	808

Schedule of statements of cash flows

Parent Company – Condensed Statements of Cash Flows


	Years Ended December 31,
	2023		2022			2021
(Millions)
Net cash used in operating activities	$	(422)	$	(219)		$	(398)
Cash flows from investing activities:

Dividends received	1,063		383			533
Purchases of available-for-sale securities	—		—			(10)
Net cash provided by investing activities	1,063		383			523
Cash flows from financing activities:
Debt proceeds from spinoff of LVI	—		—			750
Borrowings under debt agreements	1,401		218			38
Repayments of borrowings under debt agreements	(1,882)		(319)			(864)
Payment of deferred financing costs	(45)		—			(4)
Payment of capped call transactions	(39)		—			—
Dividends paid	(42)		(43)			(42)
Repurchase of common stock	(35)		(12)		—	—
Other	(2)		(3)			(3)
Net cash used in financing activities	(644)		(159)			(125)
Change in cash, cash equivalents and restricted cash	(3)		5			—
Cash, cash equivalents and restricted cash at beginning of year	5		—			—
Cash, cash equivalents and restricted cash at end of year	$	2	$	5		$	—

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Schedule of other significant accounting policies

Significant Accounting Policy

Note Number

Note Title

Credit Card and Other Loans

Note 2

Credit Card and Other Loans

Allowance for Credit Losses

Note 3

Allowance for Credit Losses

Transfers of Financial Assets

Note 4

Securitizations

Investments

Note 5

Investments

Goodwill

Note 6

Goodwill and Intangible Assets, Net

Intangible Assets, Net

Note 6

Goodwill and Intangible Assets, Net

Leases

Note 8

Leases

Stock Compensation Expense

Note 18

Stockholders' Equity

Income Taxes

Note 19

Income Taxes

Earnings Per Share

Note 20

Earnings Per Share

CREDIT CARD AND OTHER LOANS - Troubled Debt Restructurings (Details) - Consumer Portfolio Segment $ in Millions	12 Months Ended
	Dec. 31, 2023 USD ($) modification	Dec. 31, 2022 USD ($) restructuring
Troubled debt restructurings that subsequently defaulted
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Restructurings	14,196	63,726
Outstanding Balance	$ 23	$ 88
Troubled debt restructurings
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of Restructurings \| restructuring		149,815
Pre-modification Outstanding Balance		$ 227
Post-modification Outstanding Balance		$ 227

FAIR VALUES OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment carrying amount	$ 0	$ 6
Loyalty Ventures Inc.
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity method investment, other than temporary impairment	$ 6	44
Investment carrying amount		6
Equity method investments, fair value		$ 11

DEPOSITS

12 Months Ended

Dec. 31, 2023

Other Liabilities Disclosure [Abstract]

DEPOSITS

. DEPOSITS

Deposits were categorized as interest-bearing or non-interest-bearing as follows, as of December 31:


	2023		2022
(Millions)
Interest-bearing	$	13,594	$	13,787
Non-interest-bearing (including cardholder credit balances)	26		39
Total deposits	$	13,620	$	13,826

Deposits by deposit type were as follows as of December 31:


	2023		2022
(Millions)
Savings accounts
Direct-to-consumer (retail)	$	2,863	$	2,782
Wholesale	3,734		3,954
Certificates of deposit
Direct-to-consumer (retail)	3,591		2,684
Wholesale	3,406		4,367
Cardholder credit balances	26		39
Total deposits	$	13,620	$	13,826

The scheduled maturities of certificates of deposit were as follows as of December 31, 2023:


(Millions)
2024(1)	$	4,617
2025	1,142
2026	429
2027	635
2028	174
Thereafter	—
Total certificates of deposit	$	6,997

__________________________________

(1) The 2023 balance includes $6 million in unamortized debt issuance costs, which are associated with the entire portfolio of certificates of deposit.

As of December 31, 2023 and December 31, 2022, deposits that exceeded applicable FDIC insurance limits, which are generally $250,000 per depositor, per insured bank, per ownership category, were estimated to be $509 million (4% of Total deposits) and $719 million (5% of Total deposits), respectively. The measurement of estimated uninsured deposits aligns with regulatory guidelines.

DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	BASIS OF PRESENTATION The audited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Beginning in the year ended December 31, 2021, as a result of the spinoff of our LoyaltyOne segment and its classification as discontinued operations, we adjusted the presentation of our audited Consolidated Financial Statements from our historical approach under Securities and Exchange Commission (SEC) Regulation S-X Article 5, which is broadly applicable to all “commercial and industrial companies”, to Article 9, which is applicable to “bank holding companies” (BHCs). While neither BFH nor any of our subsidiaries are considered a “bank” within the meaning of the Bank Holding Company Act, the changes from the historical presentation, to the BHC presentation, the most significant of which reflect a reclassification of Interest expense within Net interest income, are intended to reflect our operations going forward and better align us with peers for comparability purposes. The audited Consolidated Financial Statements also include amounts that relate to the previously disclosed discontinued operations associated with the spinoff of our former LoyaltyOne segment in 2021 and the sale of our former Epsilon segment in 2019. Such amounts have been classified within Discontinued operations and primarily relate to the after-tax impact of contractual indemnification and tax-related matters. For additional information about the adjusted presentation of our audited Consolidated Financial Statements and our previously disclosed discontinued operations please refer to Note 22, “Discontinued Operations and Bank Holding Company Presentation” in our Annual Report on Form 10-K for the year ended December 31, 2021.
Principles of Consolidation	Principles of Consolidation The accompanying audited Consolidated Financial Statements include the accounts of BFH and all subsidiaries in which we have a controlling financial interest. For voting interest entities, a controlling financial interest is determined when we are able to exercise control over the operating and financial decisions of the investee. For variable interest entities (VIEs), which are themselves determined based on the amount and characteristics of the equity in the entity, we have a controlling financial interest when we are determined to be the primary beneficiary. The primary beneficiary is the party having both the power to exercise control over the activities that most significantly impact the VIE’s financial performance, as well as the obligation to absorb the losses of, or the right to receive the benefits from, the VIE that could potentially be significant to that VIE. We are the primary beneficiary of our securitization trusts (the Trusts) and therefore consolidate these Trusts within our audited Consolidated Financial Statements. In cases where we do not have a controlling financial interest, but we are able to exert significant influence over the operating and financial decisions of the entity, we account for such investments under the equity method. All intercompany transactions have been eliminated.
Amounts Based on Estimates and Judgments	Amounts Based on Estimates and Judgments The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments about future events that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the audited Consolidated Financial Statements, as well as the reported amounts of income and expenses during the reporting periods. The most significant of those estimates and judgments relate to our Allowance for credit losses, Provision for income taxes and Goodwill; actual results could differ.
Revenue	Our primary source of revenue is from Interest and fees on loans from our various credit card and other loan products, and to a lesser extent from contractual relationships with our brand partners. The following describes our recognition policies across the various sources of revenue we earn. Interest and fees on loans: Represents revenue earned on customer accounts owned by us, and is recognized in the period earned in accordance with the contractual provisions of the credit agreements. Interest and fees continue to accrue on all accounts, except in limited circumstances, until the account balance and all related interest and fees are paid, or charged-off which happens in the month during which an account becomes 180 days past due for credit card loans or 120 days past due for other loans, which consist primarily of buy now, pay later (BNPL) products such as installment loans and our “split-pay” offerings. Charge-offs for unpaid interest and fees, as well as any adjustments to the Allowance for credit losses associated with unpaid interest and fees, are recorded as a reduction of Interest and fees on loans. Direct loan origination costs on Credit card and other loans are deferred and amortized on a straight-line basis over a one-year period for credit card loans, or for BNPL loans over the life of the loan, and are recorded as a reduction of Interest and fees on loans. As of December 31, 2023 and 2022, the remaining unamortized deferred direct loan origination costs were $60 million and $46 million, respectively, and included in Total credit card and other loans. Interest on cash and investment securities: Represents revenue earned on cash and cash equivalents as well as investments in debt securities, and is recognized in the period earned. Interchange revenue, net of retailer share arrangements: Represents revenue earned from merchants, including our brand partners, and cardholders from processing and servicing accounts, and is recognized as such services are performed. Revenue earned from merchants, including our brand partners, primarily consists of merchant and interchange fees, which are transaction fees charged to the merchant for the processing of credit card transactions and are recognized at the time the cardholder transaction occurs. Costs of cardholder reward arrangements are recognized when the rewards are earned by the cardholders and are generally classified as a reduction of revenue with the related liability included in Other liabilities on the Consolidated Balance Sheets. Our credit card program agreements may also provide for royalty payments to our brand partners based on purchased volume or if certain contractual incentives are met, such as if the economic performance of the program exceeds a contractually defined threshold, or for payments for new accounts. These amounts are recorded as a reduction of revenue in the period incurred. Other non-interest income: Represents ancillary revenues earned from cardholders, consisting primarily of monthly fees from the purchase of certain payment protection products which are recognized based on the average cardholder account balance over time and can be cancelled at any point by the cardholder, as well as gains or losses on the sales of loan portfolios, and losses from our equity method investment in Loyalty Ventures Inc. (LVI). Contract Costs: We recognize as an asset contract costs, such as up-front payments made pursuant to contractual agreements with brand partners. Such costs are deferred and recognized on a straight-line basis over the term of the related agreement. Depending on the nature of the contract costs, the amortization is recorded as a reduction to Non-interest income, or as a charge to Non-interest expenses, in the Consolidated Statements of Income. Amortization of contract costs recorded as a reduction of Interchange revenue, net of retailer share arrangements, was $59 million, $72 million and $64 million for the years ended December 31, 2023, 2022 and 2021, respectively; amortization of contract costs recorded across various Non-interest expense categories totaled $12 million, $12 million and $11 million for those same years, respectively. As of December 31, 2023 and 2022, the remaining unamortized contract costs were $285 million and $344 million, respectively, and are included in Other assets on the Consolidated Balance Sheets. We perform an impairment assessment when events or changes in circumstances indicate that the carrying amount of our contract costs may not be recoverable. Our impairment assessment for certain of our deferred contract costs resulted in a $7 million impairment charge which has been recognized in Other non-interest expenses in our Consolidated Statements of Income for the year ended December 31, 2023. No such impairment charges were recognized during either of the years ended December 31, 2022 or 2021. Interest expense: Represents interest incurred primarily to fund Credit card and other loans, general corporate purposes and liquidity needs, and is recognized as incurred. Interest expense is divided between Interest on deposits, which relates to interest expense on Deposits taken from customers, and Interest on borrowings, which relates to interest expense on our Long-term and other debt. Card and processing expenses: Primarily represents costs incurred in relation to customer service activities, including embossing, and postage and mailing, as well as fraud and credit bureau inquiries. These costs are expensed as incurred. Information processing and communication expenses: Represents costs incurred in relation to data processing, and software license and maintenance charges. These costs are expensed as incurred. Marketing expenses: Represents costs incurred in campaign development and initial placement of advertising, which are expensed in the period in which the advertising first takes place. Other marketing expenses are expensed as incurred.
Cash and cash equivalents and restricted cash	Cash and cash equivalents: Includes cash and due from banks, interest-bearing cash balances such as those invested in money market funds, as well as other highly liquid short-term investments with an original maturity of three months or less, and restricted cash.Restricted cash primarily represents cash restricted for principal and interest repayments of debt issued by our consolidated VIEs, and is recorded in Other assets on the Consolidated Balance Sheets.
Derivative financial instruments	Derivative financial instruments: From time to time, we use derivative financial instruments to manage our exposure to various financial risks; we do not trade or speculate in derivatives. Subject to the criteria set forth in GAAP, we will either designate our derivatives in hedging relationships, or as economic hedges should the criteria in GAAP not be met. Our derivative financial instruments were insignificant to the audited Consolidated Financial Statements for the periods presented.
Property and equipment	Property and equipment: Furniture, equipment, buildings and leasehold improvements are carried at cost less accumulated depreciation, and depreciation is recognized on a straight-line basis. Costs incurred during construction are capitalized; depreciation begins once the asset is placed in service and is also recognized on a straight-line basis. Our furniture and equipment is depreciated over the estimated useful lives of the assetsCosts associated with the acquisition or development of internal-use software are also capitalized and recorded in Property and equipment. Once the internal-use software is ready for its intended use, the cost is amortized on a straight-line basis over the software’s estimated useful life.
Property and equipment: impairment	We review long-lived assets and asset groups for impairment whenever events or circumstances indicate their carrying amounts may not be recoverable. An impairment is recognized if the carrying amount is not recoverable and exceeds the asset or asset group’s fair value. No impairment was recognized during the years ended December 31, 2023, 2022 and 2021.
Concentrations	CONCENTRATIONS We depend on a limited number of large partner relationships for a significant portion of our revenue. As of and for the year ended December 31, 2023, our five largest credit card programs accounted for approximately 47% of our Total net interest and non-interest income excluding the gain on sale and 37% of our End-of-period credit card and other loans. In particular, our programs with (alphabetically) Signet Jewelers, Ulta Beauty and Victoria’s Secret & Co. and its retail affiliates each accounted for more than 10% of our Total net interest and non-interest income for the year ended December 31, 2023. A decrease in business from, or the loss of, any of our significant partners for any reason, could have a material adverse effect on our business. We previously announced the non-renewal of our contract with BJ’s Wholesale Club (BJ’s) and the sale of the BJ’s portfolio, which closed in late February 2023. For the year ended December 31, 2022, BJ’s branded co-brand accounts generated approximately 10% of our Total net interest and non-interest income, and BJ’s branded co-brand accounts were responsible for approximately 11% of our Total credit card and other loans as of December 31, 2022.
Recently Adopted and Recently Issued Accounting Standards	RECENTLY ADOPTED AND RECENTLY ISSUED ACCOUNTING STANDARDS In March 2022, the FASB issued new accounting and disclosure guidance for troubled debt restructurings effective January 1, 2023, with early adoption permitted. Specifically, the new guidance eliminates the previous recognition and measurement guidance for troubled debt restructurings while enhancing the disclosure requirements for certain loan modifications and write-offs. Effective January 1, 2023 we adopted the guidance, with no significant impact on our results of operations, financial position, regulatory risk-based capital, or on our operational processes, controls and governance in support of the new guidance. In March 2023, the FASB issued new accounting guidance expanding the election to apply the proportional amortization method of accounting to tax credit investments beyond low-income-housing tax credit investments, when certain conditions are met. Effective January 1, 2024 we adopted the guidance; the accounting policy election from which did not have a significant impact on our results of operations, financial position, regulatory risk-based capital, or on our operational processes, controls and governance in support of the new guidance. In November 2023, the FASB issued new segment reporting guidance that will be effective beginning with segment disclosures for our Annual Report on Form 10-K for the year ending December 31, 2024, and effective for interim reporting periods beginning in 2025. Early adoption is permitted; although, we do not plan to early adopt. The new guidance requires interim and annual disclosure of significant segment expense categories and amounts that are regularly provided to the chief operating decision maker, as well as disclosure of the aggregate amount and description of other segment items beyond significant segment expenses. The guidance will result in expanded disclosures for our single reportable segment but is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance. In December 2023, the Financial Accounting Standards Board (FASB) issued new income tax disclosure guidance, with the biggest changes impacting disclosures provided on an annual basis, that will be effective beginning with our income tax disclosures for our Annual Report on Form 10-K for the year ending December 31, 2025. Early adoption is permitted; although, we do not plan to early adopt. The new guidance requires greater disaggregation of rate reconciliation and income taxes paid information, as well as other changes intended to enhance the transparency and decision-usefulness of income tax disclosures. The new guidance will require enhancements to our income tax disclosures but is not expected to have a significant impact on our financial reporting, or on our operational processes, controls and governance in support of the new guidance.
Credit Card and Other Loans	Our payment and lending solutions result in the origination of Credit card and other loans, which are recorded at the time a borrower enters into a point-of-sale transaction with a merchant. Credit card loans represent revolving lines of credit and have a range of terms that include credit limits, interest rates and fees, which can be revised over time based on new information about the cardholder, in accordance with applicable regulations and the governing terms and conditions. Cardholders choosing to make a payment of less than the full balance due, instead of paying in full, are subject to finance charges and are required to make monthly payments based on pre-established amounts. Other loans, which consist primarily of BNPL products such as installment loans and our “split-pay” offerings, have a range of fixed terms such as interest rates, fees and repayment periods, and borrowers are required to make pre-established monthly payments over the term of the loan in accordance with the applicable terms and conditions. Credit card and other loans include principal and any related accrued interest and fees and are presented on the Consolidated Balance Sheets net of the Allowance for credit losses. We continue to accrue interest and fee income on all accounts, except in limited circumstances, until the related balance and all related interest and fees are paid or charged-off. We generally classify our Credit card and other loans as held for investment. We sell a majority of our Credit card loans originated by Comenity Bank (CB) and by Comenity Capital Bank (CCB), which together are referred to herein as the “Banks”, to certain of our master trusts (the Trusts), which are consolidated VIEs, and therefore these loans are restricted for securitization investors. All new originations of Credit card and other loans are determined to be held for investment at origination because we have the intent and ability to hold them for the foreseeable future. In determining what constitutes the foreseeable future, we consider the average life and homogenous nature of our Credit card and other loans. In assessing whether our Credit card and other loans continue to be held for investment, we also consider capital levels and scheduled maturities of funding instruments used. The assertion regarding the intent and ability to hold Credit card and other loans for the foreseeable future can be made with a high degree of certainty given the maturity distribution of our direct-to-consumer (DTC or retail) deposits and other funding instruments; the demonstrated ability to replace maturing time-based deposits and other borrowings with new deposits or borrowings; and historic payment activity on Credit card and other loans. Due to the homogenous nature of our Credit card loans, amounts are classified as held for investment on a brand partner portfolio basis. From time to time certain Credit card loans are classified as held for sale, as determined on a brand partner portfolio basis. We carry held for sale assets at the lower of aggregate cost or fair value and continue to recognize finance charges on an accrual basis. Cash flows associated with Credit card and other loans originated or purchased for investment are classified as Cash flows from investing activities, regardless of any subsequent change in intent and ability.
Financing Receivable	Credit Card Loans We use a “pooled” approach to estimate expected credit losses for financial assets with similar risk characteristics. We have evaluated multiple risk characteristics across our credit card loans portfolio, and determined delinquency status and overall credit quality to be the most significant characteristics for estimating expected credit losses. To estimate our Allowance for credit losses, we segment our credit card loans on the basis of delinquency status, credit quality risk score and product. These risk characteristics are evaluated on at least an annual basis, or more frequently as facts and circumstances warrant. In determining the estimated life of our credit card loans, payments were applied to the measurement date balance with no payments allocated to future purchase activity. We use a combination of First In First Out and the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD Act) methodologies to model balance paydown.
Transfers of Financial Assets	SECURITIZATIONS We account for transfers of financial assets as either sales or financings. Transfers of financial assets that are accounted for as a sale are removed from the Consolidated Balance Sheets with any realized gain or loss reflected in the Consolidated Statements of Income during the period in which the sale occurs. Transfers of financial assets that are not accounted for as a sale are treated as a financing. We regularly securitize the majority of our credit card loans through the transfer of those loans to one of our Trusts. We perform the decision making for the Trusts, as well as servicing the cardholder accounts that generate the credit card loans held by the Trusts. In our capacity as a servicer, we administer the loans, collect payments and charge-off uncollectible balances. Servicing fees are earned by a subsidiary, which are eliminated in consolidation. The Trusts are consolidated VIEs because they have insufficient equity at risk to finance their activities – the issuance of debt securities and notes, collateralized by the underlying credit card loans. Because we perform the decision making and servicing for the Trusts, we have the power to direct the activities that most significantly impact the Trusts’ economic performance (the collection of the underlying credit card loans). In addition, we hold all of the variable interests in the Trusts, with the exception of the liabilities held by third-parties. These variable interests provide us with the right to receive benefits and the obligation to absorb losses, which could be significant to the Trusts. As a result of these considerations, we are deemed to be the primary beneficiary of the Trusts and therefore consolidate the Trusts. The Trusts issue debt securities and notes, which are non-recourse to us. The collections on the securitized credit card loans held by the Trusts are available only for payment of those debt securities and notes, or other obligations arising in the securitization transactions. For our securitized credit card loans, during the initial phase of a securitization reinvestment period, we generally retain principal collections in exchange for the transfer of additional credit card loans into the securitized pool of assets. During the amortization or accumulation period of a securitization, the investors’ share of principal collections (in certain cases, up to a maximum specified amount each month) is either distributed to the investors or held in an account until it accumulates to the total amount due, at which time it is paid to the investors in a lump sum.
Goodwill	Goodwill was $634 million as of December 31, 2023, 2022 and 2021. No goodwill impairment was recognized during any of those years, and there were no accumulated goodwill impairment losses as of December 31, 2023.
Intangible Assets, Net	Our identifiable intangible assets consist of both amortizable and non-amortizable intangible assets. Definite-lived intangible assets are subject to amortization and are amortized on a straight-line basis over their estimated useful lives; indefinite-lived intangible assets are not amortized. We review long-lived assets and asset groups, including intangible assets, for impairment whenever events and circumstances indicate their carrying amounts may not be recoverable; recognizing an impairment if the carrying amount is not recoverable and exceeds the fair value of the asset or asset group.
Leases	We have various operating leases for facilities and equipment which are recorded as lease-related assets (i.e., right-of-use assets) and liabilities for those leases with terms greater than 12 months. We do not have any finance leases. We determine if an arrangement is a lease or contains a lease at inception, and we do not separate lease and non-lease components. Right-of-use assets are recognized as of the lease commencement date at amounts equal to the respective lease liabilities, adjusted for any prepaid lease payments, initial direct costs and lease incentives. Our lease liabilities are recognized as of the lease commencement date, or upon modification of the lease, at the present value of the contractual fixed lease payments, discounted using our incremental borrowing rate (as the rate implicit in the lease is typically not readily determinable). Operating lease expense is recognized on a straight-line basis over the lease term, while variable lease payments are expensed as incurred.
Stock Compensation Expense	Stock-based compensation expense is measured at the grant date of the award, based on the fair value of the award, and is recognized ratably over the requisite service period. Stock-based compensation expense recognized in Employee compensation and benefits expense in the Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021 was $44 million, $33 million and $25 million, respectively, with corresponding income tax benefits of $8 million, $5 million and $4 million, respectively. As the amount of stock-based compensation expense recognized is based on awards ultimately expected to vest, the amount recognized in the Consolidated Statements of Income has been reduced for estimated forfeitures. We estimate forfeitures at each grant date based on historical experience, with forfeiture estimates to be revised, if necessary, in subsequent periods should actual forfeitures differ from those estimates; forfeitures were estimated at 5% for each of the years ended December 31, 2023, 2022 and 2021.
Income Taxes	We file income tax returns in federal, state, local and foreign jurisdictions, as applicable. Provisions for current income tax liabilities are calculated and accrued on income and expense amounts expected to be included in the income tax returns for the current year. Income taxes reported in earnings also include deferred income tax provisions and provisions for uncertain tax positions.
Earnings Per Share	Basic earnings (losses) per share (EPS) is based only on the weighted average number of common shares outstanding, excluding any dilutive effects of unvested restricted stock awards or other dilutive securities. Diluted EPS is based on the weighted average number of common and potentially dilutive common shares (unvested restricted stock awards and other dilutive securities outstanding during the year) pursuant to the Treasury Stock method