Synchrony Financial · NYSE:SYF

Synchrony Financial — Debt Investor Presentation (March 2015)

31 slides from Synchrony Financial's debt investor presentation, Mar 23, 2015

1. Slide 1: Fixed Income Investor Review 4th Quarter 2014

   Fixed Income Investor Review 4th Quarter 2014 Exhibit 99.1

2. Slide 2: Disclaimers: Cautionary Statement Regarding Forward-Looking Statements

   2 Disclaimers Cautionary Statement Regarding Forward-Looking Statements The following slides are part of a presentation by Synchrony Financial and are intended to be viewed as part of that presentation. No representation is made that the information in these slides is complete. This presentation con

3. Slide 3: Experienced Management Team

   3 Experienced Management Team Brian D. Doubles Chief Financial Officer, Synchrony Financial  CFO since January 2009  Global FP&A leader, GE Consumer Finance  CEO & CFO, GE’s WMC mortgage business  Various other leadership roles at GE Margaret M. Keane President & CEO, Synchrony Financial  CEO s

4. Slide 4: Experienced Board Members

   4 Experienced Board Members Independent board members Jeffrey Naylor Audit Committee Chair  Experience: 25+ years retail and consumer goods  Current position: Founder & Managing Director of Topaz Consulting, LLC  Previous experience: SEVP, Chief Administrative Officer and CFO, TJX Companies, Inc.

5. Slide 5: Synchrony Financial Overview

   5 (a) Source: Nilson (April 2014) Synchrony Financial Overview Strong Value Proposition for Partners and Consumers 2  Deep partner integration enables customized loyalty products, across channels  Advanced data analytics and targeted marketing capabilities  Dedicated team members support partners

6. Slide 6: Partner-Centric Business with Leading Sales Platforms

   6 Partner-Centric Business with Leading Sales Platforms Payment Solutions Retail Card CareCredit Private label credit cards, dual cards & small business credit products for large retailers Promotional financing for major consumer purchases, offering private label credit cards & installment loans Pro

7. Slide 7: Long-Standing and Diverse Partner Base

   7 Long-Standing and Diverse Partner Base Length of relationship Last renewal 36 years 2014 21 years 2014 18 years 2014 16 years 2014 15 years 2013 15 years 2013 9 years 2013 7 years 2015 3 years 2011 2 years 2012 Partner profile

8. Slide 8: Our Market and Position

   8 $20 $30 $40 $50 Our Market and Position Credit card receivables Nilson, % of 2008 market 80% 85% 90% 95% 100% 105% Private Label Credit Cards are back to pre- crisis levels at $100 billion General Purpose Credit Cards are down 15% from peak at $730 billion 2008 2009 2010 2011 2012 2013 Synchrony P

9. Slide 9: Differentiated Value Proposition for Our Partners & Customers

   Differentiated Value Proposition for Our Partners & Customers

10. Slide 10: Providing Value for Partners & Customers

    10 Customer benefits Providing Value for Partners & Customers • Increased sales • Strengthened customer loyalty • Enhanced marketing • Additional economic benefits • Instant access to credit • Attractive discounts, promotional terms & loyalty rewards • Ability to obtain separate financing for major

11. Slide 11: Partner Value Proposition

    11 Partner Value Proposition We deliver significant savings and earnings to our partners  No interchange fees for in-store purchases  Retailer share arrangements enhance engagement Interchange savings Retailer share arrangements Margin on additional sales $2.6B ++ ++ $2.6B+ 2014 Economic benefits

12. Slide 12: Attracting New Partners

    12 Attracting New Partners Added 4 new retail partners since the start of 2012 Retail Card Increased partners by approximately 4,000 since the start of 2012 Payment Solutions Increased locations by approximately 32,000 since the start of 2012 CareCredit • Experience • Partnership with on-site dedica

13. Slide 13: Customer Value Proposition

    13 Availability of credit differentiates partners & helps customers Significant acquisition & lifecycle benefits vs General Purpose 61.7 million average active cardholders enjoying our card benefits Rewards tailored to each customer Making purchases & procedures obtainable Customer Value Proposition

14. Slide 14: Leveraging Data to Differentiate Our Value Proposition

    14 Leveraging Data to Differentiate Our Value Proposition Transactions on our closed loop network vs. general purpose Customer Merchant Acquirer Network Issuer General Purpose Card PLCC Card Date Merch. Channel Brand Cat./SKU $ 1/2/15 Belk In- Store DKNY Women’s shoes 468XUTY $83.44 1/9/15 Belk Mobi

15. Slide 15: Mobile Payment Strategy

    15 Mobile Payment Strategy  Offer options to our cardholders  Support our retailers’ mobile payments strategies  Continue to provide compelling value proposition to our customers  Enable EMV cards  Develop cross-channel tokenization strategy for private label & Dual Card  Pilot private label n

16. Slide 16: Financial Performance

    Financial Performance

17. Slide 17: Financial Update

    17 Financial Update Net earnings $ in millions 2013 2014 Strong, stable earnings Loan receivables $ in billions 7% growth Net charge-offs % of average loan receivables 4.69% 4.32% Platform revenue $ in millions $9,422 $10,126 7% growth Stable losses $1,979 $2,109 $57.3 $61.3 4Q’13 4Q’14 4Q’13 4Q’14

18. Slide 18: Significant % of Revenue Under Long-Term Contracts

    18 2014 Platform revenue 26% 74% 200,000 next largest programs  Majority auto-renew  No ongoing program exceeds 0.1% Significant % of Revenue Under Long-Term Contracts $10,126 Largest 40 programs  Typically under long-term exclusive contracts (a) (a) Platform revenue is the sum of “interest and f

19. Slide 19: Credit Quality Overview

    19 Credit Quality Overview  Synchrony controls underwriting and credit line decisions  Over 70% of assets at FICO greater than 660 Stronger portfolio U.S. consumer FICO Stable credit 30+ days delinquencies 4.58% 4.35% 4.14% 4Q’14 4Q’13 4Q’12 (a) (a) Prior to 3Q’12 a proprietary scoring model was u

20. Slide 20: Funding Profile

    20 Funding Profile Deposits GE Capital Loan Securitized Debt Unsecured Debt 4Q’14 Long-term target 6% 56% 24% 1% 15%-20% 60%-70% 15% -20% 13% Bank Loan Diverse funding sources % of liabilities excluding non-debt liabilities Fueled by strong deposit growth $ in billions 3Q’13 1Q’14 4Q’13 $22.2 $25.7

21. Slide 21: Peer Comparison 4Q'14

    21 Peer Comparison 4Q’14 (a) Consists of net interest income plus noninterest income and includes RSAs for SYF (b) Segment data for AXP-U.S Card Services and COF-Domestic Credit Card. Other data-total company level (c) Calculated as credit card yield - net charge-off rate on credit cards. SYF-total

22. Slide 22: Summary

    22 Summary Growth supported by online bank with strong deposit growth Solid fundamentals with strong returns Attractive growth opportunities, particularly to further leverage data analytics, loyalty, mobile and e-capabilities Private Label Credit Card leader well-positioned to capitalize on deep par

23. Slide 23: Master Trust

    Master Trust

24. Slide 24: Master Note Trust Changes

    24 Master Note Trust Changes Sponsor / originator Credit enhancement Synchrony Financial and subsidiaries  Synchrony Bank continues as…  Trust sponsor  Receivables originator  Synchrony Bank  Wholly owned subsidiary of Synchrony Financial • S&P (BBB-) • Fitch (BBB-)  Synchrony Financial and su

25. Slide 25: Trust Stratification Highlights

    25 Trust Stratification Highlights • +70% prime concentration • Lower balances and credit lines compared to general purpose credit cards • Highly seasoned accounts … +90% accounts over 3 years (peak losses 18-30 months after origination) Portfolio features Retailer composition FICO distribution (a)

26. Slide 26: SYNCT Historical Performance

    26 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00% SYNCT Historical Performance 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% Gross trust yield Feb’15 27.9% Principal payment rate Feb’15 12.9% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% Principal charge-offs Feb’15 6.

27. Slide 27: Appendix

    Appendix

28. Slide 28: Summary of Recent SYF Financial Information

    28 Summary of Recent SYF Financial Information 1Q'14 2Q'14 YTD'14 VPY% Growth metrics Loan receivables $54,285 $54,873 $61,286 7% Purchase volume $21,086 $25,978 $103,149 10% Statement of earnings Interest income $2,933 $2,926 $12,242 8% Interest expense 190 206 922 24% Net interest income 2,743 2,7

29. Slide 29: Non-GAAP Reconciliations

    29 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

30. Slide 30: Non-GAAP Reconciliation: Common Equity and Asset Measures

    30 Non-GAAP Reconciliation COMMON EQUITY MEASURES GAAP Total common equity……………………………………………………….………. Less: Goodwill……………………………………………………………………. Less: Intangible assets, net………………………………………………………….. Tangible common equity…………………………………………………………………….. Adjustments for certain other intangible assets, defe

31. Slide 31: Non-GAAP Reconciliation: Platform Revenue

    31 Non-GAAP Reconciliation ($ in millions) Interest and fees on loans……………………………………. Other income……………..………………………………….. Platform revenue excluding retailer share arrangements…. Retailer share arrangements………………………………….. Platform revenue…………………………………………..…. $ 10,300 484 $ 10,784 (1,984) $ 8,800 2012

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