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Form 8-K Synchrony Financial For: Jan 23

January 23, 2015 9:00 AM EST


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
January 23, 2015
Date of Report
(Date of earliest event reported)
SYNCHRONY FINANCIAL
(Exact name of registrant as specified in its charter)
Delaware
001-36560
51-0483352
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
777 Long Ridge Road, Stamford, Connecticut
06902
(Address of principal executive offices)
(Zip Code)
(203) 585-2400
(Registrants telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item�2.02
Results of Operations and Financial Condition.
On January 23, 2015, Synchrony Financial (the Company) issued a press release setting forth the Companys fourth quarter 2014 earnings. A copy of the Companys press release is being furnished as Exhibit 99.1 and hereby incorporated by reference.�The information furnished pursuant to this Item 2.02, including Exhibits, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
Item�9.01
Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being furnished as part of this report:

Number
��
Description
99.1
��
Press release, dated January 23, 2015, issued by Synchrony Financial.
99.2
Financial Data Supplement of the Company for the quarter ended December 31, 2014.
99.3
Financial Results Presentation of the Company for the quarter ended December 31, 2014.
99.4
Explanation of Non-GAAP Measures






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SYNCHRONY FINANCIAL
Date: January 23, 2015
By:
/s/ Jonathan Mothner
Name:
Jonathan S. Mothner
Title:
Executive Vice President, General Counsel and Secretary






EXHIBIT INDEX
Number
��
Description
99.1
��
Press release, dated January 23, 2015, issued by Synchrony Financial.
99.2
Financial Data Supplement of the Company for the quarter ended December 31, 2014.
99.3
Financial Results Presentation of the Company for the quarter ended December 31, 2014.
99.4
Explanation of Non-GAAP Measures


Exhibit 99.1

Contact:
Investor Relations����Media Relations
Greg Ketron����Samuel Wang
(203) 585-6291����(203) 585-2933
For Immediate Release: January 23, 2015

Synchrony Financial Reports Fourth Quarter Net Earnings of $531 Million or $0.64 Per Diluted Share
STAMFORD, Conn.  Synchrony Financial (NYSE: SYF) today announced fourth quarter 2014 net earnings of $531 million, or $0.64 per diluted share. Net earnings for the full year 2014 totaled $2.1 billion, or $2.78 per diluted share.
"
Total platform revenue increased 9% from the fourth quarter of 2013 to $2.7 billion
"
Loan receivables grew $4 billion, or 7%, from the fourth quarter of 2013 to $61 billion
"
Purchase volume increased 11% from the fourth quarter of 2013
"
Announced a new top 20 partnership with BP
"
Extended two top 40 partnershipsRooms To Go and Yamaha
"
Strong deposit growth continued, up $9 billion, or 36%, over the fourth quarter of 2013

The fourth quarter successfully concluded an eventful year for Synchrony Financial. We continued the strong momentum across business platforms as our differentiated business model delivered significant value to our partners and customers and helped drive strong receivables, deposit, and revenue growth, said Margaret Keane, President and Chief Executive Officer of Synchrony Financial. We continue to leverage our substantial experience, scale, and data analytics capabilities as we collaborate with our new and existing partners. In addition, we are employing innovative mobile and digital technologies to deepen integration with our partners mobile commerce platforms, forming strategic alliances with market leaders, such as GPShopper, to further extend our mobile offerings and capabilities.
We concluded 2014 with healthy business activity levels and strong fundamentals. As we enter 2015, we are excited about our future growth prospects and the opportunity to expand our market-leading position in the private label credit card space, stated Ms. Keane.


1


Business and Financial Highlights for the Fourth Quarter of 2014
All comparisons below are for the fourth quarter of 2014 compared to the fourth quarter of 2013, unless otherwise noted.
Earnings
"
Net interest income increased $129 million, or 5%, to $3.0 billion, driven by strong loan receivables growth, partially offset by higher interest expense from funding completed to increase liquidity in 2014.
"
Total platform revenue increased $216 million, or 9% ($170 million, or 7%, excluding the pre-tax gain associated with portfolio sales).
"
Provision for loan losses decreased $21 million, or 3%, to $797 million.
"
Other income increased $32 million driven primarily by a $46 million gain associated with portfolio sales in the fourth quarter of 2014. The gain was partially offset by increased loyalty and rewards costs associated with program initiatives.
"
Other expense decreased $15 million, or 2%, to $792 million due to charges in the fourth quarter of 2013 related to certain regulatory matters, partially offset by increased investments in growth and infrastructure build in preparation for separation from General Electric Company (GE).
"
Net earnings totaled $531 million for the quarter compared to $443 million, including a $29 million after-tax gain associated with the portfolio sales.
Balance Sheet
"
Period-end loan receivables growth remained strong at 7% driven by purchase volume growth of 11% and average active account growth of 6%.
"
The composition of loan receivables growth remained broad-based across all sales platforms.
"
Deposits grew to $35 billion, up $9 billion, or 36%, from the fourth quarter of 2013, and now comprise 56% of funding sources compared to 51% at the end of 2013.
"
The Companys balance sheet remained strong with total liquidity (liquid assets and undrawn securitization capacity) at $19 billion, or 25%, of total assets.
"
The estimated Tier 1 Common Equity ratio under Basel I was 14.9% and the estimated fully phased-in Common Equity Tier 1 ratio under Basel III was 14.5%.
Key Financial Metrics
"
Return on assets was 2.7% and return on equity was 20.2%.
"
Net interest margin declined 370 basis points to 15.60% primarily due to the impact from the significant increase in liquidity versus the prior year.
"
Efficiency ratio decreased to 32.4% this quarter from 34.8% in the prior year mainly due to charges in the fourth quarter of 2013 related to regulatory matters, partially offset by increased investments in growth and infrastructure build in preparation for separation from GE.




2


Credit Quality
"
Loans 30+ days past due as a percentage of period-end loan receivables improved 21 basis points to 4.14%.
"
Net charge-offs as a percentage of total average loan receivables decreased 37 basis points to 4.32% (excluding net charge-offs related to the disposition of non-core receivables in the fourth quarter of 2013).
"
The allowance for loan losses as a percentage of total period-end receivables was 5.28%.

Sales Platforms
"
Retail Card platform revenue increased 10% (7% excluding the pre-tax gain associated with portfolio sales), driven primarily by period-end loan receivables growth of 6%, with broad-based growth across partner programs.
"
Payment Solutions platform revenue increased 8%, driven by period-end loan receivables growth of 11%, with solid growth across industry segments led by home furnishings, automotive products, and power equipment.
"
CareCredit platform revenue increased 5%, driven by 5% period-end loan receivables growth, with growth led by dental and veterinary specialties.

Corresponding Financial Tables and Information
No representation is made that the information in this news release is complete. Investors are encouraged to review the foregoing summary and discussion of Synchrony Financial's earnings and financial condition in conjunction with the detailed financial tables and information that follow and the forthcoming Form 10-K. The detailed financial tables and other information are also available on the Investor Relations page of the Companys website at www.investors.synchronyfinancial.com. This information is also furnished in a Current Report on Form 8-K filed with the SEC today.
Conference Call and Webcast Information
On Friday, January 23, 2015, at 10:30 a.m. Eastern Time, Margaret Keane, President and Chief Executive Officer, and Brian Doubles, Executive Vice President and Chief Financial Officer, will host a conference call to review the financial results and outlook for certain business drivers. The conference call can be accessed via an audio webcast through the Investor Relations page of our website, www.investors.synchronyfinancial.com, under Events and Presentations. A replay will be available on the website or by dialing (888) 843-7419 (U.S. domestic) or (630) 652-3042 (international), passcode 42014, and can be accessed beginning approximately two hours after the event through February 6, 2015.
About Synchrony Financial
Formerly GE Capital Retail Finance, Synchrony Financial (NYSE: SYF) is one of the premier consumer financial services companies in the United States. Our roots in consumer finance trace back to 1932, and today we are the largest provider of private label credit cards in the United States based on purchase volume and receivables*. We provide a range of credit products through programs we have established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers to help generate growth for our partners and offer

3


financial flexibility to our customers. Through our partners more than 300,000 locations across the United States and Canada, and their websites and mobile applications, we offer our customers a variety of credit products to finance the purchase of goods and services. Our offerings include private label credit cards and co-branded dual cards, promotional financing and installment lending, loyalty programs and Optimizer+plus branded FDIC-insured savings products through Synchrony Bank. More information can be found at www.synchronyfinancial.com and twitter.com/SYFNews.
*The Nilson Report (April 2014, Issue # 1039)
Cautionary Statement Regarding Forward-Looking Statements
This news release contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the "safe harbor" created by those sections. Forward-looking statements may be identified by words such as outlook, expects, intends, anticipates, plans, believes, seeks, targets, estimates, will, should, may or words of similar meaning, but these words are not the exclusive means of identifying forward-looking statements. Forward-looking statements are based on managements current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include global political, economic, business, competitive, market, regulatory and other factors and risks, such as: the impact of macroeconomic conditions and whether industry trends we have identified develop as anticipated; retaining existing partners and attracting new partners, concentration of our platform revenue in a small number of Retail Card partners, promotion and support of our products by our partners, and financial performance of our partners; our need for additional financing, higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to securitize our loans, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loans, and lower payment rates on our securitized loans; our reliance on dividends, distributions and other payments from Synchrony Bank; our ability to grow our deposits in the future; changes in market interest rates and the impact of any margin compression; effectiveness of our risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, our ability to manage our credit risk, the sufficiency of our allowance for loan losses and the accuracy of the assumptions or estimates used in preparing our financial statements; our ability to offset increases in our costs in retailer share arrangements; competition in the consumer finance industry; our concentration in the U.S. consumer credit market; our ability to successfully develop and commercialize new or enhanced products and services; our ability to realize the value of strategic investments; reductions in interchange fees; fraudulent activity; cyber-attacks or other security breaches; failure of third parties to provide various services that are important to our operations; disruptions in the operations of our computer systems and data centers; international risks and compliance and regulatory risks and costs associated with international operations; catastrophic events; alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; litigation and regulatory actions; damage to our reputation; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and state sales tax rules and regulations; significant and extensive regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Act and the impact of the CFPBs regulation of our business; changes to our methods of offering our CareCredit products; impact of capital adequacy rules; restrictions that limit Synchrony Banks ability to pay dividends; regulations relating to privacy, information security and data

4


protection as well as anti-money laundering and anti-terrorism financing laws; use of third-party vendors and ongoing third-party business relationships; effect of General Electric Capital Corporation (GECC) being subject to regulation by the Federal Reserve Board both as a savings and loan holding company and as a systemically important financial institution; GE not completing the separation from us as planned or at all, GEs inability to obtain savings and loan holding company deregistration (GE SLHC Deregistration) and GE continuing to have significant control over us; completion by the Federal Reserve Board of a review (with satisfactory results) of our preparedness to operate on a standalone basis, independently of GE, and Federal Reserve Board approval required for us to continue to be a savings and loan holding company, including the timing of the approval and the imposition of any significant additional capital or liquidity requirements; our need to establish and significantly expand many aspects of our operations and infrastructure; delays in receiving or failure to receive Federal Reserve Board agreement required for us to be treated as a financial holding company after the GE SLHC Deregistration; loss of association with GEs strong brand and reputation; limited right to use the GE brand name and logo and need to establish a new brand; GEs significant control over us; terms of our arrangements with GE may be more favorable than we will be able to obtain from unaffiliated third parties; obligations associated with being a public company; our incremental cost of operating as a standalone public company could be substantially more than anticipated; GE could engage in businesses that compete with us, and conflicts of interest may arise between us and GE; and failure caused by us of GEs distribution of our common stock to its stockholders in exchange for its common stock to qualify for tax-free treatment, which may result in significant tax liabilities to GE for which we may be required to indemnify GE.
For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this news release and in our public filings, including under the heading Risk Factors in the Companys Current Report on Form 8-K, as filed on November 19, 2014. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.
Non-GAAP Measures
The information provided herein includes measures we refer to as platform revenue, platform revenue excluding retailer share arrangements and tangible common equity and certain capital ratios, which are not prepared in accordance with U.S. generally accepted accounting principles (GAAP). For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please see the detailed financial tables and information that follow. For a statement regarding the usefulness of these measures to investors, please see the Companys Current Report on Form 8-K filed with the SEC today.


5
Exhibit 99.2


SYNCHRONY FINANCIAL
FINANCIAL SUMMARY
(unaudited, in millions, except per share statistics)
Quarter Ended
Twelve months ended
Dec 31,
2014
Sep 30,
2014
Jun 30,
2014
Mar 31,
2014
Dec 31,
2013
4Q'14 vs. 4Q'13
Dec 31,
2014
Dec 31,
2013
YTD'14 vs. YTD'13
EARNINGS
Net interest income
$
2,978

$
2,879

$
2,720

$
2,743

$
2,849

$
129

4.5
�%
$
11,320

$
10,571

$
749

7.1
�%
Retailer share arrangements
(698
)
(693
)
(590
)
(594
)
(662
)
(36
)
5.4
�%
(2,575
)
(2,373
)
(202
)
8.5
�%
Net interest income, after retailer share arrangements
2,280

2,186

2,130

2,149

2,187

93

4.3
�%
8,745

8,198

547

6.7
�%
Provision for loan losses
797

675

681

764

818

(21
)
(2.6
)%
2,917

3,072

(155
)
(5.0
)%
Net interest income, after retailer share arrangements and provision for loan losses
1,483

1,511

1,449

1,385

1,369

114

8.3
�%
5,828

5,126

702

13.7
�%
Other income
162

96

112

115

130

32

24.6
�%
485

500

(15
)
(3.0
)%
Other expense
792

728

797

610

807

(15
)
(1.9
)%
2,927

2,484

443

17.8
�%
Earnings before provision for income taxes
853

879

764

890

692

161

23.3
�%
3,386

3,142

244

7.8
�%
Provision for income taxes
322

331

292

332

249

73

29.3
�%
1,277

1,163

114

9.8
�%
Net earnings
$
531

$
548

$
472

$
558

$
443

$
88

19.9
�%
$
2,109

$
1,979

$
130

6.6
�%
Net earnings attributable to common stockholders
$
531

$
548

$
472

$
558

$
443

$
88

19.9
�%
$
2,109


$
1,979


$
130

6.6
�%












COMMON SHARE STATISTICS
Basic EPS
$
0.64

$
0.70

$
0.67

$
0.79

$
0.63

$
0.01

1.6
�%
$
2.78

$
2.81

$
(0.03
)
(1.1
)%
Diluted EPS
$
0.64

$
0.70

$
0.67

$
0.79

$
0.63

$
0.01

1.6
�%
$
2.78

$
2.81

$
(0.03
)
(1.1
)%
Common stock price
$
29.75

$
24.55

n/a

n/a

n/a

$
29.75

n/a

$
29.75

n/a

$
29.75

n/a

Book value per share
$
12.57

$
11.92

$
9.06

$
8.57

$
8.45

$
4.12

48.8
�%
$
12.57

$
8.45

$
4.12

48.8
�%
Tangible book value per share(1)
$
10.81

$
10.25

$
7.06

$
6.56

$
6.68

$
4.13

61.8
�%
$
10.81

$
6.68

$
4.13

61.8
�%
Beginning common shares outstanding
833.8

705.3

705.3

705.3

705.3

128.5

18.2
�%
705.3

705.3




�%
Issuance of common shares through initial public offering


128.5









NM

128.5



128.5

NM

Shares repurchased












NM







NM

Ending common shares outstanding
833.8

833.8

705.3

705.3

705.3

128.5

18.2
�%
833.8

705.3

128.5

18.2
�%
Weighted average common shares outstanding
833.8

781.8

705.3

705.3

705.3

128.5

18.2
�%
757.4

705.3

52.1

7.4
�%
Weighted average common shares outstanding (fully diluted)
834.3

781.9

705.3

705.3

705.3

129.0

18.3
�%
757.6

705.3

52.3

7.4
�%
(1) Tangible Common Equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.

1



SYNCHRONY FINANCIAL
SELECTED METRICS
(unaudited, $ in millions, except account data)
Quarter Ended
Twelve months ended
Dec 31,
2014
Sep 30,
2014
Jun 30,
2014
Mar 31,
2014
Dec 31,
2013
4Q'14 vs. 4Q'13
Dec 31,
2014
Dec 31,
2013
YTD'14 vs. YTD'13
PERFORMANCE METRICS
Return on assets(1)
2.7
%
3.2
%
3.1
%
3.9
%
3.0
%


(0.3
)%
3.2
%
3.5
%


(0.3
)%
Return on equity(2)
20.2
%
26.8
%
29.9
%
35.3
%
31.1
%


(10.9
)%
26.7
%
38.6
%


(11.9
)%
Return on tangible common equity(3)
23.4
%
32.4
%
38.5
%
44.2
%
40.0
%


(16.6
)%
32.4
%
51.1
%


(18.7
)%
Net interest margin(4)
15.60
%
17.11
%
17.84
%
18.83
%
19.30
%


(3.70
)%
17.20
%
18.78
%


(1.58
)%
Efficiency ratio(5)
32.4
%
31.9
%
35.5
%
26.9
%
34.8
%


(2.4
)%
31.7
%
28.6
%


3.1
�%
Other expense as a % of average loan receivables, including held for sale
5.16
%
5.09
%
5.77
%
4.51
%
5.77
%


(0.61
)%
5.13
%
4.74
%


0.39
�%
Effective income tax rate
37.7
%
37.7
%
38.2
%
37.3
%
36.0
%


1.7
�%
37.7
%
37.0
%


0.7
�%
CREDIT QUALITY METRICS
Net charge-offs as a % of average loan receivables, including held for sale
4.32
%
4.05
%
4.88
%
4.86
%
5.13
%


(0.81
)%
4.51
%
4.68
%


(0.17
)%
30+ days past due as a % of period-end loan receivables
4.14
%
4.26
%
3.82
%
4.09
%
4.35
%


(0.21
)%
4.14
%
4.35
%


(0.21
)%
90+ days past due as a % of period-end loan receivables
1.90
%
1.85
%
1.65
%
1.93
%
1.96
%


(0.06
)%
1.90
%
1.96
%


(0.06
)%
Net charge-offs
$
663

$
579

$
673

$
658

$
718

$
(55
)
(7.7
)%
$
2,573

$
2,454

$
119

4.8
�%
Loan receivables delinquent over 30 days
$
2,536

$
2,416

$
2,097

$
2,220

$
2,488

$
48

1.9
�%
$
2,536

$
2,488

$
48

1.9
�%
Loan receivables delinquent over 90 days
$
1,162

$
1,051

$
908

$
1,046

$
1,121

$
41

3.7
�%
$
1,162

$
1,121

$
41

3.7
�%
Allowance for loan losses (period-end)
$
3,236

$
3,102

$
3,006

$
2,998

$
2,892

$
344

11.9
�%
$
3,236

$
2,892

$
344

11.9
�%
Allowance coverage ratio(6)
5.28
%
5.46
%
5.48
%
5.52
%
5.05
%


0.23
�%
5.28
%
5.05
%


0.23
�%
BUSINESS METRICS
Purchase volume(7)
$
30,081

$
26,004

$
25,978

$
21,086

$
27,002

$
3,079

11.4
�%
$
103,149

$
93,858

$
9,291

9.9
�%
Period-end loan receivables
$
61,286

$
56,767

$
54,873

$
54,285

$
57,254

$
4,032

7.0
�%
$
61,286

$
57,254

$
4,032

7.0
�%
Credit cards
$
58,880

$
54,263

$
52,406

$
52,008

$
54,958

$
3,922

7.1
�%
$
58,880

$
54,958

$
3,922

7.1
�%
Consumer installment loans
$
1,063

$
1,081

$
1,047

$
963

$
965

$
98

10.2
�%
$
1,063

$
965

$
98

10.2
�%
Commercial credit products
$
1,320

$
1,404

$
1,405

$
1,299

$
1,317

$
3

0.2
�%
$
1,320

$
1,317

$
3

0.2
�%
Other
$
23

$
19

$
15

$
15

$
14

$
9

64.3
�%
$
23

$
14

$
9

64.3
�%
Average loan receivables, including held for sale
$
59,547

$
57,391

$
55,363

$
55,495

$
54,895

$
4,652

8.5
�%
$
57,101

$
52,407

$
4,694

9.0
�%
Period-end active accounts (in thousands)(8)
64,286

60,489

59,248

57,349

61,957

2,329

3.8
�%
64,286

61,957

2,329

3.8
�%
Average active accounts (in thousands)(8)
61,667

59,907

58,386

59,342

58,402

3,265

5.6
�%
60,009

56,253

3,756

6.7
�%
LIQUIDITY
Liquid assets
Cash and equivalents
$
11,828

$
14,808

$
6,782

$
5,331

$
2,319

$
9,509

NM

$
11,828

$
2,319

$
9,509

NM

Total liquid assets
$
12,942

$
14,077

$
6,119

$
4,806

$
2,058

$
10,884

NM

$
12,942

$
2,058

$
10,884

NM

Undrawn credit facilities
Undrawn committed securitization financings
$
6,100

$
5,650

$
5,650

$
450

$


$
6,100

NM

$
6,100

$


$
6,100

NM

Total liquid assets and undrawn credit facilities
$
19,042

$
19,727

$
11,769

$
5,256

$
2,058

$
16,984

NM

$
19,042

$
2,058

$
16,984

NM

Liquid assets % of total assets
17.09
%
19.16
%
9.69
%
8.11
%
3.48
%


13.61
�%
17.09
%
3.48
%


13.61
�%
Liquid assets including undrawn committed securitization financings % of total assets
25.15
%
26.85
%
18.63
%
8.87
%
3.48
%


21.67
�%
25.15
%
3.48
%


21.67
�%
(1) Return on assets represents net earnings as a percentage of average total assets.
(2) Return on equity represents net earnings as a percentage of average total equity.
(3) Return on tangible common equity represents net earnings as a percentage of average tangible common equity. Tangible Common Equity ("TCE") is a non-GAAP measure. For corresponding reconciliation of TCE to a
GAAP financial measure, see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(4) Net interest margin represents net interest income divided by average interest earning assets.
(5) Efficiency ratio represents (i) other expense, divided by (ii) net interest income, after retailer share arrangements, plus other income.
(6) Allowance coverage ratio represents allowance for loan losses divided by total period-end loan receivables.
(7) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.
(8) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

2



SYNCHRONY FINANCIAL
STATEMENTS OF EARNINGS
(unaudited, $ in millions)
Quarter Ended
Twelve months ended
Dec 31,
2014
Sep 30,
2014
Jun 30,
2014
Mar 31,
2014
Dec 31,
2013
4Q'14 vs. 4Q'13
Dec 31,
2014
Dec 31,
2013
YTD'14 vs. YTD'13
Interest income:
Interest and fees on loans
$
3,252

$
3,116

$
2,920

$
2,928

$
3,032

$
220

7.3
�%
$
12,216

$
11,295

$
921

8.2
�%
Interest on investment securities
8

7

6

5

5

3

60.0
�%
26

18

8

44.4
�%
Total interest income
3,260

3,123

2,926

2,933

3,037

223

7.3
�%
12,242

11,313

929

8.2
�%
Interest expense:
Interest on deposits
139

126

109

96

93

46

49.5
�%
470

374

96

25.7
�%
Interest on borrowings of consolidated securitization entities
57

57

54

47

49

8

16.3
�%
215

211

4

1.9
�%
Interest on third party debt
78

46







78

NM

124



124

NM

Interest on related party debt
8

15

43

47

46

(38
)
(82.6
)%
113

157

(44
)
(28.0
)%
Total interest expense
282

244

206

190

188

94

50.0
�%
922

742

180

24.3
�%
Net interest income
2,978

2,879

2,720

2,743

2,849

129

4.5
�%
11,320

10,571

749

7.1
�%
Retailer share arrangements
(698
)
(693
)
(590
)
(594
)
(662
)
(36
)
5.4
�%
(2,575
)
(2,373
)
(202
)
8.5
�%
Net interest income, after retailer share arrangements
2,280

2,186

2,130

2,149

2,187

93

4.3
�%
8,745

8,198

547

6.7
�%
Provision for loan losses
797

675

681

764

818

(21
)
(2.6
)%
2,917

3,072

(155
)
(5.0
)%
Net interest income, after retailer share arrangements and provision for loan losses
1,483

1,511

1,449

1,385

1,369

114

8.3
�%
5,828

5,126

702

13.7
�%
Other income:
Interchange revenue
120

101

92

76

89

31

34.8
�%
389

324

65

20.1
�%
Debt cancellation fees
67

68

70

70

88

(21
)
(23.9
)%
275

324

(49
)
(15.1
)%
Loyalty programs
(91
)
(84
)
(63
)
(43
)
(57
)
(34
)
59.6
�%
(281
)
(213
)
(68
)
31.9
�%
Other
66

11

13

12

10

56

NM

102

65

37

56.9
�%
Total other income
162

96

112

115

130

32

24.6
�%
485

500

(15
)
(3.0
)%
Other expense:
Employee costs
227

239

207

193

190

37

19.5
�%
866

698

168

24.1
�%
Professional fees
152

159

155

141

157

(5
)
(3.2
)%
607

486

121

24.9
�%
Marketing and business development
165

115

97

83

117

48

41.0
�%
460

269

191

71.0
�%
Information processing
60

47

53

52

52

8

15.4
�%
212

193

19

9.8
�%
Other
188

168

285

141

291

(103
)
(35.4
)%
782

838

(56
)
(6.7
)%
Total other expense
792

728

797

610

807

(15
)
(1.9
)%
2,927

2,484

443

17.8
�%
Earnings before provision for income taxes
853

879

764

890

692

161

23.3
�%
3,386

3,142

244

7.8
�%
Provision for income taxes
322

331

292

332

249

73

29.3
�%
1,277

1,163

114

9.8
�%
Net earnings attributable to common shareholders
$
531

$
548

$
472

$
558

$
443

$
88

19.9
�%
$
2,109

$
1,979

$
130

6.6
�%

3



SYNCHRONY FINANCIAL
STATEMENTS OF FINANCIAL POSITION
(unaudited, $ in millions)
Quarter Ended
Dec 31,
2014
Sep 30,
2014
Jun 30,
2014
Mar 31,
2014
Dec 31,
2013
Dec 31, 2014 vs.
Dec 31, 2013
Assets
Cash and equivalents
$
11,828

$
14,808

$
6,782

$
5,331

$
2,319

$
9,509

NM

Investment securities
1,598

325

298

265

236

1,362

NM

Loan receivables:
Unsecuritized loans held for investment
34,335

30,474

28,280

29,101

31,183

3,152

10.1
�%
Restricted loans of consolidated securitization entities
26,951

26,293

26,593

25,184

26,071

880

3.4
�%
Total loan receivables
61,286

56,767

54,873

54,285

57,254

4,032

7.0
�%
Less: Allowance for loan losses
(3,236
)
(3,102
)
(3,006
)
(2,998
)
(2,892
)
(344
)
11.9
�%
Loan receivables, net
58,050

53,665

51,867

51,287

54,362

3,688

6.8
�%
Loan receivables held for sale
332

1,493

1,458





332

NM

Goodwill
949

949

949

949

949




�%
Intangible assets, net
519

449

463

464

300

219

73.0
�%
Other assets
2,431

1,780

1,358

949

919

1,512

164.5
�%
Total assets
$
75,707

$
73,469

$
63,175

$
59,245

$
59,085

$
16,622

28.1
�%
Liabilities and Equity
Deposits:
Interest-bearing deposit accounts
$
34,847

$
32,480

$
30,258

$
27,123

$
25,360

$
9,487

37.4
�%
Non-interest-bearing deposit accounts
108

209

204

235

359

(251
)
(69.9
)%
Total deposits
34,955

32,689

30,462

27,358

25,719

9,236

35.9
�%
Borrowings:
Borrowings of consolidated securitization entities
14,967

15,091

15,114

14,642

15,362

(395
)
(2.6
)%
Bank term loan facility
8,245

7,495







8,245

NM

Senior unsecured notes
3,593

3,593







3,593

NM

Related party debt
655

1,405

7,859

8,062

8,959

(8,304
)
(92.7
)%
Total borrowings
27,460

27,584

22,973

22,704

24,321

3,139

12.9
�%
Accrued expenses and other liabilities
2,814

3,255

3,347

3,141

3,085

(271
)
(8.8
)%
Total liabilities
65,229

63,528

56,782

53,203

53,125

12,104

22.8
�%
Equity:
Parents net investment






6,052

5,973

(5,973
)
(100.0
)%
Common stock
1

1

1





1

NM

Additional paid-in-capital
9,408

9,401

6,399





9,408

NM

Retained earnings
1,079

548







1,079

NM

Accumulated other comprehensive income:
(10
)
(9
)
(7
)
(10
)
(13
)
3

(23.1
)%
Total equity
10,478

9,941

6,393

6,042

5,960

4,518

75.8
�%
Total liabilities and equity
$
75,707

$
73,469

$
63,175

$
59,245

$
59,085

$
16,622

28.1
�%

4



SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
(unaudited, $ in millions)
Quarter Ended
Dec 31, 2014
Sep 30, 2014
Jun 30, 2014
Mar 31, 2014
Dec 31, 2013
Interest
Average
Interest
Average
Interest
Average
Interest
Average
Interest
Average
Average
Income/
Yield/
Average
Income/
Yield/
Average
Income/
Yield/
Average
Income/
Yield/
Average
Income/
Yield/
Balance
Expense
Rate
Balance
Expense
Rate
Balance
Expense
Rate
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Interest-earning assets:
Interest-earning cash and equivalents
$
13,631

$
7

0.20
%
$
9,793

$
4

0.16
%
$
5,489

$
3

0.22
%
$
4,001

$
2

0.21
%
$
2,792

$
2

0.28
%
Securities available for sale
962

1

0.40
%
309

3

3.89
%
285

3

4.22
%
250

3

4.92
%
237

3

4.97
%
Loan receivables:
Credit cards, including held for sale
57,075

3,186

21.68
%
54,891

3,054

22.32
%
52,957

2,860

21.66
%
53,211

2,867

22.10
%
52,271

2,963

22.25
%
Consumer installment loans
1,072

27

9.78
%
1,070

25

9.37
%
1,004

24

9.59
%
959

23

9.84
%
1,249

29

9.11
%
Commercial credit products
1,379

38

10.70
%
1,412

37

10.51
%
1,387

36

10.41
%
1,311

38

11.89
%
1,362

39

11.24
%
Other
21

1

NM

18




%
15




%
14




%
13

1

NM

Total loan receivables, including held for sale
59,547

3,252

21.21
%
57,391

3,116

21.78
%
55,363

2,920

21.16
%
55,495

2,928

21.64
%
54,895

3,032

21.68
%
Total interest-earning assets
74,140

3,260

17.07
%
67,493

3,123

18.56
%
61,137

2,926

19.20
%
59,746

2,933

20.13
%
57,924

3,037

20.58
%
Non-interest-earning assets:
Cash and due from banks
1,220

1,260

637

561

533

Allowance for loans losses
(3,160
)
(3,058
)
(3,005
)
(2,931
)
(2,823
)
Other assets
2,831

2,605

2,446

2,045

2,072

Total non-interest-earning assets
891

807

78

(325
)
(218
)
Total assets
$
75,031

$
68,300

$
61,215

$
59,421

$
57,706

Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts
$
33,980

$
139

1.59
%
$
31,459

$
126

1.61
%
$
28,568

$
109

1.53
%
$
26,317

$
96

1.50
%
$
23,857

$
93

1.53
%
Borrowings of consolidated securitization entities
14,766

57

1.50
%
15,102

57

1.51
%
14,727

54

1.47
%
14,830

47

1.30
%
15,378

49

1.25
%
Bank term loan facility(1)
8,057

46

2.22
%
3,747

28

3.00
%





%





%





%
Senior unsecured notes(1)
3,593

32

3.46
%
1,797

18

4.02
%





%





%





%
Related party debt(1)
843

8

3.68
%
4,582

15

1.31
%
7,959

43

2.17
%
8,286

47

2.33
%
9,037

46

2.00
%
Total interest-bearing liabilities
61,239

282

1.79
%
56,687

244

1.73
%
51,254

206

1.61
%
49,433

190

1.58
%
48,272

188

1.53
%
Non-interest-bearing liabilities
Non-interest-bearing deposit accounts
182

206

221

331

450

Other liabilities
3,382

3,208

3,412

3,182

3,391

Total non-interest-bearing liabilities
3,564

3,414

3,633

3,513

3,841

Total liabilities
64,803

60,101

54,887

52,946

52,113

Equity
Total equity
10,228

8,199

6,328

6,475

5,593

Total liabilities and equity
$
75,031

$
68,300

$
61,215

$
59,421

$
57,706

Net interest income
$
2,978

$
2,879

$
2,720

$
2,743

$
2,849

Interest rate spread(2)
15.28
%
16.83
%
17.59
%
18.55
%
19.05
%
Net interest margin(3)
15.60
%
17.11
%
17.84
%
18.83
%
19.30
%
(1) Interest on liabilities calculated above utilizes monthly average balances. The effective interest rates for the quarters ended December 31, 2014 and September 30, 2014, were as follows: GECC loan 4.21% and 4.21%, Bank term loan facility 2.19% and 2.21%,
Senior unsecured notes 3.52% and 3.62% respectively. The Bank term loan facility effective rate for the quarter ended September 30, 2014 excludes the impact of a one time charge incurred in connection with the prepayment of the loan facility.
(2) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average interest-earning assets.

5



SYNCHRONY FINANCIAL
AVERAGE BALANCES, NET INTEREST INCOME AND NET INTEREST MARGIN
(unaudited, $ in millions)
Twelve months ended
Dec 31, 2014
Twelve months ended
Dec 31, 2013
Interest
Average
Interest
Average
Average
Income/
Yield/
Average
Income/
Yield/
Balance
Expense
Rate
Balance
Expense
Rate
Assets
Interest-earning assets:
Interest-earning cash and equivalents
$
8,230

$
16

0.19
%
$
3,651

$
10

0.27
%
Securities available for sale
487

10

2.05
%
217

8

3.69
%
Loan receivables:
Credit cards, including held for sale
54,686

11,967

21.88
%
49,704

11,015

22.16
%
Consumer installment loans
1,025

99

9.66
%
1,336

129

9.66
%
Commercial credit products
1,373

149

10.85
%
1,355

150

11.07
%
Other
17

1

5.88
%
12

1

8.33
%
Total loan receivables, including held for sale
57,101

12,216

21.39
%
52,407

11,295

21.55
%
Total interest-earning assets
65,818

12,242

18.60
%
56,275

11,313

20.10
%
Non-interest-earning assets:
Cash and due from banks
881

552

Allowance for loans losses
(3,039
)
(2,693
)
Other assets
2,492

2,050

Total non-interest-earning assets
334

(91
)
Total assets
$
66,152

$
56,184

Liabilities
Interest-bearing liabilities:
Interest-bearing deposit accounts
$
30,110

$
470

1.56
%
$
22,405

$
374

1.67
%
Borrowings of consolidated securitization entities
14,835

215

1.45
%
16,209

211

1.30
%
Bank term loan facility(1)
3,056

74

2.42
%





%
Senior unsecured notes(1)
1,382

50

3.62
%





%
Related party debt(1)
5,335

113

2.12
%
9,000

157

1.74
%
Total interest-bearing liabilities
54,718

922

1.69
%
47,614

742

1.56
%
Non-interest-bearing liabilities
Non-interest-bearing deposit accounts
240

506

Other liabilities
3,306

2,943

Total non-interest-bearing liabilities
3,546

3,449

Total liabilities
58,264

51,063

Equity
Total equity
7,888

5,121

Total liabilities and equity
$
66,152

$
56,184

Net interest income
$
11,320

$
10,571

Interest rate spread(2)
16.91
%
18.54
%
Net interest margin(3)
17.20
%
18.78
%
(1) Interest on liabilities calculated above utilizes monthly average balances. The effective interest rates, from the date of issuance through December 31,
2014, were as follows: GECC loan 4.21%, Bank term loan facility 2.20%, Senior unsecured notes 3.55%. The Bank term loan facility effective rate
excludes the impact of a one time charge incurred in connection with the prepayment of the loan facility.
(2) Interest rate spread represents the difference between the yield on total interest-earning assets and the rate on total interest-bearing liabilities.
(3) Net interest margin represents net interest income divided by average interest-earning assets.

6



SYNCHRONY FINANCIAL
BALANCE SHEET STATISTICS
(unaudited, $ in millions, except per share statistics)
Quarter Ended
Dec 31,
2014
Sep 30,
2014
Jun 30,
2014
Mar 31,
2014
Dec 31,
2013
Dec 31, 2014 vs.
Dec 31, 2013
BALANCE SHEET STATISTICS
Total common equity
$
10,478

$
9,941

$
6,393

$
6,042

$
5,960

$
4,518

75.8
%
Total common equity as a % of total assets
13.84
%
13.53
%
10.12
%
10.20
%
10.09
%

3.75
%
Tangible assets
$
74,239

$
72,071

$
61,763

$
57,832

$
57,836

$
16,403

28.4
%
Tangible common equity(1)
$
9,010

$
8,543

$
4,981

$
4,629

$
4,711

$
4,299

91.3
%
Tangible common equity as a % of tangible assets(1)
12.14
%
11.85
%
8.06
%
8.00
%
8.15
%

3.99
%
Tangible common equity per share(1)
$
10.81

$
10.24

$
7.07

$
6.57

$
6.68

$
4.13

61.8
%
REGULATORY CAPITAL RATIOS(2)
Basel I
Total risk-based capital ratio(3)
16.2
%
16.4
%
Tier 1 risk-based capital ratio(4)
14.9
%
15.1
%
Tier 1 common ratio(5)
14.9
%
15.1
%
Tier 1 leverage ratio(6)
12.5
%
12.2
%
Basel III
Tier 1 common ratio(7)
14.5
%
14.6
%
(1) Tangible Common Equity ("TCE") is a non-GAAP measure. We believe TCE is a more meaningful measure to investors of the net asset value of the Company. For
corresponding reconciliation of TCE to a GAAP financial measure see Reconciliation of Non-GAAP Measures and Calculations of Regulatory Measures.
(2) Regulatory capital metrics as of the end of 3Q 2014 are preliminary and therefore subject to change. As a new savings and loan holding company, the Company
historically has not been required by regulators to disclose capital ratios, and therefore these ratios are non-GAAP measures. See Reconciliation of Non-GAAP
Measures and Calculation of Regulatory Measures for components of capital ratio calculations.
(3) Total risk-based capital ratio is the ratio of total risk-based capital divided by risk-weighted assets.
(4) Tier 1 risk-based capital ratio is the ratio of Tier 1 capital divided by risk-weighted assets.
(5) Tier 1 common ratio is the ratio of common equity Tier 1 capital divided by risk-weighted assets.
(6) Tier 1 leverage ratio is calculated based on Tier 1 capital divided by total assets, after certain adjustments.
(7) Our Basel III Tier 1 common ratio is the ratio of common equity Tier 1 capital to total risk-weighted assets, each as calculated in accordance with the U.S. Basel III
capital rules (on a fully phased-in basis). Our Basel III Tier 1 common ratio is a preliminary estimate reflecting managements interpretation of the final Basel III
capital rules adopted in July 2013 by the Federal Reserve Board, which have not been fully implemented, and our estimate and interpretations are subject to, among
other things, ongoing regulatory review and implementation guidance.

7



SYNCHRONY FINANCIAL
PLATFORM RESULTS AND RECONCILIATION OF NON-GAAP MEASURES
(unaudited, in millions)
Quarter Ended
Twelve months ended
Dec 31,
2014
Sep 30,
2014
Jun 30,
2014
Mar 31,
2014
Dec 31,
2013
4Q'14 vs. 4Q'13
Dec 31,
2014
Dec 31,
2013
YTD'14 vs. YTD'13
RETAIL CARD
Purchase volume(1),(2)
$
24,855

$
20,991

$
21,032

$
16,713

$
22,199

$
2,656

12.0
�%
$
83,591

$
75,739

$
7,852

10.4
�%
Period-end loan receivables
$
42,308

$
38,466

$
37,238

$
37,175

$
39,834

$
2,474

6.2
�%
$
42,308

$
39,834

$
2,474

6.2
�%
Average loan receivables, including held for sale
$
40,929

$
39,411

$
38,047

$
38,223

$
37,576

$
3,353

8.9
�%
$
39,278

$
35,716

$
3,562

10.0
�%
Average active accounts (in thousands)(2),(3)
49,871

48,433

47,248

48,168

47,455

2,416

5.1
�%
48,599

45,690

2,909

6.4
�%
Interest and fees on loans(2)
$
2,405

$
2,299

$
2,158

$
2,178

$
2,234

$
171

7.7
�%
$
9,040

$
8,317

$
723

8.7
�%
Other income(2)
141

78

92

96

113

28

24.8
�%
407

419

(12
)
(2.9
)%
Platform revenue, excluding retailer share arrangements(2)
2,546

2,377

2,250

2,274

2,347

199

8.5
�%
9,447

8,736

711

8.1
�%
Retailer share arrangements(2)
(686
)
(683
)
(577
)
(584
)
(651
)
(35
)
5.4
�%
(2,530
)
(2,331
)
(199
)
8.5
�%
Platform revenue(2)
$
1,860

$
1,694

$
1,673

$
1,690

$
1,696

$
164

9.7
�%
$
6,917

$
6,405

$
512

8.0
�%
PAYMENT SOLUTIONS
Purchase volume(1)
$
3,419

$
3,226

$
3,115

$
2,687

$
3,111

$
308

9.9
�%
$
12,447

$
11,360

$
1,087

9.6
�%
Period-end loan receivables
$
12,095

$
11,514

$
11,014

$
10,647

$
10,893

$
1,202

11.0
�%
$
12,095

$
10,893

$
1,202

11.0
�%
Average loan receivables
$
11,772

$
11,267

$
10,785

$
10,775

$
10,844

$
928

8.6
�%
$
11,171

$
10,469

$
702

6.7
�%
Average active accounts (in thousands)(3)
7,113

6,892

6,692

6,737

6,566

547

8.3
�%
6,869

6,330

539

8.5
�%
Interest and fees on loans
$
426

$
405

$
379

$
372

$
399

$
27

6.8
�%
$
1,582

$
1,506

$
76

5.0
�%
Other income
9

7

8

8

4

5

125.0
�%
32

36

(4
)
(11.1
)%
Platform revenue, excluding retailer share arrangements
435

412

387

380

403

32

7.9
�%
1,614

1,542

72

4.7
�%
Retailer share arrangements
(11
)
(9
)
(12
)
(9
)
(9
)
(2
)
22.2
�%
(41
)
(36
)
(5
)
13.9
�%
Platform revenue
$
424

$
403

$
375

$
371

$
394

$
30

7.6
�%
$
1,573

$
1,506

$
67

4.4
�%
CARECREDIT
Purchase volume(1)
$
1,807

$
1,787

$
1,831

$
1,686

$
1,692

$
115

6.8
�%
$
7,111

$
6,759

$
352

5.2
�%
Period-end loan receivables
$
6,883

$
6,787

$
6,621

$
6,463

$
6,527

$
356

5.5
�%
$
6,883

$
6,527

$
356

5.5
�%
Average loan receivables
$
6,846

$
6,713

$
6,531

$
6,497

$
6,475

$
371

5.7
�%
$
6,652

$
6,222

$
430

6.9
�%
Average active accounts (in thousands)(3)
4,683

4,582

4,446

4,437

4,381

302

6.9
�%
4,541

4,233

308

7.3
�%
Interest and fees on loans
$
421

$
412

$
383

$
378

$
399

$
22

5.5
�%
$
1,594

$
1,472

$
122

8.3
�%
Other income
12

11

12

11

13

(1
)
(7.7
)%
46

45

1

2.2
�%
Platform revenue, excluding retailer share arrangements
433

423

395

389

412

21

5.1
�%
1,640

1,517

123

8.1
�%
Retailer share arrangements
(1
)
(1
)
(1
)
(1
)
(2
)
1

(50.0
)%
(4
)
(6
)
2

(33.3
)%
Platform revenue
$
432

$
422

$
394

$
388

$
410

$
22

5.4
�%
$
1,636

$
1,511

$
125

8.3
�%
TOTAL SYF
Purchase volume(1),(2)
$
30,081

$
26,004

$
25,978

$
21,086

$
27,002

$
3,079

11.4
�%
$
103,149

$
93,858

$
9,291

9.9
�%
Period-end loan receivables
$
61,286

$
56,767

$
54,873

$
54,285

$
57,254

$
4,032

7.0
�%
$
61,286

$
57,254

$
4,032

7.0
�%
Average loan receivables, including held for sale
$
59,547

$
57,391

$
55,363

$
55,495

$
54,895

$
4,652

8.5
�%
$
57,101

$
52,407

$
4,694

9.0
�%
Average active accounts (in thousands)(2),(3)
61,667

59,907

58,386

59,342

58,402

3,265

5.6
�%
60,009

56,253

3,756

6.7
�%
Interest and fees on loans(2)
$
3,252

$
3,116

$
2,920

$
2,928

$
3,032

$
220

7.3
�%
$
12,216

$
11,295

$
921

8.2
�%
Other income(2)
162

96

112

115

130

32

24.6
�%
485

500

(15
)
(3.0
)%
Platform revenue, excluding retailer share arrangements(2)
3,414

3,212

3,032

3,043

3,162

252

8.0
�%
12,701

11,795

906

7.7
�%
Retailer share arrangements(2)
(698
)
(693
)
(590
)
(594
)
(662
)
(36
)
5.4
�%
(2,575
)
(2,373
)
(202
)
8.5
�%
Platform revenue(2)
$
2,716

$
2,519

$
2,442

$
2,449

$
2,500

$
216

8.6
�%
$
10,126

$
9,422

$
704

7.5
�%
(1) Purchase volume, or net credit sales, represents the aggregate amount of charges incurred on credit cards or other credit product accounts less returns during the period.
(2) Includes activity and balances associated with loan receivables held for sale.
(3) Active accounts represent credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month.

8



SYNCHRONY FINANCIAL
RECONCILIATION OF NON-GAAP MEASURES AND CALCULATIONS OF REGULATORY MEASURES
(unaudited, $ in millions, except per share statistics)
Quarter Ended
Dec 31,
2014
Sep 30,
2014
Jun 30,
2014
Mar 31,
2014
Dec 31,
2013
COMMON EQUITY MEASURES
GAAP Total common equity
$
10,478

$
9,941

$
6,393

$
6,042

$
5,960

Less: Goodwill
(949
)
(949
)
(949
)
(949
)
(949
)
Less: Intangible assets, net
(519
)
(449
)
(463
)
(464
)
(300
)
Tangible common equity
$
9,010

$
8,543

$
4,981

$
4,629

$
4,711

Adjustments for certain other intangible assets, deferred tax liabilities
and certain items in accumulated comprehensive income (loss)
287

292

Basel I - Tier 1 capital and Tier 1 common equity
$
9,297

$
8,835

Adjustments for certain other intangible assets and deferred tax liabilities
(20
)
(24
)
Basel III - Tier I common equity
$
9,277

$
8,811

RISK-BASED CAPITAL
Basel I - Tier 1 capital and Tier 1 common equity
$
9,297

$
8,835

Add: Allowance for loan losses includible in risk-based capital
808

760

Basel I - Risk-based capital
$
10,105

$
9,595

ASSET MEASURES
Total assets
$
75,707

$
73,469

Adjustments for:
Disallowed goodwill and other disallowed intangible assets, net of
related deferred tax liabilities
(1,181
)
(1,110
)
Other
79

4

Total assets for leverage purposes - Basel I
$
74,605

$
72,363

Risk-weighted assets - Basel I
$
62,250

$
58,457

Additional risk weighting adjustments related to:
Deferred taxes
1,321

1,319

Loan receivables delinquent over 90 days
581

526

Other
(11
)
(2
)
Risk-weighted assets - Basel III (fully phased in)
$
64,141

$
60,300

TANGIBLE COMMON EQUITY PER SHARE
GAAP book value per share
$
12.57

$
11.92

$
9.06

$
8.57

$
8.45

Less: Goodwill
(1.14
)
(1.14
)
(1.34
)
(1.34
)
(1.34
)
Less: Intangible assets, net
(0.62
)
(0.53
)
(0.66
)
(0.67
)
(0.43
)
Tangible common equity per share
$
10.81

$
10.25

$
7.06

$
6.56

$
6.68


9

4Q14 Financial Results January 23, 2015 Exhibit 99.3


2 Cautionary Statement Regarding Forward-Looking Statements The following slides are part of a presentation by Synchrony Financial in connection with reporting quarterly financial results. No representation is made that the information in these slides is complete. For additional information, see the earnings release and financial supplement included as exhibits to our Current Report on Form 8-K filed today and available on our website (www.synchronyfinancial.com) and the SECs website (www.sec.gov). All references to net earnings and net income are intended to have the same meaning. This presentation contains certain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the safe harbor created by those sections. Forward-looking statements may be identified by words such as outlook, expects, intends, anticipates, plans, believes, seeks, targets, estimates, will, should, may or words of similar meaning, but these words are not the exclusive means of identifying forward-looking statements. Forward-looking statements are based on managements current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. Factors that could cause actual results to differ materially include global political, economic, business, competitive, market, regulatory and other factors and risks, such as: the impact of macroeconomic conditions and whether industry trends we have identified develop as anticipated; retaining existing partners and attracting new partners, concentration of our platform revenue in a small number of Retail Card partners, promotion and support of our products by our partners, and financial performance of our partners; our need for additional financing, higher borrowing costs and adverse financial market conditions impacting our funding and liquidity, and any reduction in our credit ratings; our ability to securitize our loans, occurrence of an early amortization of our securitization facilities, loss of the right to service or subservice our securitized loans, and lower payment rates on our securitized loans; our reliance on dividends, distributions and other payments from Synchrony Bank; our ability to grow our deposits in the future; changes in market interest rates and the impact of any margin compression; effectiveness of our risk management processes and procedures, reliance on models which may be inaccurate or misinterpreted, our ability to manage our credit risk, the sufficiency of our allowance for loan losses and the accuracy of the assumptions or estimates used in preparing our financial statements; our ability to offset increases in our costs in retailer share arrangements; competition in the consumer finance industry; our concentration in the U.S. consumer credit market; our ability to successfully develop and commercialize new or enhanced products and services; our ability to realize the value of strategic investments; reductions in interchange fees; fraudulent activity; cyber-attacks or other security breaches; failure of third parties to provide various services that are important to our operations; disruptions in the operations of our computer systems and data centers; international risks and compliance and regulatory risks and costs associated with international operations; catastrophic events; alleged infringement of intellectual property rights of others and our ability to protect our intellectual property; litigation and regulatory actions; damage to our reputation; our ability to attract, retain and motivate key officers and employees; tax legislation initiatives or challenges to our tax positions and state sales tax rules and regulations; significant and extensive regulation, supervision, examination and enforcement of our business by governmental authorities, the impact of the Dodd-Frank Act and the impact of the CFPBs regulation of our business; changes to our methods of offering our CareCredit products; impact of capital adequacy rules; restrictions that limit Synchrony Banks ability to pay dividends; regulations relating to privacy, information security and data protection as well as anti-money laundering and anti-terrorism financing laws; use of third-party vendors and ongoing third-party business relationships; effect of General Electric Capital Corporation (GECC) being subject to regulation by the Federal Reserve Board both as a savings and loan holding company and as a systemically important financial institution; General Electric Company (GE) not completing the separation from us as planned or at all, GEs inability to obtain savings and loan holding company deregistration (GE SLHC Deregistration) and GE continuing to have significant control over us; completion by the Federal Reserve Board of a review (with satisfactory results) of our preparedness to operate on a standalone basis, independently of GE, and Federal Reserve Board approval required for us to continue to be a savings and loan holding company, including the timing of the approval and the imposition of any significant additional capital or liquidity requirements; our need to establish and significantly expand many aspects of our operations and infrastructure; delays in receiving or failure to receive Federal Reserve Board agreement required for us to be treated as a financial holding company after the GE SLHC Deregistration; loss of association with GEs strong brand and reputation; limited right to use the GE brand name and logo and need to establish a new brand; GE has significant control over us; terms of our arrangements with GE may be more favorable than we will be able to obtain from unaffiliated third parties; obligations associated with being a public company; our incremental cost of operating as a standalone public company could be substantially more than anticipated; GE could engage in businesses that compete with us, and conflicts of interest may arise between us and GE; and failure caused by us of GEs distribution of our common stock to its stockholders in exchange for its common stock to qualify for tax-free treatment, which may result in significant tax liabilities to GE for which we may be required to indemnify GE. For the reasons described above, we caution you against relying on any forward-looking statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this presentation and in our public filings, including under the heading Risk Factors in the Companys Current Report on Form 8-K, as filed on November 19, 2014. You should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties, or potentially inaccurate assumptions that could cause our current expectations or beliefs to change. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law. Differences between this presentation and the supplemental financials may occur due to rounding. Non-GAAP Measures The information provided herein includes measures we refer to as platform revenue and platform revenue excluding retailer share arrangements and certain capital ratios, which are not prepared in accordance with U.S. generally accepted accounting principles (GAAP). The reconciliations of such measures to the most directly comparable GAAP measures are included in the appendix of this presentation. Disclaimers


3 4Q14 Highlights Financial highlights " $531 million Net earnings, $0.64 EPS " Strong growth across the business � Purchase volume +11%, Loan receivables +7%, Platform revenue +9% � Mobile & online purchase volume up 18% � Strong holiday results " Asset quality continues to improve � Net charge-offs improved from 4.69% to 4.32% compared to prior year � 30+ delinquency down 21bps. " Expenses in-line with expectations " Delivering funding plan, deposits +$9 billion " Strong capital and liquidity � 14.9% T1C (B1) � $12.9 billion high quality liquid assets Business highlights � Announced a new top 20 partnership � Extended two of our top 40 partnerships, Rooms To Go and Yamaha � Payment Solutions added more than 2,000 partners and CareCredit added more than 9,000 locations since 4Q13 � Announced a strategic equity investment and partnership (b) (a) From November 1 through December 31, 2014 (b) Excludes non-core portfolio sale (a)


4 Growth Metrics +11% Purchase volume $ in billions Loan receivables $ in billions Active accounts Average active accounts in millions Platform revenue $ in millions 4Q13 4Q14 $27.0 $30.1 $57.3 $61.3 $2,716 $2,500 61.7 58.4 +6% +9% +7% 4Q13 4Q14 4Q13 4Q14 4Q13 4Q14 (a) (a) Platform revenue includes $46 million gain on portfolio sales, 7% growth excluding the gain on sale


5 Platform Results Retail Card Loan receivables, $ in billions $39.9 $42.3 4Q13 4Q14 � Strong receivable growth across partner programs � Platform revenue up 10% driven by receivable growth Payment Solutions Loan receivables, $ in billions $10.9 $12.1 4Q13 4Q14 � Broad receivable growth led by home furnishing, auto and power equipment � Platform revenue up 8% driven by receivable growth CareCredit Loan receivables, $ in billions $6.5 $6.9 4Q13 4Q14 � Receivable growth led by dental and veterinary � Platform revenue up 5% driven by receivable growth and higher yield Purchase volume Accounts $22.2 47.4 $24.9 49.9 +12% +5% $3.1 6.6 $3.4 7.1 +10% +8% $1.7 4.4 $1.8 4.7 +7% +7% Platform revenue $1,696 $1,860 +10% $394 $424 +8% $410 $432 +5% +6% +11% +5% (a) (a) Accounts represent average active accounts in millions, which are credit card or installment loan accounts on which there has been a purchase, payment or outstanding balance in the current month. Platform revenue $ in millions (b) V% V% V% (b) Platform revenue includes $46 million gain on portfolio sales, 7% growth excluding the gain on sale


6 Financial Results Summary earnings statement Fourth quarter 2014 highlights $ in millions, except ratios Total interest income $3,260 $3,037 $223 7% Total interest expense 282 188 (94) (50)% Net interest income (NII) 2,978 2,849 129 5% Retailer share arrangements (RSA) (698) (662) (36) (5)% NII, after RSA 2,280 2,187 93 4% Provision for loan losses 797 818 21 3% Other income 162 130 32 25% Other expense 792 807 15 2% Pre-Tax earnings 853 692 161 23% Provision for income taxes 322 249 (73) (29)% Net earnings $531 $443 $88 20% Return on assets 2.7% 3.0% (0.3)pts. 4Q14 4Q13 % $ B/(W) " $531 million Net earnings, including $29 million gain on portfolio sales " Net interest income after RSA up 4% driven by growth in loan receivables � Interest and fees on loan receivables up 7% in-line with receivable growth � Interest expense increase driven by liquidity, funding mix and growth " Provision for loan losses declined 3% � Decline driven by non-repeat of 4Q13 ALLL enhancements, lower charge-offs, partially offset by receivable growth � Asset quality improved & 30+ delinquencies down 21bps. vs. prior year " Other income increase driven largely by $46 million gain on portfolio sales, partially offset by increased loyalty " Other expense decrease driven by 4Q13 charges related to regulatory matters, offset by investments in growth and infrastructure


7 Net Interest Income Fourth quarter 2014 highlights " Net interest income up 5% driven by growth in receivables partially offset by higher funding costs � Interest and fees on loans up 7% in-line with loan receivable growth " Net interest margin decline driven primarily by increase in liquidity � Liquid assets increased to $12.9 billion, conservatively invested in cash and short-term U.S. Treasuries � Receivable yield 21.21%, down 47bps. reflecting slightly higher payment rate and growth in promotional balances � Interest expense increased in-line with expectations to 1.79%, impacting Net interest margin by 21bps. Net interest income $ in millions, % of average interest-earning assets 19.30% 15.60% 4Q13 4Q14 +5% $2,849 $2,978 Receivable yield 21.68% 21.21% (47)bps. 4Q13 Net interest margin 19.30% Liquidity (3.02) Receivable yield (0.47) Interest expense (0.21) 4Q14 Net interest margin 15.60% V% Net interest margin walk % of average interest-earning assets


8 Asset Quality Metrics Net charge-offs $ in millions, % of average loan receivables including held for sale 30+ days past due $ in millions, % of period-end loan receivables Allowance for loan losses $ in millions, % of period-end loan receivables 90+ days past due $ in millions, % of period-end loan receivables 4.32% 4.26% 5.24% 5.46% 4.07% 4.88% $974 $1,051 3Q13 3Q14 $2,299 $2,416 $533 $673 $2,792 $3,102 1.83% 1.85% 4.86% 4.69% $656 4.05% $579 $658 5.48% $3,006 5.52% $2,998 5.05% $2,892 3.82% $2,097 4.09% $2,220 4.35% $2,488 $908 1.65% $1,046 1.93% $1,121 1.96% 4Q13 1Q14 2Q14 3Q13 3Q14 4Q13 1Q14 2Q14 3Q13 3Q14 4Q13 1Q14 2Q14 3Q13 3Q14 4Q13 1Q14 2Q14 4.75% $600 2Q13 4.81% $603 1Q13 5.38% $2,784 2Q13 5.44% $2,718 1Q13 3.85% $1,991 2Q13 4.22% $2,109 1Q13 $844 2Q13 1.63% $958 1Q13 1.92% (a) Excludes $62 million net charge-off related to disposition of non-core receivables (a) 4.14% $2,536 4Q14 $1,162 4Q14 1.90% 5.28% $3,236 4Q14 4.32% $663 4Q14


9 Other expense $ in millions Other Expense Employee cost $190 $227 $37 19% Professional fees 157 152 (5) (3)% Marketing/BD 117 165 48 41% Info. processing 52 60 8 15% Other 291 188 (103) (35)% Other expense $807 $792 $(15) (2)% Efficiency 34.8% 32.4% (2.4)pts. $807 " Expense decrease driven by 4Q13 charges, partially offset by increased investments in growth and infrastructure " Infrastructure and separation cost in- line with expectations " Employee costs up $37 million driven by infrastructure build " Marketing/BD costs up $48 million driven by continued investments to grow the portfolio and retail deposits " Other down $103 million driven by 4Q13 charges related to regulatory matters (a) Other Expense divided by sum of NII, after RSA plus Other income (1) V$ V% (2)% (a) $792 4Q13 4Q14 Fourth quarter 2014 highlights


10 Funding, Capital and Liquidity (b) Liquid assets $2.1 $12.9 Undrawn securitization capacity - 6.1 Total liquidity $2.1 $19.0 % of total assets 3.5% 25.2% Tier 1 common $9.3 $9.3 Risk weighted assets $62.3 $64.1 Liquidity $ in billions 4Q14 $19.0 $2.1 4Q13 Capital ratios 4Q14, $ in billions BI T1C % (c) Does not include unencumbered assets in the Bank that could be pledged (c) BIII CET1 % (a) Estimated percentages and amounts (b) Calculated on a fully phased-in Basel III basis 14.9% 14.5% Funding sources $ in billions 4Q13 4Q14 Variance Deposits 51% 56% +5pts. Securitization 31% 24% (7)pts. GE Capital loan 18% 1% (17)pts. 3rd Party Debt - 19% +19pts. $50.0 $62.4 Deposits Securitization GE Capital loan 3rd Party Debt $25.7 $15.3 $9.0 $35.0 $14.9 $11.8 V$ +11.8 (8.3) (0.4) +9.3 $0.7 (a)


11 2015 Outlook Receivable Growth 5%+ 6% - 8% Net Interest Margin ~ 15.0% 15.0% - 15.5% Net Charge-off Rate Stable Stable Efficiency Ratio < 35% < 34% ROA 2.5% - 3.0% 2.5% - 3.0% Prior guidance 2015 outlook


12 Wrap Up 4Q14 Highlights " Net earnings of $531 million & $0.64 earnings per share " Broad based growth & Purchase volume +11%, Loan receivables +7% and Platform revenue +9% " Signed BP & expect to close mid-2015 " Extended two of our top 40 partnerships, Rooms To Go and Yamaha 2015 outlook and strategic priorities " Drive growth across the business " Continue investment in innovative digital and mobile capabilities " Deliver on funding strategy & grow deposits to 60% - 70% of funding " Execute on separation & file application in first half of 2015 " Operate with a strong financial profile & 2015 outlook largely unchanged (a) (a) Platform revenue includes $46 million gain on portfolio sales, 7% growth excluding the gain on sale


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14 Appendix


15 Non GAAP Reconciliations In order to assess and internally report the revenue performance of our three sales platforms, we use measures we refer to as platform revenue and platform revenue excluding retailer share arrangements. Platform revenue is the sum of three line items in our Condensed Consolidated and Combined Statements of Earnings prepared in accordance with GAAP: interest and fees on loans, plus other income, less retailer share arrangements. Platform revenue and platform revenue excluding retailer share arrangements are not measures presented in accordance with GAAP. To calculate platform revenue we deduct retailer share arrangements but do not deduct other line item expenses, such as interest expense, provision for loan losses and other expense, because those items are managed for the business as a whole. We believe that platform revenue is a useful measure to investors because it represents managements view of the net revenue contribution of each of our platforms. Platform revenue excluding retailer share arrangements represents managements view of the gross revenue contribution of each of our platforms. These measures should not be considered a substitute for interest and fees on loans or other measures of performance we have reported in accordance with GAAP. We present certain capital ratios. As a new savings and loan holding company, we historically have not been required by regulators to disclose capital ratios, and therefore these capital ratios are non-GAAP measures. We believe these capital ratios are useful measures to investors because they are widely used by analysts and regulators to assess the capital position of financial services companies, although our Basel I Tier 1 common ratio is not a Basel I defined regulatory capital ratio, and our Basel I and Basel III Tier 1 common ratios may not be comparable to similarly titled measures reported by other companies. Our Basel I Tier 1 common ratio is the ratio of Tier 1 common equity (as calculated below) to total risk-weighted assets as calculated in accordance with the U.S. Basel I capital rules. Our Basel III Tier 1 common ratio is the ratio of common equity Tier 1 capital to total risk-weighted assets, each as calculated in accordance with the U.S. Basel III capital rules (on a fully phased-in basis). Our Basel III Tier 1 common ratio is a preliminary estimate reflecting managements interpretation of the final Basel III capital rules adopted in July 2013 by the Federal Reserve Board, which have not been fully implemented, and our estimate and interpretations are subject to, among other things, ongoing regulatory review and implementation guidance.


16 Non-GAAP Reconciliation The following table sets forth each component of our platform revenue for periods indicated below. ($ in millions) 2014 2013 Platform Revenue Total: Interest and fees on loans . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,252 $3,032 Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $162 $130 Retailer share arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(698) $(662) Platform revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,716 $2,500 Retail Card: Interest and fees on loans . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,405 $2,234 Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $141 $113 Retailer share arrangements . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(686) $(651) Platform revenue . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,860 $1,696 Payment Solutions: Interest and fees on loans . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $426 $399 Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9 $4 Retailer share arrangements . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(11) $(9) Platform revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $424 $394 CareCredit: Interest and fees on loans . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $421 $399 Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12 $13 Retailer share arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1) $(2) Platform revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $432 $410 For the Three Months Ended December 31,


17 COMMON EQUITY MEASURES GAAP Total common equity&&&&&&&&&&&&&&&&&&&..&&. Less: Goodwill&&&&&&&&&&&&&&&&&&&&&&..&&. Less: Intangible assets, net&&&&&&&&&&&&&&&&&..&&.. Tangible common equity&&&&&&&&&&&&&&&&&&&&..&& Adjustments for certain other intangible assets, deferred tax liabilities and certain items in accumulated comprehensive income (loss)&&&&.&... Basel I  Tier 1 capital and Tier 1 common equity&&&&&&&&&&..&.. Adjustments for certain other intangible assets and deferred tax liabilities&... Basel III  Tier 1 common equity&&&&&&&&&&&&&&&&..&&.. ASSET MEASURES Total assets&&&&&&&&&&&&&&&&&&&&&&&&&&..&& Adjustments for: Disallowed goodwill and other disallowed intangible assets, net of related deferred tax liabilities&&&&&&&&&&&&&&&&. Other&&&&&&&&&&&&&&&&&&&&&&&&&&..&& Total assets for leverage purposes  Basel I&&&&&&&&&&&&..&&. Risk-weighted assets  Basel I&&&&&&&&&&&&&&&&&&&..... Additional risk weighting adjustments related to: Deferred taxes&&&&&&&&&&&&&&&&&&&&&&&&.... Loan receivables delinquent over 90 days&&&&&&&&&&..&&..&. Other&&&&&&&&&&&&&&&&&&&&&&&&&&..&&&. Risk-weighted assets  Basel III (fully phased in)&&&&&&&&&..&&..& Non-GAAP Reconciliation The following table sets forth a reconciliation of each component of our capital ratios to the comparable GAAP component at December 31, 2014. $10,478 (949) (519) $9,010 287 $9,297 (20) $9,277 $75,707 (1,181) 79 $74,605 $62,250 1,321 581 (11) $64,141 $ in millions at December 31, 2014 (a) Amounts are presented net of tax and related deferred tax liabilities. (a) (a) (a)


Exhibit 99.4

Explanation of Non-GAAP Measures
The information provided in this Form 8-K and exhibits includes measures which are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP").
In order to assess and internally report the revenue performance of our three sales platforms, we use measures we refer to as platform revenue" and platform revenue excluding retailer share arrangements. Platform revenue is the sum of three line items in our Condensed Consolidated and Combined Statements of Earnings prepared in accordance with GAAP: interest and fees on loans, plus other income, less retailer share arrangements. Platform revenue and platform revenue excluding retailer share arrangements are not measures presented in accordance with GAAP. To calculate platform revenue, we deduct retailer share arrangements but do not deduct other line item expenses, such as interest expense, provision for loan losses and other expense, because those items are managed for the business as a whole. We believe that platform revenue is a useful measure to investors because it represents managements view of the net revenue contribution of each of our platforms. Platform revenue excluding retailer share arrangements represents managements view of the gross revenue contribution of each of our platforms.These measures should not be considered a substitute for interest and fees on loans or other measures of performance we have reported in accordance with GAAP. The reconciliation of platform revenue, and platform revenue excluding retailer share arrangements, to interest and fees on loans for each platform is included in the detailed financial tables included in Exhibit 99.2.
We present certain capital ratios in this Form 8-K and exhibits. As a new savings and loan holding company, the Company historically has not been required by regulators to disclose capital ratios, and therefore these capital ratios are non-GAAP measures. We believe these capital ratios are useful measures to investors because they are widely used by analysts and regulators to assess the capital position of financial services companies, although our Basel I Tier 1 common ratio is not a Basel I defined regulatory capital ratio, and our Basel I and Basel III Tier 1 common ratios may not be comparable to similarly titled measures reported by other companies. Our Basel I Tier 1 common ratio is the ratio of Tier 1 common equity (as calculated below) to total risk-weighted assets as calculated in accordance with the U.S. Basel I capital rules. Our Basel III Tier 1 common ratio is the ratio of common equity Tier 1 capital to total risk-weighted assets, each as calculated in accordance with the U.S. Basel III capital rules (on a fully phased-in basis). Our Basel III Tier 1 common ratio is a preliminary estimate reflecting managements interpretation of the final Basel III capital rules adopted in July 2013 by the Federal Reserve Board, which have not been fully implemented, and our estimate and interpretations are subject to, among other things, ongoing regulatory review and implementation guidance. The reconciliation of each component of our capital ratios included in this Form 8-K and exhibits to the comparable GAAP component at December�31, 2014 is included in the detailed financial tables included in Exhibit 99.2.
We also present a measure we refer to as tangible common equity in this Form 8-K and exhibits. Tangible common equity itself is not a measure presented in accordance with GAAP. We believe tangible common equity is a more meaningful measure to investors of the net asset value of the Company. The reconciliation of tangible common equity, to total equity reported in accordance with GAAP is included in the detailed financial tables included in Exhibit 99.2.




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